Ross Smith was appointed managing director of the Southland Building Society in 1992, intending to stay for five years. Still there, Mr Smith has managed the society through some turbulent times in a way that will be the envy of others in the finance industry. Now, he is chief executive of SBS Bank, and the Otago Daily Times Southern Business Leader of the Year.
He admits while an Invercargill head office might not be the first choice of other institutions, it has had many benefits for the SBS Bank, formerly known as the Southland Building Society.
The latest annual report shows steady growth in almost all categories.
In 2001, loan advances totalled $941 million.
They reached $2 billion for the first time in 2007 and in the 2010 financial year, they reached nearly $2.5 billion. Depositors funds have reached $2.3 billion.
The operating surplus has fluctuated with the fortunes of the global financial industry, hitting a low of $10.4 million in 2002, a high of $22.2 million in 2007.
In the past financial year, the surplus was heading up again at $19.4 million from $18.5 million in the previous period.
Mr Smith arrived at SBS in 1992, telling his wife the position would be for between three and five years.
He had spent three years with the United Building Society, in Christchurch, which became the United Bank.
SBS recruited him after the failed sale of the society to Westpac.
The previous chief executive had left.
''I looked at this as a transitional role but it is fair to say I am enjoying the role, enjoying the challenges and enjoying the company of the people I work with.
''My relationship with the board is excellent and it is the same with the staff.
I wouldn't stay if I didn't like it.''
Mr Smith described himself as very competitive with a strong will to win.
He could see an opportunity for SBS from the changes happening in the banking and finance sector and how the Invercargill-based organisation could step into a new role.
Previously, SBS had been very government service oriented, he said.
''We needed to change so we made some substantial changes. It was interesting getting people on board, seeing the vision, [seeing them] donning their running shoes and joining us on the race.
''Invariably, everyone did. You engage with people so they understand the vision - connecting with them. We have fantastic success. Sure, some people left but that's life. I have a good team around me.''
The key to change was making sure as a chief executive he communicated with the people when making changes.
Gone were the days of monopolies as there were far more companies in the marketplace.
Staff needed to understand that SBS had to change, become more commercial; and that their attitude needed to change, Mr Smith said.
SBS had previously two streams of business: finance and savings; people and products.
A detailed review was held to ensure SBS had the right products and services, branches and distribution.
While admitting he did not know how to do a teller transaction, Mr Smith was proud of the fact SBS employed people who were expert in that field and could deal with myriad customer inquiries.
Once people understood their role, the business started growing naturally.
SBS then started looking at its distribution network (branches) in the mid-1990s and decided to open more branches.
It went from five in the mid-1990s to 17 now.
In early 2000, three subsidiary companies were set up, each with its own chief executive who reported to Mr Smith.
The range of products was broadened to include debit cards, chequebooks, internet and telephone banking.
''For all intents and purposes, we were a bank,'' Mr Smith said.
Customers ''tuned into the new products'' and SBS kept growing, but in the background, the desire to become a customer-owned bank was becoming stronger.
Preliminary talks had been held in the past with the Reserve Bank about gaining a banking licence but Mr Smith realised there was an opportunity for SBS as the global financial crisis took hold.
''The world changed. We ran the business as a commercial entity with mutual values.''
The co-operative values did not dictate the company's decision-making but were its conscience, Mr Smith said.
''In 2007, there was a cyclone brewing. We realised early that finance companies were falling over. I had been thinking since 1992 that we should be a bank. It was always on my agenda. We always had to keep asking the question to make sure we had the right answer.''
As the changes continued in the non-banking sector, Mr Smith started to believe the time was right for SBS so he again talked to the Reserve Bank.
The central bank seemed less than enthusiastic at the start of the discussions, perhaps not surprisingly given the havoc being wreaked upon the world markets at the time.
However, Mr Smith was not dissuaded and kept pushing to find out why the Reserve Bank seemed reluctant.
''The board carefully analysed our model. We knew we had to find out why they said we wouldn't get a banking registration as a mutually owned organisation.''
The board and Mr Smith spent a lot of time with the Reserve Bank, discussing the benefits of being a mutual and addressing the bank's concerns about the mutual model.
SBS emphasised there was no downside to being mutually owned and by 2008, the bank had agreed and decided to issue a banking registration.
The registration came on October 7, 2008, right in the middle of the greatest global financial crisis in recent times.
The next day, Lehman Brothers collapsed.
''I have nothing but praise for the Reserve Bank. They have been fantastic to deal with and supportive of us being a New Zealand-owned organisation.
We have been around for 139 years and that stood us in good stead.''
Throughout the global financial crisis, SBS managed to maintain a profitable performance.
It was hit by some bad debts, but because of its commercial attitude, bad debts were not significant.
Mr Smith believed SBS was one of the few organisations in the country to get through the crisis unscathed.
His expectations were that the profit in March next year would be about the same as the 2010 profit.
So how did Mr Smith manage to steer the former building society into becoming a bank?
One of the first things he did on arrival was start talking to the staff, believing that not much of that had happened in the past.
He greeted them on the street, something that had not happened previously.
''I don't believe in egos.
I treat people as I find them - with a degree of respect. That's the way I am.''
He instigated business and action plans so everyone knew how they fitted into the organisation and its future.
Once people knew what was expected of them, they realised the effect they had on the business.
The more successful they were, the more successful the organisation was, Mr Smith said.
And he continued to sell the journey.
There was always a slight movement in the message but the most important thing for SBS was the commercial performance of the business first, people next, then the community.
If you looked after the business, the people, staff, customers and community all benefited, he said.
The relationship with the board was critical.
Although the board was elected as representatives of the customers, board members wanted to know the returns to the customers were not at the expense of the business.
Mr Smith was in demand to speak at community organisations around the country.
He recently spoke at U3A (University of the Third Age) and often talks to Rotary, most community groups, at branch presentations and to professional organisations.
He regarded that as part of his role.
A keen player of golf and tennis, Mr Smith said he did not carry a placard advertising who he was but he knew always that he was representing the bank.
''There have been times when SBS has been hard to sell outside the region, as Invercargill is not seen as the logical place for a bank headquarters.
We are different from that perspective.
''People do respect our values. We are New Zealand-owned and the customers own us.
''We are not shipping our profits offshore. People believe in those underlying values.''
Because of that, customers stayed with SBS for a long time, Mr Smith said.
There were some who were looking for the best rate on the day, but overall, customers stayed because of the values.
Staff turnover was also low.
''We like to think we look after staff and that encourages them to stay ... Invercargill is not the easiest place to attract staff but we don't compromise.
We wait for the right people.''
Most new staff knew about SBS before they applied for the job, because many of them would have encountered the bank in their daily business with other organisations, he said.
They applied for the job because they knew what SBS stood for.
Last year, SBS merged with the Hastings Building Society as a way of increasing its North Island presence.
SBS was not aggressive in merger and acquisitions but if it saw an opportunity it would consider it.
Asked about his future, Mr Smith said he was driven by being part of a successful organisation.
''I relish success. That's what drives me. I am very competitive and like to win against the odds. It wouldn't be exciting if it was business as usual.
''The banking regulation was against the odds, the merger with Hastings Building Society was against the odds.
''I believe there are more opportunities out there. There is nothing on the table, but we are looking.''
