View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Federal Reserve Bank of St. Louis


Dennis Earhart and his son Nate building their great accomplishment out o f wood, nails and team work.

Great Accomplishments
Great accomplishments require determination.
Hard work.
And sometimes a little assistance.
Assistance from someone who believes in
you. Someone you can trust. Someone who
can work together with you and safely get the
job done.
Dennis Earhart is a key member of the
correspondent banking team at Merchants
National Bank. With professionals like Dennis
and assets of over $740 million, MNB can
provide the financial assistance and teamwork
to support your hard work and determination.
Together we can accomplish great things.
Call Dennis Earhart at 319/398-4789 or toll free
1-800-332-5991, ext. 789.
Federal Reserve Bank of St. Louis

Strength of

Merchants National Bank

Cedar Rapids, Iowa 52401

Member F D I C


W ho’s the ATM network leader?

The Plus System* network
lets its num bers do the talking.
Do 65 million Plus System®
cardholders and eight million
Plus System® transactions a
year tell you something about
national market dominance?
They should. Because the
Plus System® network has tens
of millions more cardholders
and processes hundreds of
thousands more transactions
every year than any other
nationally shared ATM
It’s no secret why the
Plus System® network is the
choice of consumers when it
comes to obtaining cash
Federal Reserve Bank of St. Louis

throughout the United States
and Canada, and soon in Great
Britain, Japan and Puerto Rico.
At the Plus System®
network, the philosophy has
always been to offer customers
unequaled reliability. And to
offer customers uncompromis­
ing security that ensures the
confidentiality of every
So when a cardholder
requests cash from a conve­
niently located Plus System®
ATM, he or she has the con­
fidence of knowing that the
process is fast, safe and secure.

Isn’t it time your financial
institution joined the Plus
System® network— the
premier choice for national
ATM sharing?
For complete information
regarding membership, please
contact your local Plus System®
member, or call Plus System,
Inc. at (303) 573-7587.

^ System
The premier choice.


FEBRUARY 1987 • 94th Year • No. 1481




Across the Desk from the Publisher


Financial responsibility

Donald Fedie calls it key to economic survival


Automating ag loans

Nebraska software package offers new approach


Ag accrual income statement

Minnesota banker likes REC-CHECK STAR


Cattle feeders fight back

“Just got my hands on the ‘Open Letter’
and have read it very carefully. Simply an
outstanding job of telling it like it is. I can
only hope that your common sense analysis
will get through to the right people.”
Carlyle P. Austinson
President (retired)
Northwood State Bank
Northwood, N.D.

Iowa program aims at retained ownership


21 reasons for appraisals

Certified farm appraiser relates benefits to banks


More on Chapter 12
Editor’s Note: Last month we published sev- 0
eral of the initial letters sent to us by N o r t h ­
w e s t e r n B a n k e r readers after publication of
our “Open Letter to Sen. Grassley” of Iowa
in our December 15 Weekly Newsletter. That
“Open Letter” invited the Senator to recon­
sider Chapter 12 Bankruptcy, which he co- £
sponsored, and to meet with bankers to dis­
cuss it. The Senator responded immediately
and has graciously scheduled a meeting
through the Iowa Bankers Association for
February 9 at his Federal Building office here
in Des Moines. We will be present and will £
give the Senator responses from bankers
documenting their specific objections to
Chapter 12. Results of that meeting will be
published later. Here are a few of the addi­
tional reader responses to date:
“Excellent letter to Sen. Grassley. We ap- %
precíate your time and effort on our behalf.
Chapter 12 is going great guns in our area.
There were 146 people who attended a Chap­
ter 12 meeting here and a like number in
North Platte. Chapter 12 does many things,
including taking no more chances with the 0
young farmer, and discriminating against
the small farmer (under $1.5 million).
Mel Adams, Chairman,
Adams Banks, Ogallala, Nebr.

Banks’ “secret weapon”


Barry Sullivan stresses personal, local relationships



Twin Cities
South Dakota
North Dakota

Des Moines
Index of Advertisers

1535 Linden Street, Suite 201, Des Moines, Iowa 50309

Phone (515) 244-8163

Publisher & Editor

Associate Publisher

Associate Editor

Ben Haller, Jr.

Robert Cronin

Melinda Sauers

No. 1481 Northwestern Banker (USPS 397-620) is published monthly by the Northwestern
Banker Company, 1535 Linden Street, Suite 201, Des Moines, Iowa 50309. Subscription
$2.00 per copy. $24 per year. Second Class postage paid at Des Moines, Iowa. POST­
MASTER: Send all address changes to Northwestern Banker, 1535 Linden Street, Suite
201, Des Moines, Iowa 50309.
Banker, February, 1987
Federal Reserve Bank of St. Louis

“Congratulations on your great letter to
the Iowa Senator. I sent a copy to Emil
Reutzel, editor of the Norfolk Daily News. I
enclose the results.” (The Norfolk news­
paper’s lead editorial was a thoughtful ap­
praisal of all the effects of Chapter 12 and
called for its repeal.)
B.M. DeLay, Chairman
The DeLay First National Bank
& Trust Co., Norfolk, Nebr.

“I am sure you’re receiving a truckload of
letters complimenting you on your open let-

(Turn to page 21, please)


Across the desk from the Publisher
Dear Readers:
has been written, spoken
and pictorialized about the ad­

verse condition of the agricultural
economy in the Midwest the past
four years. What started as another
cyclical negative “blip” on decades
of ag charts now is recognized as a
major re-structuring within the in­
dustry. Its effects are being felt on
everyone connected in any way with
agriculture—farm operators, small
town banks and other businesses,
farm implement companies—with a
total fallout that has affected mil­
lions of lives in the nationwide agri­
cultural sector, especially in the up­
per Midwest.
Four years later, however, when
many industry veterans feel that the
problems have been identified and
the final shakeout is underway, it’s
time to look ahead to the agricul­
tural and financial industry we’ll all
be working in just a few years away
and into the fast-approaching next
century. I t’s time to “accentuate the
positive,” as one of Bing Crosby’s
old songs advised. I t’s time to take
stock of positive things we have go­
ing for us, the good programs we
have in agriculture and banking, the
modern technology that can inject
an upbeat note in our cadence as we
stride forward to a new drummer.
This is not intended to close our
eyes to present realities; but, while
facing up to continuing resolution of
problems we now know exist on the
farms, in banks, in other businesses,
sometimes with pain and casualties,
it is only good business planning for
bankers and farmers alike to look
ahead and plan where they’ll be
when they are among the survivors.
I t’s not just good business, it’s vital
not only to our future but to the
world we’ll leave those who follow.
Midwesterners want to be good ste­
wards, and good stewards look
ahead to the welfare of coming gene­
For this purpose, in this issue we
have devoted extra pages we nor­
mally wouldn’t carry so that we
might present to you a special selec­
tion of ag-oriented upbeat feature ar­
Federal Reserve Bank of St. Louis

ticles, all except one of them written
exclusively for you, our readers.
That one is the text of a positive,
forward-looking talk we heard from
Barry F. Sullivan, chairman and
CEO of The First National Bank of
Chicago, when he addressed com­
munity bank executives who at­
tended his bank’s 40th Annual Cor­
respondent Bank Conference several
weeks ago. Mr. Sullivan speaks
almost enviously of “your greatest
strength,” your community bank’s
closeness to your customers, and
urges you to utilize that strength to
compete with and conquer the new
wave of outside competition.
One exclusive article by a Min­
nesota banker relates his bank’s suc­
cess with a modern record-keeping
system for farm customers, as well
as small businesses and professional
firms. Another, written by an exper­
ienced Iowa and Minnesota farm
real estate appraiser, tells how a
qualifed appraiser can be an asset to
a bank at the right time. Still, a
third exclusive feature from a young
Nebraska computer technology
devotee tells how modern high-tech
computers can work for banks and
their ag customers.
Addressing the touchy area of
how to get farm operators to under­
stand the need for accurate financial
records and, even more importantly,
how to use them on the farm and
with the bank is discussed for our
readers by an 18-year financial vete­
ran who works with banks and farm
owners in four states. Adding to this
array of forward-looking articles is a
special report on new programs be­
ing utilized aggressively by cattle­
men’s associations, with special em­
phasis on a successful Iowa pro­
In addition to preparing these
special articles for you, we’ve been
deeply involved, as many of you
know, in an effort to have Senator
Charles Grassley (R., Ia.) take
another look at the new Chapter 12
Bankruptcy Law he co-sponsored.
Our “Open Letter to Sen. Grassley,”
published in our December 15 Week­
ly Newsletter, which is mailed each
week to all paid subscribers of the

magazine, has drawn as much reader
response with dozens of letters and
long distance phone calls as any arti­
cle we’ve published in recent
memory. Some of those letters were
published in our January magazine,
while others appear in this issue as
Dear Editor letters. We are pleased
to report that Sen. Grassley con­
tacted us immediately upon receiv­
ing our letter and is very concerned
with banker reaction to the new law.
He has graciously contacted the
Iowa Bankers Association after get­
ting that letter and has arranged to
meet with the IBA and several lead­
ing ag bankers here in Des Moines in
early February. We have been in­
vited to attend that small meeting
and will give you a report later. We
are grateful to Sen. Grassley for ac­
cepting our invitation to meet with
these bankers.
With these special ag articles, and
our approach to the Senator on your
behalf, we hope to strike a positive
note, and our concentrated effort is
our re-confirmation of our publica­
tion’s commitment of 93 years to
serve you, our readers, to the very
best of our ability. Ours is the oldest
banking magazine from Chicago to
the West Coast and we are grateful
to you for your continued readership,
which in many instances extends to
second and third generation banking
To continue making our publica­
tion the strong, viable vehicle it is to
assist you with up-to-the minute
news and latest banking techniques,
we invite you to not only keep us in­
formed about news from your bank,
but also to let us know the types of
articles you feel will be helpful to
you and your staff. If you wish to
recommend that we contact you or
one of your staff or another banker
you know who is doing something
unique, or perhaps doing a routine
job uncommonly well, please contact
us. We’ll use your ideas to formulate
further exclusive articles designed
to be helpful to you and others to
build better banks for the future.
Cordially yours,
Ben Haller, Jr., Publisher
T he N orthwestern B anker
Northwestern Banker, February, 1987


■ ' .■;


iti ;


;ns all the time.
A custc^B lues and his family
^ ^ ^ ^ P ^ e r y th in g . Including
a big loan balance.
But you can prevent that
from happening to your
customers. W ith IBIS creditor
protection insurance.
We have a full line of plans
to choose from. O ne that offers
a complete excess program,
Federal Reserve Bank of St. Louis

as well as uncomplicated
coverage for the complex agri­
business world.
It’s also insurance that,
like our company, is designed
by Iowa bankers to help Iowa
So it comes with benefits
for you, too. Like a fully com­
puterized claim system, sales
and product seminars plus life

and credit life licensing schools.
W ant to know more?
For complete IBIS creditor pro­
tection insurance details, call
1-800-532-1423 toll-free.Today.


The key
to ag

Written especially for
T he N orthwestern B anker

By DONALD M. FEDIE, President
Agri Control Company, Inc.
Sioux City, la.

ECENTLY, a second year accounting student was
asked, “If you were a manufacturer, what is the
most important financial fact you would need to
know?” He answered, “My cost of production.” A sec­
ond question followed. “Why?” The answer, “Because
knowing the cost of production is essential if I am to
sell my product at a profit.”
Simple? Sure! For you and me. Unfortunately, not
simple for the majority of ag borrowers. In bank after
bank and on farm after farm, we have experienced the
frustration of farmers not knowing or understanding
the application of simple, fundamental financial man­
agement concepts. Basic terms such as accrual, fixed
and variable expenses, and allocation of interest draw
blank stares. When discussing ratios there is, at best, a
comprehension of current ratio. Debt service coverage
ratio or earned net worth change might just as well be
formulas for calculating earth’s orbit. Gross margin is
rarely understood, usually confusing.
The reason? Because, until now, the only “ financial
responsibility” required of most producers was writing
checks to pay bills, and their wives do most of that.
Until now!
The deceptive concept that increasing production
can substitute for sound financial management does
Federal Reserve Bank of St. Louis

not work. Producers cannot continue to fool them­
selves into believing that better yields will provide the
funds to amortize steadily increasing loans! Nor can
their lenders! If you need proof, look around. Count the
number of producers and lenders that failed last year.
I t’s not a problem of present income. A report
released by USD A demonstrates that net earned in­
come equalled an all time high of $45 billion in 1985,
and $40 billion is estimated for 1986. I t ’s a problem of
repositioning and restructuring capital assets. I t ’s a
problem of absorbing and allocating large capital
losses. (See Chart I)
USD A expenditures in 1986 represent a peak in
agricultural spending. So says the budget the Presi­
dent submitted to Congress recently. As shown in the
second chart, the USD A outlays in fiscal 1986 totalled
$58.7 billion with $25.8 billion of that spent to support
farm prices. The Administration projects total expen­
ditures to fall steadily to $37.6 billion by 1992. (See
Chart II)
At Agri Control Company we’ve been counseling
with producers for over 18 years. A large number of
our clients would not be in operation today had they
not faced up to the financial facts of their businesses
and learned how to utilize financial management tools.
They became financially responsible to their business,
to themselves, to their lenders.
Northwestern Banker, February, 1987


Financial responsibility means knowing and under­
standing the financial base (foundation) of a business,
however structured; then, using that understanding to
make sound, practical decisions on product selection
(corn-beans-cattle-hogs-etc), production quantities
(acres and number of head per year), and marketing
(cash-hedging-options-forward contracts); and in deci­
sions concerning land ownership, equipment and facili­
ties purchase, and livestock purchase and develop­
ment. In short, proper, profitable use of capital assets.
It means facing reality every day just like every other
businessman and making the tough decisions that
keep any business healthy, viable, and productive—a
source of profit and strength to the owners, the
lenders, and the community.
We believe the illness gripping American agricul­
ture is essentially financial in nature, and that finan­
cial responsibility provides the cure. The need to edu­
cate and change financial management habits is now
critical! For agriculture and for ag banking! It requires
the efforts of everyone in the financial industry, but
especially ag banking.
I t’s particularly discouraging to see some of our
best producers in the worst shape. I can identify with
many of my banker friends who lament about “having
closed out three farmers this week, with several to
go,“...“only 10% are immune to financial disaster,”....
“one bad crop year could take out 50%.” And it’s not
over yet!
My one ardent hope is that the present problems of
agriculture and the response of politicians doesn’t per­
manently turn the financial community away from
agriculture. There are a lot of good people out there. It
is a good industry. We do have a vested interest in
helping to save it.
□ ABOUT THE AUTHOR—Mr. Fedie was invited to share his in­
sights on financial responsibility for farm operators, based on his
nearly two decades of successful work with farm operators and
bankers in several states. Mr. Fedie has been active in financial
and management consulting for over 18 years, specializing in
agri-business since 1975. Additionally, he has been personally ac­
tive in farming, cattle feeding, and feedlot operations. This prac­
tical “ hands on” knowledge is the foundation that gives sub­
stance to his expertise. Recognized throughout the United States
as a leader in his field, he regularly appears in seminars, on
panels, and as a guest speaker for ag industry associations and
businesses. Mr. Fedie is a Certified Member of the American
Society of Agricultural Consultants, is registered with the Iowa
Securities Department, and is registered with the Securities and
Exchange Commission (SEC) as an investment advisor.
Northwestern Banker, February, 1987
Federal Reserve Bank of St. Louis

