View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.


August 5,1985

Des Moines, Iowa

Vol. 14 No. 16

A B A Supports Loan Loss Reserve








SPOKESMAN for the American
Bankers Association testified
July 26 before the House Ways and
Means Committee that the Adminis­
tration’s proposal to eliminate the
reserve method of accounting for
loan losses by banks is “ unfair, inequitable, and contrary to the na­
tional interest.”
John R. Petty, chairman and CEO
of Marine Midland Bank, New York,
speaking for the A B A as a member
of its Government Relations Coun­
cil, added: “ If a bank were not per­
mitted to deduct both its cost of
funds and a recognizing interest
from a loan, the bank would be paying taxes on phantom profits. Banks
should pay taxes on an ongoing
basis on their pretax profits after
deducting the cost of funds and a
p rov ision for exp ected credit
All of this hassle over commercial
banks’ loan loss reserve must be
bringing a smile and a twinkle to the
eye of a delightful Irishman named
Emmett W. Rossiter, who is un­
doubtedly viewing these proceed­
ings from a comfortable vantage
point in heaven. Mr. Rossiter was
just a plain, old-fashioned “ country” banker who organized the Bank
of Hartington in northeastern Neb­

raska in 1934. Mr. Rossiter died in
April, 1951 at the age of 63.
But before he died, Mr. Rossiter
created a few ripples that have had
lasting effect in the banking indus­
try. Single-handedly he doggedly
pursued his concept of allowing
banks to set up a loan loss reserve
before taxes. Mr. Rossiter’s son,
Vincent E. Rossiter, Jr., now chair­
man of the Bank of Hartington, re­
calls that his father was pursuing
this idea just prior to W W II, but it
was put on hold until the war ended
in 1945. Emmett Rossiter again
began stumping for his plan, gaining
the support of the Nebraska Bank­
ers Association.
Shortly after joining the maga­
zine in 1945, we had the privilege of
meeting Mr. Rossiter and heard him
address the 1946 N BA convention
in Lincoln on the topic, “ Loss Re­
serves Before Taxes.” Part of our re­
port on his talk quoted Mr. Rossiter
as saying, “ This legislation would
aid bankers to more nearly attain
impregnability of financial structure
through providing a definite method
whereby banks might establish loan
loss reserves in years of good earn­
ings against losses in years of de­
pression and lean earnings.” Mr.
Rossiter said further this bill was
proposed unsuccessfully to the reso­
lutions committee at the national
A B A convention in Chicago a

month earlier. Our report quoted
him as saying, “ the only way to get
action on it is for small banks, which
compose 80 percent of the A B A , to
all become interested to act on the
Mr. Rossiter was like a tenacious
bulldog with his firm belief in the
loan loss reserve concept. By con­
stant traveling back and forth to
Washington and New York, tele­
phoning around the country and
writing volumes of letters, Mr. Ros­
siter saw his idea come to life on De­
cember 7, 1947, as Mimeograph No.
6209 of the Commissioner of Inter­
nal Revenue, titled, “ Reserve
Method of Accounting for Bad
Debts in Case of Banks.” The for­
mula was based on the average loss
experience on the loans of an indivi­
dual bank over the past 20 years. It
was then embraced and endorsed by
A B A , IB A A , and all banks in the
Today, very few people remem­
ber, know or care that a wise coun­
try banker from a small Nebraska
town set the stage for a banking pro­
cedure that is playing a crucial part
in today’s loan crisis in so many
Even fewer people know that
after his idea was adopted, Mr. Ros­
siter added up his business expenses
he paid from his own pocket in con­
nection with pursuing his idea and
when they totaled $1,800.00, he
entered that total on his income tax

AND Getting
it done for you.


Bill Sprenger

Frampton Rowland

John Messina




Commerce Bank ofKansascity'
Federal Reserve Bank of St. Louis

T oTelephone
lan h n n a I R



Norwest Bank Des Moines, N.A.
Call (515) 245-3131 or toll-free (800) 362-2514



Member FDIC


f f

one of the reasons
we’re first in Iowa.
Lowell Barkley

return as a deduction. The IRS,
which adopted his suggested loan
loss reserve, promptly stamped his
deduction—“ Rejected!"

