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With its CEO Doug Johnson Coming from an Agriculture Background, Guaranty Truly Understands How to Help Farmers

Douglas R. Johnson


Guaranty State Bank and Trust Company

Interview conducted by:

Bud Wayne, Editorial Executive

CEOCFO Magazine

Published – January 2, 2023

CEOCFO: Mr. Johnson, is there significance to the banks name, Guaranty?

Mr. Johnson: Many banks have the name of the town or the county. Guaranty can fit any place, so we have grown to be very appreciative that the original folks chose that name.

CEOCFO: How long have you been with the bank and would you tell us about your role or role and how it has developed o where you are today as CEO?

Mr. Johnson: I began work at Guaranty in 1974 as an AG loan officer and in 1987 I was appointed CEO. I have been in that position since ever since. I have been with the bank 48 years.

CEOCFO: When you got into the workforce were you thinking of yourself as someday being a bank CEO?

Mr. Johnson: Actually, I was not even considering banking as an occupation when I was a senior at Kansas State University. The placement center on campus, the officer that worked with us AG graduates as we were seniors, would inform us of companies looking for people to interview, so one of the companies he referred me to was Guaranty here in Beloit. My response to him was “I appreciate the suggestion but I am not interested in the banking job.” His response to me was “That’s fine, you don’t need to be interested in banking, but you need practice interviewing and this will be onsite so you have to travel to Beloit, which will be good experience and practice for you.”

Without his admonition I would have never even come out to interview. I grew up on a farm in Iowa and my family still farms there. I went to K State as an animal science and industries major and graduated with a degree in that. My expectation was to work in some capacity on a farm somewhere, but here I am in banking.

CEOCFO: You are big on AG loans. Does your background and history make a difference and play a role in that?

Mr. Johnson: Yes, and I think that is why the officers at the time I interviewed considered me for the job, because I had a farm background and a farm academic background at K State, particularly in cattle, as I grew up on a cattle farm. Therefore, I am part of AG lending here at Guaranty. I think they saw some possibility there. It has worked out.

It is becoming harder and harder to find farm boys and farm girls that are interested in coming back to rural areas and working in the field. We really appreciate them when we find them.

CEOCFO: Do agricultural loans represent the greatest revenue potential for your bank today?

Mr. Johnson: Yes, I call it our bread and butter and 75% of the loans are AG loans. The other 25% are related to AG in some way, either AG business loans or loans to consumers that work in the field of agriculture. We are pretty well an AG bank.

CEOCFO: What are some of the other products you provide?

Mr. Johnson: Agribusiness elevators, dealers of fertilizer, seed and chemicals, and then the mom and pop small business stores in our trade area. We do both residential, commercial and farm real estate lending. That is an everyday part of our business here, financing real estate.

CEOCFO: What are some of the challenges that you face in reaching the Ag community and how do you ensure your loan officers are equipped to meet the needs of the farming community?

Mr. Johnson: We spend a lot of time orienting our AG loan officers on how to help farmers. We talk through the risk of marketing and the advancing technology that the farmers are using now in their farming machinery. It is becoming a sophisticated industry. We tell our loan officers to keep up with those trends in farming and to be good at discussing those things as they deal with financing their crops and livestock, machinery and land.

CEOCFO: Has there been any significant changes to your team over the past few years? I see that you have personnel in Information Technology. What is the significance of those positions?

Mr. Johnson: That is a big aspect of banking now that has changed over the years. IT personnel now has the challenge of understanding and utilizing technology while at the same time keeping it safe for the customer and the bank. That safe part is becoming extraordinarily challenging and expensive. Customers expect to have more and more convenience to access their money and information about their accounts and so forth while at the same time the nefarious folks out there are becoming more and more sophisticated at intercepting that information and taking advantage of the customer.

That aspect of banking has changed from being almost never discussed to now being a common topic of meetings here. In a rural part of the Midwest, we used to think we were insulated by distance and geography but with the internet now and even out here in rural areas having high-speed internet, we are as vulnerable in Beloit, Kansas as we might be in New York.

CEOCFO: Do you spend a lot of time with your staff discussing the dos and don’ts of for security?

Mr. Johnson: We do. Every month or frequently at times all of the employees including myself send test emails to test if we are aware of what to look for and how to spot those that are malicious. Frequently in all staff meetings and key security testing and lectures about what to watch for, are carried out.

We are also helping to educate our customers because sometimes customers are the ones that make their information vulnerable, not the bank. We are working on educating employees because our IT director often tells employees they are the biggest risk we have. We tell them that if they are not alert, that they are likely to open the door in our network to let a crook in, so please do not.

CEOCFO: Are you more of a business/commercial bank than a consumer bank? What is the mix and would you like to see that change?

Mr. Johnson: More of our loans are farm and commercial, but we have lots of consumer because of the counts and some are loans but because of our trade area. There are more acres of land and cattle than there are people out here.

CEOCFO: What role does wealth management play in your strategy? Is this more for customer relations?

Mr. Johnson: It is a significant part of our business and it is very much a customer relations part of our business as well. Guaranty truly deserves the label of a full-service bank. For our location being very remote, we offer trust services, escrow services, and investment services. We have licensed brokers on staff and we have a relationship with a brokerage firm so that our customers that deal with that part of the bank and do financial planning as well as purchasing mutual funds and other equities.

We say that from the moment you are born to the time of your passing, you will have the services you need. We take pride in that and we take pride in our employees being able to tell a customer that whatever financial needs that they have, very likely Guaranty can help them with those.

