- Associated Press - Saturday, May 28, 2016

OMAHA, Neb. (AP) - The little ol’ savings and loan in Omaha’s Benson neighborhood made it through the Great Depression of the 1930s, the S&L; crisis of the 1980s and the financial meltdown of the 2000s.

Metropolitan Building & Loan Association also survived 94 years without federal deposit insurance - a rarity in today’s world of finance, the Omaha World-Herald (http://bit.ly/1TvOpHw ) reported.

But it won’t survive the financial habits of young Omahans who would rather spend their money or sock it away in retirement accounts than have passbook savings at Metropolitan Building & Loan.

“I could see it coming,” said Ralph K. “Skip” Brown Jr., Metropolitan’s president and successor to his father, Ralph K. Brown Sr., and grandfather, Leroy Brown.

“The old savers are dying off,” Skip said. “Their kids come in and pay off the loans, close out the accounts and go to the Bahamas.”

But he found a way to continue the business, located just south of Benson’s bustling Maple Street, although in a new form. “I’m happy and sad,” he said. “Sad that it’s all going to change but happy that it will still be going.”

This summer, Dundee Bank will take over Metropolitan’s 200 member accounts and dozen home loans and begin renovating the 1957-vintage office at 2739 N. 61st St.

Dundee Bank, 5015 Underwood Ave., also will open a branch in October or November in the reviving Blackstone neighborhood, at 302 S. 38th St., the former McFoster’s Natural Kind Cafe and, before that, a White Rose Oil Co. gas station.

“Dundee, Blackstone and Benson - three iconic Omaha neighborhoods,” said Jeff Royal, president of Dundee Bank, which actually is a branch of Security State Bank of Ansley, Nebraska.

By early 2017, Dundee Bank’s new, full-service Benson branch will reopen with banking products that Metropolitan has never offered, including checking accounts, certificates of deposit, debit cards, commercial loans and - that newfangled thing - an automatic teller machine.

“I’ve never touched an ATM,” Skip Brown said with a touch of pride.

In that way, he’s like his father and grandfather, who hung onto the old ways of doing business and had vowed to never rely on the federal government to insure the soundness of their financial practices.

Ralph Brown Sr. had to appeal to the Nebraska Legislature to keep that FDIC-free status, winning an exemption to a state law in 1984 as long as he promised to inform customers about the lack of deposit insurance every Oct. 1. It’s the last state-chartered savings and loan in the state, with or without deposit insurance.

“Metropolitan was and is a vaunted and respected financial institution,” known for its conservative lending policies, said State Banking Director Mark Quandahl. “They didn’t try to get too big, and they didn’t chase big profits.”

When Quandahl’s bank examiners test Metropolitan’s safety and soundness, they review its books - literally, because the records are written down, not entered into a computer.

Loan documents, for example, are folded into envelopes with photos of each house taped to the front and the borrowers’ names at the top, typed on one of the office’s 1950s typewriters.

Customers buy money orders instead of writing checks and have passbooks for their savings accounts, with withdrawals and deposits carefully noted inside.

Because it’s a mutual savings and loan, each depositor is a part owner. If you put $100 in a passbook account, you own one share of stock.

Steve Kosiski, who took out his first home loan with Metropolitan in 1981 and has become a friend of Skip Brown’s, said the sale is a business decision that makes sense for all concerned.

“I think it’s a great move for him,” Kosiski said. “I think it’s a great move for the bank to hopefully expand and become a better facility.”

He plans to roll his savings into a Dundee Bank account - with deposit insurance - but then, he never worried about that as a Metropolitan saver.

“I felt confident with all the banking they’ve done for me,” Kosiski said.

Brown requires at least a 20 percent down payment on mortgages, and the average loan is about $40,000, with a loan limit well below $100,000. That restricts the neighborhoods where he can finance homes.

Home financing, of course, was the reason Metropolitan and other savings and loans were formed. Early in the last century, few banks made home loans because commercial lending was more profitable.

Leroy Brown was a founder of Metropolitan in 1922, located then at 24th Street and Ames Avenue. When a bank in the far-off town of Benson failed in the Crash of 1929, Metropolitan opened a branch there, eventually consolidating its offices in its new building in 1957.

Skip Brown said Metropolitan keeps its finances sound by lending much less than the properties are worth. It relies on substantial reserves, in-person home appraisals and personal knowledge of borrowers’ finances.

The bank hasn’t had a loan turn sour since 1963, and that one was a borrower who stopped making payments because of dementia.