Iowa News
Four one-day workshops will be
held around Iowa to introduce the
Residential Real Estate Forms and
Procedures Manual. They will be
Aug. 26 at the Ironmen Inn, Iowa
City; Aug. 27 at the Airport Inn,
Des Moines; Aug. 28 at Maxwell’s
Harbor House, Storm Lake, and
Aug. 29 at the Sheraton Inn, Mason
City. Registration for each work­
shop will be at 8:30 with adjourn­
ment at 3:00. Fee includes refresh­
ments and lunch and if paid in ad­
vance is $60 for members, $75 for

to make MNB
work for you.

Member F.D.I.C.
Federal Reserve Bank of St. Louis


GRINNELL: Stanley C. Lubben has
joined the Grinnell State Bank as
assistant vice president in the loan
department. He was previously as­
sociated with the Iowa State Bank
in Clarksville for 17 years.

subscribers and $90 for non-mem­ W ATERLOO: Otto W. Thomas has
bers. A t the door the fee is $20 addi­ been elected president o f Waterloo
tional. Register through the IB A of­ Savings Bank, effective August 19,
succeeding Dale DeKoster, who re­
fice in Des Moines.
tired recently. Mr. Thomas moves
CEDAR FALLS: A t Norwest Bank
from Youngstown, Ohio, where he
Cedar Falls Mark A. Long has been
was executive vice president of
promoted to assistant vice presi­
Bank One o f Eastern Ohio, N. A., for
dent-commercial banking and Duane
the Bank One northern region.
A. Amhof has been appointed com­
mercial banking officer. Mr. Long
Nebraska News
has been with Norwest since 1981
The Nebraska Bankers Associa­
and with the Cedar Falls bank since
1984 as a commercial banking of­ tion will host its annual NBA A g
ficer. Mr. Am hof has been with Nor­ Credit Conference in Lincoln at the
west since 1983 and with the Cedar Comhusker Hotel, September 5-6.
Falls bank since 1984 as a commer­ Registration is at 8:30 a.m. Thurs­
cial banking representative and day; program starts at 9:00 a.m.;
luncheon Thursday noon will have
credit analyst.
Nebraska Football Coach Tom
CLINTON: Wayne V. Jungjohann, Osborne as speaker. After a recep­
vice president of Iowa State Bank, tion and open dinner hour, regis­
Clinton, announced his resignation trants may attend a special ap­
to the board last month. He joined pearance of “ Alabama." The confer­
the bank in 1958 and has served in ence concludes with a Friday lun­
various capacities. Since 1981 he has cheon that features the A g Recogni­
managed the 7th Avenue South of­ tion Awards.
fice of the bank. He has indicated he
* * *
is leaving the bank to pursue other
First National Bank of York,
career and business interests.
First National Bank of Bradshaw,
DES MOINES: A t Norwest Bank The Blue River Bank, McCool Junc­
Des Moines, three were recently tion and the Farmers & Traders
named vice presidents. Patricia L. Bank, Waco, Nebraska have filed
Hanson, formerly vice president and with the Comptroller of the Curren­
controller for the bank, has been cy an application to merge the four
named regional vice president and banks. The principal office of the
controller for Region IV of the cor­ merged banks will be at The First
poration and chief financial officer of National Bank in York and the other
the bank. Mitchell A. Christensen three banks will operate as branches
has been named senior vice presi­ at their present locations. All four of
dent and cashier in charge of opera­ the banks are owned by First York

• Prompt

Toll free
1- 800- 332-5991

National Bank 151

tions. The Des Moines operation de­
partment includes the consolidated
operations function of six Norwest
affiliates in Region IV. Cara Heiden,
previously assistance controller, has
been named senior vice president
and controller.

Vice President

Count On Our
Correspondent Bankers


Vice President

Valley National Bank ■§■

Member FDIC


Call toll free (800) 622-7262


Call on the “Experienced Professionals”
Ready to meet your
correspondent needs.













Ban Corp, a bank holding company,
which is owned by Robert V. Jones
and C.G. “ Kelly” Holthus, who have
been active in banking in York and
York County for the past 35 years.
FAIRFIELD: Hastings State Bank
received approval July 11 from the
Nebraska banking department to
open an office here, replacing The
Fairfield State Bank, which was
closed by the banking director May
31. The new office is expected to
open in the old Fairfield bank
quarters in early August. Guide
Rock State Bank also applied for an
office in Fairfield, but its applica­
tion, filed two days after approval of
the Hastings application, was then
LINCOLN: First National Lincoln
will host its 25th Correspondent
Bank Conference at the Comhusker
Hotel September 6-7. There will be a
reception in the First National
across the street from the hotel Fri­
day evening. The Saturday program
will feature the traditional A g
Panel, followed by an 11:00 a.m.
brunch, after which guests will adjoum to nearby Memorial Stadium
for Nebraska’s opening football
game with Florida State.