CEOCFO: You have branches in Beloit, Burr Oak, Esbon, Glen Elder, Jamestown, Jewell, Rossville-LPO, Smith Center and Tipton. Would you tell us about the communities that you serve. Are they more rural or urban? What changes have you seen over the past two years?

Mr. Johnson: Guaranty was originally the result of merging three banks, now is the result of merging fifteen previously separate chartered banks into one bank. Guaranty is kind of a representative of what has happened to the community banking industry, or we have gone from a single charter originally to now a combined fifteen, previously independent charters. All of those other communities are smaller than Beloit but even Beloit itself is less than 4000 population. Some of the towns have a population of under 100.

Guaranty is unique and other bankers you talk to probably look at Guaranty’s strategy of trying to be successful with banks in such small rural areas, but Guaranty has been able to make that work at least so far despite a declining population and the like. We are glad to be of service to those banks. Many of those small rural communities really appreciate that they still have a bank because they lost their grocery store, school, and other mainstays. They still have a bank so they feel grateful for that.

CEOCFO: How many branches do you have and are you looking to grow that number in the near future?

Mr. Johnson: We are willing to grow back position some more but the opportunities to do that are limited now. Industry has already consolidated a great deal and many of the surviving banking organizations are pretty strong vibrant and likely to continue. We are open to those opportunities but not expecting a lot more.

We are staying close to home; we are not looking to expand our geographic coverage much more than we already are. That also limits those opportunities in the future. We will try to take good care of what we have here in north/central Kansas and over to Rossville, outside of Topeka. We do the best we can with that.

CEOCFO: With the rise of online banking and mobile apps, is the personal touch still important for you and your customers or do you find with the newer generations that are in the workforce these things don’t matter as much?

Mr. Johnson: The younger ones are more willing to do banking via electronics. We have a lot of senior citizen customers that still want to talk to us face-to-face or at least by phone. When we mention to some of our customers the availability of ATMs, they are truly not interested at all in that option. They younger ones are for sure but many of our seniors are not open to that too much. They build their trust and their impression of us as they talk to us and see us, where the younger generation seems to measure by how easy it is electronically to do business with the bank or whoever. We are trying to accommodate both the younger and the older generation and provide banking to both.

CEOCFO: You have a Facebook page. How important is social medial for you and what do you use it for?

Mr. Johnson: We try to use it more for a social communication with a bent towards communicating what Guaranty is doing besides trying to sell financial services for a profit because we are very attuned to having to be an integral part of the community more than just being a bank but volunteering and donating. To celebrate our hundredth year there was a group of employees who formed a task force to carry out what they call the 100 acts of kindness throughout the year 2022. Our Facebook page from time to time would mention things. I think we have passed 100 different ways that Guaranty has extended acts of kindness to our communities. That has been fun.

We gave each employee the opportunity to name a charity that had a local impact and Guaranty would then donate $250 to that charity in the name of our employee to honor the employee and to communicate to the community that we are interested in respecting and honoring our employees while at the same time interested in supporting charities that help our local communities. I think the response of the employees to that was pretty positive. We were glad to be able to do that. I saw the list, we have 70 employees and I think there was 50 different charities that received funds through that program, so that was kind of fun.  

CEOCFO: Do you have a marketing person or team? If so, what is their role? Is it community relations messaging, helping pitching your products and loan offering or a mix?

Mr. Johnson: Yes, we have a marketing director and there is a second officer that helps with marketing as well as HR and other things. They, together with some other staff help do marketing that includes advertising, business promotion, social media, and all of those things.

We do Christmas open houses and we just completed the last one at one of the banks here in the last few days. We invite customers to come in and then pick-up physical Christmas gifts this time of the year. We will actually put the gifts under the Christmas tree in the lobby and invite customers to come in and pick up their gift.

CEOCFO: How is the bank funded? Do you have shareholders, investors, if so, how many and are you looking to grow that number?

Mr. Johnson: That is a unique characteristic of Guaranty. Guaranty is very broadly held; we do not have a majority shareholder. The largest block of stock is 7. something percent, which makes Guaranty unique among small rural banks. We have 275 plus shareholders who have addresses literally all the way from New York to Los Angeles. Guaranty’s shares are not traded any place. You just have to work through us.

Oftentimes the shares are handed down from one generation to the next. When they want to sell or transfer shares, they contact us but with many shareholders we have limited communication and we send them the annual financial reports and their dividend and that is about it. So that is a little bit unique to us. We have made the best of it.

We cannot call a meeting of all of our shareholders like some banks can and have everybody sit around the table and talk things through, but never the less we have a good board of directors and they represent the shareholders well. It works.

CEOCFO: In closing, what sets Guaranty apart from other local banks and why are you important to the fabric of the community?

Mr. Johnson: The full-service nature of Guaranty and being able to provide deposit services, loan services, trust services and investment services as well as financial planning, all make Guaranty an effective member of the community and an effective financial organization and for customers. I call it a positive tension between Guaranty and the communities we serve because we think truly the communities need Guaranty and of course Guaranty needs the community and its customers. We feel like it is a nice relationship where we truly need each other.

We have limited population and limited alternatives, so making it a positive thing for both the customers and the bank is important and I think Guaranty is pretty good at it. We enjoy life and feel we have a good quality of life here. It is good.

Guaranty State Bank and Trust Company | Douglas R. Johnson | Kansas Banks | With its CEO Doug Johnson Coming from an Agriculture Background, Guaranty Truly Understands How to Help Farmers | CEO Interviews 2023 | Community Banks

“We have limited population and limited alternatives, so making it a positive thing for both the customers and the bank is important and I think Guaranty is pretty good at it.”
Douglas R. Johnson