June 24, 2014
Glenwood State Bank, a $211 million-asset community bank located 120 miles northwest of Minneapolis, has been creating loyalties in its community for 107 years. President Peter Nelson attributes the bank’s success in loan volume—it is ranked in a tie for 32nd place among the top 100 overall loan producers, with an 89 percent ratio between loans and assets—above all to its attitude toward customers.
“Typically, we restructure rather than foreclose,” Nelson says. “We keep the flexibility to work through the bumps and bruises where we perceive a good work ethic, good business sense, good product and willingness to listen.”
Helping when the chips are down solidifies relationships for the long haul. So does taking an initial chance on financing startups and entrepreneurs, who may begin their companies in garages but now employ hundreds. The bank’s philosophy of taking some risks on those borrowers make it known as “a little more progressive” than some of its competitors, according to Nelson.
Glenwood State Bank’s diverse loan portfolio is representative of the economic diversity in west-central Minnesota, divided among lake tourism, agriculture, retail and manufacturing. Commercial loans, including those involving real estate, make up 59 percent of the bank’s loan portfolio, agriculture about 22 percent, one-to-four family about 17 percent and consumer loans take the remaining. The bank particularly supports family-owned enterprises, where it can add value through its expertise in relevant issues like corporate succession planning.
Nelson himself makes radio commercials, advertising the bank’s values and longstanding family ownership. “People see my family and me in the bank every day, and know we can make our own decisions fast. We do what we have to in order to meet our customer’s time frames and expectations.”
Nelson recalled one commercial real estate transaction that the bank completed in 22 hours from the time of application. “We had to call in some favors, but we got it done.”
Glenwood State Bank, believing in the soft sell, has the patience sometimes to wait years for customers to respond. Loan officers dedicate one day a week outside of the bank prospecting and developing relationships. Also, the bank’s 56 employees are actually paid to perform voluntary work in the community. Both of these initiatives are deemed important enough to warrant having additional staff to cover in-house responsibilities.
“We try to foster a culture of compassion and giving back,” Nelson says, and that commitment includes reinvesting money locally. Lastly, he insists giving credit for the bank’s success to God. “God has blessed us, and we are doing our best to be good stewards of His assets.”
Published in Independent Banker Magazine