^ F irs t N a tio n a l L in co ln
" '" m a ,


fectively as commercial loan offi­
cers. Approximately 110 bankers
are expected to attend this year.
* * *
BENSON: James E. Hella has been
elected president of the First Securi­
ty State Bank. He previously served
as president of Farmers State Bank
o f Lake Benton. Donald C. Minchow
was named vice president o f the
bank. He previously was with Swift
County Bank in Benson.
H IGH LAND: American National
Bank has named John D. Turner
vice president and manager of its
new detached facility in Highland.
He most recently served as presi­
dent of The Highland Bank, where
he was employed since 1969.
M IN N EAPOLIS: Norwest Bank
Minneapolis has appointed four vice
presidents. Ronald T. Whitcomb has
been named vice president, metro
business banking. He most recently
served as manager of metro busi­
ness banking and senior manager at
the 615 N. 7th St. branch as well as
manager of the Metro Business
Banking Center at 1221 Nicollet
Ave. Anthony M. Pasko has joined
the bank’s corporate banking group
as a commercial banking representa­
OM AH A: FirsTier, Inc., a Neb- tive in the real estate development
raska-based financial services com­ department of the special industries
pany, has formed a new subsidiary division. He was previously a vice
that will offer consulting services to president for First National Bank of
banks in the region, called FirsTier Chicago. Douglas S. Pearson was
Management Consultants, Inc. Ron- named vice president in the corpo­
aid L. George will serve as president rate banking group’s regional corpo­
of the subsidiary. He was previously rate banking division. He joined the
regional director of special surveil­ bank in 1983 as assistant vice presi­
lance for the U.S. Comptroller o f the dent and senior commercial banking
Currency’s Kansas City office and is specialist. Garrett W. Boss was
also a former employee of FirsTier named vice president in the trust in­
dividual services area of capital
subsidiary Omaha National Bank.
management and trust. He joined
PAPILLION: J. Sid Dinsdale has
the bank in April as senior portfolio
been named president o f Bank of
manager in trust capital manage­
Papillion. He was formerly execument services.
tive vice president of the Fort Lupton State Bank, Fort Lupton, Colo­ M INNEAPOLIS: David G. Herzer,
senior vice president of administra­
tion for First Bank System and a
Minnesota News
former Wisconsin bank president,
The Minnesota Bankers Associa­ has been named president of the
tion Commercial Lending School First Bank System Foundation and
(CLS) will be held August 11-16 at senior vice president of public af­
St. Olaf College in Northfield. Ac­ fairs. He succeeds Lloyd L. Brandt,
cording to CLS Adm inistrator who retired July 31 after 12 years in
Wayne Berthiaume, the p r o g r a m the company’s public affairs depart­
glims to prepare bankers to serve ef­ ment.
Federal Reserve Bank of St. Louis

streets, uncoin,


e^ oT "

South Dakota News
The South Dakota Bankers A sso­
ciation will sponsor a Qualified Plan
Seminar (formerly Keogh) on Aug­
ust 28 at the Holiday Inn in Mit­
chell. Reigstration will begin at 8:30
and the seminar will conclude at
4:30. Fee is $95; register through the
SDBA office in Pierre.

North Dakota News
BISM ARCK: Steve Jacobsen has
joined Norwest Bank Bismarck as
senior vice president-loan adminis­
tration. He has been associated with
Norwest since 1971, most recently
as senior vice president at Norwest
Bank Wahpeton.

Wyoming News
GLENROCK: First National Bank
was closed July 23 on order of H.
Joe Selby, Acting Comptroller of the
Currency. The deposit liabilities of
$17 million were assumed by Na­
tional Bank of Glenrock, a newlychartered bank, which paid FDIC a
premium of $9,000.

