We had a young guy from a distant state come into two of our branches to open a CD for $500.00. The first branch denied the account because typically we don’t open accounts for out of state persons. However, after he left he went to one of our other branches and they actually opened this account. When the account opener asked what brought him to our bank from such a distant state, he said he was visiting a family member who also lives out of our state but a bordering state. He also said he found us by “just driving around”. Our bank is nowhere close to the bordering state line, so this comment is strange in itself. After the customer left, the branch sent me the chex systems report which shows 10 other bank inquiries since January. All these banks seem to be small town savings banks that are located in bordering states and one other in-state.
I have been pondering a possible explanation for this all day and I just can’t come up with one?
Note: We are public bank already (not fully public) but given this guy’s age of only (22), I don’t feel he’s a would-be investor.
We are way under the SAR threshold but should I think voluntary SAR or not? Or does this only strike me as very odd?

It's fishy and he effectively lied when he went to the second branch to do what the first branch said he could not. I would:

1) mail him a check for the amount of the time deposit plus accrued interest.
2) Think about whether a SAR was required and decide it wasn't.

Step 1 is more important than step 2. My two sentence cover letter for the check would recite the fact that he was told about our policy and branch #1 and that we are retraining the folks at branch #2.

The most likely scenario is that he does not understand that you are no longer a savings bank. The other possibility is that you are part of some scheme that has yet to unfold. You've already spent more time on this than your net interest margin on $500 could ever cover.

We had something similar happen about a year ago, shortly after we acquired 4 branches of another Bank. TONS of people from outside our defined market area attempted to open accounts through the phone, web, mail, etc. because they saw the acquisition as a potential move to be made before a company would go public. They figured that by having a deposit relationship with us, they would be aware of any initial offerings made by the company to stakeholders. Since you're already public, I'm wondering if maybe he thinks you're either set for a big move yourself, or he knows of someone who's looking to buy you? Don't sleep on the younger folks being investors, I got into it at the age of 20!

Unless you happen to be a mutual organization, having a deposit account at a bank doesn't entitle you to squat - so I don't see the investment angle. In a stock held organization (public or private) a depositor is not a stakeholder, they are just a customer.

Thanks for the replies. I plan to close the account as soon as the check clears. I don't want to promote another account later on from this out of state person. Thanks again!

I don't know if this will help or not but My mother always had a simple rule with us kids when we were sick/injured which was if the question of whether or not we should go to the ER the immediate answer was yes. I apply that to SAR so if the thought pops into my mind that maybe I should file an SAR then I file an SAR. Better safe than sorry.

This situation is clearly below reporting thresholds, and noted as such by the original poster.

Regarding the statement that "if I think I should file, then I'll file," somewhere between those two endpoints, I would hope there's an investigation to filter out the non-SAR-worthy events. "Kill 'em all and let God sort 'em out" is not a good SAR decisioning strategy.

Explanation of why someone would want to make a deposit in a mutual savings bank (see paragraph 5). A001's question indicates an understanding of the situation.

As noted, making a deposit in a garden variety bank gets you nothing but interest and precious little of that.