CHELSEA STATE BANK, A BRIEF HISTORY
1897 - 2009

Chelsea state Bank marks December 18, 1897 as its birth date. On that day, Reuben Kempf and Charles H. Kempf, who had operated a private bank known as R. Kempf and Brother since 1876, consented to sell their private banking business to a diverse group of Chelsea investors. Twenty-one individuals joined in the purchase of four hundred shares of stock and the Kempf Commercial and Savings Bank was born with an initial capitalization of $40,000. Articles of Incorporation were filed, a State banking charter was obtained, and the bank opened for business on January 17, 1898.

Initially the Kempf Bank had five directors: Reuben Kempf, Harmon S. Holmes, Charles H. Kempf, Rolland S. Armstrong, and Christopher Klein. The bank operated with essentially two employees, John A. Palmer, Cashier and George A. Begole, Assistant Cashier. To give a flavor and sense of the times, early board minutes include the approval of a $15.63 expense for 2 1/2 tons of coal and a recommendation from the Audit Committee to purchase a typewriter in 1903 "in order that the correspondence of the bank may be printed and in keeping with modern progress."

A second bank existed in Chelsea at the turn of the century known as Chelsea Savings Bank. It was principally owned by the Glazier family and had been chartered by the State in 1880. In December 1907 the Chelsea Savings Bank was closed by the State of Michigan as it was judged to be insolvent.

This left Chelsea with one bank, the Kempf Commercial and Savings Bank, and in April 1908, the Farmers and Merchants Bank of Chelsea was incorporated and granted a charter by the State. As its name implies, this bank was formed by a large group of Chelsea area farmers and merchants. The bank's initial capital was $25,000 consisting of 250 shares at $100 par value with 56 individuals owning the stock and no one individual owning more than ten shares.

The first directors of the Farmers and Merchants Bank were John F. Waltrous, Peter Merkel, Christian Grau, Lewis Geyer, Joseph H. Guthrie, C.H. Kalmbach, John Kalmbach, Orrin C. Burkhart, and John Farrell. Paul G. Schaible, Sr. was one of the primary organizers. He served as Cashier and was the only employee in the early years.

Both Chelsea banks flourished over the next two decades. By
January 1929 the Kempf Bank had accumulated $850 thousand in total assets and capital of $140 thousand and the Farmers and Merchants Bank had grown to $1.1 million in total assets and capital of $130 thousand. The Kempf Bank operated out of the building on the southwest corner of Main and Middle as it had since inception. The Farmers and Merchants Bank was originally located on the west side of Main street one storefront north of the old drug store on the northwest corner of Main and Middle. In 1927 it purchased the vacant stone building formerly occupied by the Chelsea Savings Bank, renovated it, and opened for business there on July 9, 1927.

The country fell on hard times in the early 1930's and many banks across the nation failed. Although both Chelsea banks were conservatively managed and healthy, they did decide that operating as one institution would be more practical. Thus on February 24, 1934 the two banks merged to form the Chelsea State Bank "for the purpose of greater efficiency and economy of management, as well as for the general welfare of said corporation and the community wherein they transact business."

Paul G. Schaible, Sr. was named President of the bank and would remain in that position for the next 28 years, when Paul E. Mann succeeded him. Chelsea State Bank became a member of the newly formed Federal Deposit Insurance Corporation in 1935 with deposits insured to $5,000. The bank grew and prospered as the Village of Chelsea and its neighboring communities grew and prospered. It continued to operate out of the stone Glazier building at South and Main until the late 1960's when the need for drive-up banking services and expanded facilities necessitated a move. Wanting to stay in the downtown area, the southeast corner of Main and Orchard was finally decided upon as the site for a new building. The bank opened for business in its new quarters in February 1968 with total assets of $15 million. The stone building, which had been the bank's home for 41 years, was given to Washtenaw County to be used as a District Court.

Over the next three decades the bank would continue to grow steadily and prosperously, again paralleling the growth of Chelsea and its surroundings. In 1980, with total assets now $48 million, a branch office was opened at Old US 12 and S. Main. This site became the location of a new 17,000 sq. ft. headquarters building in 1993. In 1995 CSB pioneered image checking technology in this area and converted all of its customers to the latest record keeping convenience with image statements.  In 1997 the bank finished a complete renovation of its former headquarters at Main and Orchard, demonstrating a commitment to a vital and dynamic downtown Chelsea. A 100 year anniversary celebration took place in the summer of 1997 and was truly the celebration of the century.  The bank also made the donation of the century by starting the Chelsea Community Foundation with a $250,000 opening pledge. The year 2000 featured the bank’s first branch office outside of Chelsea when the Dexter Banking Center office of CSB opened in Dexter. In 2003 the bank expanded its image technology into its internet banking product and made customer check images available 24/7 at www.csbonline.com.

By June 2007 the assets of the bank had grown to $200 million – quite a change from 1897! Such growth and longevity can only come through consistently conservative business methods and totally fair, courteous, and honest treatment of all in its business dealings. Although technology in banking at CSB has come a long way, these principles have not changed.

The current directors, officers, and staff of Chelsea state Bank pay tribute to the founders of this organization for their integrity, resourcefulness, and determination; to former directors and employees for their dedication, honesty, and service; and last, but certainly not least, to all customers for their patronage, loyalty, and support. 112 YEARS - THANKS TO YOU!

Community Involvement:

Chelsea State Bank is your true community bank. We have been serving customers in the Chelsea / Dexter area since 1897, through good times and bad.