Montana News
BILLINGS: Keith D. Cook has been
promoted to vice president-commer­
cial loan department at First Inter­
state Bank o f Billings. He joined the
bank in 1984 as an assistant vice
president in commercial lending.
BUTTE: A t First Citizens Bank of
Butte, Erin Goosey, formerly vice
president and cashier, has been
named chief executive officer.
Charles F. “ Bud” Brasier has been
elected vice president, commercial
loan officer. Both were formerly
with Montana Bank System.
We offer farm appraisal services throughout
Iowa. Our senior appraiser has 22 years’ experi­
ence. Our services include (1) Fully documented
appraisals, (2) Estimates of value, (3) Periodic
valuation updates, and (4) Special use valuations.
We also offer a complete professional Farm
Management service, Farm Owner and/or Opera­
tor Consultation and Farm Transfer services.
Our name is new but our Division has been serv­
ing agriculture for over 40 years.
Farm Management and Land Services Division
First Interstate Bank ol Des Moines, N.A.
Sixth and Locust
Des Moines, IA 50309
Telephone: (515) 245-7009
Iowa WATTS (800) 362-1615


Financial Careers

BANK PRESIDENT—$40 million bank located in southern
Wisconsin in county seat town of 3,500 people. Candidate
must have prior bank management experience either as
president or as senior officer of a similar size rural bank.
This Job requires strong leadership ability, salesmanship,
as well as excellent lending experience. Send resume to
file WDN c/o Northwestern Banker.

Banking Specialists
G cdl

. . .

hJe ¿Liten!

Confidentiality Maintained • Employer Paid Fees

MANAQER/OFFICER— Immediate position available for
individual to manage our Detached Facility. Qualified
applicants must have 3-5 years banking experience; col­
lege degree preferred. Excellent written and oral skills are
necessary as well as previous supervisory experience.
Marquette Bank Columbia Heights, (612) 574-9400.

CEO for $60 million independent mid-west bank. Excellent
opportunity for person with good track record Salary open.
CEO for $20 million bank owned by multi-bank group. Re­
quires strong administrative and ag lending background .
............................................................................... Salary open
NUMBER TWO person for western Iowa bank. Requires ag
lending background and all around banking experience ..
..................................................................... Salary to $40,000
MORTGAGE BANKER for major multi-bank holding com­
pany. Must have knowledge of secondary market and com­
mercial mortgages.............................................Salary open.
TRUST OFFICER with two or more years experience for
$90 million bank in college community .. Salary to $32,000
INVESTMENT OFFICER for major multi-bank holding com­
pany. Requires experience in bank of $200 million or more
........................................................................... Salary $50,000

A N D (f f iW ) A S S O C IA fË S

"Successful Banking is Quality Personnel"

SENIOR LOAN OFFICER $40mm country bank,
strong bank, top town and location ......................
SENIOR LOAN OFFICER $50mm suburban bank,
leader in peer grou p....................... $45,000-550,000
SENIOR LOAN OFFICER $200mm, 50,000+ popu­
lation, administrative background............ $60,000
LENDER Small Holding Company $40,000-$43,000
PRESIDENT $15mm outstate bank, non ag ..........
COMMERCIAL LENDER $50mm, 3-5 years experi­
ence, $10mm portfolio................................. $35,000



AG LENDER—$75mm clean N.W. IL bank. Opty
dept head in 2 yrs. $30K. Contact Barbara J. Ritta.

NUMBER TWO person for bank in university town. Must
have commercial lending and development experience . . .
..................................................................... Salary to $40,000.
MANAGER for $20 million eastern Iowa bank. Requires
some experience in commercial and real estate lending ..
.............................................................................. Salary open.

PRESIDENTS— needed for $40mm and $50mm
bks in S. MN and S. Wl. Good oppty for a Sr.
Lender to move up. Salaries open.
Contact Pamela J. Swenson.

AG LENDERS for communtiy.banks in a variety of loca­
tions............................................... Salaries range to $30,000.

SENIOR LENDER—$40mm S. Wl bk. Will oversee
$35mm port. 10 + yrs exp.
Contact Pamela J. Swenson.

For Professional Assistance Call

lation, lake area ........................................... $40,000

1- 800- 225-2885

COMMERCIAL LENDER real estate construction
background, $65mm b a n k ............................. OPEN

In Nebraska 402-397-2885

Many years in bank management enables me to
find the right banking environment for you, com­
pletely confidentially. Send your resume or phone:

AG LENDER for $40 million ag bank in Iowa. Position leads
to number two person in the bank ................... Salary open.

5 yrs exp.
Contact Barbara J. Ritta.

