Iowa banker finds growth worth the effort

Peg Scott, CEO/CFO, recruited investors to buy Union State Bank of Greenfield, Iowa, to keep it locally owned.

Peg Scott doesn’t play the blame game but neither does she settle. It was an inclination toward positive action which sparked Scott to pursue a college degree as a non-traditional student after being passed over for a promotion, spurred her to assemble a group of investors to buy the bank where she worked rather than watch outside interests move in and displace her coworkers, and inspired her to be a leader for the times as the Iowa Bankers Association launched its first Women in Banking conference. 

Scott, the CEO/CFO of Union State Bank in Greenfield, Iowa, is one of six bankers honored this month by BankBeat magazine as a 2019 Outstanding Woman in Banking, sponsored by SHAZAM; she is being recognized precisely because she is a changemaker.

Being passed over for a promotion wasn’t something Scott internalized. “It wasn’t just me,” she said. The executive staff never looked within when it was time to promote, she said, even though “we were all good and smart enough to be moved up.” She ascribed the experience to “just how it was.” The men made decisions and the women took instructions. Ancient history, you might say, except Scott was in her mid-40s at the time. 

“It was one of the best things that happened to me, because I was like, ‘Whoa, I need to be more aggressive if I’m going to move up,’” she said. Scott enrolled in college and studied at night alongside her daughter, Jessi, who was also in college studying to become a nurse.

Scott’s defining moment had yet to come, however. In 2007, the owners of Union State Bank decided to get out of banking and put the then-$43 million in asset bank on the market. What came next Scott described as “a leap of faith.” She went home to her husband, Jim, who had been farming since 1975, and together they made the decision to try to find investors to buy the bank and keep it locally owned. “He was definitely my 100 percent partner in that process,” Scott said about her husband.

The couple had a friend who’d just bought a bank, so they reached out for guidance, contacted a lawyer, and started contacting potential investors. As it played out, Jim Scott knew a lot of farmers who were interested in buying in, and word spread through their part of Iowa like Palmer pigweed. One example: While Jim Scott idled at a grain elevator in Winterset, a farmer approached and asked: “Aren’t you married to the woman who is trying to buy the bank in Greenfield?” That farmer became the bank’s largest investor.

It took the Scotts about six months to get through all the meetings and each, “Oh, by the way, you need to raise more money,” setback. They were initially told to raise $2 million but the capital estimates changed with the seasons and by the time they took over the bank on Dec. 3, 2007, they’d raised $4 million from 33 investors. 

“To this day, I can’t believe we really decided to do that,” Scott said. “Once you’re in it, it kind of snowballs.”

The recession years that followed didn’t hurt the ag bank too much, and even in recent years, Union’s farm customers have fared well, thanks to weather that has been conducive to high yields. In 12 years under Scott’s leadership, Union State Bank has nearly doubled its asset size. 

Scott and her husband, Jim, run a cow-calf operation at their 1,200 acre farm; they have three children and seven grandchildren. In September, Scott completed her year as chair of the Iowa Bankers Association. Scott has also served on the Advisory Board for the Iowa Division of Banking and on the Community Bankers Council of the American Bankers Association.

As the leader of an $80 million bank and part of the executive committee for the Iowa Bankers Association, Scott has advocated enthusiastically for her banking peers.  In a conversation with former FDIC Chair Martin Gruenberg, for instance, Scott noted that the regulator’s idea of a “small bank” was “maybe under $1 billion.” When she pressed the point, asking: “What about an $80 million bank?” Gruenberg’s response was to tout the economies of scale. “That was frustrating,” she said. That exchange aside, Scott said one of the highlights of her involvement in IBA leadership has been building relationships with legislators. 

Her leadership legacy is helping launch IBA’s Women in Banking conference in 2018. Scott was part of an advisory committee that got that event off the ground. A women’s conference had long been on the short list of events IBA staff had wanted to start, said Ann Winkel, vice president of education. “It was a long time coming,” she added. 

Sometimes a new idea needs a spark, and Scott provided it. “She was one of the people who mentioned it to John [Sorensen] and it started to percolate,” Winkel said. With Scott and others talking the program up, the event moved to the top of the list, Winkel said. “Her leadership and involvement gave it that much more weight for us to get behind it.”

The planning committee expected 100 to 150 participants at the inaugural conference. Nearly 300 people registered. Registration grew for the 2019 Women in Banking conference. One bank sent 50 employees.

As IBA’s incoming chair when the first women’s conference convened, Scott served as host. “She welcomed everyone and closed the conference. Her remarks were on point and meaningful,” Winkel said. “I think it really touched her. She was proud of our banks.”

Leadership roles are more abundant in Iowa’s banks, thanks to women like Scott, Winkel said. One of those roles is populated by Scott’s daughter, Jessi, the former nurse and her mother’s college study-mate who now works at Union State Bank as vice president of operations. 

“Buying a bank was nothing compared to having my daughter come on board,” Scott said, recalling the stress of learning her daughter had submitted a job application at the bank without first telling her. “I told our president ‘you have to interview her and you have to make the decision,’” Scott said. If Jessi didn’t work out, Paul Nelson was told the firing would be on him too. “I certainly didn’t want to disappoint her.” 

Fortunately for the family, Jessi worked out. “She just does everything for me,” Scott said. “I’m very lucky to have her.”