Our continuing problem is that we can’t reach q
enough people and change enough minds to make a
dent in the real scope of the problem. The economic
downturn has happened swiftly enough to engulf too
many producers. I t ’s the domino theory in practice.
To this end, approximately one year ago, a bank vice
president in charge of an ag loan portfolio of approxi­
mately $40 million asked me to put together a financial
planning seminar (workshop) which could be offered to
the banks’ customers. We developed a two-day work- •
shop and, as of this writing, have already conducted, or
have commitments to conduct, workshops for several
banks in Iowa, Nebraska and Kansas.
The response has been gratifying. The bankers echo
our thoughts (or vice versa) about financial responsibil- •
ity, and support the educational effort. To quote a cou­
ple: R. Strachan, DeLay First National Bank & Trust,
Norfolk, Nebr., says, “Survey results demonstrate an
enthusiasm for materials presented.” R. Cowan,











[----- P r o j e c t i o n s ------- ]

Laurens State Bank, Laurens, la., says, “Survival is
understanding break-even costs, they can’t market
without it.”
Comments from participating producers have in­
cluded these:
“If I were in banking, every young person begin­
ning farming would be required to attend such a semi­
nar as this.”
“Should have been three days.”
“Makes us more aware how important good
records are to survive.”
“Super seminar.”
“Encourages me to keep better records.”
But, let’s not kid ourselves. The road to educational
excellence is a narrow, rough and twisting road. There
will be continued disappointments, and we need the
support of everyone within the financial community.
We already know that the present two-day financial
planning seminar should be thought of as only the first
in a series of different topics. The ag producer will
(Turn to page 17, please)


the ag loan

Written especially for the N orthwestern B anker
Founders Financial Services, Inc.
Lincoln, Nebr.

RECENTLY released software package offers a
fresh new approach to the time-consuming task of
managing the ag loan portfolio. While other financial

software packages were designed from the farmer’s
standpoint, the newly developed agMGR (pronounced
“ag manager”) software package from MGR Software,
Inc., was designed with the aid of ag loan officers to of­
fer lending institutions a standardized method for the
£ handling and evaluation of financial information.
The basis of the agMGR software package came
from a series of forms used by a major Nebraska bank­
ing corporation. The forms were originated by a group
of corporation employees whose backgrounds included
q government agency, Farm Credit System and commer­
cial bank lending experience. The forms that were
developed included an extensive cash flow, balance
sheet, trend analysis, and credit arrangement with a
credit scoring system designed to complement the
• package.
The agMGR software incorporates all the ideas of
these refined financial forms and adds a few twists to
make a very complete, useful and efficient package.
The package is very user friendly as a result of its
menu driven format and it is right in line with these
every day thought processes of an ag lender:
1. Balance Sheet. The heart of the system revolves
around the balance sheet which is easily compiled
through a series of supporting shedules. The user has
the ability to compile a single and double column
balance sheet at the same time. After the balance sheet
is complete, the user can choose from various print
modes which include: three styles of balance sheets,
general customer information, and supporting
schedule information. The completed balance sheet in­
formation then can be incorporated into a trend analy­
2. Trend Analysis. The trend analysis included in the
agMGR package can span up to five years of customer
information. In the trend analysis section, the user has
Federal Reserve Bank of St. Louis

a variety of evaluation tools at one’s finger tips. The
tools the user has to choose from include an earned net
worth worksheet, collateral margin worksheet, liquida­
tion analysis worksheet, and credit scoring worksheet.
This is not the end of the evaluative tools of the
agMGR package; from here the user may proceed to
the credit arrangement.
3. Credit Arrangement. The credit arrangement form
used in the agMGR package was designed with the
bank director in mind. With today’s depressed ag
economy and the trend of bank directors towards tak­
ing a more active role in lending decisions, this one
form gives directors all the items necessary to make
sound lending decisions and to help reduce lender lia­
bility. Evaluative tools of the credit arrangement in­
clude a collateral margin worksheet that differs from
the one in the trend analysis, a debt repayment
analysis worksheet, and the same credit scoring sys­
tem used in the trend analysis. It also includes a sec­
tion to record the terms of the loan, repayment
sources, security taken, lien search information, bor­
rowing history, and other balance relationships. The
credit arrangement also includes an area to record imAUTOMATING AG LOANS. . .
(Turn to page 12, please)
ABOUT THE AUTHOR: Marc Currie is a graduate of Dakota Wes­
leyan University where he received a Business major, with minors
in ag management and computer science. As a programmer he
designed agMGR, an ag/financial statement software program of­
fered by MGR Software, Inc., Burwell, Nebr., of which he is a
stockholder. The company markets agMGR in Nebraska and it is
marketed in other states by Founders Financial Services, Inc.,
Lincoln, which was formed recently to provide marketing services
for a number of single-product software firms. Organizers of FFS
are Roger Beverage, a Lincoln and Omaha attorney who is also a
former Nebraska superintendent of banking, and Tom Shambo, a
former member of the Nebraska department of banking. Among
the products marketed by FFS is BancAnalysis, designed and
owned by Mr. Beverage and Mr. Shambo, and featured in previous
issues of Northwestern Banker.
Northwestern Banker, February, 1987


Computer generates
ag accrual income
statement figures
FARM Customers at First Nat’l Bk., Keister, Minn, are taking advan­
tage of REC-CHEK, a simplified record-keeping system. Above, left
to right, Dawn Braund, mgr., REC-CHEK processing department,
talks with Clair Hagen, area farmer and bank REC-CHEK customer,
and Donald Nickel, v.p. and ag loan off. Also pictured is Ken Bird,
bank pres.

Editor's Note: Just over 20 years ago we had the privi­
lege of writing the first feature article that related to
our banker readers the potential advantages of a new
bank service called REC-CHEK, a simplified record­
keeping system for farm customers. REC-CHEK was
developed by Nevada National Bank, and Sam
McHose was president of the $8 million deposit bank
at that time. He had just hired Tom Johnston in
March, 1965, to manage the small bank’s operations
department. With Mr. McHose, he developed the cod­
ing system that is key to REC-CHEK. The nine-month
pilot program had 55 participating farm customers.
Mr. McHose later sold his interest in Nevada National,
but continues to serve as chairman.
Farm Journal magazine became interested in the
new venture in mid-1966, purchased a half-interest,
then later bought out the company. In the late 1960s,
Farm Journal sold the company to its present owner
and president, Dave Anderson, who was with Nevada
National Bank at that time and with the REC-CHEK
system almost from its founding. He has continued to
build it into the pre-eminent farm record-keeping sys­
tem in use, and has given it state-of-the-art manage­
ment with the latest, most sophisticated computer ap­
Now, 20 years after that first feature article in these
pages, the following article recounts how well RECCHEK continues to serve community banks and their
ag customers with a solid system that has grown in use
over the past two decades.
* * *
Written especially for
T he N orthwestern B anker

By KENNETH R. BIRD, Executive Vice President
First National Bank, Kiester, Minn.
N OUR bank we are moving from ag lending based
on analyzing the tax return and a cash flow to a more
analysis of the farm operation’s Net Farm In­
come based on an accrual income statement. That has
required additional training on our part, as well as a
concerned effort to train our farm customers on how to
gather that information.
For a period of time, many ag industry experts were
Northwestern Banker, February, 1987
Federal Reserve Bank of St. Louis

saying that to gather that kind of information we
would need a double entry accounting system from our
farm operators, but few of our customers had the time
or the understanding to handle a system of that kind.
REC-CHEK has recently come out with a system
called STAR that takes the information from the RECCHEK program that we run in our bank and makes the
necessary adjustments to complete a 5-year Balance
Sheet Spread and an Accrued Income Statement. We
are now able to use our in-bank microcomputer to
prepare these statements.
REC-CHEK’s training program combines lender/
computer operator training with on-site customer edu­
cation meetings, so that our borrowers now can see
what is necessary to complete the forms that we need
here in the bank.
I think all ag lenders now are realizing that a simple
tax return and a cash flow, although adequate for lend­
ing in times of appreciating land and equipment
values, are just not enough to determine the real pro­
fitability of a farming operation. To get the net income
figure from an accrual income statement, and then to
determine the capacity to repay capital debt, requires
customer training and a recordkeeping system that
show an accurate Family Living Expense figure.
In the last several years we have moved from a
period of farming where poor records were adequate to
one of good records being a requirement. But, we must
consider our customers! Without the opportunity to
obtain formal accounting training, which most will not
have, we are asking them to perform an impossible job.
One alternative would be to ask them to get a certified
statement from a CPA, but we have found that to be
very expensive, if not impossible. Several years from
now, we may require that on large lines, but in the
meantime we need to provide a system that is as easy
to operate as possible, and then use a system like RECCHEK’s STAR to make the adjustments we need to
have an accrual income statement.
In the last severed years we have seen software com­
panies that sell ag packages to banks come and go. Our
bank purchased one of those packages, and having a
package with no support and training is worse than
having no package at all. The REC-CHEK company
has been around for 20 years, and I believe it has a
large enough base of banks and revenue to continue the











FORM RC 100 t



5645134 ________ i i__
75672 ¡"34
45672}. 34
_____ i _ __ . _ _
j __ --------------7---i
3455 TffÖ
— 56739T34
56739}. 34
--------------r1__ " iT s s s s y tr f
234 .¡60 ------------ -—ii,----AUTO
567¡. 34
i -—Ti
5 ¿>706*.i 1¿.
64651 .¡46
i1 - -------------i
7932 .¡50 -------------- ii,----2300'. 50
1234*. 35
4690 .¡69
789 .¡50
678 .¡23
-------------- 1
12000 .'00
1200o'. 00
SStfö ..<Jö
567 .¡i 2 ________ 1___
------- BBTöGlScf
___ ___ i
076 .¡3Ö
456Î. 34
9 1 2 aó8
j 109801 .182
733441.65 _ 1081071.02
_ _ i - - Gi 109801 .¡82 198883». 02
------- 1----3
nu r r v e st g c r
9 o g q o L oo
75000 ^00
-----------1------- ________ i.__
34000 400
12500o!. 00
T u Ta L
"T24-67S:¡23300 U0{. OÌJ
605 400
15925 402
2456». 34
H í 77*75 470
245¿if 34
9 2 ^. 0 2

105 CORN
20 0
Federal Reserve Bank of St. Louis


Northwestern Banker, February, 1987


of operation, the training that is being done by RECCHEK, and the fact that it is an Ag analysis package
written for banks and not farm operators. Those other
packages are fine for the farmers that are capable of
running them, but they don’t produce the Risk Rating
and the many ratios we get from STAR.
Whatever program your bank selects, make sure it
will produce an accrual income statement, is easy for
your people to operate, and that the company offering
it will support it with continuing training, for both
lender and farm operator.
training and support we will need as our requirements
for information and our computer equipment change.
REC-CHEK charges for these services, but we in our
bank are now realizing that we cannot afford the exper­
tise necessary to maintain the programming effort to
support a system on our own. In effect, we are contrac­
ting for this specific job, and I suggest that unless
your bank is large enough to have a programming staff
for your microcomputer department, your bank would
be dollars ahead to do the same.
There is also the issue of liability. Our industry has
been successfully challenged in the last severed years
by borrowers in bankruptcy proceedings who claimed
that the figures on the financial statements were not
those of the borrower, but those of the lender. In other
words, the lender filled out the financial statements.
We are quickly coming to the time where we will not be
able to buy enough liability insurance, if, in fact, we
can buy it at all, to cover that situation. We need to
conduct borrower training seminars to instruct our cus­
tomers to fill out our financial statements. Again, that
is an excellent application of contract services, and one
that the staff of REC-CHEK provides for us.
REC-CHEK’s STAR program produces a Cash
Flow, a Five-Year Balance Sheet Spread with a Risk Rat­
ing System, an Accrual Income Statement, and an all-im­
portant Comparison of Actual versus Projected that
can be run anytime during the year. That last report
would be excellent for FmHa Guaranteed Loans. In
our bank we like the STAR package because of the ease
(Continued from page 9)
portant credit factors that affect the loan.
4. Cash Flow. The one final intricate part of the pack­
age is the cash flow section. Within this section the
user can compile a projected and an actual quarterly
cash flow on the customer. One unique feature of the
cash flow is its ability to establish an accrual-based in­
come statement on the customer. Another feature the
cash flow offers is the ability to run a monitor report in
which the computer compares the actual data to the
projected data looking for any variances in the figures.
The monitor report may be run for any specific quar­
ter, with a year-to-date comparison at the same time.
5. Other Features. Other features of the agMGR soft­
ware package include:
• A time saving feature that allows the user to build
a set of data for the new year off the previous year’s
• An option package that includes the SIDEKICK
desk top manager from Borland International, which
consists of a full function note pad, calculator,
Northwestern Banker, February, 1987
Federal Reserve Bank of St. Louis

Microcomputer Ag Credit Analysis
Five Year Balance Sheet—Enter three year’s history,
make the fourth year the current year’s data, and the pro­
gram will interact with the cash flow to make a projection
for the end of the next operating year. After calculating Net
Worth on a Market Value Basis, the program calculates li­
quidation margins, and such ratios as the Current Ratio,
Debt/Worth Ratio, and Liquidation Margin/Debt Ratio. A
credit scoring is also produced by assigning points to the
ratios, and printing a Performance Rating for each cus­
Accrual Income Statement—Previous year’s tax returns
are required to produce an accrual income statement. The
program matches expenses for a given year with income for
that year, with adjustments for beginning and ending inven­
tories from the Five Year Balance Sheet and tax deprecia­
tion. Cost basis for major assets are used.
Farm Budgets—A projected budget for crop and live­
stock income and expense is produced. This information
automatically flows to the Cash Flow, which saves much
time when completing each customer’s Cash Flow.
Cash Flow—A projected plan for the up-coming year that
requires additional income and expense information not
brought forward from the Farm Budgets.
Cash Flow Monitoring—One of the most valuable parts
of the system, this program interacts with the REC-CHEK
program to produce a report that compares the projected
with the actual income and expense for both the month and
year-to-date, with a variance for each category. This is an
excellent report for FmHa Guaranteed Loans, or any credit
that your bank is monitoring.

calendar, modem dialer, and an ASCII table. It should
be noted that the SIDEKICK package is fully
active at all times when using the agMGR package. By
using the SIDEKICK package, the user has the ability
to record all pertinent documentation while working in
the agMGR package via the note pad.
• A complete set of data collection forms that coin­
cide with the software package inputs. These forms are
to be completed by the customer for two purposes:
1) To aid the banker in completing the required com­
puter inputs.
2) To allow the lending institution to protect itself
from the borrower when taking control of the
operation by having the borrower sign the forms
to indicate he understands them.
• One final feature that further enhances the pack­
age is its ability to run “what if” situations in all of the
sections of the agMGR package.
The agMGR package operates on IBM and IBM
compatible computers. A minimum of 256K memory is
necessary with 3.1 or higher DOS (disk operating sys­
tem). Two floppy disk drives or one floppy and one
hard disk drive also are required.




