Independent Banker - January 2023 - 53

niche lending areas, " she says, " but for the most part, we're
less concerned with branch expansion and more focused on
adopting and off ering the self-service technology and tools
that our customers expect. "
WESTERN STATE BANK: Making the leap
With three locations in North Dakota and seven in Arizona,
Western State Bank is a $1.7 billion-asset institution that
broke out of its traditional geographical boundaries during
the Great Recession. Headquartered in Devils Lake, N.D.,
the bank opened a loan production offi ce in Chandler,
Ariz., in 2008-roughly 1,700 miles away from its home
base-and then began exploring the feasibility of opening a
full-service branch there.
" We ended up buying a very small branch with less than
$1 million in assets in Chandler and folded it into our
operations without needing a separate charter for it, " says
Brad Jacobson, president and COO.
Located about 20 miles from Phoenix, the branch had
very few customers and only one employee at the time,
but it gave Western an entry in a market the bank was very
interested in serving. " It was an opportunity for us to get
into the market a little bit faster, " Jacobson says.
Western would go on to acquire a bank in Casa Grande,
Ariz., in 2012 and a failed institution in Scottsdale the
following year. " The rest of our growth in Arizona has
been organic, " Jacobson says. " That's our preferred route,
because we want to get the right team in place to deliver
the 'Western way' from a service perspective. "
Asked why Western chose Arizona as its expansion
target, Jacobson says it was less about catering to
snowbirds-most of whom probably don't make the long
trek from North Dakota to Arizona with any regular
cadence-and more about gaining exposure and insight to
the market when buying commercial loan participations
from a Phoenix-based bank in 2004. After managing
several of those transactions and visiting the bank in
person, Jacobson realized that the market was dominated
by large, national banks.
" Internally, we started talking about how attractive our
level of service and banking style might be to customers
in that marketplace, " says Jacobson. " We're a full-service
bank, but we're also very focused on the business banking
side. We felt we could stand out by leveraging our existing
relationship-based banking model in that new market. "
Moving beyond North Dakota's borders would also help
Western-which has a nationwide equipment fi nance
division-grow its assets in a brand-new territory.
" The expansion has been great in terms of increasing
our balance sheet and income statement, and it's led to
increased profi tability because of the asset growth, " says
Jacobson, " which we wouldn't have had if we hadn't
expanded into Arizona. " Early on, the challenges included
unfamiliarity with the new marketplace-a roadblock
that Western worked through by building out a concierge
banking team with individual teller stations as well as the
products, services and support that the market expects.
And because some of Western's new team members
came from larger banks, getting them onboard with the
relationship banking approach took some eff ort. " When
you're hiring from big banks and basically reeducating
them on how to deliver a diff erent way, it defi nitely presents
challenges, " says Jacobson. " We had a couple of market
presidents who were helping to lead the eff ort and that,
unfortunately, didn't work out. "
What did work out well for Western was relocating Andy
Strand, regional chief credit offi cer, from North Dakota
to Chandler about 10 years ago. " Andy was instrumental
in ensuring that as we started hiring more team members
in Arizona, we were getting the right people on the team
to deliver the service that our customers expect, " says
Jacobson. " That's a challenge for any bank, but when you're
1,700 miles away, it's even more diffi cult. "
" we
see the
business
at our
[arizona
branches]
pick up
during
the winter. as people
move down there, OUR
TRANSACTION
COUNTS GO UP during
those periods of time. "
-Randy Chesler, Glacier Bank
independentbanker.org // 53
http://www.independentbanker.org
Independent Banker - January 2023

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