The Relationship Builder

Charlie Schmalz emcees the 2018 ABA Conference for Community Bankers in Honolulu.

By Grant Wishard

It seems inevitable that Charles Schmalz would be CEO of East Wisconsin Savings Bank. No, not because his father and grandfather both took turns steering the mutual savings institution. In fact, he’s rather surprised to be running the family business. But because one thing has always been true of banking—people want to give their money to someone they can trust—and in Kaukauna, Wis., that someone is Charlie.

A mutual bank, East Wisconsin Savings Bank has been servings its members since 1887. Changes in the past 131 years have been mostly cosmetic. The front entrance to the corporate office—a brightly-lit modern building situated on a classic small-town main street—remains in its original location. Charlie is the third Schmalz to start his day walking over that threshold, and he makes many loans on the same houses that his father and grandfather made loans on. If only he could keep doing business with a handshake instead of mountains of paperwork, he says with a chuckle.

Depositors have a wealth of options when it comes to choosing a bank. These days they can do it all online, and in Kaukauna there are larger options down the street. But with $250 million in assets, East Wisconsin Savings Bank has taken its mutual community bank model to five additional branch offices in the surrounding towns in the Fox River valley, situated between Lake Winnebago to the south and Green Bay to the north.

What is that model exactly? Schmalz credits EWSB’s success to clarity of purpose. “It’s our commitment to the community,” he explains. “We’ve remained pretty focused on our original mission and not gotten off on tangents that maybe got some other institutions into difficulties.” Staying simple, staying relatively small, has allowed EWSB to provide modern, full-service banking with the same friendliness and care you find in the neighborhoods they serve. That sounds like an easy recipe for success when Schmalz explains it, but staying committed to the same mission statement adopted back when Grover Cleveland was president—“to afford our members a safe and profitable investment of their savings and to aid them in acquiring homesteads and other property”—is an impressive stunt in the 21st century.

The 2008 financial crisis—which Schmalz refers to as “the time of darkness” and “the great financial plague”—was largely tied up in EWSB’s mainstay: people’s homesteads. “We survived quite well,” he says modestly. Small towns are great places to raise kids—and ride out terrifying recessions. “We know the people we lend to. We’re good at doing what we do. We’ve been doing it a long time. We are primarily a portfolio-based lender,” he explains, “so we were able to stay close to our borrowers and clients and work things out with them.”

People and relationships are important themes in the way Schmalz runs his business. Staying current with digital banking is another challenge for smaller banks such as his. A large regional bank in Kaukauna switched to automated, online home lending in recent months, Schmalz notes. Unafraid of smartphones, he’s given his customers digital options but believes there is still a place for people who want to talk about their money in person, face to face. He is enormously grateful for his 52 employees—his “work family [and] day-to-day A-team”—that give the bank its charm. He wants to give his customers the reassurance “that that building and those people are there,” so they have the ease of knowing “I can go there if I have a problem.”

He’d never say it himself, but that relational touch is what makes him exceptional at the job. “He’s very personable,” says colleague and friend Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association. “He reaches out to people in the community and wants to help anybody when they’re in need. He cares a lot about his fellow community bankers.”

Another friend, Trey Maust, the CEO of Sheltered Harbor who preceded Schmalz as chairman of the CBC, says “he’s probably one of the most genuine and authentic people that you’re going to meet and because of that people trust him, they want to hear his perspective and they will cede leadership over to him because he is someone they can trust.” Everyone who knows Schmalz describes him as being ferociously serious about his community and his colleagues and equally ready to have a fun time. Unlike most people, says Maust, Schmalz never falls too hard on either side of that line—which he proved by wearing a loudly colorful Hawaiian-print sport coat to the 2018 Conference for Community Bankers in Honolulu.

Building and banking

If Schmalz seems like a natural fit for the hands-on, high-touch job of community banking, he was maybe the last one to realize it. “My first thought going to college was, like a lot of 18-year-olds, to get out of town,” he admits. Perhaps escape was the natural rebellious course, especially coming from a family as deeply rooted as his. “Our history gets a little foggy,” he jokes, “but I’m pretty sure we were hanging out when those folks showed up on the Mayflower and were waving from the shoreline.” First stop was Northland College, in Ashland, Wisconsin. Schmalz chose it out of passionate love for winter sports, admitting to himself he’d never graduate if he allowed himself to “study” (i.e., ski all day) in the mountains of Colorado.

Thankfully he met another love on the very first day of school, Dana. “She was a couple of doors down the hall,” Schmalz remembers, grinning. “We met, and I’d like to say it was all wonderful since that minute but…it took a little longer than that to convince her there was hope for me.” If he’s as good with anniversaries as he is with his customers’ money, the two have been married 29 years.

After graduating, their first move was to Bucks County, Pa., where Charlie tried practically everything but banking. He worked construction during the summers through college, he spent time at a finance company, several different sales jobs, and a couple of manual trades for good measure. Whenever a construction crew tries to give him the runaround, Charlie sweetly reminds them that “I wasn’t always a banker.” He’s grateful for that early, diverse work experience. “People are similar,” was his lasting impression. “They have different goals and different ideas but they’re usually working towards the same thing.” Banking, of course, is where those hopes and dreams intersect, “and if we can be a little bit of assistance,” Schmalz says, “that’s wonderful as well.”

Charlie and Dana moved back to Kaukauna in 1993. They raised two kids, Shannon and Connor. They recently moved to a fixer-upper on the water for the sake of their mutual obsession—sailing. If his life reminds you of a famous movie character, small town building and loan banker George Bailey perhaps, Charlie will wave off the cliché as overused.

Then again, East Wisconsin Savings Bank’s tagline just happens to be “helping members build a ‘Wonderful Life’ since 1887.”

Grant Wishard is a writer in northern Virginia. His work has appeared in the Weekly Standard and USA Today.