A N orthwestern B anker interview with
Iowa Cattlemen’s Association, Ames, la.
OLIN J. COX, Nutritionist
Cox Nutrition & Technical Services, Patón, la.
NE CASUALTY of the Midwest ag crisis has
been the cattle feeding industry, a mainstay of the
farm economy in most upper midwest states. An


assault on the dietary value of red meat, coupled with
traditionally low returns for producers while retail
counter prices soared in the 1970s, converged for a
showdown at the same time the economic recession
that greeted the 1980s brought sweeping changes to
the livestock industry.
Along with a re-structuring shakeout that has been
occurring in all areas of agriculture, trade associations
representing the livestock interests are fighting back
with new programs on behalf of their members. One is
the Commercial Feeding and Grazing program offered
by the Iowa Cattlemen’s Association, based on the
“Retained Ownership” concept. The Nebraska Live­
stock Feeders Association, Lincoln, and the Nebraska
Stock Growers Association, Alliance, have hired a
staff person whose principal duty is to promote the cat­
tle feeding industry for the state and provide a commu­
nications link for this vital area of the livestock indus­
try. The Kansas Livestock Association, Topeka, has a
program very similar to that in Iowa.
Mark Williams, ICA fieldman, says his association’s
Commercial Feeding and Grazing program, which
went into effect early in 1986, offers a listing service of
qualified livestock feeders and grazers in the state.
“Qualified is the key word,” he emphasizes. “That
means those individuals have met standards set by a
core group of feeders and grazers in conjunction with
the ICA. Our organization did the approval work last
Federal Reserve Bank of St. Louis



year when the program was started. The sign-up period
is open once a year and that 1987 sign-up was during
the month of January for 1987. This year the approval
of those who meet our standards is given by ICA along
with the member core group.”
Mr. Williams coordinates the promotional work to
market this concept. This includes a videotape for
ICA or member use that shows ideal conditions for
feedlots and grazing and explains visually the various
steps that should be followed by a qualified operator in
pursuit of good feeding and grazing practices. In addi­
tion, ICA will go alone or accompany members on
visits to prospective cattle customers in other states,
and also conducts tours of qualified Iowa facilities for
ag visitors.
Mr. Williams says the association’s Commercial
Feeding and Grazing program offers these features:
• Grazing for cows-calves and yearlings.
• Retained ownership calves a specialty—back­
ground or finish.
• Consulting nutritionists and veterinarians.
• Computerized feedlot monitoring and record-keep­
• Contracting and hedging services.
In its contacts with prospects, the ICA points to the
state’s abundant feed at low costs, proximity of sev­
eral major commodity delivery points, no property tax
on cattle, personal attention with professional care,
proximity to high quality feeder cattle of southern
Iowa, and surplus slaughter capacity.
The core committee of ICA consists of 12 members,
with Evan Vermeer of Sioux Center as chairman and
Steve Taylor of Mt. Ayr as vice chairman. One of the
committee members is Olin J. Cox, owner of Cox Nutri­
tion and Technical Services, Paton, la. He received his
Bachelor of Science degree in animal science with a
production background from Kansas State in 1969,
then earned an M.S. degree in ruminant nutrition in
1973 at Kansas State. He has commercial cattle
Northwestern Banker, February, 1987


JA N 10
JU L 6
F E E D E R C O S T C * / 100 L B S . >
S A L E P R I C E CS /1 00 LBS. >
7. S H R I N K
7. D E A T H L O S S
mi s c . c o s t <:$:>
W E A T H E R E F F E C T (7. 1R E D U C T I O N )
7. I N T E R E S T


60. 00
12. 50
5. 75
. 10


2. 78


10. 25
7. 16



B R E A K E V E N P U R C H A S E P R I C E T / 100 75.71
C O S T / D A Y <$)
P R O F I T / L O S S P E R H E A D <*>

10 1987




*/ 1 0 0 L B S .


2. 58
4. 75
. 16

13 9. 94
2 o . o3


1 9 8. 39

101 C O R N
30 6 HA Y MIX
51 5
901 BA L STR
375 C O R N S I L A G E
20 2 L A C T O - W H E Y
52 4 R U M V T M / S E
401 S A L T
27 5 M E A T & B O N E M E A L
2 4 4 S O Y B E A N M E A L 44
409 UREA
400 L I M E S T O N E
40 2 D I C A L
41 3 D Y N A M A T E
43 0 M A G O X I D E
426 E L E M E N . S U L F U R
521 C A L F S T A R T E R C O N
5 2 0 C A T T L E S T R E S S /D
41 1 P O T A S S I U M C L R I D E
60 0 B O V I T E C 68
J A N 10
2 G R O W E R #1
J A N 31
4 F E E D L Q T #1
b F E E D L O T #2
6 F E E D L O T #3
M A R 14
7 F I N I S H E R #1
M A R 19
8 F I N A L F I N I S H E R : M A R 24




F I G U R E S A R E E S T I M A T E S A N D A R E B A S E D ON T H E B E S T I N F O R M A T I O N A V A I L A B L E .
A N I M A L P E R F O R M A N C E W I L L BE A F F E C T E D BY W E A T H E R , G E N E T I C S , E N V I R O N M E N T , A N D
COX N U T R I T I O N & T E C H N I C A L S E R V I C E S RR1 BOX 63 R A T O N , I A . 5 0 2 1 7


*********************************************** ******** *********** *************


Banker, February, 1987
Federal Reserve Bank of St. Louis


“Each feedlot operator or grazer must meet nine criteria
before being placed on the listing service.”_______________
feeding and technical services credentials that go back
to 1968, including commercial cattle feeding on his
own, feed company field nutritionist and technical ad­
visor, with the past two and one-half years as field
nutritionist for Eldon Juhl at Dana, la., for cattle be­
ing fed, plus developing that company’s computer
management and monitoring programs. Mr. Cox
developed his computer skills while he was a field
nutritionist with ADM working with ranchers, feedlot
operators and large capacity swine producers in
Nebraska and Kansas.
Mr. Cox points out that the Commercial Feeding
and Grazing program encompasses these two main
1. Revitalization of the Beef Industry
• utilize facilities currently idle
• re-employ people to do what they know best; i.e.,
feeding and raising cattle
• recognize and understand the economic ramifi­
cations of a healthy livestock industry on our
local community level
• the creation of wealth by utilizing resources
that for the most part are renewable, but have
little or no economic value unless fed to a rumi­
nant (forages, grazing, by-products, corn and
soybean growers)
2. Restructuring of the Cattle Feeding Industry
• utilization and incorporation of computers and
applicable software to our industry
• utilization of specialists and professionals in the
area of health, nutrition, finance, tax and ac­
• predetermining profit potential, return on in­
vestment, price protection, and risk manage­
• cattle health and performance monitoring
• shared risk of cattle ownership: a. retained
ownership, b. cattle partnerships, c. cost of grain
feeding, d. feed and yardage with predetermined
ceiling and floors on feed cost.
Each feedlot operator or grazer must meet nine cri­
teria before being placed on the listing service. Five of
these criteria are the same for feeders or grazers:
• Access to a certified livestock scale
• Projection capabilities
• Defined close-outs
• Reasonable animal health program
• Member Iowa Cattlemen’s Association
Additional criteria that must be met for each group
For Feeding
• On-farm feed scales
• Nutritionally balanced rations
• Knowledge of water, air and waste management
• Semi-monthly feedlot monitoring program
For Grazing
• Accurate method of charging feed costs to owner
• Water source
• Adequate fences
• Working facilities
Federal Reserve Bank of St. Louis

In addition, feedlots and pastures are classified by
types to help the potential client decide which partici­
pating member fits his cattle feeding need. Also, each
feedlot operator is expected to furnish, upon request
by a client, reference as to character, management and
credit. It is also recommended that insurance, liabili­
ties and the use of a written contract be discussed with
every client.
Implementing this type of program to renew the cat­
tle feeding industry within Iowa costs money, and the
ICA and its members have put up their funds.
ICA has committed $5,000 seed money and the ser­
vices of staff member Mark Williams as coordinator.
Each participating ICA member pays an annual ser­
vice fee of $150, plus 10 cents per head based on a one­
time capacity in the feedlots or pasture. The Depart­
ment of Economic Development contributed $6,000 for
development of the 15-minute videotape entitled, “A
Profit to Be Made.”
Working with ICA, the core committee began its ad­
vertising campaign last June in cattle publications in
Kentucky, Missouri, South Dakota, Virginia, Tennes­
see, Arkansas, Alabama, Mississippi and Georgia.
Those ads resulted immediately in 45 requests for
further information.
Further, the core committee made personal contact
with four states—Kentucky, Virginia, North Dakota
and South Dakota. As a result, 30 cattlemen from Ken­
tucky have toured Iowa feedlots and pastures, and the
first bunches of their cattle has gone through the feedlot program here. A small group made the tour from
Virginia and has expressed high interest in the ar­
rangement to ship feeders to Iowa, some with retained
ownership, others to sell as replacements. Approxi­
mately 80 cow/calf producers from South and North
Dakota visited Iowa and several loads have been
placed in Iowa feedlots and pastures from North
Additionally, ICA has worked closely with cow/calf
operators in southern Iowa to place their calves in the
feedlot and grazing program; again, some with re­
tained ownership and some as outright sales of calves.
The 46 initially approved feedlot and grazing opera­
tors have one-half concentrated in the northwest quar­
ter of the state, which in former years was a premier
feeding area of the nation. The balance of the 46 initial
qualified members on the list show 12 in the southwest
quadrant of the state, nine in the central counties in
the eastern half of the state, and one in extreme north­
eastern Iowa and one in southeastern Iowa.
Rich McKee of the Kansas Livestock Association,
Topeka, describes his association’s effort to promote
feeding as being closely parallel to the effort Iowa ini­
tiated last year. “We are putting together a video,” he
said, “to aid members to explain to cattlemen, primari­
ly in other states, how the feeding industry in Kansas
works, and to explain the advantages of Kansas to
them. This is aimed primarily at those who have tradi­
tionally weaned calves, and now retain ownership. Our
feedlot members can take this videotape with them
outside the state and show it to any individual or to in­
terested groups.”
Northwestern Banker, February, 1987


21 reasons
farm appraisals

Written especially for T he N orthwestern B anker
Harry S. Halvorsen Real Estate
Forest City, la.
...with the assistance of Fred Greder, farm loan repre­
sentative, Travelers Insurance Co., Mason City, la.

GRICULTURE is in a crisis with new problems
each day. Too many who have only been in farm­
ing for the last 20-25 years feel the present situation is
different. We who remember the good old days of the
’20s and ’30s, and heard our fathers and grandfathers
talk about the early 1900s and before, know that the
history of farming is only repeating itself.
My Uncle Jap, who was born around 1890 on my
grandfather’s farm, attended country school and the
local academy which served as high school and junior
college of that day and went to work in a bank at
Thompson, la. He married a farm girl and owned a
team of horses, a buggy and a milk cow for his growing
family. Like most rural bankers, he had no problem
understanding a farmer’s problems and correctly judg­
ing a farmer’s needs and ability to pay back a loan
most of the time, unless there was a weather problem
or extra poor prices.
This was true for most rural bankers through the
’40s and ’50s and into the ’60s when the new era
dawned and cash flow was replaced with the equity for­
mula and many bankers and farmers became paper mil­
lionaires. At the end of the ’70s higher interest became
king and many of the equity loans that had been made
were in trouble.
The Government’s new program to lower grain sup­
port prices put the final kiss of death on equity farm
loans. Because of equity farm loans, bankers and farm­
ers are going through severe emotional and financial
The current loan problems have developed a need for
an outside independent person to judge the current
value of previous loans made and on any new loans to

Banker, February, 1987
Federal Reserve Bank of St. Louis

be made. Bankers and farmers need a person who is
schooled in such appraisal techniques.
The farm real estate and appraisal industry has re­
sponded to that need over the years with professional
training and standards for members of the several
trade associations serving these professionals. Much
has been written concerning the need for accurate appraisals and how they should be conducted. For exam­
ple, Robert C. Suter, PhD, listed the following “ Rea­
sons for Appraisals” in his 1974 book, The Appraisal
of Farm Real Estate (published by THE INTER­
STATE Printers & Publishers, Inc., Danville, 111., for %
$14.50 per copy in that year). Mr. Suter was then in the
Department of Agricultural Economics at Purdue Uni□ ABOUT THE AUTHOR—Mr. Halvorsen is a self-employed farm
and land broker and appraiser, plus having an active part in farm­
ing 320 acres with his wife and son. He has been a farmer 44 years
and had 20 years experience in that time in the fertilizer and seed
business. He has been a licensed broker in Iowa and Minnesota
for 10 years, and in Missouri since 1982. Mr. Halvorsen’s career in­
cludes appraisal work for attorneys on estates; banks and sav­
ings institutions for loan values, and IRS for challenges of estate
value. He has a long string of credits for professional appraisal
schools and seminars for continuing education, commencing in
1966. He is a member of the National and Iowa Associations of
Realtors and National and Iowa Farm and Land Institute; Farm­
land of America, and North Central Board of Realtors.
Currently, he is on the Iowa Farm and Land board of directors,
serves as its regional vice president for northeastern Iowa, is
chairman of its state legislative committee and has been ap­
pointed to the state legislative committee of the National Farm
and Land Institute. He received his AFLM designation in 1983
from the National board of governors of the Farm and Land In­
stitute, holding certificate #648 in the 40-year history of that re­

