Ag bank's history with Jack Henry goes back to tech firm's founder

A $229 million-asset community bank can credit its longstanding relationship with Jack Henry and his eponymous company for some of its strides in technology.

First State Bank of Purdy in Purdy, Missouri, has served as a testing ground for core software company Jack Henry & Associates for decades. Its proximity to the Jack Henry headquarters eight miles away in Monett was a valuable advantage before the world moved online.

The bank was the second customer to ever go live on Jack Henry's core system and is now its oldest existing customer. The fruits of that relationship have enabled a small ag bank to offer technology to its customers that may be modest by regional and large bank standards, but make sense for its agricultural base — dispelling the notion that farmers are averse to technology.

"Bankers who are in the ag space do it to themselves — 'my customer will never sign up for this, they like me sitting across the kitchen table and collecting financials or want to stop in the branch and hand their check in,'" said Jennifer Roths, partner at West Monroe. But she finds that features such as remote deposit capture, document uploads and electronic signatures are welcome once ag clients realize the efficiencies, and adoption is higher than banks expect.

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The Jack Henry-FSB connection dates back to the 1970s.

Glen Garrett bought First State Bank of Purdy with a friend in 1974. Jack Henry, co-founder of Jack Henry & Associates, was once a controller in Garrett's machine shop. Henry conceived of Jack Henry, the company, with co-founder Jerry Hall after his position as data processing manager at Gillioz Bank & Trust was eliminated following an acquisition. He asked for a copy of Gillioz's software rather than severance.

Henry and Hall used FSB's IBM System/32 to write their original software after-hours, since at the time "computers were not easy to find," said John Garrett, Glen's son and the current chairman of FSB's board. The company launched in 1976 with Henry's name only because Hall preferred operating behind the scenes.

"Jack was the visionary, Jerry made it happen," said Jonathan Baltzell, president of bank solutions at Jack Henry.  

Beyond the fortuitous location, "we were open to them trying new things and using us as a guinea pig," said John Garrett. "It was always in our best interest because we got the newest and best stuff first."

FSB, which uses CIF2020 as its core, is a more formal beta tester today. For instance, it tested OnBoard Deposits, an account-opening product, in 2015. It is currently a beta tester for Banno Business, Jack Henry's digital banking platform for small- to medium-size businesses.

"You know they will be honest with you," said Julie Morlan, senior managing director of product design at Jack Henry. "They are super upfront about the problems they see."

The bank today uses Jack Henry's Banno digital banking platform, including such features as remote deposit capture and online bill pay, and its Vertex teller system that lets tellers post payments in real time. Chief Operations Officer Amanda Lee expects to roll out contactless debit cards by the end of this year.

"Our relationship with Jack Henry enabled us to have all the features you expect to have at a big bank with a community bank feel," said Lee.

Remote deposit capture and contactless cards are standard at larger institutions. Still, the timing made sense for FSB's customers. Both Baltzell and Lee report that most businesses in the community only enabled tap-to-pay capabilities a couple of years ago.

These features also sync well with FSB's ag client base, which range from family farms to large commercial businesses.

"Our farmers love remote deposit capture," said Lee. She finds that older generations are some of its most avid users, whereas "the younger farmers want to come in and talk to a banker," she said. "They want to meet the banker that helped their dad and grandpa."

She expects these kinds of in-person relationships will always be important.

"Technology is just one piece to make that better," said Lee.