You know the saying: History repeats itself.
Since our founding in 1876 to supply capital to the cotton industry, Bank of Yazoo has always stood behind our customers and our communities with unwavering strength, even as, time and time again, we have led the field in service enhancements. From new branches when and where they were needed to our first drive‑through service in the fifties to internet banking in the nineties, we have stayed out front to keep all of our customers' needs covered.
In 1876, a group of Yazoo‑area businessmen gathered in the home of Robert Clayton Shepherd, a Yazoo City merchant and alderman. Their purpose: to discuss the formation of a bank to supply capital for the cotton industry, rebounding at last after the devastation of the Civil War. The recovery, while welcome, was also overwhelming for local merchants, unable to supply the necessary financing for all of the goods required by farmers to increase production. New capital was urgently needed.
The stockholders raised $41,300 in capital to provide funds for the new bank, obtained a charter, and on October 11, 1876, Bank of Yazoo opened its doors for business, with Shepherd serving as President, his business associate Charles Roberts as Vice President, and L.B. Warren as Cashier.
Standing with a community against fire, flood and fever.
For the next quarter century, the Bank would become an enthusiastic marketing partner to local farmers. It would also provide crucial support for the entire community as it faced all manners of challenges, including deadly and recurring Yellow Fever epidemics, two major floods and a national depression which sent cotton prices plummeting. Through the credit provided by Bank of Yazoo, local cotton planters managed to weather all forms of turbulence, and by 1896, Bank of Yazoo's resources had surged to nearly $125,000.
The twentieth century dawned with much promise, as well as a tragedy that became legendary when Casey Jones rode his locomotive to immortality near the community of Vaughan in Yazoo County. In 1904, incendiary tragedy struck when a massive fire claimed 27 blocks of Yazoo City, consuming businesses, the school, the newspaper offices, and, of course, the offices of Bank of Yazoo. Five days after the fire, the Bank's directors voted to rebuild, phoenix-like, in a more favorable location on the corner of Main and Commercial. The Bank also managed to make a recommended ten percent dividend, increase the Bank's surplus by another $100,000 and provide a $4,000 loan to the telephone company to restore telephone service to the ravaged city.
Growing stronger in the face of Depression.
In 1914, the Bank passed another milestone when it became a "guaranteed bank," with resources approaching the million-dollar mark; and, four years later, Bank of Yazoo became a Federal Depository for the U.S. Treasury.
When the great Depression reached Yazoo City, the Bank took swift action to ensure solvency. Although examiners gave the Bank a clean bill of health and congratulated the institution on its soundness, management closed the Bank’s doors to guard against a "run," which may have triggered the calling of loans, in turn devastating the already hard-pressed farmers. Less than six months later, the Bank reopened for business. In 1935, Bank of Yazoo began to take FHA Home Loan applications in a program that would prove to be a huge success; and, in that same year, Bank of Yazoo qualified and was accepted by the newly formed Federal Deposit Insurance Corporation. At the end of 1936, the Bank reported resources of over $2 million, and a ten percent dividend was declared.
Exponential growth amid war and victory.
In the thirties, as young men shipped off to Canada to join the RAF and a few older men cried out for isolationism, the average Mississippian still enjoyed peace and prosperity. A person could buy a fully equipped Plymouth automobile for $850 and take an entire year to pay for it at Bank of Yazoo. However, war was looming, and the Bank entered into an agreement with the U.S. Treasury to sell U.S. Defense Savings Bonds Series E six months to the day before the unthinkable: Pearl Harbor. After that fateful day, young men in great numbers shipped off to war, while women began taking their jobs on the home front, and Delta farmers, though raising all the cotton they could, still could not meet the demand. By 1943, the Bank's resources had climbed to nearly $4 million, and with oil discoveries in the county, the Bank began encouraging yet another industry with loans for oil leasing and drilling. By 1945, resources were up to nearly $6.5 million, and the Bank was accepted as a member bank of the Federal Reserve System.
The fifties: Driven to serve.
Post-war America needed cotton almost as much as before, it seemed, with the expected post‑war slump ending quickly. As the fifties dawned, the Bank, with resources now topping $8 million, pitched in for worthy projects: for the building of the new hospital, and later, for the building program of the First Baptist Church.
By 1954, the Bank had embarked on an extensive renovation that would add an exciting new innovation in service — a drive-through window for customers, another first for Yazoo City banking. A few years later, an agricultural officer would be added to the Bank's staff.
The fifties would also witness the birth of the very special relationship between Bank of Yazoo and Mississippi Chemical Corporation. In 1957, the Bank created a stock financing program under which the Bank loaned 80% of the stock purchase price to Mississippi Chemical employees.
The sixties and seventies: Growing quickly, holding fast to a commitment of service.
In 1961, the Bank passed the magic $10 million mark in resources, and, throughout the next two decades, rapid growth would continue unabated. In 1966, the Lintonia branch was opened, and additional staff was also added. In an historic move, the Board of Directors decided to create an Advisory Board in March, 1968.
By then, the Bank's need for a new facility had become obvious, and new property was acquired on the corner of Main and Broadway. The Bank also weighed in on other city improvements by formally endorsing the Delta Plaza Urban Renewal Housing Project.
In 1972, groundbreaking ceremonies for the new Bank facility were held. By October of that year, resources had climbed to over $21 million. A formal grand opening was held in the spring of 1973. When double-digit inflation struck in the seventies, the Bank's Board of Directors recognized that it was unwise to allow Bank funds to remain as non-interest-bearing reserves with the Federal Reserve and subsequently resolved to withdraw its membership.