versity. His nine reasons for farm appraisals are still
valid today:
1. To buy, to sell, to trade or to transfer ownership.
2. To establish the bases for depreciating various
buildings and improvements insubsequent tax sche­
3. To settle a claim resulting from fire, wind or other
4. To assess the subject property for real estate tax
5. To obtain the basis for federal estate or state in­
heritance taxes.
6. To extend credit to the owner, thus financing the
purchase of the farm, using the farm as security.
7. To liquidate the property, using the asset’s sale
price to settle debts, liens, and other encumbrances.
8. To establish just compensation to the property
owner in instances where a public agency is taking
either all or part of the property for public use.
9. To appeal where compensation, assessment, or
other values or amounts are thought to be in error.
In the light of continuing developments since the
publication of that book, we would suggest the follow­
ing additions to that list:
10. To understand the different soil types and to
figure their productivity for the area.
11. To establish the cash flow potential for a period
of years.
12. To judge the potential cash flow on the different
farm buildings in hog-cattle or grain storage and dry­
ing facilities.
13. To understand the effect of the new tax law and
the new Chapter 12 which will write down loan debt to
fair market value and draw interest at a negotiated
rate and establish the point beyond which 0% interest
14. To petition the court for a receiver to be ap­
It is easier to get a receiver if an unbiased appraisal
establishes that the collateral won’t cover the out­
standing debt.
15. Outside appraisals may influence the decision of
other lenders with whom a bank is negotiating; for in­
stance, FmHA in a guarantee loan application or Land
Bank in a cash settlement compromise.
16. To argue for or against “marshalling” defenses.
This is where a junior mortgage lender asks the court
to force the first mortgage holder to bid each part of
(Continued from page 8)
eventually need to think in terms of a “continuing
educational commitment” just like most other highly
technical professions. It won’t be easy to produce this
kind of attitude turnaround, but it is necessary.
Our seminar is called “There Is An Answer.... and
there is! It starts by asking the right questions.
Recognizing that ag producers can do little about
problems like export market base, interest rates, cur­
rency strength, and embargoes, more emphasis is re­
quired in areas that can be controlled, such as cost con­
tainment, management by objective and prudently fi­
nanced growth.
For example, knowing the exact cost of producing
Federal Reserve Bank of St. Louis

the collateral separately at a Sheriff’s Sale.
17. To motion for the lift of the automatic stay in
bankruptcy so the creditor can proceed with the collec­
tion. As in a receiver petition, it’s usually necessary to
have outside estimates showing the loan is already
18. Some of the midwestern states have legislation
that requires the lender to bid the homestead separate­
ly at a Sheriff’s Sale at fair market value, which may
be considerably less than the debt. An outside ap­
praisal may protect the lender from being forced to bid
the homestead too cheap. In Minnesota, for example,
the homestead can include up to 160 contiguous acres.
19. Outside, independent, credible appraisals are one
of the few defenses left to a creditor after a customer
has filed Chapter 12 bankruptcy. Chapter 12 reorgani­
zation plans will usually call for the debt to be written
down to fair market value. The creditor cannot veto
the plan as in Chapter 11 , but can make every effort to
have the fair market value stay as high as possible.
20. The Chapter 12 era has already prompted more
interest in programs whereby a portion of the debt is
set aside to draw zero interest. The amount of debt
within fair market value would continue to draw inter­
est at a negotiated rate. Outside appraisals would be
helpful to establish the point beyond which zero inter­
est accrues. In Minnesota, The Rural Finance Admin­
istration is a state-sponsored debt set-aside and inter­
est rate buydown program.
21. Independent appraisals serve as excellent docu­
mentation in loan files for the benefit of examiners. Ap­
praisals support values to book acquired properties.
Appraisals support the value of acquired properties
already re-sold on contracts for deed.
A bank’s best chance to establish the market value
in today’s world is to use an accredited farm appraiser
with a record of several years’ practice in its area.
Readers may contact one of the following for informa­
tion on accredited appraisers:
1 . American Institute of Real Estate Appraisers,
430 N. Michigan Ave., Chicago, Illinois 60611.
2. Realtors Land Institute (Formerly the Farm and
Land Institute), 430 N. Michigan Ave., Chicago, Illi­
nois 60611.
3. American Society of Farm Managers and Rural
Appraisers, 950 South Cherry St., Suite 106, Denver,
Colorado 80222. Telephone 303-758-3513.
one bushel of grain or 100 pounds of beef or pork is cri­
tical to the operator in order to determine the most effi­
cient utilization of fixed facilities, inventory and cash.
Over the last few years, Agri Control has developed
an inexpensive system of collating and analyzing data
from existing producer records that generates this in­
formation quickly and easily. The seminar is where we
deliver that system to the producer. First, by
educating him or her to the need and application of
financial management tools, then by providing the sys­
tem for using that education. In short, we teach finan­
cial responsibility and provide the means to achieve it.
We sincerely believe that achieving financial responsiFINANCIAL RESPONSIBILITY. . .
(Turn to page 20, please)
Northwestern Banker, February, 1987


Local banks
have a
“secret weapon”...
...“the strength and quality of your
relationships with customers”
Remarks by
First Chicago Corporation
Chicago, 111. First National Bank’s 40th Conference of Bank Correspondents
November 24, 1986
ITH REGARD to the nature and scope of the
changes we face, it is interesting to note that
three years ago the Bank Administration Institute
sponsored a study on the outlook for banking in this
country. It involved surveying hundreds of industry
experts to determine their views on what the years
ahead would hold for financial services. Generally
speaking, the results of that study were quite reason­
able, and remain so today. But, some of its specific pre­
dictions bear out the underlying truth in the old rule
that, when you are forecasting, give a number or give a
date but never both!
In particular, the study concluded that the number
of banks in the United States would decline by almost
one-third, to 9,600, by the year 1990. For example, it
projected that “small” banks, those with assets of up
to 100 million dollars, would contract in number some
40 percent. Not surprisingly, perhaps, more than half
of all banks in this country, the study predicted, would
be involved in consolidations either as acquirers or as
Today, three years later, it is apparent that the
future is not unfolding quite in accordance with the
conclusions in that report. For example, the total
number of banks in the United States has held fairly
steady at around 14,000 in spite of consolidations and
closings. This is so because hundreds of de nova banks
have opened in recent years. In 1985, the figure was
345. And a good number of them are community
The Record of Acquisitions
Acquisitions have been taking place — there were
Northwestern Banker, February, 1987
Federal Reserve Bank of St. Louis

236 last year — but not at a pace that would ultimately
involve one-out-of-every-two banks. In fact, I think
that we in the industry need to make certain that we do
not allow thinking about acquisitions to become a pre­
occupation that interferes with other pressing matters.
Potential acquirers are finding that the prices of in­
stitutions that are truly desirable candidates have
risen to stratospheric levels. For example, in 1984,
First Chicago purchased American National and its
subsidiaries for 1 and Vz times book value. Ju st recent­
ly, N.B.D. Bancorp of Detroit reportedly agreed to pay
3 and Vz times book for USAmeribancs — a holding
company with six banks here in the Chicago area.
In some cases, there may well be a unique reason for
“paying up” to acquire a position.
But acquisitions at hefty multiples are frequently
explained by pointing to large anticipated synergies.
The massive synergies needed to justify some of
today’s purchase prices can be realized only by intrud­
ing broadly and deeply into the operations of the ac­
quired institution. And that kind of heavy involve­
ment runs the risk of draining that bank of the very
strength that made it a sound acquisition candidate in
the first place.
Acquisitions can be an important part of a bank’s
plans. And they are here at First Chicago. But an ac­
quisition strategy is not a panacea. We must also address the changes in our environment that threaten the
very strengths we bankers want to preserve, acquire,
or sell.
The challenges and opportunities resulting from
these changes face local banks —just as they face their
larger colleagues.












The Commercial Paper Story
For example, 15 years ago, banks accounted for fully
90 percent of short-term corporate borrowing. This
year, 50 percent of that market has been taken over by
commercial paper. That phenomenon has been given
the name “securitization,” and this form of disinter­
mediation is now creeping into the market for mediumterm lending, as well.
There is little question that commercial paper has
made bank lending to the “Fortune 1 ,000” a break­
even business, at best. And some observers have gone
on to wonder how long it will be before the “C & I.”
loan is a thing of the past. That concern is understand­
After all, commercial paper has displaced loans not
just to the “Double A” and “Triple A” credits. Com­
mercial paper has also taken over a significant portion
of short-term lending to the lesser investment grade
Impact of Securitization
Without exploring all of the various possibilities, let
me say that it is my view that the “easy” disinter­
mediation has already taken place. Any new ground
gained by securitization in the future will be hard
fought. In particular, I believe that securitization will
not reach smaller borrowers in the middle market. This
is so because, unlike with larger firms, it is not possible
to use information that is more or less public and readi­
ly available to assess their creditworthiness. This
means that the companies that borrow from local
banks will not be in a position to disintermediate
through securitization.
Nevertheless, securitization has serious implica­
tions for the balance sheets of local banks. This follows
from the fact that its impact on larger banks has
forced them to begin looking on smaller companies as
potential customers. Clearly, this means pressure on
the pricing structure. And, if larger institutions can
somehow offer enough rates, lending business could
move in their direction.
My own feeling is that new arrivals are going to find
local banks to be pretty tough competitors. Among the
advantages that local banks have are their strong fran­
chises. And that is not a piece of banking mythology.
The Atlanta “Fed” took a look at this issue and con­
cluded that smaller firms definitely prefer to deal with
smaller banks.
But securitization through the shift of many cor­
porations to the use of commercial paper is not the
only reason why money-center and regional banks are
searching for new customers to lend to. The more gen­
eral problem that adds impetus to this search is one
that is shared by all of us in this industry. It is that ob­
solete legislation prevents us from offering a wider ar­
ray of financial services to both our wholesale and
retail customers.
Banks Need Fuller Powers
With regard to local banks lending to business, this
is relevant because that vestige of the “New Deal” —
the Glass-Steagall Act — prohibits larger banks from
fully entering the field of investment banking. Given
the heavy pressure on margins, broader underwriting
ability would diminish the need of larger banks to
move deeply into the middle market. This is borne out
by the fact that more than one major institution has
Federal Reserve Bank of St. Louis

spoken publicly of the possibility of giving up its bank­
ing charter in order to gain full access to investment
We banks are restricted from providing our custo­
mers with the full range of financial services that they
want and need. But, as you well know, the same is not
the case with the so-called “non-bank banks” and our
other competitors — such as American Express. Here,
the focus is primarily on the consumer part of the busi­
ness, which is such a vital part of your franchises and,
historically, a great source of the strength of local
The threat, therefore, is a major one even though we
will, I am confident, ultimately have expanded product
powers. The problem is that, in the meantime, our com­
petitors will gain footholds from which we will have a
hard time dislodging them. And there has already been
some serious erosion in consumer lending areas that
have traditionally been part of the product mix of local
Home Mortgages Now a Tool
The home mortgage business is a perfect example.
I certainly realize that there have been difficulties
with fixed-rate mortgage portfolios. Nevertheless, it
can be argued that a home mortgage is an especially
important product to sell to a consumer.
It is a major financial transaction for the homeowner. And it can be used to establish or strengthen a
relationship that includes other products and services.
That is why it is a source of some concern that fully 50
percent of all mortgages are tunneling through to
mortgage bankers without any involvement by com­
mercial bankers.
How can this development be dealt with?
When a product plays such a key role in marketing
strategy, it is a likely candidate for “loss leader” sta­
tus. There is nothing inherently wrong with this ap­
proach to pricing. Nevertheless, it does entail incurring
a loss on a product. If the marketing objective is to
establish an overall relationship, as you know, that can
be achieved without losing money.
This is because of something that began back in the
early 1970s.
Pooled Mortgages Now Competitive
That was when the Federal Government created a
secondary market in pooled mortgages through agen­
cies such as the Government National Mortgage Asso­
ciation — “Ginnie Mae.” The idea caught on. Today,
mortgages, once the most illiquid and most localized of
financial instruments, have become an accepted part of
the wider financial landscape. In fact, the spread be­
tween new mortgages and 10-year Treasury notes, for
example, has dropped more than 200 basis points in
the last dozen years or so. Furthermore, according to
one report, by 1983, the volume of newly issued mort­
gage-backed securities was greater than the volume of
newly issued stocks and bonds.
Because of the nature of local bank funding sources,
you are in a position to be quite competitive with
regard to pricing without actually going below your
cost of funds. With a strong secondary market readily
available, there is, therefore, an opportunity to price
aggressively, and then to sell-off the instrument. In ad­
dition to the benefit of starting or strengthening a rela­
tionship with a consumer, your local bank can earn the
Northwestern Banker, February, 1987

points and the origination fees.
My purpose in mentioning this is to emphasize that
there may well be a greater threat than we have recog­
nized associated with the incursions of our competitors
into the home mortgage business. But both “Ginnie
Mae” and now “Fannie Mae,” as well, offer the oppor­
tunity to compete effectively.
“Home Equity” Installment Loans
And I want to continue on the subject of homerelated lending. As you know, the recently enacted Tax
Act has enhanced the attractiveness of the “Home
Equity” loan for consumers.
It is not very likely that this vehicle will lead to an
increase in consumer borrowing in the aggregate. Still,
it may shift the mix of consumer debt, and this may be
especially beneficial to a local bank that does not have
a credit card product.
I say that because you may have been noticing some
slippage in the installment loan category and not just
because of the auto financing situation. It is a fact that
there has been a tendency for the consumer to substi­
tute borrowing on his credit card — or cards, in some
cases — for personal installment debt. The tax-pre­
ferred nature of the home equity loan may prove
strong enough to outweigh the convenience of credit
card borrowing for some consumers. To the extent that
it is, you may do some home equity lending that other­
wise would have taken the form of credit card debt at
some other bank.
Auto Financing Is “Loss Leader”
Because auto loans have played a role in cementing
the local bank franchise with the consumer, let me say
a few words about auto financing. It there ever was a
“loss leader,” it is the loans being offered by the
finance subsidiaries of the automobile companies.
For marketing reasons, the domestic producers have
chosen low financing interest rates as the mechanism,
in effect, for lowering the prices of their cars. The trick
to using an incentive like that is to avoid letting it
become a fixture. It looks to me, unfortunately, as if
concessionary interest rates have become practically
No wonder that the captive finance companies grew
their market share from 31 percent of auto installment
debt to 35 percent in just one year — 1985.
That was at the expense of commercial banks, and
similar increases can be expected in the years ahead.
Part of the reason for this is the recent securitization
— that is to say, the pooling and sale — of automobile
loans. These securitized loans are known as certificates
of automobile receivables — “CARS,” for short — and
they will permit the captives to expand without being
constrained by the growth rate of their capital.
Frankly, I think we need to recognize that this prob­
lem is going to get worse before it gets better. The
domestic automobile industry will continue to face a
very competitive environment for many years to come;
and, because of its flexibility, concessionary financing
will remain an attractive marketing tool. In my view,
all of us in banking need to think about finding a sub­
stitute for the traditional auto loan.
Non-Bank Bank Threat
My comments have been directed at some examples
on the asset-side of the balance sheet — to highlight
the incursions into our product areas. Yet, there is a
Northwestern Banker, February, 1987
Federal Reserve Bank of St. Louis

