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Banking is in the blood

April 27, 2010
Minot Daily News

Third generation keeping First Western Bank & Trust successful

By DAN FELDNER, Staff Writer

In an age of consolidation and acquisition in the business world, First Western Bank & Trust has not only stayed locally owned, it has also stayed within the same family for three generations.
It all started with Jack Hoeven, who didn’t found the bank, but did make it what it is today. Hoeven said First Western State Bank was started in May of 1964 and was originally located on Central Avenue West, where Brady Martz is now. Around 1966 or 1967, it moved to South Broadway at what is now the current location of Town & Country Credit Union.
“I purchased the bank on January 1, 1970, and then it (the building) wasn’t satisfactory for what we needed, so we decided to build a building, which we did and moved into it the first week of December of 1972, And that’s the location where we are now,” Hoeven said during a phone interview from California March 19. “And that location has been added onto on each end, so the building that you see there was actually built in three sections as the bank grew and needed more space. And it seemed to me it was a constant problem of getting more space.”
Hoeven said the bank’s growth has been more than satisfactory over the years, and when the Dakota Square Mall was opened in the early 1980s he was able to get some space to open a branch there.
“At the time that it was being built, Jim Jenson, who was the main promoter of the partners that built it, was a friend of mine and we made arrangements where we would have a space near the shopping center,” Hoeven said.
The arrangement was the partners would build the building and rent it to the bank for 12 years, while the bank was responsible for putting in all the fixtures. That location was used as a satellite branch with tellers and some consumer loan officers.
After the 12-year lease was up the bank bought the property and added to the building a few years later.
“It still functions with tellers and loan officers but it also has our trust department, our insurance department and our investment department,” Hoeven said.
While it’s now actually part of First Western Bank & Trust’s name, Hoeven said they originally weren’t looking to get into the trust business. It just kind of happened and the bank had no choice but to keep offering more and more trust services.
“We got in the trust business not because we wanted to but because people died and named us as the trustee. So we were more or less forced to get into the trust business,” he said. “And now it’s turned into, you know, by far the largest trust department in town. We have more people working in our trust department than all the rest of the trust offices in the whole community. It’s a pretty good-sized department now.”
Getting enough confidence from people in the community to be named a trustee was something Hoeven definitely had to earn after he bought the bank because the business had fallen into a poor state of affairs before the purchase.
Hoeven said regulators had gone in and taken over the bank and forced the owners to sell it off. Part of the agreement the previous owners made with the regulators was that in addition to selling the bank, none of them could stay on the board of directors and all of the bank’s officers had to go as well.
The community hadn’t responded to the previous owners very well, and they had few deposits that were actually from the community, Hoeven said.
“So I had to replace all of the officers and have a new board of directors, which we did. We managed to survive and prosper,” Hoeven said. “I think the community has always been very good to First Western Bank. Hopefully we’ve been good to the community, that’s why they’re good to us.”
Family ties
Jack’s son John wasted no time getting into the family business, coming to work at the bank in 1972 when he was just 15 years old. This was probably due in no small part to his parents wanting him to get out of his previous job.
When he was 14 John was an independent contractor for the Minot Country Club and ran the driving range during the summer. However, his hours ranged from 6 a.m. to 10 p.m., which made for very long days.
“Those were tough hours,” Hoeven said. “He didn’t complain, but his mother didn’t like them too much.”
John started at the bank in bookkeeping and worked his way up through the teller position during the summers all the way through high school. Each year his jobs at the bank grew in responsibility.
“He got a really wonderful fundamental understanding of every facet of the bank business,” Hoeven said.
In John’s later years of college, he was considering attending law school, but having done that himself, his father didn’t have much enthusiasm for it. Instead, John was persuaded to get a business degree at Northwestern University in Illinois.
When John came back in 1981 he took over the trust department. Hoeven said the trust department wasn’t doing very well at that time due to a lack of leadership, so it was hoped that John could turn it around.
“So he went in there and he realized that the only way he was going to get business was to go out and get it, and so that’s what he did,” Hoeven said. “He started calling attorneys and accountants and so forth, and in a relatively short time he built that trust department up quite well.”
While John was doing well in the trust department, Hoeven said he was having problems with his executive vice president and senior vice president, so he had to take his son out of the trust department and move him into the bank as the vice president lending officer. A few years later John became the executive vice president, a position he held from 1986 to 1993 until moving on to the Bank of North Dakota to serve as its president and CEO.
“That was, I’d have to say, a mutual decision. I think he’d reached a point where he needed to probably be the boss and CEO, and you don’t need two of those in one bank,” Hoeven said. “I wasn’t ready to retire by any means, I still haven’t retired. So he did that and I think that was a good move for him.”
