RankingBanking 26 Digital - Flipbook - Page 20
18
midwest
One could perhaps consider the Midwest the tortoise of the regional economies. It enjoys a slower
and steadier pace of growth. “The Midwest doesn’t
experience the significant growth spurts, but it also
then doesn’t have the same pullbacks,” says Nate
44%
23%
20%
Percent of U.S.
banks headquartered in the Midwest
Percent of banks in
RankingBanking
Percent of banks
in top 25
Kauffman, executive director of the Kansas City
Fed’s Center for Agriculture and the Economy.
So-called flyover country is home to a significant
sonally, stay closely connected to our communities
amount of agriculture and manufacturing, meaning
and believe in meaningfully giving back,” he adds.
that banks rely less on real estate lending in the
“That combination builds trust and supports long-
region to generate profits. Michael Molepske, CEO
term partnerships, aligning well with community
and chairman of Bank First Corp. in Manitowoc,
banking.”
Wisconsin, notes that his markets in the upper Mid-
Overall, five of the 25 top performers are
west offer several advantages for banks, including
based in Midwestern states. However, more than
strong borrower credit scores and “a diverse econo-
1,900 of the country’s banks — or about 44%
my, with manufacturing, agriculture, healthcare and
of U.S. banks — are headquartered in the region,
service industries all playing important roles.”
according to data from the FDIC. Many of these
That means banks, with the right expertise, can
institutions are small and privately held — and
develop diversified loan portfolios while offering
therefore aren’t eligible to be considered for the
C&I loans to these companies. And in general, these
RankingBanking list.
types of lending opportunities can mean a better
But this does present acquisition opportunities
deposit franchise and lower cost of funding, Crowley
for strong performing Midwestern banks looking to
says. The Midwest had the lowest median cost of
gain scale. “Most of these have really good deposit
interest-bearing deposits for community banks, ac-
franchises because of where they are located,”
cording to an analysis of five different U.S. regions
says Mike Daniels, chairman and CEO of Nicolet
completed by S&P Global Market Intelligence.
Bankshares in Green Bay, Wisconsin, which was
Kauffman notes that Midwestern banks that do
No. 10 on the RankingBanking list this year. He
well tend to be well established in their commu-
has led the $15.4 billion institution through 10
nities and are able to adeptly respond to their
bank acquisitions over its 26-year history.
customer needs. “That could be a metro area or a
However, one challenge Midwestern banks face
rural place where they have just become synon-
is slow population growth. That contributes to
ymous with that location and invested in their
fewer new businesses being formed. Lower rates
communities,” he adds.
of immigration have further exacerbated the prob-
Molepske emphasizes that relationship banking
lem, Molepske says. “That means banks need to
is key in the $5.9 billion Bank First’s success. The
be intentional and disciplined in how they attract
institution was No. 6 among the top 25 banks in
talent, win customers and create growth opportu-
RankingBanking. “We know our customers per-
nities,” he adds.
