ABA Banking Journal - November/December 2016 - 38
> AGRICULTURAL BANKING
Maintaining a Commitment to
Innovation can be more than engineering the latest and
greatest gadget. It also means flexibly adapting to and
meeting customers' needs throughout the business cycle.
BY BRIAN NIXON
innwest Bank, a $1.6 billion
institution serving Minnesota
and South Dakota, makes
no bones about posting its
commitment to agricultural
customers prominently on its website.
"Agri-banking through thick and thin,"
the bank says. "We'll see it through."
their businesses and finances so that
they can withstand any downturns in
We also have organic growers on the
crop side and organic dairies that
The goal is to help producers position
themselves to weather the current down
cycle and be ready to participate in the
better times that will eventually follow.
These customers all have
The words are apropos in the Upper
Midwest and throughout rural America,
which is under stress from low row-crop
commodity prices. Even so, despite
a difficult and challenging economic
environment, there is opportunity for
both producers and ag lenders. With
record low interest rates, producers
are looking to restructure debt for the
Roots in rural America
Faced with that demand from ag
customers, banks have had to
respond with creative-dare we say,
innovative?-solutions that meet
producers' needs while mitigating their
own interest rate risk concerns.
"It's no secret that the ag economy
is in tougher times right now," says
Dan Koster, who is one of Minnwest's
regional presidents. "What we're
doing is educating our borrowers and
customers about proper debt structures,
proper performance matrices, and
really trying to help them to structure
ABA BANKING JOURNAL | NOVEMBER/DECEMBER 2016
Minnwest, which is based in Redwood
Falls, Minn., executes this strategy with
the help of an experienced team of
bankers with farm backgrounds who
understand the particular challenges
producers face. "I view our competitive
advantage as our lenders," Koster says.
"The lenders we have for the ag sector
by and large come from the farm. They
have grown up there. They understand
the business. They understand the
dedication it takes to be a successful
farmer or agribusiness."
Those lenders work with a fairly diverse
client base because Minnwest's $550
million ag loan portfolio reflects a broad
"We have corn and soybean growers,"
Koster says. "We are big into livestock
lending, particularly in the financing
of cattle and hog operations. We have
specialty crop growers like sugar beets,
sweet corn, peas and edible beans.
"Our philosophy is each business owner
in the ag sector is a unique person,
a unique individual and a unique
business," says Koster. "It's our job and
responsibility to deliver services that
really benefit each one of them. We try
to design our packages-whether its
loan packages or the service part of our
business-to really fit each customer."
Such an approach requires a creative
touch combined with sound analytics.
"I view our lenders as really architects
or engineers who go in and design a
debt structure piece that helps that
customer," Koster says.
When done right, producers are better
positioned to maximize potential and
operate profitably for the long haul. "We
view ourselves as part of their advisory
team," Koster says. "Our lenders are
part of our customers' advisory team,
giving them ideas and helping them
It's also important to note that lending is
part of an overall products-and-services