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Des Moines, Iowa Vol. 15 No. 44 February 16,1987 On Chapter 12 Bankruptcy Law # Sen. Grassley Hears Banker Concerns B y B E N H A L L E R , JR. Publisher S H E P R O M IS E D earlier, Sen. Charles Grassley (R., Ia.) met with a banking industry group in his Des Moines office February 9 to dis cuss the great concerns all communi ty bankers are expressing over the impact o f the Chapter 12 Bankrupt cy Law enacted in the 1986 Con gress and which became law Thanksgiving Day. That legislation was co-sponsored in the Senate by Sen. Grassley. Present for the meeting were the Senator and two aides. Representing the banking industry were Russell S. Howard, president o f the Iowa Bankers Association and chairman of Mahaska Investment Co., Oskaloosa, a bank holding company that owns three Iowa community banks; Leslie Miller, assistant vice presi dent and ag loan officer at Davis County Savings Bank, Bloomfield; Neal Conover, chairman, First N a tional Bank in Creston, who testified for A B A at Congressional hearings on the bill; Neal Milner, executive vice president, Iowa Bankers Asso ciation; W es Ehrecke, vice president for government affairs, IB A ; Rich ard Stageman, recently retired Bankruptcy Judge for Southern Iowa and now a member o f Davis, A Hockenberg, Wine, Brown & Koehn law firm, Des Moines, and this pub lisher. The meeting was prompted by the “ Open Letter to Senator Grassley” which we published in the December 15 issue o f the Weekly Newsletter, which described for the Senator the great concerns over Chapter 12 being expressed to us by so many banker readers. W e invited him to meet with bankers at home and listen to the problems they have with this law that so many consider was totally unnecessary. Sen. Grassley wrote a response to that letter, published in full in our January 19 Newsletter, and the February 9 meeting ensued. In the meantime, we gathered letters and various documents from more than 50 bank ers who wrote us from across five states with their views and experi ences. Photocopies of this entire file were turned over to Sen. Grassley at the meeting last week. That meeting took a very positive tone when Sen. Grassley expressed a genuine interest in learning directly from the bankers present how and why they felt Chapter 12 would im pact banks adversely. The testi mony o f the participating bankers touched basically on several points, all of them using specific cases from Q within their own banks which, for privacy reasons were not divulged by name. Each banker cited instances already where farmer borrowers who are currently making loan payments with a positive cash flow and not delinquent, but technically are insol vent because o f reduced land value collateral, are threatening a Chapter 12 to get “ a free g ift” o f a reduced secured loan position. Mr. Howard cited a case where the farmer actually made a small, taxable income. However, the indivi dual is filing a Chapter 12 “ to get his debt relieved and w e’ll lose $60,000. That loan cash flows but that will be no good under a Chapter 12.” Another case was cited where the borrower has enough to pay his bank debt but is threatening a Chap ter 12 on the Federal Land Bank, which holds the m ortgage on 320 acres. “ W e ’ll be sucked in,” was the comment, “ and we have no idea what our loss could be even though we are now marginally collatera lized.” Mr. Conover suggested to Sen. Grassley that since so many farmers are in trouble in their dealings with the F L B that there should perhaps be separate consideration for long term and short-term debt so that the deficiency with the F L B long-term debt doesn’t taint the short-term debt that is being cash flowed with the local bank. Ms. M iller agreed and said, “ The failure to deal with F irs t In te rs ta te B Iowa Division 1-800-362-1615 Ext. 7019 Randy Steig https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • Ken Danilson • Bill Mullins • Ken Malecha • Diane Grotenhuis 2 is not an Iowa problem only. A t the conclusion o f the meeting, Sen. Grassley arranged with IB A o ffi-^ NORWEST BANKS Call (515) 245-3131 or toll-free (800) 362-2514 Member FDIC cials to meet with the IB A delega tion when they visit W ashington early in A p ril and go over the bill completely, noting IB A banker re -^ commendations for changes th a t^ should be made in the law. H e pro mised to take that information to the subcommittee which he chaired at the time he co-sponsored the b ill,^ John Cretzmeyer although he is no longer chairman. The IB A accepted this offer and is the Federal Land Bank is para I felt it should be more in the Chap making arrangements to have re mount. They (FLB ) threaten they’ll ter 11 context, but it slipped more commendations spelled out for that drag bankers