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Bass' desire for growth spurs expansion of Great Western

03/28/2012

Great Western Bank is already among the biggest banks in Iowa, but Doug Bass wants more.

The journeyman Iowa banker — his career includes stops in Cedar Rapids and Sioux City and then a decade at Fort Dodge-based First American Bank — took over the Iowa, Missouri, and Kansas region for Great Western in 2009. His job has been to make it grow.

The latest move was Great Western’s acquisition of First Federal Savings Bank of Iowa — Bass’ idea. The Fort Dodge-based bank had 11 branches, several in new or untapped markets for Great Western.

First Federal’s branches in Nevada, Perry, Burlington and Mount Pleasant will be key for Great Western, Bass said. The acquisition takes Great Western to number four or five in deposits in the state —behind only Wells Fargo, US Bank and Bank of America and pretty much even with Bankers Trust.

The move also expands Great Western’s Iowa presence outside metro Des Moines and the southwestern quadrant of the state. Now owned by National Australia Bank, Great Western was started in Leon, Ia., and is today headquartered in Sioux Falls, S.D.

The bank wants to have the top two or three market-share in every state where it has a branch. In Iowa that would require the bank to more than double, which, it turns out, is not so far-fetched.

At the beginning of 2007, Great Western had $1.4 billion in assets and 34 offices, according to the FDIC. Since then, the bank has been on an acquisition spree. It’s up to $8.5 billion in assets and nearly 200 branches. Most of them are in Iowa, South Dakota, Nebraska, Colorado and Arizona. Missouri and Kansas each have a smattering.

Bass, 50, grew up near Council Bluffs, and earned his bachelor’s degree at Iowa State University. He was interviewed on Monday at his office in Clive.

Q. What’s the thinking behind the First Federal acquisition?

A. First Federal has been a very strong consumer and mortgage bank, and we want to continue to do all that they have done, and then we want to take the capital, liquidity and lending resources that Great Western has and expand the commercial, agriculture and agribusiness lending presence in those communities.

Q. What First Federal markets are exciting to you, and why?

A. We look at Fort Dodge as having opportunity in commercial and ag, because those two areas historically have not been a focus for First Federal. Burlington and Mount Pleasant in southeast Iowa have the same opportunities. The additional branches in Perry and Nevada will probably give us a higher level of success when you have a physical presence. We’re doing ag and commercial loans in those markets from our existing Great Western branches today, but any time you get a branch in a market, your success level increases.

Q. How much does expanding market share involve taking customers from other banks?

A. Most businesses are well taken care of by their current bank, so you have to work really hard to convince customers to change banks. Businesses change their banking relationship, on average, every five to seven years. It’s our job to try to make sure we’re out in front, to be at least on the top two or three on a company’s list to talk to when they’re ready to make a move.

Q. How do you get along with your local competitors — West Bank, Bankers Trust?

A. I think we’re all good, friendly competitors. We respect that there are a lot of good institutions in town and, fortunately or unfortunately, depending on which side of the ledger you’re on, good customers always have multiple opportunities.

Q. You’re opening a branch in what’s now a Liberty Bank location in North Liberty in June. Are you going to keep expanding farther north from there, farther east?

A. We’re going to continue to look for opportunities in all of eastern Iowa — Cedar Rapids, Linn County, Black Hawk County, Dubuque, Johnson County and Iowa City, and then on farther east in Scott County and the Quad Cities. We’ve actively looked at other banks for acquisition — have, and will continue to.

Q. How much authority do your local lenders have?

A. We have individuals that reside in rural markets that have up to $2 million of lending authority, because they’ve exhibited over time prudent decision-making. That kind of authority and autonomy bodes well in the communities of Osceola and Ames and Marshalltown, as three examples that are here close. We can push authority levels to a higher level than either what community banks would have, or what large national or regional banks would allow their people to have. That’s how we try to set ourselves apart.

Q. What are the hallmarks of businesses you want to lend to?

A. Companies and individuals that have their own, very clear-cut, defined direction that they want to head in. I’m working with companies that are growing and expanding. I’m looking for companies that are in an acquisition mode, that are buying businesses and joining with another company and expanding product lines. We’re attracted to individuals that know where they want their business to be in one, three, and five years — x dollars in revenue, x product line, serving this market, serving this geography, selling to this country.

Q. Why did you make the move to Great Western?

A. Opportunity and stability. I saw an opportunity here with growth, acquisition and expansion plans. Today my responsibility is regional president for Iowa, Missouri and Kansas, which encompasses 56 branches.

Q. Who’s a banker that you admire?

A. The individual that originally hired me and we maintained a long friendship over the years was Holmes Foster. He was a great guy. He was a good listener. He may have had an opinion, but he definitely listened to a situation, and I think evaluated what he was hearing before he publicly relayed his own opinion.

-Adam Belz, The Register, March 28, 2012
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