COMMERCIAL LENDER Metro area, 3-5 years ex­
perience, $20mm portfolio ........... $35,000-$40,000

PRESIDENT $70mm bank, outstate/independent,
ag & commercial c re d its ............... $50,000-$55,000

COMMERCIAL LENDER with five or more years experi­
ence for bank of $125 million located in a city over 35,000 .
..............................................................................Salary open.

CEO for independent bank in north central Io w a ................
.............................................................................. Salary open.
Where will you be in your present job in five, ten or fifteen
years? In a rut? Maybe you should contact Malcolm
Freeland or Cy Kirk at Freeland Financial Service, 1010
Equitable Bldg., Des Moines, Iowa 50309. Phone
515/282-6462. Employer pays fee.

Ag Banking Specialists

Let us help with your career advancement or staffing
needs. Call in confidence, without obligation. Employ­
ers pay our reasonable fee to hire the best.

BOX 24227 • OMAHA, NEBRASKA 68124

2508 East Meadow
Springfield, Missouri 65804
(417) 882-2265


Eddie Wolf Bank Sales
7202 Maple Drive, Des Moines, la. 50322
Phone: 515/278-2271

Loan risk-rating, bank risk-rating, work-out loan
assistance, documentation audit, training. 8 yrs.
exp. loan review/loan officer/bank counsel.
Daniel W. Hansen
3827 Llndlavlsta, Des Moines, la. 50310
Phone: 515-278-9174

CEO/PRES • Strong bank in healthy community seeks rural
lender with leadership exp for #1 spot. Great oppty for sr
man who finds career path blocked despite being well
qualified to run a $20mm+ facility.
AQ LENDER - Growing dept of $70mm + bank is looking to
add a deg’d ag lender with 3 + yrs of ag exp in a banking
environment. Some workout exp a plus but committment
to job most important.
RE LENDER - Excellent position in white collar college
town for a experienced RE and comm’l lender. Must have
mgmt skills, be a motivator, a leader and a desire for pro­
motion to pres.
KURT ROSENCRANTS AT (515) 244-4414

AG LENDER -1-2 yrs experience. N. Central Iowa.
Low $20’s
TRUST OFFICER - Head a $45 million trust dept.
Need 3 or more years experience. To $35K.
Richard L. Beem, CPC
11246 Davenport Street
Omaha, NE 68154
Phone: 402/330-3260
Member National Personnel Associates
We’re Nationwide

Serving bankers quietly and efficiently.

Jean 515/263-9598 (W/F)
712/779-3567 (M/T/TH)
Massena, Iowa 50853




COMM’L LOAN - $100MM suburban bank with aggressive
new ownership. Prefer five to seven yrs. experience in sim­
ilar size bank.
COMM’L LOAN/BIZ DEV - $80MM suburban bank affiliated
with major holding company. Emphasis on new business
development but need solid credit background.
SENIOR LENDER - $150MM suburban bank with large
comm’l and real estate portfolio. Second position in bank
with opportunity to advance.
REAL ESTATE LOAN • junior position in large suburban
bank. Will assume some duties in construction and
comm’l real estate depts. plus handle residential loans.
$23 K
AGRI-LOAN • $25MM community bank with 50% of loans
in agri-credits. Prefer background in cattle financing. $30K
Additional positions available for experienced bankers.

K it

E.V.P. - Need 10 years or more in banking. Heavy
in ag lending. Some knowledge in all areas of
lending. Small Eastern Nebraska town. Will lead
to CEO upon retirement of current president.
$40-50K Package.

Linda 515/394-5827
New Hampton, la. 50659

317 6th Ave, Ste. 650
Des Moines, IA 50309
(515) 244-4414



714 First Interstate Bank Building
Des Moines, Iowa 50309

2024 Swift - Box 12346
North Kansas City, MO 64116
“ Serving the Banking Industry Since 1970”

Vol. 14 No. 16 Northwestern Banker Newsletter (USPS 873-300) is published weekly by the Northwestern Banker Company, 1535 Linden
Street, Suite 201, Des Moines, Iowa 50309, (515) 244-8163. Subscriptions $1.00 per copy, $18.00 per year. Second class postage paid at
Des Moines, Iowa. Address all mail subscriptions, changes of address (Form 3579), manuscripts, mail items to above address.
Federal Reserve Bank of St. Louis