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Liberty Bank’s fast growth puts it on track for statewide presence


What do Greater Des Moines business leaders such as Bill Krause, Terry Branstad, Matt Manning, David Fisher, Bill Knapp, Josh Reel, Chris Risewick and Doug Reichardt have in common with University of Iowa head football coach Kirk Ferentz, Iowa Athletic Director Bob Bowlsby and San Diego Chargers wide receiver Tim Dwight?

They’re among the 70 investors of Liberty Banshares Inc., the holding company for West Des Moines-based Liberty Bank FSB. The bank was formed in May 1998, when a group of investors led by W.A. “Bill” Krause bought Lakes National Bank in Arnolds Park.

With its assets growing at a compounded annual rate of 62 percent over the past six years, Liberty Bank has become one of Central Iowa’s fastest-growing banks.

The bank has made that claim prominent on billboards and on signs for projects it’s financing throughout the state, and “no one’s challenged us on it yet,” said Kurt Kuta, Liberty Bank’s president.

Sharing space with Krause Gentle Corp.’s headquarters on Westown Parkway, Liberty Banshares has close ties with the Krause family, which owns about 43 percent of the stock. Liberty Bank’s charter branch is located at 6139 Ashworth Road.

Through internal growth and the acquisition of StateFed Financial Corp. last year, Liberty Bank now has 18 branches throughout Iowa, and as of last month, an office in Naples, Fla., where it plans to add a second branch early next year. In the past year and a half, the bank has nearly doubled its asset base, from about $325 million to $645 million.

“We’re trying to (grow) in a sound way,” Kuta said. “We’ve put a great deal of emphasis on growing this right, and we don’t want to lose sight of the fact that we are a community bank.”

Much of Liberty Bank’s growth is attributable to its emphasis on approaching banking “from the other side of the desk,” said Russ Olson, president and CEO of Liberty Banshares. The bank holding company focuses on attracting local investors who help it maintain a customer perspective, he said.

“They’re our sales people,” Olson said, “and one of the things we ask our investors to do is to be active in the bank.”

Liberty Bank’s goal is to grow by one branch a year in each of its primary markets, including Greater Des Moines and the Cedar Rapids-Iowa City corridor, Olson said. The bank is now building a second Cedar Rapids office to open in December, as well as a second West Des Moines branch at 50th Street and Mills Civic Parkway that will begin operations in January. The second Naples branch will open in the first quarter of 2005, and the bank is looking at further expansion in that Southwest Florida city.

As a Subchapter S corporation, the holding company is limited to no more than 75 investors, so it plans to spin off a separate Florida charter for its Naples operations, which will have its own group of local investors, Olson said. As its base of investors grows, Liberty Banshares will have to reorganize as a C corporation within the next five years, and at some point will probably make an initial public offering of stock, he said.

A key part of Liberty Bank’s offerings in the future will be wealth management services, which the bank intends to offer at many of its offices.

“That’s an initiative we really want to put on the fast track going forward,” Olson said. The bank plans to hire up to 10 investment representatives who are registered to sell products such as life insurance, annuities, mutual funds and other investments. The bank also intends to introduce its own credit card in January 2005; it had previously contracted with a larger bank to issue the cards with the Liberty Bank name on it.

At the same time, Liberty Bank will be introducing its Community Home Buyers’ Choice program, which will be geared toward making home loans to low- to moderate-income families.

It’s all part of Liberty Bank’s goal to become a statewide banking organization, and one of the largest banks in Iowa, Olson said.

Will Liberty Bank remain independent in the long run?

“It’s certainly (the investors’) intent, and they’re having a lot of fun,” Olson said. “One of the thing you never hear at board meetings is, ‘Should we be looking at selling out?’ That just never comes up.”

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