ICBA’s top loan producers for 2017: Find out who made the list

» CONSUMER AND MORTGAGE

By William Atkinson

Lawrenceburg Federal Bank:
Homes at its heart

Strong relationships and word of mouth have put Lawrenceburg Federal Bank on the top of the pile in its category. CEO Billy Helton III explains its philosophy.

Real estate is Lawrenceburg Federal Bank’s first, last and everything.
“We don’t do any kind of commercial loans,” says Billy Helton III, CEO of the $60 million-asset community bank. “We do a few personal and auto loans, which is about 5 percent of our portfolio, but real estate is our sweet spot.”

To get the word out to the Lawrenceburg community about the community bank’s mortgage-lending services, Lawrenceburg Federal does a lot of radio and newspaper advertising. “Our employees also promote our specialty,” Helton says. “When we are out in the community, we aren’t afraid to meet a stranger and ask if we can help them out.” However, Lawrenceburg Federal’s biggest source of new business is word of mouth from satisfied customers. Helton believes there are a number of reasons customers are so satisfied with the bank and so willing to tell others about their experiences with obtaining mortgage loans.

“First, customers are very satisfied with us because of the way we treat them,” he says. “We provide very personal service.”

“[Our first-time homebuyer’s program] really helps people who have never owned a home before but who have a good credit rating and a good employment record.”

—Billy Helton III, Lawrenceburg Federal Bank

Second, Lawrenceburg Federal works hard to get loans closed as quickly as possible. “In fact, we try to get most loans closed within four weeks,” says Helton.

Third, in terms of closing costs, the bank charges customers just what it costs the bank. “We don’t try to make any money on our closings,” he says.

Finally, the bank does everything in-house. “Customers know they are going to be able to deal with us for the duration of the loan,” says Helton. “As a result of all of this, our customers are happy to tell their friends and family members about us,” he says.

Another effective marketing tool is the bank’s recently launched first-time homebuyer’s program. “This really helps people who have never owned a home before but who have a good credit rating and a good employment record,” Helton says.

» COMMERCIAL

By William Atkinson

Seacoast Commerce Bank:
Laser focus on SBA lending

Seacoast Commerce Bank’s SBA lending specialization has brought a deep knowledge of its markets, says president and CEO Richard Sanborn.

San Diego-based Seacoast Commerce Bank has found success through specialization. “We are a unique institution in that we are a mono-line specialty lender,” says Richard M. Sanborn, president and CEO. “The only thing we do is SBA financing for the purposes of buying or building real estate for owner-occupied users under the SBA program.”
Seacoast entered SBA lending in late 2009 after working to save the bank from failing. It selected that specific program after realizing that SBA lending offered two distinct advantages that the bank needed.

“First, we could originate a lot of loans and sell the guaranteed portion in order to produce more fee income,” Sanborn says. “Second, we could do this without having a lot of growth. Coming out of a crisis and having limited capital, no growth and a lot of fee income was a great combination for us.”
The bank also realized that carving out a niche held a special appeal. “There have been some studies by the Conference of State Bank Supervisors and the Federal Reserve System reporting that banks which had a specialization through the crisis tended to fare better,” says Sanborn. “One reason is that when you specialize, you are more aware of what is going on in your marketplace, and you have a better understanding of your products and your borrowers.”

While the bank opted to sell as much of the guaranteed portion of its loans as possible in the early days, its long-term goal was to gradually build a sustainable bank. As a result, in 2012, it switched from selling 100 percent of the guaranteed portion of its loans to holding as much as it could.
“There are tremendous financial benefits to SBA loans if you hold them rather than sell them,” Sanborn says. “This is when our growth really started to take off.” The bank was able to grow from about $150 million in assets in 2011 to $585 million today. “While our loan production is only up modestly each year, our outstandings have been growing substantially, because we are selling fewer and fewer loans,” says Sanborn.

Challenges in the future? Sanborn doesn’t anticipate many. “The biggest challenge for any bank operating under a government program is whether the government is going to continue to support that program,” he says. “Fortunately for us, the SBA program is a great jobs creator. Whether you are on the left, the right or in the middle, everyone supports the idea of creating more jobs and growing the economy, so there is wide bipartisan support for this program.”

