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Tom Ashenbrener admits he can get choked up about First Federal Park. The all-access playground represents something profound to the Board Chair—tangible proof that some things matter more than maximizing profit.

“It’ll brighten your day. It’s for all children and all families, no matter what their physical abilities are,” shares Ashenbrener.

The park exists because First Fed operates as Idaho’s only mutual bank, a structure where depositors—not shareholders—own the institution. Some may consider this an old-fashioned concept in a modern world, but it enables First Fed to make decisions that publicly traded banks wouldn’t consider.

Owned by Customers, Not Wall Street

“In 99 percent of banks, there are stockholders who are the owners,” Ashenbrener explains. “In mutuality, the depositors are actually the shareholders—the owners. They don’t get dividends on a quarterly basis. Instead, that money is available for better lending opportunities, better rates, and the ability to hire top talent.”

Jason Meyerhoeffer, First Fed’s CEO, sees this structure as fundamental to everything the bank accomplishes. “As a mutual, since we are owned by our depositors, our interests are very well aligned with our customers’ interests.”

When First Fed decided to gift an all-inclusive park to celebrate its 100th anniversary in 2015, the decision flowed naturally from its mutual structure. “If I was a shareholder of a stock-owned bank and the executive team said we’d like to gift a big chunk of money to a park, I’m not sure I’d be that excited about that,” Meyerhoeffer admits. “But as a mutual, we thought it was a great thing to do to say thank you to the community.”

When Character Guides Decisions

Alan Horner, who served as First Federal’s CEO for 18 years, recalls pivotal moments when the mutual structure guided crucial decisions. During one economic downturn, when a family faced foreclosure on their home, First Fed went to the auction and bought out the first mortgage to become the family’s sole lender.

“They were great people, very involved in the community, but had met some hard times,” Horner remembers. “That kind of set a trend for us throughout our history.”

Years later during the pandemic, when stimulus programs and PPP loans added considerable money into the system, many banks paid zero interest on deposits. As Meyerhoeffer explains, “From a purely financial standpoint, that was probably a good business decision by those institutions. But from our standpoint, as a mutual, we felt we had an obligation to make sure that we still offered customers competitive rates.”

Sustainable Growth and an Employee-First Approach

While mutual banks face growth limitations, First Fed’s leadership sees this as a strength. “We can only grow as fast as we grow retained earnings,” Meyerhoeffer explains. “I think it makes for a more stable and safe organization because we don’t grow at a rate that maybe isn’t healthy or reach for earnings that puts us in higher risk areas.”

Reinvestment is also a hallmark of a mutual. Without the need to pay dividends, First Federal is able to put money towards customer service and offerings as well as technology, facilities, and, especially, people. Horner recalled a time when the bank had one IT employee; today there are six. Staffing, and the support they receive, is a significant point of pride. This employee-first approach was readily apparent during the pandemic. When many organizations struggled with workforce decisions, First Fed was able to continue its employment plan.

The mutual structure also creates unique employee benefits. Without stock incentives to offer, First Fed compensates in other ways, including what Meyerhoeffer describes as “a generous 401(k) plan and other benefits that take the place of what stock incentives would be.”

More importantly, employees work toward a mission they believe in. “Our mission is to enhance the well-being of our customers by providing solutions to their financial needs,” Meyerhoeffer notes. “That’s a really powerful statement for employees to have as their North Star.”

Community Dividend in Action

Most notably, the mutual structure enables what Meyerhoeffer calls a “community dividend”— where profits that would typically go to shareholders instead flow back to local communities and causes. This support appears through donations, sponsorships, paid employee volunteer hours, and even as large as the establishment of a charitable foundation.

The First Federal Foundation, created from what Ashenbrener calls “a random idea” when the bank received investment funds, provides grants to nonprofits throughout the Magic Valley and Treasure Valley. Since it was established in 2003, the Foundation has awarded over $1.5 million to more than 200 different Idaho nonprofits, supporting educational, civic, health, human services, social, and cultural organizations.

A Local and National Rarity

First Fed’s commitment to mutuality makes it unique in Idaho—and increasingly rare nationwide. “We are the state’s only mutual bank, and we have latched on to the beauty and benefits of being a mutual bank,” Ashenbrener explains.

That commitment faces ongoing pressure as consolidation continues to sweep the financial industry. “If we were ever to convert to a stock-held bank, probably within 10 years we wouldn’t even be around,” Meyerhoeffer observes. “Some big bank would come and buy us, and we’d go away.”

Instead, First Fed is focused on continuing a 110 year-old legacy and a business model that prioritizes purpose over pure profit. It helps the bank take the long view—investing in employees, serving customers, and strengthening communities.

“It’s Idaho people helping Idaho people,” states Horner.