CENTURY OF BANKING: Costello learns the business from ground up
By ROWENA PLETT
Staff writer/photographer
Ed Costello of Marion is celebrating 50 years of service with Tampa State Bank. When he took over management in September 1953, the total assets of the bank were $600,000, with capital accounts of $72,000. Today, the total assets are $36,750,000, with capital accounts of $4,329,000.
A native of Tampa, Costello had a law degree and was a practicing attorney but had no banking experience when he accepted the job.
He succeeded Frank Rhodes, a "kindly old gentleman" who fell ill one week after he started, so, for the most part, Costello had to learn the ropes on his own.
"I didn't know 'sickum' about banking," he said, "but I wasn't afraid to ask questions."
When he had a situation he didn't know how to handle, he called neighboring bankers for their advice.
Once a year, together with other bankers, he attended a bank clinic at the University of Kansas.
The bank had two other employees, Alvina Klein and Zona Keefer.
It was a difficult time to get started in banking because Kansas was in a drought. The bank had some problem loans which were exacerbated by the drought.
In those years, practically every farmer had a cowherd but many did not own pasture for them which meant they had to rent grass. In drought years, pastureland was scarce and rent was high.
Costello encouraged farmers with cowherds but no grass to sell their cows, then buy calves in the fall based on the amount of feed they had raised. This was difficult for them to do because most had had cowherds for years.
Corn was a common crop, raised as feed for cattle and hogs, but milo was beginning to be used as a substitute for corn.
During drought years, the corn would dry up in July, making no grain and very little silage.
The county agent told Costello corn planted in Marion County would make a good crop about 25 percent of the time and milo would make it about 75 percent.
After some prodding, Costello persuaded most farmers, if they did not have bottom ground, to switch to milo.
He said at least two farmers later thanked him for his advice. A few farmers failed, but most managed to hang on until rains came again.
After the 1950s drought, the bank began to grow. By late 1972, the bank had about $2,950,000 in total assets and $220,000 in capital.
On Jan. 1, 1973, the Costellos (Ed and Mary) became sole owners of the bank. Their six children — Pat, Cathy, Chris, Teresa, Barb, and Mickey — all worked at the bank during summers and some weekends as they were growing up and eventually graduated from college.
Chris and Mickey continue to be involved with the bank. Chris rejoined the bank in 1982 after obtaining a law degree and has been president and chief executive officer for more than 10 years. Mickey is a KSU graduate and is the bank's vice president.
Together with Jim and Joan Donahue, the Costellos owned the Chase County Bank at Strong City from 1987 to 1993, when it was sold to Cottonwood Valley Bank.
During the 1980s, when land values plummeted, leaving many farmers in dire straits, Costello negotiated with customers who were near bankruptcy to arrive at a financial settlement.
"We realized if you sue a customer, you'll be tied up in the courts for two or three years with no return; instead, we took a loss, and the farmer could get out with dignity," he said.
In 1989, the bank opened a branch in Ramona. It was closed in 2002.
A new branch bank facility was built at 1100 E. Main in Marion and opened for business in April 1998. Costello said the expansion has resulted in at least double growth. As of March 2004, the bank has total assets of $36,566,000, deposits of $31,506,000, and $4,321,000 in capital.
Costello has been chairman of the board since 1991, leaving management of the bank to Chris and Mickey "with some unasked-for advice from the old man," as he put it.
After the bank celebrated its 100th birthday in 2001, the Costellos sold their interest in the bank to Chris and Mickey. Each of them have three children.
Chris' daughter Emily and son Kevin have worked weekends and summers and occasionally Mickey's daughter Bridget will show up for work.
Costello remains as chairman of the board. He is concerned about the trend toward bank mergers and its effect on local communities.
"It's surprising how many banks have disappeared since I started," he said. "Chris and Mickey have been doing a great job at Tampa State Bank. Hopefully, with good management, the bank will continue to be a family-owned-and-operated bank for another 50 years."
