Five Straight Years on Top


Midwest Bank
Detroit Lakes, Minn.
ROAA in 2015: 2.16 percent
ROAE in 2015: 22.61 percent
Assets: $369 million
Retail locations: Seven
Employees: 87
Founded: 1917

By Steve Daggett

The employees of Midwest Bank are pleased that the bank is featured as an ICBA high-performing community bank and are especially pleased that it represents the fifth straight year of this recognition. To be successful in the highly competitive banking industry, we know we need to differentiate ourselves from our competitors. Our financial results would suggest we have done a pretty good job of this.

One way we differentiate ourselves is by providing a responsiveness on commercial and agricultural credits that is unmatched. We also pride ourselves by making loans that other banks may pass on because the loan doesn’t meet their underwriting criteria. By no means does this mean that we sacrifice quality for growth. This is evidenced by our five-year average for gross charge-offs of less than five basis points per year.

To be responsive we need a talented lending team, and one way we have built this talent is by having every lender as a member of our Officer Loan Committee for at least one quarter during the year. Some of the junior lenders participate as nonvoting members, but everyone benefits from the discussion that occurs at the weekly meetings. The input increases the odds that a proper decision is made on the credit being presented. Many times lenders also learn valuable information that they can use as they meet with prospective loan customers. As a result of this loan process, our bank maintains a high loan-to-deposit ratio with a loan portfolio that is top quality.

Another approach that differentiates our community bank is our More Free, Less Fee approach, in which we simply believe that charging less for services provided at higher costs by our competitors has been a successful strategy in our financial success. Although we do miss some profit potential by not charging fees that many of our competitors charge, we believe this is more than offset by the growth that occurs, because it is a style of banking that our customers appreciate and our employees enjoy providing.

The last factor in our strong results is our efficiency. Focusing strictly on efficiency ratios can result in poor customer service. Midwest Bank operates efficiently and yet provides excellent customer service. This is a result of high-quality staff combined with an investment in technology.

Lastly, everyone at Midwest Bank realizes our success is also a function of the communities in which we operate. When these communities thrive, we thrive. Because we have been fortunate to be in strong communities, we feel it is our responsibility to give back to these communities, both financially and through donating our time to the many worthwhile organizations that make our communities such a great place in which to live.

Steve Daggett ( is president and CEO of Midwest Bank.