Other members of the family who work at the bank include Hoeven’s eldest daughter, Becky Elder, who started at the bank in the mid-1970s and still works there today.
“She more or less did the same thing, working through all the different departments and so forth, and now she works on a limited basis. She works three days a week — Monday, Wednesday and Friday. She pays the bills, that’s her main function as far as I’m concerned,” Hoeven said. “But if a teller gets off she can go down and help, she can pitch in just about anywhere over and above her regular duties.”
Elder’s son Matthew also worked at the bank for a time as a teller while he went to college. Her daughter, Alesha, is still going to college and works as a teller at the Dakota Square branch.
Another grandchild who works at the bank is Marcela Hoeven, John’s daughter. When she graduated from the University of St. Thomas in St. Paul, Minn., in 2007 with a degree in marketing management, Marcela went to work for Target Corporate, but grew tired of that job after a while.
“She worked there for several years, but I don’t think she felt she was challenged enough and she was kind of bored with that job,” Hoeven said.
Marcela had worked briefly at a sister bank to First Western Bank & Trust located in Eden Prairie, Minn., during one of her summer breaks during college. She liked that experience and wanted to pursue it further after leaving Target.
“That was kind of my first experience in a bank, and there I helped out doing some marketing,” Marcela said during a March 24 interview. “We went door-to-door to the businesses around Eden Prairie to kind of tell them we’re here and tell them different promotions we were running. I was only there for three months that summer so I got a quick overview of some of the teller duties and how to fill an ATM, things like that.”
Marcela’s father felt that if she wanted to really learn the banking business, she needed to come to Minot for a while to work at First Western Bank & Trust.
“My son thought that if she was going to learn anything about the banking business, that she should come to Minot because he wanted her to understand our philosophy of banking,” Hoeven said. “And he felt that I was the one who should be the teacher, because I established it. So that’s how she came to Minot.”
Marcela arrived in Minot in June this past year. She was only supposed to stay for three months to learn the basics of banking before heading back to Minnesota to work at the Eden Prairie bank.
“At that point, coming back to Minot from Minneapolis, I just couldn’t wrap my head around it. That’s why we kind of compromised,” she said. “I’ll come back for three months, get some experience, and then hopefully be able to work at Eden Prairie.”
Marcela started out the way her father had, learning about the bank one department at a time from the bottom up. She started in the auditing department, then moved to the Dakota Square branch a month later to learn some consumer lending. She has also been in the trust department, insurance department, mortgage lending and the teller line.
Things didn’t go exactly as planned, however, as Marcela grew to love living in Minot too much to leave.
“Just being back in North Dakota, being close to my parents who live in Bismarck, being close obviously to my grandparents who live here, my aunt’s here. You know, I was originally born in Minot so I got reacquainted with some old friends, made some new friends, and I just really started to like Minot and made the decision that having this bank is a great opportunity for me, and Minot’s pretty cool too, so I decided to stick around,” Marcela said. “So what was supposed to be a three-month stint turned out to be, I guess, indefinite. I’m planning to stay here potentially forever — but we’ll see.”
At the moment, Marcela is working with marketing, which is a perfect fit with her marketing degree. Some of the things they’ve been working on include an updated Web site and a newly-launched Facebook page. As for her next step, she said she will probably be spending quite a bit of time in commercial lending.
“She really seems to like the banking business, she’s a very fast learner and the people who work with her have very nice things to say about her,” Hoeven said. “Which makes a grandfather happy.”
While Marcela was kept busy learning the ins and outs of banking, she still had time to learn a thing or two from her grandfather during daily visits in his office that covered a wide range of topics from banking to responsibilities.
“She would come into my office about four o’clock or later in the afternoon and then we’d visit maybe for an hour or so, and most every day she did that,” Hoeven said. “I think she liked it, she always came back and never found an excuse not to come.”
“Initially it was just the whole history of the bank, you know, when he first started out, just different trials and errors there. He also told me about the bank’s mission statement, the mentality he has and what’s important to him, you know, the whole reason why he started the bank,” Marcela said. “He really did it to help Minot grow and get businesses on their feet.
“We just had I think our 40th anniversary not too long ago, so it was really cool to see his passion behind it and it was really interesting for me to hear about that. Because we’ve always known that this bank’s been very important to Grandpa, but to actually talk to him about it has been great. I really cherish those (talks).”
Although those talks started out more about the bank’s history, they soon grew to cover just as much history about family and old friends. Marcela not only learned more about the bank, but about her own grandfather as well.
The relationship between the two also evolved right along with the topics. When talking about the bank, Marcela said her grandfather was more professional and business-like during the chats. When more personal stories came up, however, they would go from employer and employee to grandfather and granddaughter.
