2012 Rising Stars in Banking: Adam Dittrich

As president of Americana Community Bank, Adam Dittrich has been the leader his bank needed as it defied the odds against its survival. Dittrich grew up in banking but at age 28 significant economic and regulatory obstacles threatened the family bank. Dittrich, however, overcame those obstacles and today the Minnesota bank is on the road to recovery.."For someone to step up to the plate like Adam has done is tremendous," said David Saber, senior manager at Wipfli, an accounting and consulting firm. "CEOs with 40-plus years of experience are pulling their hair out over challenges like this. But Adam has seen his way through.".NorthWestern Financial Review is honoring Adam Dittrich as a Rising Star in Banking for 2012, along with seven other bankers. Three other bankers are honored in this issue (see pages 8, 10 and 12) and four bankers were honored in the June 15 edition of NorthWestern Financial Review..Americana Community Bank is based in Sleepy Eye, Minn., but the bank is primarily involved in the western Twin Cities market through its branches in Chanhassen, Maple Grove and Minnetonka. The bank competed in these markets as a commercial real estate and housing development lender. Like many lenders in 2008, the bank's portfolio started falling apart as the economy eroded. "We were caught off guard by the size of the recession. Based on the concentrations we had, we were proportionately hit," Dittrich said. "We recognized the problems fairly quickly but, like so many others, we didn't see how bad it was or how long it would last.".In 2008, the year Dittrich became the bank's president, the bank's capital began to decline. Capital erosion followed each year, at an increasing rate. "We started having challenges and then we had to make a breakneck 180," Dittrich said. "We had to transition from a time when things were good — with no delinquencies and the sales team ramped up — to a time of protecting the base and looking at the risk.".Some of the bank's customers abandoned ship when the going got tough. "When it got hard, there were customers who came and told us it was our fault because we gave them the money," Dittrich said. "They threw the keys at us and walked away. That kind of customer makes you want to throw your hands up too," he added..But he didn't quit. Adam Dittrich drew on the legacy of his father, Bob Dittrich, and forged ahead..Living in New Ulm, Minn., Bob Dittrich has been in business for himself for almost 50 years. As a teenager, he figured out how to make money collecting and recycling cardboard. Later, he bought a grain truck. "Dad went on to build that company into a nice trucking business," Dittrich said..One night, Dittrich decided to go to the local bank. "Dad got into a bit of a spat with one of the tellers and she snapped at him, 'if you don't like how we're serving you Bob, why don't you go buy your own bank?'" She may not have expected the literal effect of that suggestion..Dittrich happened to know a friend who was selling a small bank. "He called this friend who, thinking Dad didn't have any interest, told him all the current bids," Adam Dittrich explained. The next day Bob Dittrich's bid came in a little higher than the highest bidder. "He obviously won," Adam Dittrich said. Bob Dittrich went on to partner with a friend who was to teach him banking..In 1983, when Adam was 5 years old, Dittrich sold his share in the bank. He then bought State Bank of Sleepy Eye, the bank now called Americana Community Bank.."Dad started as an entrepreneur," Adam Dittrich said. Many bankers learn about small businesses from their experience in banking but Bob Dittrich earned that experience ahead of time. "Dad was taught in the school of hard knocks; it's not the cheapest education but it is a good education.".Bob Dittrich has taught those lessons to his son. "My biggest mentor has been my father," Dittrich said. "He has always been a big advantage for our bank." It is unique for a banker to have experience on both sides of the desk. Not many lenders have had the experience of meeting payroll and making hard decisions, such as laying people off, he said..The battle to stay above water at Americana Community Bank has been hard fought but the bank is strengthening. Relationship management has been the key. "My job has been to act as quarterback," Dittrich said. "There have been times where we have had to say to a customer that they need to cut expenses if they want to survive." Many of those negotiations have gone well because "these are the customers who bust their butts." Dittrich said these customers don't want to be a detriment to the bank and they want to protect their employees..In the first quarter of 2011 the bank sold its Medford, Minn., branch and the family invested capital in the bank. "Our goal is not to cost the FDIC insurance fund anything, to not cost our ownership anymore and to not hurt the community or our customer," Dittrich said..Dittrich and the management staff buckled down and focused on the balance sheet. "We hit 20 different fronts at once and made those tiny changes that allowed us to survive and move to the next level," he said. Now the economy has started to be more favorable and the bank is beginning to reap the benefits of the steps it has taken. "That has been a direct result of our hard work to do those 20 little things," he said..Dittrich held his team together. "There are many people in the bank who have more knowledge than I have. I have been able to contribute by bringing about collaboration and by getting the most out of my team," he said. The bank could not spare its resources for inefficiency. "We couldn't be duplicating efforts. We had to be efficient. Everyone had to be doing their job. They had to do it right the first time and they had to do it quick.".Now, the empirical data shows the bank is headed in the right direction. The bank's capital is increasing again. "Everything is improving; it has been a ton of hard work just to see a turn. There was no silver bullet to get us out of it" he said. "We're starting to spend some time in normal again.".Dittrich used to be told that he hadn't lived to see the bad times by older bankers who lived through the agriculture crisis. "Now," Dittrich said, "I can find the college grads and be the crotchety old guy saying 'you never had to do this, you don't understand what you're analyzing.'"."All bankers in the industry right now have a career's worth of experience," he added.Other 2012 Rising Stars in Banking honorees include: Sherri Van Beek, CorTrust Bank, Sioux Falls, S.D.Henry Schutz, Lake Country Community Bank, Morristown, Minn.Todd Heilman, Western State Bank, Devils Lake, N.D.Tod Eastman, HomeStar Bank and Financial Services, Manteno, Ill.Blair Folkens, L.A. Amundson Investments, Sioux Falls, S.D.Greg Turner, MidWestOne Bank, Iowa City, IowaEric Kjos, Regional Missouri Bank, Marceline, Mo