In 1976, the Bank opened a personal loan department to better serve consumer needs. Because 1976 was also the centennial year for the Bank, as well as - by happy coincidence - the bicentennial celebration year for the United States, an invitation was extended to Miss America 1976, Tawny Godin, to serve as the official hostess for the Bank's April 15th centennial celebration. As a birthday gift to area farmers, the Bank decided to install a commodities wire to give farmers the benefit of up-to-the-minute market information.
During the seventies, the Bank also contributed to a variety of worthy projects, making donations to the Yazoo City Community Triangle project and adding rare books to the Library.
The eighties: A period of high interest rates, economic dislocation and deregulation.
The economy stagnated in the 1970s after a period of persistent high inflation caused by oil supply shocks and accompanied by high levels of unemployment. The central bankers thought that excess liquidity and cheap money would spur economic growth and increase employment. The increase in the money supply above the rate of economic growth only acted to make inflation worse as more dollars chased the same level of goods and services.
In order to get inflation under control, Paul Volker, Fed Chairman, severely constricted the money supply by moving interest rates above 10% in 1980 and near 20% in late 1981 and early 1982. The resulting recession in 1981-1982 severely lowered economic output, increased unemployment, but eventually curbed inflationary expectations.
The upheaval in the economy affected prices, and our local economy felt this because of inflated land prices and cratering commodity prices. The Bank was heavily involved in agricultural lending, and the losses severely strained capital. In 1982, Yazoo Capital Corporation was formed as a holding company to provide financial support to the Bank through a capital injection from leveraging the Employee Stock Ownership Plan. This allowed the Bank to once again survive the most severe recession since World War II.
The eighties also saw the deregulation of interest rate ceilings on deposits to allow banks to stem the flow of funds from banks whose deposit rates had been capped way below market rates as inflation rose. Deposits were flowing out into brokerage firms’ money market accounts and commercial paper. Deregulation allowed the Fed to strengthen its control over monetary policy which it needed to battle inflation. Also during this time, the FDIC-insured deposit limit was raised from $40,000 to $100,000 in an effort to adjust for the effects of inflation. Deposit costs increased dramatically with deregulation at the same time that lending was becoming more risky and economic activity was muted. The Bank’s income suffered dealing with these new trends, but new products like interest-bearing checking accounts were developed to keep deposit funds.
The nineties and new millennium: A period of technological change and expansion.
After introducing its first Automated Teller Machine (ATM) in the late 1980s at the Grand Avenue branch, the nineties saw technology enter into more processes within the Bank. Accounting transitioned from paper ledgers and savings passbooks to integrated computer software and paper account statements. Loans were produced on $12,000 desktop PCs using software and printers rather than typewriters and pre-printed loan forms. Computer terminals were at every employee’s workstation, and the result was the ability to run processes more efficiently and with less personnel.
The Bank also launched a computer system that customers could call by phone to check balances and transfer funds between accounts. It was well-received, and customers used the system thousands of times each month.
During this time, a new technology was developing called the “World Wide Web” or “internet.” Bank of Yazoo City was proud to launch the state’s first true online banking application using an encrypted connection to a secure site on the internet.
ATM cards began to be used more and more at point‑of‑sale terminals and became known as “debit cards.” Soon the Bank would begin electronically imaging checks to exchange with other banks and to return image copies instead of the original paper checks in customer bank statements.
The next development was mobile banking which allowed customers to access to accounts through a secure connection, and the Bank also introduced commercial remote deposit capture for businesses. Mobile capture for use on smartphones followed. Convenience was becoming more than just physical branches and ATM locations and was now in the palm of customers’ hands. As these technologies developed, and continue to develop, the Bank always puts a premium focus on secure methods of authentication and other features to prevent fraud and identity theft.
Technological advancements made it much easier for the Bank to do business over greater distances, and the decision was made to expand into Rankin County, Mississippi. In May of 2003, the Bank opened a temporary loan production office on Lakeland Drive in Flowood. After finding a suitable location on Highway 80 near Crossgates Boulevard in Pearl, the Bank opened a branch in November 2003 in a modular building and began construction of its Crossgates West location which opened in July 2005 next door to the modular branch.
Also in 2005, the Bank moved into Madison County, Mississippi, opening its Flora branch location along Highway 49.
Having experienced significant growth in loans and deposits in the Metro area, the Bank soon opened a branch in Flowood in 2007 to take advantage of significant commercial development in that city.
In late 2007 and into 2008, the economy ground to a halt in the Great Recession due to a residential mortgage crisis and a crisis of confidence in banks. The vast majority of Bank of Yazoo’s residential lending was done by making loans and holding them on its books rather than churning out ill-fitting loans to be sold in the secondary markets. By keeping those loans on its books, the Bank had more conservative underwriting and experienced fewer than 10 home foreclosures during the crisis. Once again, Bank of Yazoo’s conservative, stable and long-term view helped it weather the Great Recession without having to rely upon a government bailout.
A decade later, the Bank continues to be very well-capitalized with strong reserves. This position of strength allows the Bank to continue to serve and support the financial needs of the communities in which it operates. By leading community economic and humanitarian efforts, such as being a leader in helping Yazoo City land the Federal Correctional Facility which continues to be a leading employer in the community and leading clean-up and rebuilding efforts following historic tornadoes and floods in Yazoo County, the Bank is devoted to supporting its communities both economically and personally. Bank of Yazoo remains committed to providing each customer with a highly personalized, responsive banking experience with the highest standards of integrity.