» AGRICULTURAL

Iowa State Bank:
Aiming high in Iowa

For Iowa State Bank in Orange City, Iowa, lower commodity prices, a downturn in the cattle market and higher land ownership costs have resulted in occasional negative cash flows during the past two years. But the $581 million-asset bank’s long-term approach, based on building rock-solid client relationships, is helping both it and its customers ride out the storm.

“Our customers have a fantastic can-do spirit combined with an unmatched work ethic and collaboration within all phases of agriculture,” says president and CEO Leroy Van Kekerix. “Even in the downtrend in our recent ag markets, we continue to have a number of strong producers, and this also creates opportunities for us.”
Iowa State Bank’s plan for growth is rooted in a steadfast belief in the industry and in Iowa’s rich soil, which remains some of the very best in the world. “We will continue to be out in our markets looking for customers who are survivors and are willing to take the risk with us for the future,” Van Kekerix says. “We believe in the future of agriculture for the long haul.”

Independent Banker sat down with leaders of three other top-performing agricultural lenders in Iowa—the state with the most banks in our top ag lending tables—to discuss their formulas for success and their plans for future growth. Here’s what they said. —Andrea Lahouze

IB: What makes your community bank a strong and growing ag lender?

Rod A. Rowland, Landmands Bank: We have a staff that has some longevity and ties to our area, which has allowed us to build some strong personal relationships and become a trusted source. Our customers want to do business with people they know and trust, and they refer others.

Owen Bolte, United Bank of Iowa: Being located in the heart of the Corn Belt with a strong livestock presence has been a primary driver in our success. We are fortunate enough to be surrounded by some of the best farm ground in the world, and in many cases, those farms have been operated by the same families for three or four generations. We have employees dedicated to knowing, understanding and living agriculture, which has allowed us to develop long-lasting relationships with our customers. Our employees, management team and board of directors are all dedicated to the communities we serve, as well as production agriculture, which has allowed us to maintain a focus on ag lending.

Bruce Weigel, Peoples Savings Bank: We are located in a community of 550 people in rural northeast Iowa. Our customer base is primarily agricultural, as we have 74 percent of our loans in agriculture. We know agriculture and we promote ourselves as an “ag bank.” Our farm customers have had a good and profitable run the past 10 years.

IB: How would you describe Iowa’s ag lending landscape right now?

Rowland: It’s currently going through a down cycle. The livestock side is starting to show some opportunity for gains, but the grain side looks like the compressed margins of the recent past will continue. Control of your real estate input costs is the key.

Bolte: Overall, the long-term outlook remains bright, as demand for the highest-quality ag products produced in the world remains high. Tightening profit margins for producers over the last few years have created a few more challenges in agriculture than we had three or four years ago. However, efficient producers have been able to adjust their cost structure to generate a modest profit. In general, producers’ liquidity positions have eroded from the levels they had just a few years ago. Asset values have remained strong in Iowa.

Weigel: Land values are 15 percent to 20 percent off their highs, but prices are firm due to lack of land on the market. We have numerous small dairies in the area that are holding their own. Contract hog buildings are plentiful and have been good for the farmer cash flows. Cattle feeders are also abundant is this area. [Last year] was a difficult year, but 2017 has been much better. Crop yields were well above the five-year average the past two years, which helped offset the high input costs. Rents must come down if yields come down.

IB: What is your growth strategy for the next 12 months?

Rowland: Our plan has worked well for us over the last 108 years. We constantly listen to what our customer base needs and wants and when it’s feasible try and fill that need. They know we are there for them in both the good and bad times.

Bolte: We will continue to focus on strengthening our relationships with our existing customers by providing them with solid financial advice and solutions while continuing to develop new relationships in our market area.

Weigel: We expect loan growth to be good (5–8 percent) in 2017. Most of our farm customers finished second at many of the land auctions in recent years, and most are well positioned financially to take advantage of growth opportunities over the next couple years.

—Sara Schlueter