threat on the liability-side, as well. It is that the “nonbank banks” pose a serious potential challenge to your
base of core deposits.
In particular, it would be unwise for any of us to
underestimate the situation created by some of the ma­
jor retailers. It is reasonable to assume that, sooner or
later, their stores in your local market will be compet­
ing aggressively with your for deposits. When that
happens, it will certainly raise our level of frustration.
Obviously, banks need more even-handed laws and
regulations relative to our “non-bank” competitors.
That will help us all. But local banks have a “secret
weapon,” if you will, in this battle. It is actually a
weapon that is really no secret at all.
Local Banks Offer Value
I am referring to the strength and the quality of
your relationships with your customers. You are will­
ing and able to give a degree of personal service that
few competitors can match and all customers value.
And I mean “value” in a very concrete sense.
In fact, I am convinced that, if local banks continue
and even deepen the personal service that has gotten
them where they are, they will have more than a fight­
ing chance to fend of the coming assault on core
I have consciously focused my remarks on some
issues that pose challenges to local banks, so, I want to
be sure to underscore the fact that we at First Chicago
believe very strongly that local banks in the Midwest
have bright futures ahead of them. That confidence
arises in large measure from the readily observable
fact that local banks have strong and long “track
records” of successfully and profitably adapting to
and serving their markets. Consequently, the enviable
franchises that local bankers can point to are not the
result of “happenstance.” Rather, they reflect an
understanding of, and willingness to serve, the needs
of customers.
Correspondent Relationships
That has always been a key to success in banking. It
always will be, even as our industry continues to
undergo profound change. I am convinced that the cor­
respondent relationships that, hopefully, have served
you well in the past will continue to be sources of
mutual benefit in the years ahead.
(Continued from page 17)
bility provides the only real, long term answer to the
problems facing the ag producer and his lender.
Our seminar, among other things, teaches the pro­
ducer to understand the language and appreciate the
terminology of a banker. At Agri Control, it’s our goal
to understand the language and appreciate the terminology of a producer, a farmer. I t’s important to know
the meaning and full economic impct of cattle on feed
days, of conversion ratio and average daily gain. I t’s
important to recognize fixed and variable expenses,
and how each are affected by total acres cropped,
bushels per acre, cattle on feed days, pigs per litter, or
acres per cow/calf unit.
The challenge of the future for all of us within the
agricultural and financial community is to attain the
degree of confidence required to insure our ability to
work as a profitable partnership.















(Continued from page 4)
ter to Senator Grassley. I am enclosing a let­
ter I wrote to him describing our first experi­
ence with Chapter 12. You have described the
situation perfectly. There will be a lot of
farmers who will not get credit because of
Chapter 12, double jeopardy and a host of
other discriminatory laws passed by our leg­
islature and Congress. I hope your letter gets
to the proper source and I’m sure it will.”
Edward L. Tubbs, Chairman
Maquoketa State Bank, Maquoketa, la.
* * *
“I have just read your open letter to Sena­
tor Grassley and was overwhelmed with a de­
sire to say ‘thank you.’ Your letter should be
applauded by all bankers and I hope your
past rapport with Chuck will help him realize
the urgency of the matter.
A moratorium is one thing, but no bank
can or should have to absorb the losses in­
flicted by Chapter 12. When the farmers
asked to borrow money they threatened us
with ‘doing business down the street’ if we
didn’t go along. Their loyalty was pretty thin
in those days and we bankers believe we were
servicing our good customers. Because of
Chapter 12, even the good ones will now find
financing non-existent.
“We have an attorney in Sioux Falls that
has advertised to the farmers not to pay un­
til they review with him the possibility of
protection under Chapter 12.
“Senator Grassley has been less than ap­
preciative of the bankers’ original support to
elect him, but I don’t think he meant to ring
the death knell on them and then like domi­
noes, the farmer, businessmen and ultimate­
ly the small town itself. I hope your letter
gets positive results.”
L.H. Olson, President
Commercial Trust & Savings
Bank, Mitchell, S.D.


farming. The growth of our banks and the
community will be hurt severely by the new
Chapter 12 Bankruptcy Law.
“I hope more than Senator Grassley will
be able to read your letter. Very well written
and brings the true story home.”
James C. Stratton, President
Osmond State Bank, Osmond, Nebr.
* * *
“I just finished reading your letter to
Senator Grassley. Congratulations and best
wishes! You sure know how to ‘give ’em hell’
and all of us are behind you. I trust that all
who agree with you on this situation will
have some influence on the people we elect.”
James R. Campbell, President
Norwest Bank Minneapolis, N.A.
Minneapolis, Minn.

Jeff Rodman Leaves ABA
To Join MASI Staff As V.P.
Jeffrey J. Rodman is joining the
staff of MABSCO Agricultural Ser­
v ices,
(MASI) as vice
p re sid en t-m ar­
keting, effective
F e b ru a ry 17.
Mr. Rodman re­
signed his posi­
tion as assistant
director of the
A g ric u ltu ra l
B ankers D ivi­
sion a t th e


“May I express my thanks for sharing
with our industry your excellent letter to
Senator Grassley on Chapter 12 Bankruptcy.
“For some reason, we have difficulty in
educating our legislators, along with others,
that we are going the extra mile to help save
the farmer and small business that show any
sign of possible survival. We do not need ridi­
culous solutions like Chapter 12.
“As you so skillfully pointed out, they do
not realize that we have a responsibility to
our depositors, regulators and stockholders.
If the local bank fails, the community prob­
lems are magnified many, many times.
“I have always appreciated your fine pub­
lications and news of banking. Please keep up
the good work and maybe some of our farm­
ers, businesses and bankers will survive for
another day.”
Darold Petersen, President
Lakeside State Bank
New Town, N.D.

“Excellent job...The young farmers in our
area will be the hardest ones hit. We will not
be able to finance them and getting them into
a new venture. I can see no way that we can
take a chance, like someone who has the po­
tential and the seed money to get started
Federal Reserve Bank of St. Louis

We ifajffre Perf ormance
As field representatives of the G.D.
vanWagenen Company, we enjoy
being of service to our customers.
Teaming with our internal service
representatives, we deliver the highest
quality of Collateral Insurance
Management. At G.D. vanWagenen,
service delivers performance.

Automated Insurance Management
Blanket Single Interest Insurance
Conversion and Confiscation (Skip
Credit Life/Primary and Excess
Mobile Homeowners Insurance


Offices At:
Denver, CO
Phoenix, AZ
Omaha, NE

Cedar Rapids, IA
Billings, MT
Reading, PA

G.D. van Wagenen Company

12 South Sixth Street
Minneapolis, MN 55402
1-800-742-5658 (Minnesota)
1-800-328-2052 (Out-of-State)

The Collateral Protection Insurance Specialists

Northwestern Banker, February, 1987


American Bankers Association
headquarters in Washington, D.C.,
to accept this new appointment in
Des Moines, la., headquarters of
In his new position he will man­
age marketing and sales, formulate
marketing strategy and product de­
velopment, handle public relations,
and supervise participant training.
MASI serves member banks of 12
state banker associations, as well as
participating banks in three addi­
tional states.
Mr. Rodman is a native of Springville, la., and is a 1977 gradute of

Iowa State University. Upon gradu­
ation, he began his financial career
with the Federal Land Bank Asso­
ciation in Decorah, la., serving there
as vice president/branch manager.
In 1982 he joined the Farm Credit
Administration headquarters in
Washington, D.C., as a regional
supervisory officer. In that position
he was assigned to a two-man team
with responsibilities for maintaining
on-going contacts with the Farm
Credit Banks of St. Paul, comprising
$11-$12 billion in total assets. He
was reassigned in 1984 to Farm
Credit Banks of Spokane as part of

C apital.
Another reason fo r
selecting Swords Associates.

had received a warning from the
Comptroller’s office. Swords Associ­
ates was called to help us organize
our chaos.
After a meeting with manage­
ment and an examination of the
bank’s operations, Swords Associ-

“We as the directors of a $200
million national bank had to make
some drastic decisions. Our ROA
had dropped below .60% and our
capital-to-assets ratio stood at
4.8%. We had dismissed most of
the upper level management, and

ates was back within a week with
what they considered our most
viable solution.
Swords Associates recom­
mended that our bank offer to
exchange variable rate preferred
stock for our soon-to-be-due deben­
tures. An austerity program was to
be launched immediately to en­
hance our profitability. With Swords
Associates assistance a prospectus
was developed, a meeting held with
the Comptroller and the exchange
idea presented and approved by the
debenture holders.
Today after carefully following
Swords Associates suggestions and
further consultations on other minor
problems, our bank has fully re­
covered. Our ROA is presently run­
ning at a respectable 1.26%, capital-to-assets ratio is up to 6.8%.
We have recently lifted our austerity
program and are viably competing
for business in the community."



4900 OAK



(816) 753-7440

The Carpenters Pension Fund of Illinois, covering the State of
Illinois and the eastern half of Iowa, announced today a financ­
ing program of new and rehabilitation construction projects.
The Pension Fund is interested in providing financing of con­
struction and end loans at competitive rates. The servicing of
these loans, ranging from $250,000 to $2,000,000, will be
handled through local banks. The program is available for com­
mercial and residential projects.
For further information, please contact: Frederick A. Westmark, Administrative Manager, Illinois Employee Benefits Cor­
poration, 28 North First Street, Geneva, Illinois, 60134, 312/
Banker, February, 1987
Federal Reserve Bank of St. Louis

the FCA’s reconstruction effort in
that problem-plagued district.
He left the FCA in 1984 to join
the American Bankers Association
headquarters staff as assistant
director for the Ag Bankers Divi­
sion, where he has been responsible
for all activities, services and pro­
ducts of the division.
After receiving his B.S. degree in
Industrial A dm inistration from
Iowa State in 1977. Mr. Rodman
also did post-graduate study at
Luther College in Decorah, and at
American University in the nation’s
capital. He has also taken advanced
training in ABA’s Commercial
Lending School at the University of
Oklahoma, and its course in Nego­
tiating Skills, as well as several AIB

LaSalle National Corp.
Acquires Lisle Bancorp.
LaSalle National Corp., Chicago,
has completed the acquisition of the
Lisle Bancorporation, the holding
company for the $100 million Bank
of Lisle.
The bank, renamed the LaSalle
Bank of Lisle, now offers access to
higher lending limits and proven in­
ternational, trust and support ser­
vices to Lisle and all of DuPage
LaSalle National Corp., the hold­
ing company for LaSalle National
Bank, Chicago, had announced its
plans to acquire the profitable Bank
of Lisle in July, 1986. It has since
received regulatory and shareholder
approval for the merger, according
to Homer J. Livingston, Jr., presi­
dent and chief executive officer of
LaSalle National Bank.
Leonard P. Ponte remains as
president of the Lisle bank.
LaSalle National Corp. paid $18
million to purchase and merge with
the Bank of Lisle, located at 4733
Main St. in Lisle.
During 1985, the Bank of Lisle
reported a 2.17 percent return on
assets, ranking it in the top 4 per­
cent of banks its size.
LaSalle National Bank is a subsi­
diary of Algemene Bank Nederland
N.V. (ABN Bank) and a member of
its ABN/LASALLE group which
has offices in 13 North American
cities. ABN is one of the world’s
largest financial institutions, with
more than $60 billion in assets and
more than 900 offices in 43 countries

of Chicago. He was also responsible
for CASH STATION, First Chica­
go’s proprietary ATM program as
well as its credit card merchant pro­
gram, home banking and self-service
terminals. Previously, he managed
ATM network marketing for CASH
STATION, Bank-at-W ork/ACH
sales and consumer affairs, all at
First Chicago.
* * *
bank for 13 years. She most recently
IBA Conference Set
served as assistant cashier.
For Feb. 25-26
Ms. Turner most recently served
The Illinois Bankers Association as personnel administrator. She will
will hold a Consumer Credit Confer­ be assistant cashier in personnel.
ence on February 25-26 at the Hyatt Ms. Slimp has been with the bank
Regency Woodfield in Schaumburg. for six years. She most recently
This year’s conference theme is served as teller supervisor respon­
“Changing Ideas To Profits.”
sible for proof, cash vault and ATM
On February 25, Bill Grove of At­ operations. In addition to being pro­
lantis, Fla. will speak on “Excel­ moted to cashier, she will also serve
lence is an Inside Job.” Mike Moebs, as manager.
G.M. Moebs & Associates, Lincolnwood, will present “Home Equity
Ideas for Profits.” Jerry Markbreit,
NFL Referee, will be the luncheon
The afternoon workshop sessions
include: “ Implementation of Home
Equity Loans: A ‘user’ tells all;”
“Building Dealer Volume: Auto/RV/
M arine;” ‘‘S tu d e n t L oans—A
Changed Environment,” and “Pric­
ing Techniques for Improved Profit­
ability-A utos, Home Equity, etc.”
On February 26, James W.
Evans, attorney from Champaign,
will speak at 7:30 a.m. on “Ques­
tions & Answers” and at 9 a.m. on
“Loan Documentation for Con­
sumer Lenders.” Morning workshop
sessions include: “When to Use Pro­
fessional Collectors;” “The Pluses of
Mergers & Acquisitions,” and
“Compliance Issues for Installment/
Consumer Lenders.”
Stephen S. Cole has been named
Registration is $150 per person
and $125 for each additional regis­ president of MONEY STATION of
trant from the same bank/firm. The Illin o is, Inc.,
fee includes two continental break­ C hicago, th e
fasts, a luncheon, three coffee newly consoli­
breaks, two receptions and all con­ dated automated
teller network of
ference materials.
Three Promoted in Aurora
Mary K. Cinton has been pro­
Mr. Cole, who
moted to assistant vice president in began his career
operations, and Barbara L. Turner with First Na­
and Martha J. Slimp to assistant tional Bank of Chicago in 1972,
cashiers of Aurora National Bank on most recently served as vice presi­
Indian Trail.
dent and head of the electronic bank­
Mrs. Cinton has been with the ing division of First National Bank
Federal Reserve Bank of St. Louis

Lane Financial, Inc. has an­
nounced that it has completed its
previously announced acquisition of
the $107 million asset Bank of West­
mont in Westmont.
William N. Lane, III, chairman of
Lane Financial, said the affiliation
of the Bank of Westmont with Lane
Financial will provide a strong pre­
sence in the western suburbs and
boost the economy’s assets to nearly
$ 1.6 billion.
Marcel Levesque will continue to
serve as CEO of the Bank of West­
Total assets of the Bank of West­
mont were $107 million as of Sep­
tember 30, 1986.

Promoted in Monmouth
Chris J. Gavin has been promoted
to assistant vice president of Mon­
mouth Trust and Savings Bank. He
joined the bank in 1983 and was ap­
pointed loan officer in 1984.

