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The Story of F&M Trust

A new trust company is born

National BankDuring the early years of the 1900's, many banking institutions were formed and banks rapidly sprang up in towns and communities across the nation. Through the years, banks have been challenged from the depths of the Great Depression in the late 1920's and early 1930's through the current ongoing consolidation of financial institutions, both large and small. F&M Trust has met these challenges throughout history. And this is our story:

On the evening of December 7, 1905, a group of businessmen, lawyers, farmers, doctors, and merchants met to discuss the organization of a trust company. Although a number of them were board members of another local bank (the National Bank of Chambersburg), they wanted to form a corporation that would better serve the community. At that time, national banks did not have fiduciary powers and they wanted to offer services like personal guardianships, trusteeships, and title guarantees.

The group was united in their mission: the formation of a corporation for general banking services to support the Chambersburg business community and "for the insurance of owners of real estate, mortgages and others interested in real estate, from loss by reason of defective titles, liens, and encumberances." An attorney by the name of Walter K. Sharpe suggested that the bank be named "Farmers and Merchants Trust Company" which narrowly won approval over "People's Trust Company."

On January 10, 1906, the bank was granted a bank charter by the Commonwealth of Pennsylvania under the name "The Farmers and Merchants Trust Company of Chambersburg, PA". Walter K. Sharpe was elected as the bank's first president.

The bank opened its doors on February 5, 1906 in a small front room located on the Memorial Square in Chambersburg. The room had previously been occupied by the Chambersburg Trust Company until it moved. Furniture and fixtures for the office were purchased from the Chambersburg Trust Company for $20.00. With hours from 9 to 3 each day and from 7 to 8:30 on Saturday evenings, the bank paid 3 percent on time deposits.

To get some idea about the value of the dollar during the bank's early years, consider that for $1 you could purchase four meals at the National Hotel. Or the same $1 would purchase you twelve shaves and a haircut at Sam Rinehart's barbershop. A new six-room frame house could be built for $2800. And F&M Trust's stenographer and assistant bookkeeper was paid a salary of $15 per month. Prospective employees were taken to meet each one of the board of directors prior to becoming hired. If you drank or smoked—you were not suitable for employment!

One of the early challenges that our bank's management faced was utilizing deposits to generate income. The bank had plenty of deposits and since there weren't automobiles, there weren't auto loans. Local farmers rode into town, tied their horse at the hitching rail in front of the bank and arranged for a loan to get their wife a new sewing machine or perhaps a piano for the family.

FM TrustF&M Trust moved to the south side of the National Bank (located across the street from our Memorial Square office) in 1908. The building was home to two banks: F&M Trust was located in the southern half and the National Bank in the northern half. The annual rent for this building, which included all banking facilities from janitor to vault, was $2,000.

In 1913 the H. M. White building at 20 South Main Street was purchased for $50,000 and would become the bank's home in July 1918. The move was made by employees loading all the machines, supplies, and money in peach baskets and walking across Main Street without a police escort or armed guard.

F&M Trust weathers the storm

As the end of the 1920's approached, the country was experiencing great prosperity. The stock market went wild and F&M Trust's stock was no exception, advancing from $30 to $80 per share in a short time. Many buyers purchased without considering book value or earnings, only to have paper fortunes disappear with the blink of an eye as the stock market crashed on October 29, 1929. Production fell off sharply, profits disappeared, and losses were on the rise. Consequently the 1930's wreaked havoc on financial times, and Franklin County was hit hard. Many banks were faced with a regularity of loan losses, and some closed, never to reopen. Franklin, Fulton, and Huntingdon were the only counties in Pennsylvania that didn't have a bank failure. Even as the bank's stock price depreciated from $80 to $20 per share, customer confidence did not waver. F&M Trust was hit by a lot of charge-offs and times were tough—but no depositor ever lost a dime. Bank employees rallied and agreed to take an across the board pay cut of 12½%. Interest rates on savings accounts fell from 4% to 1%!

As banks began to emerge from the depression, the FDIC was formed in 1933 and F&M Trust was one of the first banks nationally to join. During the tough times, F&M Trust had taken over farms and homes on loans that had defaulted. Over the next two decades the bank gradually recovered money as real estate prices increased following World War II.

