Dave Nelson, chairman and CEO of West Bank and a Greater Des Moines native, has Minnesota on his mind.

That’s easy enough to understand. After leaving graduate school at Drake University, Nelson worked for a few years at Bankers Trust Co., then spent the next 25 years in Minnesota, including 15 years as the head of Wells Fargo’s southeast Minnesota banking division, based out of Rochester, Minn.
His children were raised in Minnesota. The family hosted members of the Rochester Honkers, a developmental league team for elite college baseball players, and was deeply involved in community affairs.

Nelson made 25 years of business and banking connections. He landed first in Mankato with Norwest Bank, later to become Wells Fargo, before heading off to Rochester.

In 2010, Nelson returned to Greater Des Moines to lead West Bank and its parent, West Bancorporation, based in West Des Moines. Just a few months after starting to work, Nelson brought Harlee Olafson to West Bancorporation as chief risk officer and executive vice president. The two first met at Norwest in Mankato. In January, Nelson recruited another ally from the Mankato days, Brad Peters, to West Bank. 

The Mankato bank “turned out to be what I call kind of the poster bank for the Norwest system,” Nelson said. “I mean it was the top bank in the company so everybody that was part of that, including myself, got to go be a bank president someplace. I picked Rochester. My buddy Harley, who sits right next to me here at West Bank, picked Mankato, so he was the president there for next 15 years. So the other fella, Brad Peters, picked Owatonna. All three of us did real well in those marketplaces.”

Three years after returning to the Greater Des Moines banking market, Nelson was back in Minnesota, this time extending West Bank’s reach to Rochester. After starting from scratch as a loan production office with $0 on the books, the Rochester operation is now a full-blown banking operation, catering to the city’s business community with loans of about $180 million.

That growth can be attributed to hiring bankers that Nelson is familiar with and tapping into business relationships nurtured when he led the Wells Fargo bank. His Rochester bankers are tapped into the community, and what the local newspaper described as a who’s who of business leaders is tapped into the bank as members of its community board.

Following the same script as in Rochester — open a loan production office and as soon as possible convert it to a full-fledged banking operation — West Bank is poised to make more inroads into the Minnesota banking market by opening operations in Mankato, Owatonna and St. Cloud.

Don’t be surprised to learn that Nelson also has connections in those cities. He will use those connections to operate banks and he will use connections in the local business communities to create community boards. 

Unlike many banks that expand through acquisition, Nelson believes in a form of expansion that is a bit more raw: Just start a new operation that has its base in West Des Moines.

“What makes this so much different than any bank just opening up someplace in a new town is that we didn’t acquire anything, we didn’t buy a bank, we didn’t pay for anything,” Nelson said. “We have an advantage because we already have existing relationships, both with the bankers themselves and then either directly ourselves or indirectly through our new bankers, existing relationships with local business owners and business leaders, people who represent or control business that would be valued by the bank.”
After Peters joined West Bank in January, Nelson said his old Minnesota crew began recruiting banking teams in Mankato, Owatonna and St. Cloud. The operations will be simple at first, working out of storefronts. Nelson anticipates that in time each will have its own bank building.

“I had a community board when I was with Wells Fargo in Rochester. After opening West Bank in Rochester, I went and asked them to join us again. Every one of them resigned from being a director of Wells Fargo and joined us at West Bank, plus we added several new community leaders as well,” Nelson said. “So that was not them bringing their business to us, but their endorsement served as validating who we were to the rest of the community. And so that’s what we’re doing in these three new marketplaces.” 

There are more reasons for opening a branch operation rather than buying an existing bank.

“When you buy a bank, you’re buying not only a series of other people’s decisions, you’re also getting people, you’re getting customers, you’re getting buildings, you’re getting all these accounts, some of which are probably unprofitable accounts, some of the loans no doubt might have poor of credit quality, you might be buying bad loans, you might have buildings that you really don’t need. You’re paying for all this. Plus you’re paying a premium over and above the book value of the business,” Nelson said.
In other words, you’re paying good money for risks that you can eliminate by building relationships, and Nelson is all about building relationships.