FNBOS Officers Earn
MBA Degrees

AT a staff wine and cheese party, USAmeribanc First National Bank of Skokie Pres.
James A. Carlson (left), congratulates April
A. Locander, v.p. of support services, (cen­
ter), and Michael Henthorn, cust. serv. off.
and mgr. of the Financial Services Center,
(right), for completing the necessary
courses to earn a masters degree in busi­
ness administration from Loyola University.
Diplomas were awarded in January. Ms.
Locander and Mr. Henthorn joined the bank
in 1979.
Northwestern Banker, February, 1987

bank as vice president-cashier and
director. He formerly served as
president and director of American
Bank, Danube, and most recently
was a loan officer with Farm Credit
Services in Elkhorn, Wis.
R.W. Terwilliger, pres., Eden Prairie
T.L. Jeffers, exec, v.p., Minneapolis

MBA Expands Programs
The Minnesota Bankers Associa­
tion, with direction from various
committees and the MBA board of
directors, has expanded its educa­
tional offerings 97 percent during
the last two years, according to
MBA Administrative Vice Presi­
dent Wayne Berthiaume.
Nearly 200 days of programs will
be offered by MBA during July
1986-June 1987. Two hundred pro­
gram days averages out to be almost
one program for every working day.

1975 when she joined the bank’s
department, where she
The Investing for Profits seminar,
positions including
sponsored by the Minnesota Bank­
she became an
ers Association Investments and
System work­
Funds Management committee, will
Dakota, Min­
be held March 5 at the Hotel Sofitel,
She rejoined
Bloomington. The seminar will pro­
in 1980 as
vide an opportunity to discuss new
investment products and services,
tax reform impact on the invest­
polis and Trust Company as assis­
ment portfolio and outlook for inter­ tant vice president in charge of Named in Andover
Kathy S. Cripe has been named an
est rates.
assistant vice president of St. An­
The registration fee is $80 per operations.
thony National
registrant and includes all meeting
Bank, St. An­
materials, lunch and breaks. Only Changes Told in Adams
The Farmers State Bank of thony Village,
members and associate members of
the MBA are eligible to attend. For Adams has announced the retire­ and will manage
more information, contact the MBA ment of Robert D. Hanson as presi­ the bank’s new
dent. He joined the bank in 1967, office in Ando­
serving as president since 1981.
Prior to join­
Gordon Klaudt has been elected
Named in Eden Prairie
the bank last
Marquette Bank Eden Prairie has
she had
announced the appointment of Bill
Ks CR|pE
Breit to presi­
m anager w ith
dent. He had
Roland Hoffert has joined the First Minnesota Savings Bank.
served as a vice
p re s id e n t
Marquette Bank
St. Anthony N a t’l Bk. Opens in Andover
M i n n e a p o lis ’
corporate ser­
vices group.
Before joining
Marquette Bank
Minneapolis, he
was a division
sales manager for Westinghouse
Credit Corporation in Chicago, 111.
He also served as a vice president
and client executive for Norwest
Bank in Marshall. In addition, he
served as vice president and market­
ing manager for Norwest Business
Credit and assistant vice president
of lease marketing for Norwest

MBA Seminar Scheduled


Named in Northfield
Elaine Bauernfeind has been
named assistant vice president in
charge of operations at First Bank
She began her banking career in
Banker, February, 1987
Federal Reserve Bank of St. Louis

ST. Anthony National Bank in St. Anthony Village has opened a temporary office in Ando­
ver at 13851 Round Lake Blvd. The office is the bank’s first detached facility. Plans are
underway for construction of permanent headquarters on Bunker Lake Blvd. The new 6,000 #
sq. ft. building is scheduled for completion late this year.


Several new officers have been
named at National City Bank of
Three were named to senior vice
president status. They are: Thomas
J. Freed, chief fi­
nancial officer
and m anager,
control depart­
ment; David M.
Nash, manager,
corporate devel­
opment depart­
ment, and Floyd
J. Stewart, com­
mercial banking
division - A.



William L. Meyer has joined Norwest Bank Minneapolis as assistant
vice president in
the community
b an k in g d iv i­
Prior to join­
ing Norwest, he
was in the corMarquette Bank Minneapolis has r e s p o n d e n t
appointed Carmen Gugin as vice banking division
at First Wiscon­
president and di­
sin N a tio n a l
rector of market­
Bank of Milwau­
ing. She will be
kee, calling on banks in northeastern
responsible for
the m arketing
* * *
function at Mar­
q u e tte B an k
Norwest Corporation has named
Minneapolis and
Kathleen L. Lock director of in­
its seven facili­
vestor relations
ties in down­
for the corpora­
town Minneapo­
She suc­
lis, Eden Prairie,
K erry
Burnsville, northeast Minneapolis, Noyes, who has
Edina and Brooklyn Center.
tran sferred to
Before joining the bank, she was Norwest Capital
vice president for planning and mar­ Resources as se­
keting at St. Francis Regional nior marketing
Medical Center in Shakopee.
re p re se n ta tiv e
* * *
for pension and
employee benefit
John (Jack) A. Hoffner has joined programs.
bank and manager of the accounting
division. He has been with the bank
since 1974.
Named vice president of the com­
mercial banking division - B, Brid­
get A. Manahan has eight years of
commercial banking experience.
* * *

v u in IT
ic i t i a i





Mr. Freed has been with the bank
since 1969. He is the secretary and
controller of National City Bancorporation. Mr. Nash has been in the
banking industry since 1971. Con­
tinuing as manager of the commer­
cial banking division - A. Mr. Ste­
wart has been in the banking indus­
try for 27 years.
In addition, Donald E. Ferroni
has been named controller of the
Federal Reserve Bank of St. Louis

State Bank, St.
P aul as vice
president, retail
He joins the
bank after 24
years with Min­
nesota Federal,
formerly F irst
j.a. h o f f n e r
* * *

Sale of Four Minnesota
Norwest Banks Completed

Sale of the assets and deposits of
four Norwest banks in Minnesota to
banks owned by Minnwest, Incorpo­
rated have been completed, accord­
ing to an announcement by Norwest
Norwest announced last January
an agreement to sell assets and lia­
bilities of its banks in Montevideo,
Robert P. Platzer has been pro­ Ortonville, Dawson and Luverne to
moted to assistant vice president— Minnwest, a new bank holding comlending of Cherokee State Bank, St.
Paul. He has been with the bank for MINNESOTA NEWS. . .
(Turn to page 26, please)
six years.
Northwestern Banker, February, 1987

Pres. Named in Kenosha
Rudolph F. Scuglik has been
named president and chairman of
the F irst Na­
tional Bank of
Kenosha, suc­
ceeding Knox D.
C orrigall who
has retired.
Mr. Corrigall
joined the bank
as a vice presi­
dent in 1966 and
became p re si­
dent and chair­
man of the board in 1976. Bank
assets have grown from $120 million
to $290 million during his term as
Mr. Scuglik started at First Na­
tional in 1953 as a teller, was pro­
moted to cashier in 1968 and execu­
tive vice president and board mem­
ber in 1976.

First Interstate Acquires
First Interstate Corporation of
Wisconsin has announced that it has
completed the acquisition of MidContinental Bancorporation, Inc. of
Milwaukee. Mid-Continental Bancorporation is the parent of Conti­
nental Bank, which operates five of­
fices in Milwaukee. As of September
30, 1986, Mid-Continental had as­
sets of approximately $166,000,000.
First Interstate currently has
Milwaukee-area banking offices in
Shorewood, West Allis, New Berlin,
Racine and Caledonia. The five Con­
tinental Bank offices will initially
continue to operate independently of
the five existing First Interstate
Bank offices in the Milwaukee area.
The change in name to First Inter­
state and coordination of customer
services among all offices in the Mil­
waukee area will occur by mid 1987.
First Interstate Corporation of
Wisconsin had assets of $1.27 billion
as of September 30, 1986. With the
Northwestern Banker, February, 1987
Federal Reserve Bank of St. Louis

Bankshares, said that “unresolved
issues between the parties led to the
mutual agreement between Central
Wisconsin Bankshares, Inc. and the
Knutson family to cancel the agree­
ments for the acquisition effective
Plans for the purchase of the bank
stock from the Knutson family had
been announced in September 1986.
The Federal Reserve Board had
granted approval of the acquisition
on November 4, 1986.

addition of the five Continental
Bank offices, it now operates 38
banking offices throughout Wiscon­ MINNESOTA NEWS. . .
sin and has assets aggregating $1.44 (Continued from page 25)
pany founded by M.D. McVay, re­
tired president of Cargill, Inc. and a
Two Named in Brown Deer
former director of Norwest Bank
Brown Deer Bank has named Minneapolis. Final approvals of the
Brian Casper and Catherine Drager sale were received from regulatory
assistant vice presidents.
agencies in December and the trans­
Mr. Casper joined the bank one fer of operations was completed
year ago as a lender in the commer­ January 19.
cial banking department. He pre­
Following the closings, Mr.
viously held several lending posi­ McVay said, “The banks are welltions with another major Milwaukee staffed, well-managed and located in
area bank.
strong communities with growth po­
Prior to her promotion, Ms. Dra­ tential, particularly in the agricul­
ger served as assistant controller tural sector.
and operations officer for the bank.
“Every community needs a sound
She joined the bank in 1976.
banking institution dedicated to the
economy of the community. We are
ABA Accredits WBA School pleased to become part of these com­
The Wisconsin Consumer Credit munities.”
School, sponsored by the Wisconsin
Bankers Association at St. Norbert MBA Appoints Manager
Gordon L. Engfer has been ap­
College in West De Pere, has been
given accreditation by the American pointed as manager of MBA Insur­
ance Agency, a
Bankers Association.
The accreditation was announced w h o lly -o w n ed
at the ABA Education Policy and subsidiary of the
Developmental Council’s recent M i n n e s o t a
Bankers Asso­
The Iowa General Banking ciation.
M r. E n g fer
School, sponsored by the Iowa
Bankers Association at the Univer­ w as fo rm erly
sity of Iowa in Iowa City, also re­ p re s id e n t
D rovers F irst
ceived accreditation.
American Insur­
ance Agency in
Acquisition Cancelled
South St. Paul and is a graduate of
William H. Rodd, chairman and the Hartford Insurance School. He
CEO of Central Wisconsin Bank- was with the Drovers Agency for 33
shares, Inc., and Lincoln V. Knut­ years and spent six years with Drov­
son, president of Westby-Coon ers First American Bank.
Valley State Bank, has announced
MBA Insurance Agency is the
the cancellation of agreements pro­ Minnesota agency for Banclnsure
viding for the acquisition of approxi­ financial institution bonds, directors
mately 65 percent of the stock of the and officers liability insurance and
bank by Central Wisconsin Bank- other bank risks. The agency also of­
fers other needed insurance pro­
Edwin J. Zagzebski, president ducts for Minnesota banks and bank
and COO of Central Wisconsin agencies.

Two Named in Sioux Falls

Appointed in Aberdeen
Norwest Bank South Dakota,
N.A., has announced the appoint­
ment of Kenneth D. Loken as senior
vice president in the bank’s Aber­
deen branch.
He had served as president of the
Norwest Bank operation at Groton.
He assumed his new position as part
of a move to consolidate the re­
sources of the Aberdeen and Groton
branches. Mr. Loken will report to
Terry D. Baloun, president of the
Aberdeen branch.
Mr. Loken began his banking
career in 1978 as an agricultural
lender at Norwest Bank Aberdeen.
He moved to Groton in 1980 and
became president of the Groton
branch in 1986.

Elected in Sioux Falls
First Bank of South Dakota has
elected Jacalyn M. Bunkers as per­
sonal trust officer, trust services di­
vision, Sioux Falls.
She joins the bank after working

Added in Richardton
The First American Bank of Rich­
ardton has announced that Richard
Kingsley has joined the bank as vice
president with the responsibility of
senior loan officer and supervision of
financial and regulatory reporting.
He was most recently associated
with Bremer Financial Services for
Region V in special credits. His
banking career began as an exami­
Federal Reserve Bank of St. Louis

with the accounting firm of Lyle B.
Wrage & Company for the past six

Sioux Falls Bank Names Two

Dan Callis has been named assis­
tant vice president, mortgage lend­
ing of Norwest Bank South Dakota,
N.A., Sioux Falls. He joined Nor­
west in 1978 in Rapid City and in
1985, transferred to Sioux Falls as a
regional mortgage underwriter.
In addition, Pam Friedel has been
named mortgage loan officer of the
bank. She joined Norwest in Min­
neapolis in 1977 and transferred to
Sioux Falls in 1978 as a real estate
secretary. She most recently served
as regional processing administra­

David M. Eiesland has been Retired in Tripp
elected commercial loan officer of
Harrison O. Brosz, vice president
Western Bank in Sioux Falls. An ex­ and cashier, has announced his re­
perienced commercial lender, he has tirement from First State Bank of
over 12 years of banking experience. Tripp, formerly Dakota State Bank.
He has been associated with the
bank for 35 years. He also served as
a member of the bank’s board fulfill­
ing the duties of secretary.

Joined in Sioux Falls
Dennis Hoffman has joined Nor­
west Capital Management and
Trust in Sioux Falls as a trust in­
vestment officer.
Prior to joining Norwest, he was
an investment officer and account
Bryan K. Person has been elected executive with a local brokerage
managing officer of Western Bank - company. He replaces Tim Melin
North in Sioux Falls. Formerly a who has accepted the position of
personal banking officer, he has manager of the Rochester Norwest
trust office.
been with the bank since 1983.
Susan Welo has been promoted to
a d m in istra tiv e o fficer—in v e st­
ments. She joined the bank in 1979.
Mina Ulven has also been promoted
to administrative officer—tax. She
has been employed with the bank
since 1984.
Greg Sorum has been promoted to
systems officer. He joined the
bank’s staff in 1979.
Promoted to personal banking
officer, Nancy Schuelke joined the
bank in 1981 and has worked in sev­
ner for the FDIC. He was also a vice eral areas of the bank.
Bonnie Krueger has been pro­
president at Liberty National Bank,
Dickinson, where he was employed moted to mortgage loan officer. She
for seven years in operations, invest­ joined the staff of First National in
ments and lending.

Named in Grand Forks
Promotions in Grand Forks
A number of officer promotions
have been announced at the First
National Bank in Grand Forks.

David Ramage has been elected to
the board of Community National
Bank of Grand Forks. He is the
owner of United Cable Management.
Northwestern Banker, February, 1987

Bank—Sheridan. He has served as ^
president of the Rawlins bank for
the past seven years. He has also
served as regional vice president
over First Wyoming banks in Lara­
mie, Saratoga, Hanna and Wheat- f
Mr. Eddington joined the bank in
1986. He has been in banking for 21

Changes Told in Kemmerer
Larry L. Hassler has resigned as
president and CEO of the First
Wyoming Bank—Kemmerer, to ac­
cept a position as president and
CEO of the Anita State Bank in
Anita, IA.
Thomas Chinnock, senior vice
president, has been promoted to
president and CEO.

