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Chad Hoffman
President & CEO
Richwood Bank
Interview conducted by
Bud Wayne, Editorial Executive
CEOCFO Magazine
Published – September 9, 2024
CEOCFO: Mr. Hoffman, you have been with Richwood Bank for 30 years, serving as teller, bookkeeper, and CFO before taking over in leadership. Would you tell us about that journey and how it developed to where you are today as President and CEO?
Mr. Hoffman: I started on January 24th of 1994, so I just hit my 30th year at the bank. I had worked as a teller here during summers and I wanted to get my CPA license back when I graduated from college. If you worked at a CPA firm for two years, you were able to get your CPA license and if you worked in industry it took you four years. After I received my license, I accepted a job at another community bank because I wanted to work in banking long-
CEOCFO: Would you give us a little background and history of the bank and how it developed from its founding?
Mr. Hoffman: The Richwood Bank was established in 1867. My family was not involved in the beginning. The bank was started by G.B. Hamilton, who was a pastor and the postmaster at the time. My grandfather did not get involved until 1925. We are closely held and are owned by the farmers, business owners, and residents of the communities we serve. We have no institutional stockholders. We covet our stockholders; they have been very kind to us and we have
a waiting list for our stock today.
The part of the history that I like is that there were three banks in Richwood during the great depression and ours was the only one that survived it. We had a president at the time whose name was Milo Strosnider, he was 6 ft. and 4 inches tall, and they referred to him as having pie pan hands. He would stand in the lobby every day when people would come in and out. Often they left without taking all their money out. He was an imposing figure and a lot of people thank him for the bank's surviving the great depression. With his size he probably made people feel uncomfortable and maybe a bit intimidated from pulling all their money out.
In the state of Ohio, we are registered as The Richwood Banking Company. That goes back many years to the early 1900s. However, in 2015 we redid our logo and branded everything, so we have a branded house. We refer to ourselves today as Richwood Bank. We also have Richwood Marketing, Richwood Payroll, Richwood Financial and Richwood Coffee that we run today.
CEOCFO: People, family, and community seem to be central to your vision. Would you explain what that means and how it sets you apart from other banks in the areas you serve?
Mr. Hoffman: Our vision is to Inspire, Protect and Celebrate anything that helps communities thrive. We strive for a stronger community so that local businesses, local organizations, and even the residents themselves are more financially stable. If the community is stronger, then the bank is going to be stronger.
CEOCFO: You as a leader emphasize "innovative thinking." Would you give us a couple of examples of that and how it makes a difference to your customers?
Mr. Hoffman: In 2014 we had one of our strongest financial years. We were in the top ten percent of financial performance in the state of Ohio. We were operating well but we looked like everyone else. We strategically decided that we wanted to enhance the community banking model. When you look at the mergers and acquisitions driving the numbers of banks down quickly, it was like being a Blockbuster Video. You are looking at your model and saying it is fine when you know it wasn’t and that a change was coming. We were trying to enhance the community banking model a little bit. Therefore, we decided to add some unique services to our model that would benefit our customers and the bank. Now have Richwood Marketing, Richwood Payroll, Richwood Financial, Richwood U and Richwood Coffee.
Richwood Marketing is an advertising firm that helps our customers drive business. We build websites, logo design, and ads for our customers. We also provide social media posting and monitoring to help them stay on top of today’s selling techniques. There is a great book out there called, The E-
With Richwood Payroll, we do payroll for approximately 300 companies currently. They have anywhere from one employee to well over 300. A lot of small businesses do not perform their payroll well and they get penalized because they do not pay their taxes on time, or they make mistakes. It is one more stress that they have that we can alleviate. They trust the bank because they have their accounts here, so for us to do their payroll seems like a perfect extension.
We have Richwood U, and we bring in speakers and have classes and we partner with schools in providing financial and business literacy classes to help them become better managers and leaders as well as better strategists. We try to help small businesses get information that could help them grow.
CEOCFO: One thing I noticed unique to you is your Richwood Coffee Brand. Would you tell us about that, the purpose, and how successful it has been?
Mr. Hoffman: It all came from the fact that we were trying to change the community banking model. Our lobbies looked like the 1950s with the blonde wood. The teller windows even had the bars on them. We wanted to do something that brought more people to the doors. Today most of the time the big banks, or even regional banks, do not have physical locations. Competitively, we wanted to leverage the biggest advantage, our locations, that we have over them.
We started thinking about it, we were going to put in a wishing well and have a wheel with water so kids could come in and flip coins into it. We thought it would be fun but thought it would need to be cleaned regularly and provide a lot of noise in our lobby.
We decided we had the space, and everyone seems to like coffee shops today so let’s give it a try. I called the Federal Reserve and told them we were thinking about having a coffee shop and asked them if they had any problems with that. The initial response was "No, I don't think we will have any problems." I got a call from them the next day and they said they would have a problem, because the Glass-
We started thinking about it and decided to use a donation model. If you come in and make a $20 donation, you receive, as a thank you, seven cups for our coffee shop. What you decide to put in the cup is up to you.
The donations go to a beneficiary that the individual designates. We have a list of beneficiaries for them to choose from. All of them are customer of the bank and non-
CEOCFO: Who makes the coffee for you that is branded as Richwood Coffee?
Mr. Hoffman: We use a local company called Crimson Cup, which allows us to brand it Richwood Coffee because we do not sell it. It is an excellent coffee and a Starbucks competitor. We have smoothies, frozen coffee, or anything a normal coffee shop would do. However, we don’t have an espresso machine. We use a Nestle pushbutton machine to do Americanos and Cappuccinos because I do not want the loud sound of an espresso machine in the lobby.
