2014 Rising Stars in Banking: Brian L. Johnson

Brian L. Johnson, CEO of Choice Financial, Grand Forks, N.D., always has had a flair for performance. A self-proclaimed perfectionist, Johnson's appetite for new challenges has taken him far early in life. At age 39, he leads a $648 million bank rated the top-performing bank in the country among banks with assets between $500 million and $1 billion..NorthWestern Financial Review is honoring Johnson as a Rising Star in Banking for 2014, along with five other bankers..Johnson got his first bank leadership experience at age 25. When Johnson graduated from North Dakota's Jamestown College in 1999 with a degree in business management and economics, he had already worked as an ag lender since the age of 21. After graduation he took a job as an ag lender for Walhalla State Bank. "I moved to Walhalla, N.D., in July 1999; the bank was under a cease and desist order by 2000," Johnson said..The top three managers in the $18 million bank were removed by the regulator. "Asset quality issues and underwriting practices were the source of the regulatory action. I pitched the idea to our regulator that I could lead the bank out of the cease and desist," Johnson said. "That's how I became president of the bank at 25 years old.".In less than a year, Walhalla State Bank was out from under the cease and desist order. Under Johnson's leadership the bank grew to $25 million by 2001..Choice Financial was formed in 2001 with the merger of four North Dakota banks with seven locations: Citizens State Bank Grafton-Petersburg, First Capital Bank of North Dakota, West Fargo, First State Bank Langdon and Walhalla State Bank. Johnson was one of the company's leaders who envisioned a much larger bank with the economies of scale enjoyed by Choice Financial today. In 2001, the combined organization was $160 million in assets..After the merger, Johnson became the bank's chief credit officer. "My job was to get everyone on the same page from an underwriting policy standpoint," he said. "We had four ways of doing things back then.".In 2007, he became the market president for the bank's Grand Forks location. He grew the branch's assets by four times to about $180 million..By the time he became CEO in 2011, his market made up more than a third of Choice Financial's $480 million in assets..Today, the bank has 15 locations across the state. It is the 10th largest bank in the state for deposits and it has a 2.75 percent return on average tangible assets before tax. These metrics earned the bank recognition by SNL Financial as the top performing community bank in 2013 among the 784 banks with assets between $500 million and $1 billion. In 2012, SNL ranked the bank among the top 35 in the country..Johnson said there is no secret sauce to Choice Financial's performance. "It represents the quality and dedication of our staff in delivering value-added service to customers," he said. "We are a straight-forward bread-and-butter community bank.".Yet, Johnson does admit his hard work has played a role. "Operational efficiencies are my thing," he said. "I just negotiated our contract with FIS, our core processor. It took 25 percent of my time this year. I feel one has to find the time as CEO to dig into these large contracts to gain the knowledge and drive that expense down.".Since Johnson took the CEO's chair, Choice Financial's efficiency ratio has dropped to 51.69 percent, an improvement from higher than 55 percent. "Years ago I would have been noted as a perfectionist. These kind of people are usually control freaks," he said. "I can take time on an expense reduction project because I can depend on my team when I need to delegate projects to others. I am proud of that.".Choice Financial's reputation as a straight-forward community bank also helped it find its first acquisition opportunity. In 2013, the bank purchased Great Plains National Bank, Belfield, N.D. Great Plains brought $182 million in assets and five branches to Choice Financial. "Great Plains saw us as a great cultural fit and sought us out as an acquirer," Johnson said. "The bank was never available for sale publicly to other banks; they wanted to join us. We'd love to have that happen again.".Now Johnson has added another kind of performance to his repertoire: Dancing. Last year, Special Olympics North Dakota asked him to compete in its Dancing for Special Stars fundraising event. "I have absolutely zero dancing experience" he said. "The cause was just worth it. Given what the athletes do, I decided to suck it up and do it.".Johnson was partnered with an experienced dancer who helped him find his step. The fundraiser had record-setting success. Johnson and 12 other dancers raised $53,000. Of that, Johnson raised $23,000. "I think some of the success came from people wanting to see me dance," he joked..In addition to community activities, Johnson also is involved in industry advocacy. He is chairman of the Community Depository Institution Advisory Council of the Federal Reserve Bank of Minneapolis. He and the chairmen of the 11 other Federal Reserve banks' councils meet in Washington D.C., twice each year to update the Board of Governors on issues facing community institutions.Other 2014 Rising Stars in Banking honorees include:Katy Wolf Bode, Platte Valley Bank, North Bend, Neb.Daron Van Beek, The First National Bank, Sioux Falls, S.D.Laura Pomerene, First National Bank and Trust Co., Beloit, Wis.John Welle, Minnwest Bank Metro, Eagan, Minn.Dusten Johnson, Northeast Bank, Minneapolis