The Federated Bank (formerly known as the Onarga State Bank) was authorized by the State of Illinois Auditor's Office to commerce business on January 30, 1918. James Kewley, Wilbur Kerns and Henry Knoche were granted permission to organize such a banking association with Capital Stock of $100,000, divided into 10,000 shares of $100 each.
James Kewley was the first President of the bank, and Wilbur Kerns was its first Cashier. Following the death of Mr. Kewley in 1926, Wilbur Kerns became President and Otto Maddin became Cashier. During the year 1926 Mr. Kerns transferred his ownership to G.B. Egley, who became the President.
In 1983 the Onarga State Bank changed the name to Federated Bank of Onarga. In 1985 a couple of changes were made: the bank purchased the Bank of Chebanse, Chebanse, Illinois, and changed the name of both banks to Federated Bank; permission was granted by the State of Illinois and Federal Deposit Insurance Corporation to open a banking facility in Loda, Illinois. And in 1997, Federated Bank received like approval to open a banking facility in Bradley, Illinois.
Despite crises facing the nation as well as the banking industry during the troubled years of the 30's and 40's, the Onarga State Bank is especially proud of the fact that it remained open throughout the depression and was among the first banks to open when the banking moratorium was called. The quick recovery from the moratorium gave Onarga State Bank prestige that started it on a period of rapid growth. The bank is one of a few in the nation that has never cost its depositors one penny of loss and has never been required to make any concessions to the government in order to remain open. During the sixth war bond drive of World War II, the sales of the Onarga State Bank alone were greater than the Onarga Township quota. The Secretary of the Treasury recognized Onarga State Bank for the part they had played in the successful sale of war bonds in this community.
The main bank has continued to conduct business in the same banking house in Onarga, Illinois.