News Column

How I became the youngest bank president in South Dakota

February 1, 2014

Doffing, Matt

In 1980, I was 30 years old and a loan officer for Farmers State Bank of Marion, S.D. I thought I had another 20 years before I would lead a bank from the president's office. Fate had different plans.

I remember that morning in early 1980. It was eight o'clock. I had just put on my coat to leave for work and the phone rang. It was one of the directors of the bank. Eldon Smith, the bank's president, woke up that morning and died of a heart attack at age 56. The director asked: "Can you just keep running the bank for the time being?" I said yes.

It was just 10 years earlier, as a recent graduate of the University of South Dakota, Vermilion, with a degree in business administration, that I left Canton, S.D. I came from a banking family. My father, Elmer H. Anderson, and mother, Eleanor Aasheim, met at Farmers State Bank of Canton. He started as a teller in 1946. She was already employed there as a bookkeeper. I worked at the bank in college but when I graduated the bank didn't have room on the staff to hire me full time. They told me to go get some outside experience. Who knew what the future would hold.

So, in 1971, my first job outside Canton was to manage the insurance agency of Farmers Savings Bank, Boyden, Iowa. I moved to Farmers State Bank of Marion to run its insurance agency and to be a loan officer in 1972. By the time Eldon passed away, I was waiting on half the loan customers of the bank. And, I was still running the insurance agency. I had been on the board of directors since 1978.

On the morning of Eldon's departure I took over the securities portfolio of the bank. I had never taken care of the bond portfolio before, so I picked up the bank's bond book and figured it out.

Eldon's sons were not old enough to take over management of the bank. So, about a month afterward, I got a second phone call. It was Eldon's wife asking if she and one of the bank's directors could speak with me. We met in my living room. I didn't really know why they wanted to come. They offered me the president's office that afternoon.

But I didn't take the title then. I told them I would run the bank but the people of Marion would more likely identify with a president from the area. So, they appointed Robert Hiee president; he had been there longer than me. I took the vice president title. Then, after two years, I was formally named president of the bank and became the youngest bank president in the state of South Dakota in 1982.

By 1984, it was time to return to Canton. My father, brother and I had decided we were going to buy the bank. My father already was the first president of the bank who was not a member of the three owning families. My brother Drew and I were hired by the board of directors. He ran the bank's insurance agency. I was hired as a loan officer.

Our plan hinged on my father. Bank shares were widely held around town. As people died and sold their bank stock, my dad would buy it. By 1984, my Dad owned one quarter of the shares in the bank. With the founding generation aging and the second generation unable to take over management, we knew the owning families were going to want to sell the bank soon.

Dad retired as president in 1984 and I became the bank's president in 1987. By the summer of 1988, we began to negotiate a price with the families.

The owning families hired a bank broker to find other buyers. I still remember, he called while I was on vacation and told me that the Billion family which owns Billion Automotive, a national car dealership today, had bought the bank. I returned from vacation to find the daughter of Mr. Billion sitting at my desk in my chair. That gave me a scare. It turned out she hadn't gotten my job; she was just using the open office to review some of the bank's files.

The family had held out for a high price with the Billion family as they had with us. The Billion family had hoped to raise investors in town and within a month, they were no longer interested in buying the bank. My Dad emerged as the acquirer in 1988. We formed a holding company and invited the board of directors to join in the purchase. The Anderson family came away with a controlling interest in the bank of 52 percent.

Today, Farmers State Bank of Canton is still a small town bank with $53 million in assets and one location.

After 43 years in this business I retired in 2013. My brother Drew is now the bank's president and my daughter Valerie is the third generation of the family to run the bank. I have been lucky. I could not have made the contribution I did to building this business without the help of my wife of 37 years, Cheryl, and of my twin daughters Valerie and Vanessa. *


Source: Northwestern Financial Review

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