Traditions and Growth

The bank began a long tradition in 1950 with "Know your Bank Day" where displays of agriculture from dairy and apple industries were placed in the bank. This tradition continued for over 50 years through the bank's tribute to the dairy industry with "Dairy Days."

In 1952, F&M Trust became one of the first banks in the area to create a retirement fund for their employees and a year later became the first bank in Franklin County with a drive-up window. In 1955, a second office was opened at 150 Lincoln Way East (our present day Loan Operations Center). It housed a modern drive-up facility with heated drive-up lanes to eliminate ice and snow—one of the first of its kind.

The first expansion outside of downtown Chambersburg occurred in 1959 when F&M bought the Marion Bank. By the end of the decade, deposits reached $14½ million.

The decade of the 1960's witnessed great growth for our communities. Interstate 81 was opened bringing relief from traffic that clogged downtown streets. In 1964 the bank purchased the former Wilcox Market and, following extensive renovations, opened the Guilford Hills Office to serve customers East of Chambersburg. It wasn't long before the bank's community office network expanded again, this time to the West of Chambersburg as the West Side Office opened in 1968.

The bank continued to grow - - - on the south and north ends of Chambersburg - - -with offices opening on Wayne Avenue and Philadelphia Avenue during the 1970’s. By the end of the decade the bank had installed a computerized operations system and deposits topped the $100 million mark.

Around this time, the bank began to promote and market itself as "F&M Trust" to distinguish itself from the other "Farmers" banks in the area. While our official name is "Farmers and Merchants Trust Company of Chambersburg, PA," you'll find that the name "F&M Trust" will appear on the majority of bank materials.

Technology and Market Expansion

The traditional way of banking was quickly changing. As bank's applied greater utilization of new technology, customers had additional methods of banking placed at their fingertips. F&M Trust installed four automated teller machines (ATMs) later joined the CashStream regional ATM network (which later became MAC, and today is the STAR network) in 1983.

Also that year, F&M Trust formed a holding company called Franklin Financial Services Corporation to position the bank for the future. Expanding into nearby communities, the Mont Alto State Bank became the second bank in the holding company in 1987. This expansion continued in the early 1990's as the Waynesboro office of Home Federal Savings Bank was bought in 1992 to become the seventh F&M Trust office, and a MAC/CIRRUS ATM was installed at Fayetteville.

In 1995 Mont Alto became an office of F&M Trust to offer consistent product offerings and services. A year later, the bank opened the Penn Hall Office at the Menno Haven-Penn Hall Retirement Community in late June, as well as entered into Cumberland County with the purchase of three former PNCBank branch facility locations in Newville, Boiling Springs, and Shippensburg. In 2000 the Ritner Highway Office in Carlisle became the bank’s fourth office in Cumberland County.

In 2001, the bank launched its web site and online banking service to add to customer convenience and accessibility. Enhancements over the next several years to online banking were added, including online bill pay, Franklin Busine$$Link, online trust access, and online loan applications.

The bank continued to grow with the acquisition of the former Fulton County National Bank & Trust Company in 2006, entering the Fulton and Huntingdon County markets. Community offices in McConnellsburg, Warfordsburg, Hustontown, St. Thomas and Orbisonia were added to the bank's retail delivery network. During the decade, other offices were added in Carlisle, Greencastle, Chambersburg, and Camp Hill. Today there are 25 F&M Trust community banking offices - six of which have Personal Investment Centers, 35 ATMs, and two Investment & Trust Services hubs (Camp Hill and Memorial Square - Chambersburg).

By 1993, as a result of mergers and acquisitions of competitors, F&M Trust became the largest locally-owned and managed community bank in Franklin County. The bank's tremendous growth and success can be attributable to many individuals throughout our company's history. It has been said of our bank's founding fathers that "no band of men were in a better position to organize a bank and to secure the cooperation and confidence of the public, which is a fundamental requisite of banking." Here was a "a cumulative experience of men who knew banking, of men willing to learn the art and men who knew the clientele needing banking service."

While the men who formed the company established the foundation for success, the directors, management and staff of F&M Trust through the years have been responsible for continuing this commitment to communities, customers, shareholders, and employees.