Dakotafire asked these Dacotah Bank ag bankers the following questions.
Q: We often see great introductory offers, but they are only for new customers. What do you do to take care of established customers, not just try to get new ones?
A: I haven’t been a believer in special offers for new customers. I believe building relationships with existing customers is the most effective way to build a customer base. If you do a good job with existing customers, they may refer a neighbor or friend to you. —Mark Oberlander, Valley City, N.D.
A: Adding new customers to a loan portfolio is always one of the more important goals for a banker to have, but servicing our existing customers is of equal or higher importance. At Dacotah Bank, we like to think that our existing customers are being taken care of more by service than by rates. Customers are our number one priority and with that goes without saying getting them the best interest rate we can. We like to focus on making sure our customers’ advances are done in a timely manner and any loan documents are prepared as quickly as possible in order to get the farmers back to their operation. —Kelly Hanson, Webster, S.D.
A: We try to provide good service to both established and new customers on machinery, operating and real estate financing. We are a full service bank whether they are new or existing customers. —Trevor Samson, Aberdeen, S.D.
Q: When a farmer applies for a loan, do you only consider cash flow, or do you also look at equity, which might be favorable to farmers because of the increase in land value?
A: In evaluating credit, many aspects of the farm operation are considered not only equity or cash flow. While equity and cash flow are important, I have found character and management ability to be also very important. In fact at times I have found these to be more important than equity and cash flow. —Mark Oberlander, Valley City, N.D.
A: I tend to look at both. However, I think cash flow should be the most important factor when considering a loan application. It has been my experience that only cash pays back the loan. Not land, not net worth, etc. Some things I like to focus on in regards to equity is how did net worth change over a given period of time. Was there an increase in equity because real estate values were inflated or a result of net operating profits. —Nate Zerface, Valley City, N.D.
A: Cash flow is an important part of the loan decision process, but not the only factor. When putting together a cash flow, there are many unknowns that will come to affect the operation throughout the year. Earned Equity would be a larger part of the decision making process than just total equity. Earned Equity helps to show the character and management ability of an operation and will give us an opportunity to make a loan to the person rather than just the situation if cash flow or equity is a little tighter. — Kelly Hanson, Webster, S.D.
A: When viewing loan applications we look at cash flow, equity, and also past profitability of the operation. —Trevor Samson, Aberdeen, S.D.
Q: What do you do to help farm families transition assets from one generation to another?
A: In regard the transition of family assets, I tend to act as a facilitator. It’s my job to recognize potential concerns in this area and refer them to proper experts (trust bankers, lawyers, accountant). —Mark Oberlander, Valley City, N.D.
A: At Dacotah Bank, we have some very good tools for our customers to utilize without even having to leave the building. Our Trust Department can help our customers out with several different tools and avenues for transitioning assets, along with advice and guidance. The same goes for our Insurance Department. If these two areas of Dacotah Bank are not suitable for the situation, we have Investment Centers of America that would be able to help as well. — Kelly Hanson, Webster, S.D.
A: Dacotah Bank has a fully staffed Trust Department which we work jointly with to help provide the best service possible in the transition from one generation to another, and if the transition requires financing we would work with the farmer to provide a financing package to assist the transition. —Trevor Samson, Aberdeen, S.D.
Q: Do you have any special offers for beginning farmers?
A: In North Dakota, we are fortunate to have several Bank of North Dakota (BND) Programs available for beginning farmers. These programs are available for real estate, machinery or livestock purchases. As a local banker, I work in conjunction with BND and the customer. These programs have attractive interest rates and payment terms. Our bank has also used the Farm Service Agency Guarantee Loan Program to assist beginning farmers. —Mark Oberlander, Valley City, N.D.
A: We have many different tools and programs available to us to utilize for each situation. Every situation is different when it comes servicing a farm customer for borrowing money, especially when it comes to beginning farmers. We have access to several different programs in-house, as well as externally, that can benefit beginning farmers as well as established customers. Our service would definitely be an offer to a beginning farmer, by helping them get the best loan product available to them. — Kelly Hanson, Webster, S.D.
Q: Why do you enjoy living in the Dakotas?
A: I have lived in this area for all my life. I guess I don’t know anything else. I do enjoy working with honest customers and co-workers with a strong work ethic. —Mark Oberlander, Valley City, N.D.
A: I think I enjoy living in North Dakota because of the people. Growing up in North Dakota you are also exposed to that “small town” feel and values. —Nate Zerface, Valley City, N.D.
A: I have lived in South Dakota my entire life and wouldn’t dream of living anywhere else. The people here are friendly and personable and I feel that it is a very safe place to raise my children. — Kelly Hanson, Webster, S.D.
Correction: The print version of this article misspelled Trevor Samson’s name.