PIERRE | Trust companies headquartered in South Dakota surpassed $226 billion in assets during 2015, according to the state Division of Banking.
Director Bret Afdahl described the five-fold increase in five years as “sustained and dramatic growth” during a meeting Thursday with the state Banking Commission.
There were 223 employees of trust companies in South Dakota last year. They included 120 people working for 51 public trust companies, 93 people working in the trust departments of banks and 10 people working for 33 private trusts.
There were nine trust departments at banks, 51 public trust companies and 33 private trusts.
The bank trust departments held $7 billion in assets, while public trust companies had $165 billion and private trusts about $54 billion.
The Legislature and the governor’s advisory committee on trusts have worked consistently with the Division of Banking and its commission to better position South Dakota as a site for trusts starting some 20 years ago.
Trusts choose among the states for the best tax advantages.
Four private companies and 22 public companies had an active presence as of last year. There were 26 private companies and 22 public companies that had a contracted presence. Three of each had a limited presence.
Changes made by the Legislature this year are intended to lead to more employment by trust companies in South Dakota.
“If they’re not working that way, they’re working their way out,” Afdahl told the commission.
The Division of Banking now has two deputy directors, one for banks and one for trusts, and a staff of eight devoted to trust examinations.
Last year the division didn’t conduct any examinations outside South Dakota. There are trusts with offices in 22 other states.
“They’re supposed to have situs in South Dakota,” said Jeff Erickson of Sioux Falls, the commission’s chairman.
Instead people associated with the trusts fly into South Dakota for examinations.
“This is a lot more efficient,” Afdahl said.