2023 Community Bank Case Study Competition Journal

Iowa State University Executive Summary

P eoples Savings Bank (PSB) was established as a De Novo (start-up) in 1998. Over the next 25 years, the bank would grow both organically and by acquisition. It grew through both the Great Recession of 2008 and the COVID-19 pandemic. Few banks in the “class of 1998” have thrived like PSB. The bank continues to expand as a De Novo due to its locational expansion strategy outside highly populated cities, its ability to attract a stable workforce in the current labor market, and its technological expansion to better serve its customers. PSB is a community bank primarily serving customers in rural Iowa with an agricultural focus. At the end of 2022, bank assets under management were $495 million, which ranked them the 55th largest out of 247 Iowa banks. Kevin Halterman, the President and CEO of PSB, started the bank along with 120 investors with a single location in Indianola, Iowa. In the subsequent 25 years, PSB has grown to 80 employees in seven locations throughout seven communities in southern Iowa. All of

the locations are De Novo branches except for the acquisition of their Pleasantville location. The primary office in Indianola, along with the Carlisle location, borders Des Moines, the state’s largest metropolitan market. This gives the bank opportunities for growth in both metropolitan and rural markets. Only two other states boast more banks than Iowa, making Iowa a target-rich environment for acquisitions. This bank is wired for growth. The bank’s management possesses the mentality and ingredients that fit its growth strategy. They anticipate the expenditures and margins sacrificed by this mentality will pay off in the long run as efficiency and scale are obtained. The bank’s well-managed loan portfolio, consistent profitability, and solid capital levels support a growth strategy either organically, by acquisition, or by De Novo. The deposits gathered in the bank’s rural footprint will need to fuel further prudent loan growth. PSB successfully cultivated a positive company culture throughout its geographic and staffing growth. The “Iowa-nice” attitude of the bank’s organizational culture enhances the commitment to rural communities. PSB has been successful in retaining employees at a greater rate than the banking industry as a whole. PSB expects to leverage this “Iowa nice” mentality by growing into more rural communities in southern Iowa in the coming years. The bank established a succession plan for key positions, including that of Halterman, who has

PSB has been successful in retaining employees at a greater rate than the banking industry as a whole.

2