It has become a win/win/win. July we had our second best month ever in coffee donations with over $18 thousand in donations. This model is in six of our nine branches now. Last month we passed $750 thousand in donations since the inception of the program!
When Capital One came out with their Café model, I received hundreds of messages and texts saying they were copying Richwood Coffee!
CEOCFO: How does all this get paid for? Is it through the bank?
Mr. Hoffman: Yes we pay for it. It is part of our marketing dollars. It is the strongest marketing that we do because if you think about it the organizations that we give to and they are out there marketing us. They are saying "Hey don't get your coffee at those other places, go to Richwood Bank and donate and you will get a great cup of coffee but you will get to donate to us." This means I have other organizations out there that are pushing us as a bank. We have Wifi in the lobbies and seating for twenty to thirty people. Students can come in and do homework. We have a pinball machine in most of the branches too. There is an energy in the bank that feels more like a coffee shop than a bank with cattle stalls and bars. We want to be that third place between work and home. They come to us before they even go to work or school. When I go to the lobby I see junior high and high school kids. It’s great! We want to make it an atmosphere that people are attracted to and not running away from.
CEOCFO: How does that work with the other services? Are you allowed to charge for the marketing and payroll services?
Mr. Hoffman: As long as they are a customer of the bank, by the regulations I am allowed to do those services for those individuals. If they are a customer of the bank, it is considered financial services that I am providing.
CEOCFO: Have there been any significant changes to your team over the past few years? Also when bringing on new members to your team, how important is education and experience?
Mr. Hoffman: Education is huge. We love to grow from the inside. There is a huge focus on growing skill sets internally. The challenge is we have grown so rapidly. In 37 months we grew from 500 million in assets to over a billion. That required some skill sets that I did not have on board yet. In 2021 and 2022 I brought on some new leaders that had worked at billion-
I like to hire someone who doesn’t have a banking background but comes in with other types of experience to share with the team. It is not that we won't hire bankers. I find people have ideas in their minds about how banks are supposed to work, and we are trying to break that mold. I love hiring team members from the hospitality industry. They can teach us a lot!
Our goal is to be trusted, friendly advisors to our customers’ finances. We also want to provide an unique experience in the industry that keeps you coming back!
CEOCFO: With all the transactions being done online and through mobile devices today, security has become very important. How are you addressing these issues?
Mr. Hoffman: We invested in our IT team. We have a very strong Chief Information Officer and Chief Information Security Officer. They work with knowledgeable companies that know how to defend us and we fully leverage those partnerships. We realize the number one thing is trust from our customers, and that comes right down to security and confidentiality. We take it very seriously. We put a lot of investment into this, and I believe we have some of the best products in the market today. We are utilizing vendors as well as in-
CEOCFO: You have a board of directors and also an advisory committee. Would you tell us about their role and how helpful they have been?
Mr. Hoffman: The way we run our board is kind of a regional thing. Several of our board members represent one of the communities that we operate in. They can help us be included in some things and maybe avoid other things because they have a knowledge of their market that maybe we don’t. These are not bankers coming in to serve on our board; these are local people who have a desire to keep the community strong and to keep a strong community bank. They are not interested in selling to larger institutions, they want to keep a strong community bank and they can help us with opportunities in the communities where they live, work, and play, and opportunities to grow with intention.
CEOCFO: You have locations in Richwood, Plain City, Marysville, LaRue, Huntsville, Delaware, Springfield, and Bellefontaine. Would you tell me about the businesses in your communities? Which industries would you say are the backbone of the communities, providing jobs and community development?
Mr. Hoffman: We are in Central Ohio and there are a lot of things going on. There is a lot of farming and industry here. Ag is the backbone of our area, but we also have manufacturing, IT, and insurance. We were very fortunate to have many different successful industries, but we still find agriculture as the overall core.
CEOCFO: Are you more of a business/commercial bank than a consumer bank? What is the mix and would you like to see that change?
Mr. Hoffman: From a lending perspective, it is going to be mostly on the commercial and agricultural side. We do consumer lending, especially on mortgages. From a dollars-
CEOCFO: Are you more commercial than Ag or more Ag than commercial?
Mr. Hoffman: I would say commercial has probably exceeded agriculture in the last few years, just because of the growth and then some of the areas that we moved into. Ag used to be 70%, I would guess it is somewhere in the 30% range today. It is probably more like 50% commercial. The rest of it would be consumer.
CEOCFO: How is it that you can reach the AG community, do you look for people that have a background in AG, or even with any other kind of lending, what do you look for in your people?
Mr. Hoffman: What is nice, being in central Ohio many of our people are graduates of Ohio State. Ohio State has a strong Ag department and Ag Econ is a common degree our loan officers obtained. I grew up on a farm, I was a farm hand through high school. We had livestock and grain. Most of our loan officers have a familiarity when we are talking to farmers, we understand what challenges they have and where we can help. It’s humorous during growing season, because of our farming background, many of us get nervous when it is not raining, or it rains too much.
CEOCFO: You have 9 branches; are you looking to grow that number shortly?
Mr. Hoffman: We did make one purchase back in 2018 and it brought two branches on. It was about $120 million to our bottom line when it comes to our balance sheet. That is one-
CEOCFO: In closing, you serve on several local boards. What is the benefit to that and why is Richwood Bank important to the fabric of the community?
Mr. Hoffman: I think there is a symbiotic relationship between the businesses, the farmers, the community organizations, and the bank. If one does well, they all get better. We have many team members who serve on boards in our community. We, as a bank, incentivize them to participate. It helps us all to be stronger. Most of our staff lives in the places that we operate. We all want a nicer place to live, work and play.