Shelter Bank, a little-known local banking asset

When banking, most people don’t have insurance on their minds. But one of Columbia’s largest banks is part of a regional insurance company based in the city.

Shelter Financial Bank, a wholly owned subsidiary of Shelter Insurance Companies, holds more than $152 million in assets,  $90 million in deposits and $148 million in loans. Although most of the bank’s customers are Shelter Insurance clients, the bank is open to the general public at 1817 W. Broadway.

Shelter Bank and other community banks in town offer similar products, such as loans for cars and boats, and similar deposit products, primarily certificates of deposit and money market accounts. What Shelter does not have is a wide network of physical buildings and drive-through services. The lower overhead makes for greater efficiency, allowing the bank to pay more for deposits, charge less for loans and pass the savings on to customers, said Ron Wheeling, president and CEO of Shelter Bank.

“We’re a little different from other banks in that we don’t have ‘brick-and-mortar’ locations that we are operating from,” Wheeling said. “We have a physical location here … and of course we have some customers who come in and deal with us in person, but the majority of our business is done through agents.”

Shelter Insurance has 1,300 agents in 14 states who can sell banking products. Bank customers also can submit loan applications and deposits over the Internet.

“I couldn’t ask for better service or better product than what they’ve provided me,” said Mark Pfeiffer, attorney with Bley and Pfeiffer, who is both a commercial and personal customer. “They’re a creative lender; they’re not afraid to step outside the box to find creative ways of putting together a good package for their customers.”

Wayne Powell, who is a client of two other local banks as well as a long-time Shelter Bank customer, said he often purchases certificates of deposit and says he likes Shelter Bank because of its rates and service. “The rates are always competitive or better,” he said. “I’ve always liked the way they’ve tended business.”

Local Shelter agent Clint Miller said every month some five to 10 of his customers ask about the bank and usually work directly with the bank. Chuck Wilson, another local Shelter agent, said his clients request about five or six loans a year. “What’s good for me is it’s so simple,” Wilson said. “They just make it almost effortless to help a client get a loan.”

Shelter began the bank began nine years ago, shortly after the federal government allowed insurance companies to offer banking products, Wheeling said. In addition, he said, the bank grew out of the systemic financial service relationship that already existed between insurance agents and their customers.

“Customers already know and trust their Shelter agents to help them with insurance products – their homes, their cars, life insurance and annuities; it’s a natural extension of that financial services portfolio that a Shelter agent could offer to their customers,” Wheeling said.

The bank chose Columbia for its headquarters rather than a larger metropolitan area because its connection to the company headquarters allowed it to keep overhead low. A move to a larger metropolitan area would have meant much larger physical and operating costs such as those taken on by traditional banks, Wheeling said.

“It would have meant a more retail strategy with bricks and mortar, drive through tubes, and giving out dog biscuits and suckers,” he said. “We’re sort of the Sam’s Club of banking. We’re a little bit ‘no frills.’  We don’t provide every service that typical banks do, but the ones we do provide, we provide with a great deal of personal touch and at a rate that’s typically better than most banks.”

The bank began originally as a consumer loan business, specializing in automobile loans, but has expanded to offer other types of loans, such as personal and commercial real estate loans. Because it kept a conservative focus and never took on risky loans like other mortgage lenders did, Wheeling said, the bank has not been hurt by the mortgage crisis.

“In fact, we may have been helped by it,” he said. “There was a lot of shenanigans that went on out there in the early 2000s, and we didn’t participate in them. We have not been hampered by having to deal with a large volume of bad loans like some people in the market.”

Wheeling said Shelter Bank had its best year ever in 2008, both in the amount of loans made and profitability. “We are going to break all previous existing records, both in terms of total assets and in terms of earnings as well,” he said.

Wheeling says the Shelter formula is the secret of its success. “We concentrate on safety first, and we concentrate on earnings second,” Wheeling said. “Growth is important, but we never concentrate on growth to the sacrifice of the previous two.”