down with them before into the Chapter 13 context. It is in April meeting. D# tended to bring more negotiation. I f they’ll mediate.” Both Mr. Howard and Ms. Miller you are really going to make it work, Iowa News stated emphatically to Sen. Grass- it needs more than three years of The Central Iowa chapter o f the ley that many g o o d farm customers supervision to pay o ff unsecured are unhappy that other borrowers creditors. W h y should creditors and Bank Administration Institute will can walk away free on a bankruptcy. bankers have to spend more on hold its monthly meeting Feb. 19 a t # Ms. M iller also pointed out, “ Large supervising these people? A s money the Quality Inn Westmark at I 80 amounts o f debt are held in a few starts to come in, creditors should and Ashworth Road, Des Moines. hands. I f those are dealt with be able to ask for a re-opening o f the The topic o f bottom line banking through bankruptcy, they’ll be com case to recover any gain. It needs will be presented by Robert DeMeulpressed through Chapter 12 instead the benefit o f 11.11B so they (credi enaere, B re n to n B anks, D a le # o f being worked out over a longer tors) can gain the advantage of Froehlich, Ankeny State Bank, and time. W e ’ve crunched all o f the future appreciation. Otherwise, it ’s Robert Millen, First Interstate Bank. numbers and we feel we can work a windfall to the farmer.” Mr. Milner concurred, stating, out things better than going into IO W A C IT Y : Richard “ D ick” A . # bankruptcy with all the attendant “ Also, this would protect against Barkalow, senior vice president of the farmer who cash flows, but files expenses.” Iowa State Bank and Trust, died Judge Stageman observed, “ W e a Chapter 12, reduces his debt, then Feb. 22 after a long illness. H e had have the law and have to live with it. gains by any valuation increase been with the bank since 1951. which the lending bank can’t M IS S O U R I V A L L E Y : Gregory D. • touch.” Comments from other states were Pollard has been elected president included in the testimony to assure and chief executive officer o f The Sen. Grassley and his aides that this First National Bank. H e has been Norwest Bank Des Moines, N.A. Ye am work: one of the reasons we're first in Iowa. Jerry Trudo MNB Correspondent Banker Together We Can Accomplish Great Things Call 319-398-4306 or toll free 1-800-332-5991 Strength of \ Eastern J lowa_^/ Merchants National Bank in Cedar Rapids. Iowa 52401 Member F D i C https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A BANKS OF IOWA BANK Engineering highperformance portfolios. Since the 1920s United Missouri Bank has been advising banks on the management of their bond portfolios. These timely recommendations have a history of sound logic and a positive contribution to bank earnings. Whether short- or long-term, we expect the strategies we recommend to be successful. Why? Because we continually update ourselves about the economy, the market and changes in the banking industry. So for quality recommendations that are engineered for high performance, contact our Investment Banking Division. Call (816) 556-7200 today. ki UNTTED M ISSOURI BANK of Kansas C ity, n.a. 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V A N H O R N E : Michael C. H agerty • h a s been elected executive vice president o f Van Horne Savings Bank, according to W illiam J. Beohm, president. H e succeeds David Coulter, who has resigned. • M r . H agerty previously was vice president o f Tama State Bank. Nebraska News B E L L E V U E : Bank o f Bellevue has • elected the following to vice presi dent status: Linda Balash, director of personnel and marketing; Bar bara Plott, and Jack D. Steinbeck, cashier. Ms. Balash joined the bank • in 1970, and Ms. P lott joined the bank in 1976. Mr. Steinbeck joins the bank from M etro North State Bank in Kansas City, Mo., where he served as vice president and cashier. ^ G O R D O N : John L. W ay has been promoted from assistant vice presi dent to vice president o f Gordon State Bank. ^EFirsTierBank Lincoln 13th & M Streets, Lincoln, Nebraska 68501 football coach John Gutekunst will be a special guest speaker at the Minnesota Bankers Association In vesting for Profits Seminar sche duled for Mar. 5 at the H otel Sofitel in Bloomington. H e will address the noon luncheon. The all-day seminar will feature various investment ex perts discussing new investment products and services, tax reform impact on investment portfolios and interest rate outlooks. The seminar is sponsored by the M B A invest ments and funds management com mittee, which is chaired by G. M ar tin Robertson, president o f State Bank o f Rogers. Illinois News The Illinois Bankers Association will hold its Consumer Credit Con ference Feb. 25-26 at the H ya tt Re gency W oodfield