Retired in Lusk
Robert C. Templeton has an­
nounced his retirement from the

Lusk State Bank. He has been with
the bank for 28 years and has served
as its president since 1967. He and
his wife, Jo, plan to stay in Lusk and
will be available to the bank in an
advisory capacity.

Named in Casper

First Interstate Bank of Casper
has named Donald Jepsen as vice #
president in the
bank’s real es­
tate department.
He served as
the branch man­
Pres. Named in Rawlins
ager at Provi­
James R. Eddington has been d e n t F e d e ra l
named president and chief executive S a v in g s and
officer of the First Wyoming Bank— Loan in Cody
Rawlins. He will replace Robert W. prior to accept­
Pappenheim, who has been named ing this posi­
D- J epsen
president of the First Wyoming tion.

Wayne Martin Retires
From Denver Fed Bank

Schedule Change For
MBA Marketing Conference
The Montana Bankers Associa­
tion’s 1987 Marketing Conference
will be held April 9-10, instead of
April 2-3. The conference location in
Big Sky remains the same.
The dates were changed to accom­
modate featured speakers John
Pratt and Wes Seargant. Mr. Pratt,
who will discuss sales and where
they fit into the bank, will speak on
April 9. Mr. Seargant will be speak­
ing on “You as a Marketing Profes­
sional” on the morning of April 10.

Hired in Helena
Montana Department of Com­
merce Director Keith L. Colbo has
announced that Fred J. Flanders,
Helena, has been hired as commis­
sioner of financial institutions.
Mr. Flanders, who was employed
Northwestern Banker, February, 1987
Federal Reserve Bank of St. Louis

as a senior vice president, senior
lending officer and second officer of
Norwest Bank Helena, joined the de­
partment on January 19.
Prior to joining Norwest, he was
an investment broker with D.A.
Davidson & Co. in Great Falls, and
CEO of the Bank of Montana in
Helena, in addition to holding a
number of bank management posi­
tions earlier in his career.

Scott Potter to Speak
The MBA has booked Scott Pot­
ter, director of training for Financial
Shares, Inc., to present “Underwrit­
ing the Self Employed Borrower” on
Wednesday, March 25, at the North­
ern Hotel in Billings.
Mr. Potter has been an outstand­
ing speaker at past MBA real estate

W ayne W. M a rtin re tire d
December 31 as senior vice president and Denver branch manager
for the Kansas City Federal Reserve
Bank, a post he had held for the past
10 years. Under Mr. Martin’s gui­
dance, operations of the Denver
branch grew rapidly and now is
among the largest branches in the
Fed system in terms of check clear­
ing and other services provided to
financial institutions.
His acknowledged leadership as
head of the Denver branch is due in
great measure to the high regard
and personal respect he earned from
10th District bankers during his
33-year career with the Kansas City
Fed. He joined the headquarters of­
fice in 1953, was promoted to assis­
tant vice president in 1965, then in
1966 was transferred to the check
collection department where he was
named vice president in charge in
1970. His promotion to senior vice
president came in 1976 when he was
named Denver branch manager.
Succeeding Mr. Martin at the
Denver branch is Enis Alldredge,
Jr., who had been vice president and
assistant branch manager. He
joined the Kansas City office in 1967
and then the Denver branch in 1981.








of Denver, has transferred to Colo­
rado National Bank—Exchange,
Colorado Springs and has been
elected an assistant vice president of
that bank.
He began his career with Colorado
National in 1981 and has held vari­
ous investment positions.

Businesses Indicate Worst
May Be Over
Retired in Denver
R.J. (Jim) Nelson will retire as ex-

41 ecutive vice president and director
of Central Bank
of Denver effec­
tive February 1,
1987. He will be
H retained as a
c o n su lta n t to
the bank.
In making the
an n o uncem ent
• Donald D. Hoff­
man, chairman
of the board,
stated, “Jim Nelson has made a sig­
nificant contribution to the growth
• and progress of Central Bank over
the period of 37 years and we wish
him well in his retirement. We are
fortunate to have the continuing
benefit of his knowledge and experi• ence through a consulting arrange­

ler works in real estate banking. He
joined the bank last year.
In addition, Thomas E. Kuhlman
and Stanley M. Solodky have been
promoted to assistant vice presi­
dents. With the bank since 1983,
Mr. Kuhlman works in the personal
trust and investments services area
of asset management services. Mr.
Solodky has worked in the public fi­
nance department since joining the
bank in 1984.
Also named was Leslieann Galla­
gher to asset management officer.
She joined the bank last year.

Denver Bank Elects Two
Colorado N ational Bank of
Denver has elected Joe W. Stander
as senior vice president, and Gary L.
Klein as vice president.

Two Elected in Pueblo





Kevin S. McCarthy has been
elected a vice president of Colorado
National Bank—Pueblo. He began
his banking career in 1976 as a loan
review administrator with Pueblo
Bank and Trust Company. He
joined Colorado National Bank in
1983 as a commercial loan officer.
Mark D. Dunsmoor has been
elected a commercial loan officer of
the bank. He recently transferred to
the bank after completing an exten­
sive training program in Denver. He
began his banking career with Citi­
zens State Bank in Wyoming in
1979. He later was associated with
the First State Bank in Idaho

Named in Denver

United Bank of Denver has
named Sally J. Kelly and Conrad W.
Steller to vice presidents. Ms. Kelly,
who joined the bank in 1965, man% ages the consumer bank’s seniors
and professionals markets. Mr. Stel­
Federal Reserve Bank of St. Louis



There are signs of cautious opti­
mism emerging among Colorado’s
business executives, according to
United Banks’ Colorado Business
Confidence Survey for the fourth
quarter of 1986.
In commenting on the survey’s
findings, Dr. Tucker Hart Adams,
vice president-economics and plan­
ning for United Banks of Colorado,
said, “ In our fourth quarter survey,
we found that while business confi­
dence remains low, there are signs
that this sentiment appears to be
changing. Markedly fewer firms are
planning to reduce their labor force
over the next few months and the
proportion of firms increasing their
hiring plans has doubled from our
second quarter survey. In addition
to that, only a few companies now
rate their financial position weak;
this is down sharply from our find­
ings six months ago. Another sign
of improvement is that fewer busi­
ness executives expect continued
problems in Colorado’s economy.”
“There seems to be more hope as
we enter 1987,” continued Mr. Adams,
“although business executives are
still guarded in outlook. What seems
certain, however, is that the pessi­
mism prevailing throughout the
state is contributing to the soft
economy because it has caused busi­
nesses to curtail or delay investment
and consumers to delay con­
United Banks’ Colorado Business
Confidence Survey queries the chief
executives of more than 100 of the
largest firms in Colorado. It incor­
porates a representative sample of
the state’s employment base and
geographic distribution.

Mr. Stander, controller of the
bank, joined Colorado National in
1984 and was promoted to vice
president in 1985. He previously
served as credit center manager for
the seven state Great Lakes Region
for Citicorp Retail Services, Inc.
from 1983-84, and was vice presi­
dent and controller at IntraWest
Bank of Denver from 1979-1983.
Mr. Klein began his banking
career in 1976 as a loan officer for
Omaha Farm Credit Bank. He
joined Colorado National Bank of Elected in Boulder
Denver last year.
Annette Taylor has been elected a
vice president of Colorado National
Named in Colorado Springs Bank—Boulder. She began her
James M. Desmond, who until re­ career with the bank in 1973 and
cently was an assistant vice presi­ was later elected an operations offi­
dent of the Colorado National Bank cer of the bank.
Northwestern Banker, February, 1987



$5 ,075,000
$3 ,155,000


Our Reputation Is
We’re known as a bank that performs. In fact, the average annual growth rate of
the after-tax earnings of First National Bank of Omaha* is 15%. And 85% of that goes
back into the bank for better services and products.
We’re proud of our solid growth. And proud to serve you— and assure you —
with our strength, financial expertise and experience.
Few institutions offer you what we can in performance and stability. Wouldn’t
you rather trust your money to the people who have a reputation for sound financial
In 1986, we achieved $11 million plus in earnings. That’s why we’re proud of
our name.
* First National of Nebr., Inc.

No Wonder They Call Us First.

firs! national bank
Banker, February, 1987
Federal Reserve Bank of St. Louis

of omaha
Member FDIC

Insurance to increase the limits of
its “Directors and Officers Legal
Defense and Limited Liability Poli­
cy” from $100,000 to $250,000.
For more information, contact
Steve McKelvey at the NBA office
at (402) 474-1555.

Promoted in Minden
Changes Told in Alliance
James E. Abbott, controlling
shareholder of the Abbott Banking
Group, has been named chairman of
The Guardian State Bank & Trust
Company, Alliance, replacing Don­
ald D. Stull, who has resigned as
chairman to pursue other interests.
Mr. Abbott has been a vice presi­
dent of the bank since 1981 and
since 1982 has served as president of
the holding companies that own the
other Abbott Banks.

Jack Craig has been promoted to
senior vice president of the First Na­
vice president. Thomas J. Ehlers tional Bank of Minden. With the
has been promoted from cashier to bank for 35 years, he most recently
vice president. Promoted to opera­ served as vice president.
tions officers were Jill Olson and
Pamela Carlson.

Merged in Gresham
Promoted in Gordon
Tim Keller has been promoted to
executive vice president of Gordon
State Bank, Gordon. He has been
with the bank for seven years.

Retires in Fullerton



It was also announced that Frank
L. Tolstedt has been named chief
operating officer of the Abbott
Banking Group. Mr. Tolstedt, who
has been serving as president of the
Guardian State Bank & Trust Com­
pany since 1986, will remain in that
position as well as serving as presi­
dent of the Gordon State Bank in
Gordon and The Anchor Bank in
Merriman. He has almost 30 years
of banking experience.
The Abbott Banking Group is
comprised of 10 banks located in
northwestern Nebraska. This chain
of banks was established by Mr. Ab­
bott’s parents and grandparents,
making him the third generation of
the Abbott family to be actively in­
volved in the management of the

Dale J. Black, who had served as
president for First National Bank
and Trust, Fullerton since 1970, has
resigned. He will continue to serve
on the bank’s board.
He joined the bank in 1965 as vice
president. Prior to that, he was a
partner with the late Frank G. Ar­
nold in the Arnold-Black firm in Ful­
lerton for 14 years. He began his
business career in Fullerton in 1936
in the grocery business with his
father, the late Henry Black, and
brother, Donald Black.
Mr. Black served one term as
mayor and is a part president of the
Fullerton Chamber of Commerce.

Celebrates 50 Years
In Wauneta
An open house was held at the
Wauneta Falls Bank on December
17, 1986 to honor J. Wiley Green,
chairman, for 50 years of service to
the banking industry.
Approximately 120 people at­
tended the special occasion.

Increase on D&O Coverage
Limits Approved

Kansas Bankers Surety Co., the
firm which writes blanket bonds and
Advanced in Albion
other bank insurance for many Neb­
The Albion National Bank has raska banks through the Nebraska
promoted several individuals.
Bankers Association’s insurance
Wayne Boilesen has been pro­ subsidiary, has received approval
moted from vice president to senior from the Nebraska Department of
Federal Reserve Bank of St. Louis

The Gresham State Bank merged
as a branch office of York State
Bank and Trust Company on Janu­
ary 1, 1987. Regulatory authorities
had granted approval for the merger
on April 18, 1986. At that time,
Gresham State Bank reported
assets of $3.5 million.

Two Banking Schools
To Be Held in Nebraska
The Schools of Banking, Inc.,
sponsored by the Kansas and Neb­
raska Bankers Associations, will
hold its 1987 School of Banking
Fundamentals and its 1987 Profes­
sional D evelopm ent P rogram
Commercial Lending school.
The School of Banking Funda­
mentals will be held March 9-13 at
the Holiday Inn in Kearney. The
school offers a newly revised and ex­
panded curriculum specifically de­
signed for entry level bankers or
those with very specialized experi­
The PDP Commercial Lending
School will be held April 5-10 at the
Holiday Inn in Kearney. This school
offers an exciting new curriculum af­
filiated with the ABA’s Professional
Development Program. The course
presents commercial lending as a
complete process, emphasizing
financial analysis.
Enrollments for each school are
limited. Contact Jone Beer or Pam
Bartak at the Schools of Banking at
(402) 474-3313 for more information.

Promoted in Stamford
Mark A. Mercer has been pro­
moted to vice president of the Stam­
ford Bank, Stamford. He previously
served as cashier.
Northwestern Banker, February, 1987


Directors of The First National
Bank of Omaha have elected Bruce
R. Lauritzen, 43,
president to suc­
ceed F. Phillips
Giltner, 61, who
held that posi­
tion the past 17
years. The pro­
motion was re­
commended as
p a r t of th e
bank’s continu­
ing management B.R. LAURITZEN
succession policy by Mr. Giltner,
who was named vice chairman of the
board and will continue as a member
of the three-officer executive com­
mittee, along with Bruce Lauritzen
and his father, John R. Lauritzen,
chairman. Mr. Giltner also con­
tinues as president of First National

of Nebraska, Inc., the bank’s hold­
ing company.
Bruce Lauritzen is the fourth
generation of his family to serve as
president of First National Bank,
and the fifth generation to serve on
its board of directors. Chartered in
1863, the year the National Banking
Act was passed, First National is
the oldest bank from Omaha west.
Mr. Lauritzen received his A.B.
degree from Princeton University
and an MBA degree from the Uni­
versity of Virginia, then joined First
National in 1967. He has served the
bank as a commercial loan officer,
second vice president, vice president
and since 1981 as executive vice
Mr. Lauritzen also is president of
three family bank holding com­
panies that own banks in Nebraska

NIBA Legislative Dinner Held

THE Nebraska Independent Bankers’ Association hosted its 1987 Legislative Dinner at the
Nebraska Club in Lincoln last month. Present at the meeting were, from left: Lt. Gov. Bill
Nichol, Scottsbluff; NIBA Pres. Roy Yaley, pres., Nebraska State, S. Sioux City; Sen. Bill
Barrett, Lexington and Sen. R. Wiley Remmers, Auburn.
Northwestern Banker, February, 1987
Federal Reserve Bank of St. Louis

and Iowa.
(A detailed interview with Bruce
Lauritzen will be published in the
next issue.)
* * *
Glenn R. Wilson, Jr., president of
the Government National Mortgage
(Ginny Mae), has
nam ed
p resid en t and
chief executive
officer of FirsTier Mortgage
M r. W ilson
has served the
organization for
20 months. He
joined FirsT ier M ortgage on
February 2.
Keith Morphew, retired president
and chairman of the board of Firs­
Tier Mortgage, served as acting
president during the past two
* * *
American N ational Bank of
Omaha has elected Lori A. Packer as
assistant cashier
of the bank. The
supervisor of the
customer service
department and
teller area, she
joined the bank
in 1982.
John J. Guthmann has joined
the bank and
will be active in
personal banking and in the trust
and investment division. He was as­
sociated with a bank in Lexington,
Ky. for seven years.
* * *
An Omaha bank executive, John
R. Cochran, chairman and CEO of
Norwest Bank Nebraska, has been
appointed a director of the Omaha £
Branch of the Federal Reserve Bank
of Kansas City. He succeeds Donald
J. Murphy of Omaha.
In related actions, Janice D.
Stoney, executive vice president and %
COO, Northwestern Bell Telephone
Co., was reappointed a director of
the branch, and Kenneth L. Morri­
son, president, Morrison-Quirk
Grain Corp., Hastings, was reap- #
pointed chairman of the branch
Other actions announced by the
(Turn to page 33, please)






FirsTier Bank Lincoln has an­
nounced a number of promotions.
Jay D. Callahan has been pro­
moted to vice president, municipal &
government bond division, and
Charles Greenway has been pro­
moted to vice president, agricultural
& financial institutions division. Mr.
Callahan joined the bank in 1978.
Mr. Greenway joined the bank in
Promoted to assistant vice presi­
dent status are: Kathryn A. Barker,
agricultural & financial institutions;
Fern M. Spencer, marketing, and
Marlene K. Wagner, municipal and
government bond. Ms. McCall
joined the bank in 1983. In 1977,
Ms. Spencer joined the bank’s mar­
keting division and was named mar­
keting officer in 1980. Ms. Wagner
has been associated with the bank
since 1979.

