The Bank of Salem was organized and incorporated in November 1908 with stockholders: B.H. Castleberry, Rex Castleberry, J.L. Short, Harry Pickren, George T. Humphries, H.J. (Race) Humphries, C.W. Dixon, J.A. Sigler, and J.A. Watson.

The first bank was on the north side of the Court Square in the embossed tin front building where Aid True Value was located for years. In 1919 it moved to a new native stone structure on the NE corner of the square where Hughes, Welch, and Milligan is presently located. In 1965 the bank moved to its third and present location, a new brick veneer building just off the square on Church Street. The facility was expanded to double its original size in 1976. In 1982, the Bank of Salem opened its first branch facility at Viola, 10 miles west of Salem, to better serve the western part of Fulton County. In January 2004 the bank opened the Mammoth Spring Bank, a branch of the Bank of Salem. Bank of Salem also has an insurance company, SABCO Insurance, which has offices located inside the main bank lobby and on Pickren Street in Salem.

The bank was established with $25,000 in capital, which was later changed to $20,000 in capital and $5,000 in surplus. In 1950 capital was increased to $50,000 and in 2007 has increased to over $11 million and asset size has increased to over $120 million.

In the past 100 years the following people have served as president of the bank: B.H. Castleberry (1908-1919), George T. Humphries (1920-1921), G.T. Cunningham (1922-1924), H.A. Northcutt (1924-1927), Rex Castleberry (1927-1957), Jim Humphries (1957-1982), Frank B. Burge (1982-1992), James Burns (1992-1993), Mark H. Montgomery (1994 to present). Other stockholders have included: Fay Castleberry, W.R. Castleberry, Ray Castleberry, H.J. Humphries, G.A. Edmonston, C.W. Pardue, E.M. Reeves, Lanis Ashley, Cuthbert Pickren, George Rex Humphries, Corwin Mosey, Mary Linn, Kathryn Cogburn, and L.R. “Jack” Cochran, The Bank of Salem now has 40 full-time employees and employs 4 full-time at the SABCO Insurance offices.

Richard T. Smith, Chairman and Chief Executive Officer of Smith Associated Banking Corporation (SABCO) of Hot Springs, purchased the bank in 1982. The present directors are: Mark H. Montgomery, C. Dwayne Plumlee, Guy “Buck” Smith, Jim Short, John Ed Welch and Karrol Fowlkes.