in Schaumburg. The one-and-one-half day annual meeting will feature sessions on home equity Unes o f credit, student loans, auto/RV/marine loans and other topics for retail bankers. FirsTier Bank, N.A., Lincoln, Member FDIC nounced he will retire at the end of this year. H e has been elected vice chairman o f the board and is suc ceeded as president by Ron Scott, formerly vice president, who joined the First State Bank in 1962 as a teller. M IL E S C IT Y : Craig Rehm has been promoted to vice president o f First Interstate Bank o f M iles City. He joined the bank in 1984. Colorado News D E N V E R : United Bank o f Denver has elected the following to execu tive vice president status: Beverly J. Haddon, consumer banking; W il liam S. Hershberger, asset manage ment services; Oliver W . Hickel I I I , funds management division, and Lawrence J. Ricketts, investment b an kin g. E le c te d sen ior v ic e presidents were A lvin W . Haggerty, Roger E. Johnson, Charles H. Powers, Candice W . Rogers and W illiam J. Rundorff. South Dakota News B O W D LE : The State Banking Com mission has approved the applica tion of the Leola State Bank, Leola to acquire the Bowdle State Banl and establish a branch bank at Bow die. H IG H M O R E : The application of the First State Bank, Highmore to move its main office to M iller and establish a branch bank at Highmore has been approved by the State Banking Commission. Montana News Minnesota News University of Minnesota head M A L T A : Roger Ulrich, president of First State Bank since 1964, has an COUNTONIt Count on Commerce for superior capabilities and personal attention to your correspondent banking needs. A combination we’ve upheld for more than 120 years. Give us a call. 1-800-892*7100 1-800-821-2182 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (Outside Missouri) dSit Commerce Bank o f K ansas City 3 4 POSITIONS AVAILABLE $171MM organization is looking for a talented and person able SR CREDIT ADMINISTRATOR to join our manage ment team. Send resume to File No. WHZ c/o North western Banker. (PA) PRESIDENT. $10MM East central Iowa bank has A + rat ing and wants to keep it. Seeking detail oriented CEO w ith ag expertise. Send resume to File No. WIH c/o North western Banker. (PA) COMMERCIAL LOAN OFFICER. Excellent opportunity for individual w ith minimum 3 years commercial lending ex perience. Bank moving to Ames, IA. Send resume to or contact Joseph R. Simmens, Pres., American State Bank, Box 367, Roland, IA 50236. (515) 388-4331.___________ (PA) OPERATIONS OFFICER. Excellent opportunity for indivi dual looking for a growth oriented bank. Prefer minimum of 5 years experience w ith micro computer training. Bank moving to Ames, IA. Send resume to or contact Joseph R. Simmens, Pres., American State Bank, Box 367, Roland, IA 50236. (515) 388-4331. (PA) Position open for an experienced AGRICULTURAL LEND ING OFFICER. Insurance and accounting background beneficial. Send resume and salary requirements to Ar nold Leen, Citizens State Bank, Box 126, Waterville, MN 56096.__________________________________________(PA) Walker State Bank, Walker, IA needs #2 PERSON with lending & operations experience & computer interest. In surance licenses a + . Good town & great staff. Contact Bill Bernau, Box 128, Crawfordsville, IA (319) 658-2131. (PA) VP. $20MM central Iowa bank. In charge of loans & loan adm inistration. Prefer 10 years + experience in commer cial, ag, & RE lending. College degree required. Send resume to R. Chittenden, Pres., Farmers Savings Bank, Box 670, Mltchellville, IA 50169. (PA) WANT TO BÜY BANKING NEW OPPORTUNITIES MANAGER to head $120 m illion loan dept. Must have p r o - ^ ven management skills and commercial lending fo r this senior position............................................. Salary to $55,000 COMMERCIAL/AG LENDER. Business development skills coupled w ith analysis and docum entation make you a natural for $65mm bank. W ill provide portfolio to fit your expertise! Pleasant 24,000 com m unity .................... $30,000........................Call Steve. VICE PRESIDENT. 8 + years general lending, good credit skills for $60 + mm holding company bank. Supervise loan officers. Excellent bonus program! . ........................ To $40,000.............................Call Marj. COMMERCIAL LOAN MANAGER. Manage the de partment and s ta ff of th is $80mm bank. 5 + yrs. commercial experience. Outstanding com m unity! 401K, retirement plan, benefits! ................................. ........................ Mid $40’s............................ Call Bruce. REAL ESTATE LOAN OFFICER. $150mm bank lo cated in college town o f 30,000 + provides opportu nity for VA, FHA and Conventional Loan expertise. Secondary market exposure w ill make you a perfect fit. Profit sharing and benefits make life even better! .......................... $25,000............................. Call Steve. : COMMERCIAL LENDER. Join this bank w ith its his: tory of high performance and strong capital! Di verse portfolio from wholesalers/retailers to manu: facturers. Solid business clim ate, excellent school : s y s te m ................ To $40,000.................... Call Bruce. FINANCIAL PLANNER. C.F.P., Iowa Insurance lij cense, a bility to work w ith people for$160m m bank. Dollar potential unlim ited! ........................Call Marj. ¡COMMERCIAL LOAN OFFICER. Loan review and analysis for a $100mm bank. Perfect fo r someone 'w ith exam ining experience. C ollege tow n 60 i minutes from m e tr o !........ $28,000............Call Steve. |JR. C .L .0 .1 + yrs. commercial, a bility for business development, docum entation skills for $40 + mm : bank. Excellent growth potential! ............................. j ........................ To $28,000............................Call Marj. COMMERCIAL LOAN POSITIONS in major Iowa cities. Prefer college grads w ith tw o to five years experience. . . . ..................................................................... Salary to $35,000 LOAN REVIEW POSITION for prestige banking organiza - ^ tion located in area of 350,000................... Salary to $ 3 0 ,00 0 9 INSTALLMENT LENDER w ith 3 or more years experience fo r $60 m illion Iowa bank.......................................To $25,000 Financial Careers (Division of Freeland Financial Service, Inc.) 1010 Equitable Bldg. Des Moines, IA 50309 515/282-6462 Employer pays fee. & W Please contact Lorraine Lear concerning these and other Midwest banking opportunities. POSITIONS AVAILABLE ^ PRESIDENT Do you want a bigger challenge? A $40mm So MN bank needs a take charge mgr im m ediately! This holding co bank desires an existing president w ith 8 + yrs banking exp, a degree, and an MBO mgmt style! This is a great opty I To $55 K. Job #NW117 8 . £ EXECUTIVE VICE PRESIDENT Are you tired of constant change and deteriorating morals? A $50mm So MN bank needs a #2 person to mge the lending and operational functions! This is a super opty that leads to the presidency. Desire a lending generalist w ith emphasis in coml lending, a degree, and proven mgt. Ready to interview now! To$50K. Job #N W 1 1 7 9 .^ PRESIDENT Good, used brand COIN COUNTER ft PACKAGER. Call Lee at (319) 935-3364. (WTB) (personnel Search 1126 So. 72nd St. Om aha, Ne. 68124 Broken promises and constant change got you de pressed? A No MN bank of $15mm needs a dynamic mar ket driven banker. This position req’s 7 + yrs banking exp w ith emphasis in coml lending, a degree, and proven mgt. A great opty to run your 1st bank! ^ To$40K. Job#NW1180.“ FOR MORE INFORMATION CONTACT PAUL GENTZKOW OR JEAN TODD 1 3636 IDS Center Minneapolis, MN 55402 (612) 339-9001 ALL FEES COMPANY PAID POSITIONS AVAILABLE AG LOAN OFCR Not in line for #1 job? Here’s your chance to get back on track! $20MM ag bank seeks 5 + years bank ag for #2 spot. POSITIONS AVAILABLE Fantastic location offers best of both worlds. Must enjoy small bank but looking to enjoy city atmosphere. SBA, FHA, and operations exp in healthy bank. $25K. CASHIER - $25MM Ag Bank. Requires background with inhouse minicomputers and some knowledge of Agri Loans. $30K FARM MGR Progressive Illinois bank in excellent location seeks farm mgr w/3 yrs exp in bank handling 3,000 acres + . Growth into Sr. bank position w/loan respons. $30K. PRESIDENT - Agri Bank with problem loans. Should have administrative experience and solid Agri Loan skills. $40K SR LOAN OFF. Take charge of 8M + portfolio as #2 in 30K + city. 7-10 yrs of exp in true com m ’l lending for 40M + bank. Highly visi ble spot! $36K. FOR FURTHER INFORMATION CONTACT KURT ROSENCRANTS OPERATIONS ■ manage department of 35 for large urban bank. Experience with deposit accounting and account services required. $38K AGRI LOAN - com m unity bank with large Ag portfolio. Seven yrs. or more Ag Lending experience needed. $35K COMMERCIAL LOAN - large suburban bank with $100MM loan portfolio. Degree and minimum 3 yrs. comml lending experience with six figure credits. $32K Additional positions available in Midwestern states. 317 6th Ave, Ste. 650 Des Moines, IA 50309 (515) 244-4414 ALL FEES COMPANY PAID TOM HAGAN & ASSOCIATES 2024 Swift - Box 12346 North Kansas City, MO 64116 816/474-6874 “ Serving the Banking Industry Since 1970" Vol. 15 No. 44 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, $24.00 per year. Second class postage paid at % Des Moines, Iowa. Address all mail subscriptions, changes of address (Form 3579), manuscripts to Northwestern Banker, 1535 Linden St., #201, Des Moines, Iowa 50309. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis
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