Despite the conservative lending philosophy, several years ago Brown began seeing changes that threatened Metropolitan’s future.

Members were aging, and their children weren’t interested in passbook accounts, even with 1 percent dividends that are higher than interest paid on insured bank savings accounts.

Depositors slipped from 350 in 2008 to about 200 today, with $551,000 in their accounts, half as much as a decade ago. Loans dwindled from 75 mortgages totaling $950,000 in 2008 to 12 today, totaling about $500,000.

As total savings declined, the amounts that Metropolitan could loan declined, too, so Brown had to turn down some good loan applications. Profits declined, and the downward spiral shows no sign of reversing.

Until recently, Benson’s downtown district was moribund, with vacant storefronts and signs of neglect. Brown thought that after his father died, he might have to close Metropolitan and turn the building into an office for his law practice, insurance agency and income tax preparation service. (His laptop for those businesses is the only computer in the building.)

“But now Benson is hopping,” he said, becoming a lively hub of restaurants, taverns and other small businesses.

Through friends in the industry, Brown made contact with William Brush, president of Security State Bank, who came to the Metropolitan office and liked the location, close to a city parking lot and just steps away from busy Maple Street. “It’s so retro, and so much kind of a historical small-town feel, with the personality of the Browns,” Brush said. “That’s a little bit of our roots. It has a good feel.”

Dundee Bank’s main office is in a building formerly occupied by a grocery run by Warren Buffett’s grandfather, giving it a similar connection to Omaha’s history, Brush said.

“We’re hoping to get the same good feelings from that little building there in Benson,” he said. “I could sense the new vibrancy there.”

A purchase agreement followed, and Metropolitan’s depositors-owners unanimously approved the sale. Their passbook savings, plus a premium, will be transferred to insured accounts at Dundee Bank. Approval from the Banking Department is pending.

Royal is getting bids on the renovation and will work out staffing in time for the reopening. Brown is to remain at the Benson branch, making Dundee Bank part of Benson’s commercial community.

“We’re really gratified that Skip is going to stick around,” Royal said.

The building will get a new roof and new utilities, an entirely new interior and more space, with the front bumped out toward the sidewalk to house a walk-up ATM.

Brown, 58, said he figures that he has 30 years’ worth of work ahead. His grandfather worked on a Monday, fell ill on Tuesday and died on Wednesday at age 84. His father worked until a few months before his death in 2013 at age 88.

One thing Skip won’t miss: Working every day. Taking a day off is difficult, he said, and a week’s vacation is unheard of, even though he keeps up his hobbies: driving in dirt-track NASCAR races and flying radio-controlled airplanes with sons Nathan, Jacob and Micah.

The remodeling will change the old office forever, removing its fish trophies, its wallboard listing of addresses and prices of homes for sale, its placards advertising money orders and legal services, its rack of rubber stamps, its hand-cranked adding machines and its 1950s furniture.

The massive Diebold safe - carried on a flatbed from 24th and Ames to Benson nearly 60 years ago - is embedded in a wall and used to lock up documents at the end of the day. It might be put on display in the new office.

After all the changes, Brown will be the depository of Metropolitan’s history.

For a few years, he brought his grandfather to the office, where he would scan the books with a magnifying glass. One day Skip, working as a teller, received a $50 or $100 bill from a customer and stepped away for a few seconds to get a receipt. When he returned, the bill was missing - in his grandfather’s hand. “Never leave money on the counter,” Leroy Brown instructed.

In 1986, Ralph Sr., sitting at his desk, pulled out a pistol and fired three shots at a would-be holdup man who burst into the office wearing a ski mask and carrying a Luger.

Skip chased the man, who dashed out of sight but was arrested the next day after a customer supplied the license plate number of the getaway car.

Ralph Sr.’s favorite movie was “It’s a Wonderful Life,” a 1946 classic about a small-town building and loan run by George Bailey, played by actor Jimmy Stewart.

Ralph Sr. could imitate actor Lionel Barrymore, who played the villainous banker Henry Potter, but he identified with Bailey and even had a George Bailey doll, given to him by a customer.

When Dundee Bank puts its FDIC decal on the remodeled office window, Skip Brown expects to hear his father stirring in his grave. But the alternative was simply closing.

“He knew something was going to happen, but he didn’t want to change anything,” Brown said. “He wanted to stay the course. It’s been a wonderful life. I’m glad we can keep it going. Now we’re going to have all those bank services right here.”

And he might even try out the ATM.

___

Information from: Omaha World-Herald, http://www.omaha.com

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