“He’s definitely very professional, but you know, when we’d sit back in his office I’d go get us Cokes from the Coke machine and we’d talk about banking. But a lot of times talking about those old stories would lead to other stories about all sorts of topics — family, friends,” Marcela said. “So I think it started very professionally in our conversations but it definitely would lead to personal topics as well.”
Hoeven spends his winters in California, and Marcela said she is definitely looking forward to when he comes back to Minot in the spring so they can continue their talks.
One thing Marcela and her grandfather have both given some thought to is her future at the bank. Marcela has greatly enjoyed her time at First Western and said becoming the banks’ president one day is something both of them have considered.
“We’ve discussed that and I think she would like to work up to that point,” Hoeven said.
Before that happens, however, Marcela readily admits there are still years if not decades of learning and experience she must acquire before being ready to tackle that challenge.
“It definitely will be far off, because I have so much to learn. You know I’ve barely skimmed the surface. I feel like there’s just a wealth of knowledge here and I definitely want to soak it all up, but it’s going to take time,” she said. “I think looking towards the future, you know, 20 years from now, however long it may be, if that works out I would love for that to work out. I just know it will take a lot of work and it’s definitely a goal I have right now.”
Family values
Marcela is proud to be carrying on the family name at the bank, but said that tradition goes hand-in-hand with responsibility.
“It does make me very proud, but with that comes a lot of responsibility. Both my grandfather and father, who both ran the bank, are extremely intelligent people,” she said. “So I feel like I have very big shoes to fill. But if I get the training and definitely put the work in to someday follow in their footsteps would be great.”
One thing Hoeven has always stressed is that at the end of the day, someone in the teller line is just as important to the bank as its CEO. That’s a principle Hoeven makes sure all his employees know, whether or not they share his last name.
Hoeven said he has always thought it was fairly easy working with other family members at the bank and has never heard any complaints from other employees. He said this is because members of the family who worked there understood he would not tolerate them taking on airs because of who they were.
Marcela said she feels lucky to have the opportunity to learn from all the employees at First Western, many of whom have been there for decades.
“The employees here are so great — best employees around. They’ve been so patient with me, you know, because I’ve been hopping around and they have their own workload to do while also taking the time to assist me in trying to get a little taste of what they do,” she said.
Treating everyone as equals isn’t something Hoeven limits to his employees, either. Treating every customer with the same amount of respect is just as important to him.
“One of the main principles behind this bank is it’s for the common guy. I still have savings (deposits) much higher than anybody else in town, and that’s because I feel that the wealthy man, he always finds a way to invest his money someplace where he can do well,” Hoeven said. “But the fellow who can only save $5 or $10 a week doesn’t have that opportunity. He’s working all the time and doesn’t have access to the same things they do, so I’ve tried to always keep something in there so that if he puts a little bit away he gets a decent rate of interest.”
Most people would assume the typical bank places a high value on turning a profit, but making money doesn’t appear on First Western’s mission statement until near the bottom. Hoeven believes a bank should worry about helping the community first, and if it does that good things will follow.
“To me the main function of a bank is to promote the community, and the way you promote that community is passing money through. In other words you make a loan so that money is flowing through the community. And the more you do that the better your community is going to be, so it’s a responsibility,” he said. “In our mission statement you get down to number seven before there’s ever anything said about making money and so forth in the bank. You’ve got six things that are more important, as far as I’m concerned.”
He also said that banks have a responsibility not only to loan customers money to improve the community, but to also deny loans to customers who might be unable to repay them. Although denying loans might not make the bank very popular, Hoeven said they owe it to themselves and the customers they are denying because it would be irresponsible to give that person another payment they aren’t able to make. This might frustrate the customer, but it’s far better than bankruptcy.
He noted that in 1995 Money Magazine named First Western the best bank in North Dakota, and they were in the running to be the best bank in the country, but lost to a bank in Texas. The bank has also won several other honors over the years.
Hoeven said giving good service and treating customers as equals have been the keys to the bank’s continued success. He also noted that banks don’t really help customers because when they borrow money and then pay the loan back with interest, the bank is helped just as much as the customer.
“I think good banking is made up of relationships, and so you have to make relationships with people,” Hoeven said. “And you find if you make good relationships with people, they know other people and they talk. It’s the word of mouth I think that has (helped the bank grow).”

Article Photos

Dan Feldner/MDN
Marcela Hoeven works at her desk March 24 at First Western Bank & Trust. Hoeven is the third generation to work at the bank, following her grandfather Jack Hoeven and father John Hoeven. While her father, the current governor, left the banking business for a career in politics, he still holds a seat on the bank’s board of directors. Her grandfather, however, is still involved with the day-to-day business of the bank as its CEO and chairman of the board of directors.



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