Magistrates Vote To Move All County Banking To One Single Bank

Darren Doyle, story:
Magistrates voted 3-2 to move all county government accounts from Peoples Bank to Bank of Edmonson County at yesterday's Edmonson County Fiscal Court meeting.

District 2 Magistrate T.J. Massey spoke on a proposal that was presented to the court by representatives of Bank of Edmonson County at their previous fiscal court meeting. He explained that the county currently has 80% of their accounts at Peoples Bank, with balances totaling approx. $3.5M and the other 20% at Bank of Edmonson, with an approx. balance of $500,000.

Mag. Massey said that Bank of Edmonson County has offered competitive rates for the county, but those rates would only apply if all accounts were moved over. Massey did not say what the rates were at the meeting. County Treasurer Tammi Willhite said the county would immediately lose $7,000 in banking products that would have to be replaced if all accounts were moved. Those products include laser security checks and carbon deposit books, which she said are required for government entities. Massey said he thought the discussion had become emotional and he didn't understand why, and he said at even losing $7K now, the county's accounts would be better off in the long run by moving.

Treas. Willhite and Judge Lindsey said the rates would be the same overall between both banks, but Lindsey said the decision was up to the magistrates. Both Mags. James Vincent and Anthony Hennion asked about having a larger portion moved to Bank of Edmonson, and Judge Lindsey said Willhite showed an example of how to make a change from 80/20 to 63/37 while only losing $1500 in products; however, Mag. Mark Meeks said the agenda item was to vote on moving all accounts, not a portion.

With no more discussion, Meeks motioned to move all accounts from Peoples to BoEC, with Massey seconding the motion. Magistrates voted in favor of the motion except James Vincent and Anthony Hennion, who voted against. Mag. Gary Bagshaw recused himself of the vote due to a conflict of interest.

Today, we spoke with Magistrate Massey about his motion and vote and Massey provided much more context than was discussed in open court.

"The Bank of Edmonson County has approached the county multiple times about better rates but nothing has ever been discussed. I know the question has been asked before as to why there is so much money at Peoples Bank but not much at Bank of Edmonson County, and there's never really been much of an answer," Massey said. "Throughout the year, Peoples Bank has raised their rates and we obviously welcomed that. But once I started looking into it, I started laying out facts, and they were facts. Once Bank of Edmonson gave us a competitive bid, they asked for all of the money at a rate of 5%. We have two accounts right now at Peoples higher than 5% but the rest of them are lower, at somewhere around 4.85%."

Treas. Willhite told the Edmonson Voice that her job is simply to look out for the best interest of the county when comes to financial matters, and why she felt like the change would still be about the same.

"The proposal was based on the money being in the Fed Fund Rate program set by the Federal Reserve in Washington, D.C.. It being a federal program, when the target rates are set by the Federal Reserve, it is the same for any bank institution that falls within Federal Reserve guidelines. So this program is consistent over multiple financial institutions and all carry the same target rates under the Fed Fund rate program."

Massey said that by moving all the accounts over to Bank of Edmonson, it makes the county more money this year, which he did not completely clarify at yesterday's meeting. Other factors that Massey said went into his decision to support the move was that Peoples Bank has been sold four different times since some of the accounts were first created in 1975. He noted that Bank of EC has never changed ownership in their history. He said despite some scrutiny he has faced since supporting the motion and vote yesterday, he felt like it was the best decision for the county.

"I just started making direct comparisons, rates, and writing down facts. And again, these are facts," he said. "Bank of Edmonson County has three offices with their main branch located in Edmonson County. Peoples Bank has 138 offices with a main branch being based out of Ohio. Bank of Edmonson holds 83.69% of the market share in our county, currently. Peoples Bank holds 16.31% of that market share. Forty-five of 49 employees of Bank of Edmonson reside in Edmonson County, Peoples Bank has 3 employees that reside in Edmonson County. Bank of Edmonson pays $50,000 in deposit tax, Peoples Bank pays approximately $5,000 in deposit tax. Bank of Edmonson pays property tax of $1.7 million of property evaluation, which directly comes to fiscal court. Peoples Bank pays a property tax of $430,000 of property evaluation. Bank of Edmonson County closed 609 loans to county residents in 2023, totaling $28,126,744. At this time, and I didn't have comparable numbers for Peoples Bank, but I did learn that the growth tax from 2022 to 2023 for new property in Edmonson County was $32 million, therefore, if the Bank of Edmonson County closed $28 million of that, they obviously hold a lion's share of this amount."

Massey said he had to favor the proposal of Bank of Edmonson County when considering the total picture, and that's why he chose to support the motion to move all accounts.

"I stand by my decision to move all the county's money, but I think it should be revisited later," Massey said.