A number of new officers have
been elected at National Bank of
Elected vice presidents were Ann
Carlson, Randy Gustafson and Julie
Pokorny. Ms. Carlson has held a
* * *
position in the trust tax department
since joining the bank in 1980. Mr.
Several were promoted at Na­
Gustafson joined the correspondent
tional Bank of Commerce Computer
banking division in 1984 and served
Services Corporation.
as a farm and ranch officer pre­
Rob Spackman was promoted to
viously. Also elected a trust officer,
vice president. He joined NBC/CSC
Ms. Pokorny has worked in the trust Commerce Group as loan review and in 1978 as a conversion representa­
division since joining the bank in general audit officer. Dan Walsh tive.
joined the mortgage loan division in
Named assistant vice presidents
Elected assistant vice presidents 1983.
were Mike Sorensen and Paul Wat­
were H. Cameron Hinds, Don Hoeltson. Mr. Sorensen joined the com­
ing, Vicki Ladegard, Catherine Mor­
pany in 1979 and Mr. Watson in
rissey and Dan Walsh. Mr. Hinds
and Mr. Hoelting both held posi­
Mary McCombs has been pro­
tions in trust investments since join­
moted to customer services officer.
ing the bank in 1984. Ms. Ladegard
She joined NBC/CSC in 1975.
joined the trust marketing depart­
ment of NBC in 1983. Joining the
correspondent division in 1985 Ms.
(Continued from page 32)
Morrissey previously worked for
Federal Reserve Bank in Kansas Ci­
ty include the reappointment of F.
Phillips Giltner, president, First Na­
tional Bank, as Tenth Federal Re­
serve District representative to the
Federal Advisory Council. In addi­
tion, Robert G. Lueder, chairman,
Lueder Construction Co., was desig­
nated as deputy chairman of the
board of directors of the Federal
Reserve Bank of Kansas City.
The Kansas City Fed’s Omaha
Branch has almost 200 employees.


Federal Reserve Bank of St. Louis



Kelly Summy has been elected
farm & ranch officer. He was asso­
ciated with Hawkeye Farm and
Ranch Management before joining
NBC. Mona Wanser has been
elected personnel officer. She has
held a position in human resources
since joining the bank in 1984.



F. Donald Lewis, vice president of
Southeast Banking Corporation of
Miami, has died of pneumonia at the
age of 42.
He had a 20-year career in bank­
ing and had been a correspondent
banker at the FirsTier Bank, (for­
merly the Omaha National Bank),
from 1974-1980.
Northwestern Banker, February, 1987

// §

John Chrystal, President, Bankers Trust


hen you get a loan request, your customer wants
a prompt answer.
So when you ask your correspondent bank about
overlines, shouldn't you be able to expect the same
quick response?
At Bankers Trust, our correspondent staff understands your overline needs. Just as important, we
understand the need to respond to them without delay.
As a major independent bank, we can usually give
you an answer right away. An honest, straightforward answer.
So, talk with Bankers Trust, where your overline
requests receive the attention y o u deserve.




Call us for a complete range of correspondent
banking services.


Investment Management
Individual/Corporate Services

Bank Acquisition Loans
Overlines & Participations


Full line of International Services

Fed Funds


Banking Systems Processing
ATM & Débit Card Support
Cash Letter Processing
Remote Processing Support

Call 1-800-362-1688 or 515-245-2424 • Seventh and Locust • Des Moines 50304

BankersTrust •
Member FDIC

Banker, February, 1987
Federal Reserve Bank of St. Louis

Wednesday, March 4

R.S. Howard, chmn., Oskaloosa
N. Milner, exec, v.p., Des Moines

IBA Marketing Conference Meets Mar. 2-4
HE 1987 Iowa Bankers Associa­
tion M arketing Conference,
“Marketing Per­
formance = Pro­
fit,” will be held
March 2-4 at the
Hotel Fort Des
Moines in Des
An excellent
lineup of market­
ing experts, new
ideas and inno­
vative products
will be featured at the conference,
The exhibit area will contain new
products and services available to
assist bankers.
Winners of the “Best of Iowa”
competition will be announced at the
dinner on Tuesday evening.
The program follows:
Monday, March 2
7:30 Reception, Hotel Fort Des
Moines. Sponsored by John
H. Harland Company, Des
Tuesday, March 3
8:00 Continental Breakfast.
8:00 Registration Desk.
9:00 Welcome and Opening Re­
marks—Michael Thompson,
marketing committee chmn.
and v.p., Citizens State
Bank, Clarinda.
9:15 The Product Planning/Process—Gary Raddon, pres.,
Raddon Financial Group,
10:40 Energy Break.
11:00 Customer Service—Kateri
Schmerler, asst, v.p., First
Bank St. Paul.
12:15 Lunch.
1:30 Concurrent Workshops
M ark etin g Show case I
(three presenters)
Federal Reserve Bank of St. Louis




M arketing Showcase II
(three presenters)
Pricing—Mike Moebs, pres.,
G.M. Moebs & Associates,
Lincolnwood, 111.
A nnuities—Jeannette E l­
lington, asst, v.p., life, dis­
ability, and annuity divi­
sion, Iowa Bankers Insur­
ance and Services, Inc., Des
Concurrent Workshops
M ark etin g Showcase I
(three presenters)
M arketing Showcase II
(three presenters)
Pricing—Mike Moebs.
Direct Mail—Don Uker, pro­
fessional media consultant,
Energy Break.
“What We Want Out of
CEO panel with moderator
Russell S. Howard, IBA
pres, and chmn., Mahaska
Investment Co., Oskaloosa.
Cocktail Hour. Sponsored
by Federated Investors,
Inc., Pittsburgh, Penn.
Best of Iowa Awards Dinner
and Presentation, Grand
Ball Room, Hotel Fort Des

7:30 Continental Breakfast.
8:00 “A Company Called You”—
Dr. Charlene Bell, a licensed
psychologist, educator, and
consultant for business and
industry, Des Moines.
9:00 “McDonald’s & Banking”—
Peter Vergis, pres., Sides
E a rn in g s G roup, Inc.,
Greenlawn, New York.
10:10 Energy Break.
10:30 Exhibit Area Closes.
10:30 Creating A Sales C ultureGeorge Morvis, pres., Finan­
cial Shares Corporation, Chi­

Mid-Winter Mgmt. Conf.
Planned For Feb. 25-27
“Bringing New Ideas Together,”
is this year’s theme for the MidWinter Management Conference,
planned for February 25-27 at the
Sheraton Steamboat Resort and
Conference Center, Steam boat
Springs, Colo.
The purpose of the event is to pro­
vide time for bankers to share com­
mon ideas, concerns and solutions to
problems facing Iowa’s banking in­
dustry today.
Representatives from the Office
of the Comptroller of the Currency
and the Federal Deposit Insurance
Corporation have been invited to
speak on regulatory issues. Present­
ing the Thursday evening program
will be representatives from ABA’s
executive management staff.
In addition to the beneficial items
on the conference agenda, partici­
pants will be able to enjoy one of
North America’s premier ski desti­
For more information, call Barb
Lowe, IBA conference coordinator
at (515) 286-4346 or (800) 532-1423.

1987 Iowa Group M eetings

February 22-23
May 4
May 5
May 6
May 7
May 18
May 19
May 20
May 21

Cedar Rapids
Des Moines
Council Bluffs
Fort Dodge
Clear Lake

Northwestern Banker, February, 1987


Io w a N e w s

Group 11 To M eet at The Holiday
In Burlington February 22 and 23


THREE-HOUR seminar on
“Bank Directors’ Responsibili­
ties and Liabilities, Capital Adequa­
cy, and Short-Term and Long-Term
Strategic Planning,’’ will be pre­
sented during the Iowa Bankers As­
sociation Group 11 meeting at The
Holiday, Junction of Highways 34
and 61 in Burlington, February 22
and 23. Edward K. Johnstone, II,
president of Keokuk Savings Bank
& Trust Co., will preside at the meet­
ing as Group 11 chairman, the post
he was elected to at last year’s meet­
ing after then Chairman William R.
Bernau, president of Peoples Sav­
ings Bank in Crawfordsville, re-



signed to become the Iowa superin­
tendent of banking.
Named Group 11 secretary at last
year’s meeting was Daniel H. Doyle,
president, Wellman Savings Bank,
who succeeded Mr. Johnstone in
that post. Group 11 and other oddnumbered IBA groups normally
elect new officers in odd-numbered
years, while even-numbered groups
elect in even-numbered years.
Conducting the three-hour semi­
nar from 9:30 a.m. to 12:30 p.m. on
Monday, February 23, will be wellknown banking consultant Dr.
Douglas Austin, president of Doug­
las Austin & Associates, Inc. His



firm is headquartered in Toledo and
has offices in Chicago and Lansing.
Doug Austin holds a Ph.D in both
economics and business, is a Char­
tered Financial Analyst, attorney
and a widely-known speaker on financial institution structure, man­
agement and operations. Dr. Austin
draws on his 17 years of consulting
experience and his years of research
and study as a professor of finance
at the University of Toledo. Dr. Aus­
tin will incorporate all three topics
of bank directors, capital adequacy
and strategic planning into this
three-hour presentation. It will be a
condensed version of the day-long
seminar he and an associate pre­
sented for the IBA last year at a
seminar at Iowa State University.
The Group 11 meeting will start
on Sunday with registration at The
Holiday at 4:00 p.m. The social hour
and buffet dinner will be followed by
an address from IBA President Rus­
sell S. Howard, chairman of Mahaska Investment Co., Oskaloosa.
Dancing will then continue to mid­
night, as usual.
The Monday morning business
session will commence at 8:30 a.m.,
featuring a report from Mr. John-


$30 Special!

The Holiday (Jet. of Hwy. 34 & 6i)
...for senior management and all bank directors

Featuring Douglas A. Austin , PhD.
Dr. Austin, president of his bank consulting firm in
Toledo, Ohio, will conduct a three hour seminar. He will
be addressing these important topics:
• Directors Responsibilities and Liabilities
• How to Run your board, not vice-versa.
• Short Term and Long Term Strategic Planning

Sunday - 22nd

Monday - 23rd


8:30 Business Meeting
9:30 Douglas A. Austin Seminar
12:45 Luncheon

Registration - The Holiday
Social Hour and Dinner
IBA Pres./Elect’s Address

Hawkeye Bank & Trust
Farmers & Merchants Bk. & Tr.
First National Bank
Banker, February, 1987
Federal Reserve Bank of St. Louis








Io w a N e w s

stone, then a report from Neil Mil­
ner, executive vice president of the
Iowa Bankers Association, Des
The meeting will conclude with
£ the Monday noon luncheon and en­
tertainment. The program follows:
Sunday, February 22
4:00 Registration - The Holiday
5:30 Social Hour - The Holiday
7:00 Buffet Dinner
8:15 Russell S. Howard, IBA pres­
8:45 Dancing to midnight
Monday, February 23
8:30 Business Meeting - The Holi­
day. Presiding, Edward K.
Minutes of previous meeting
Speakers: Mr. Johnstone and
Neil Milner, IBA executive
vice president.
9:30 “Bank Directors’ Responsi­
bilities and Liabilities, Capi­
tal Adequacy, and ShortTerm and Long-Term Strate­
gic Planning—Dr. Douglas
Austin, president, Douglas
Austin & Associates, Inc.,
Toledo, Ohio.
10:00 Ladies program scheduled at
The Holiday
12:45 Luncheon - The Holiday
Entertainment and adjourn­

Waterloo Bk. Promotes Two
Waterloo Savings Bank has pro­
moted James E. Thielen to vice president/trust officer, and Thomas H.
Witry to manager of the bank’s
0 Hudson office.
Mr. Thielen joined the bank in
1981 and was promoted to trust offi­
cer in 1983.


Iowa Farm land Values Decline Again

THE value of Iowa’s farmland fell again during the past year—a decrease of 17 p erce n taccording to the annual Iowa State University survey of land values. The above graph
shows county estimates of average dollar value per acre for Iowa farmland based on U.S.
Census of Agriculture estimates and a Nov. 1,1986 survey of Iowa real estate brokers. The
top figure is the estimated Nov. 1, 1986 value; the bottom figure is the estimated Nov. 1,
1985 value. This is the fifth consecutive year that land values have declined, however, this
decline seems modest compared with the 30.2 percent decline in land values in 1985.

Prior to joining the Hudson office,
he was with another financial insti­
tution for eight years where he held
the positions of loan officer, staff ap­
praiser and Traer branch manager.

Changes Told in DeWitt
Several management changes
have been announced at DeWitt
Bank and Trust Company.
Ellis O. Barber, formerly presi­
dent of the bank, will now serve as
chairman of the executive commit­
tee. Jon G. Billhorn has been pro­
moted to president and senior opera­
tions officer, and Larry C. Henson

has been named chief executive of­
ficer and senior policy officer. Mr.
Billhorn and Mr. Henson had served
as executive vice presidents of the
bank. Richard D. Kelly, previously
senior vice president, has been pro­
moted to executive vice president
and senior lending officer.

Promoted in Lone Tree
Deborah K. Lake has been pro­
moted to assistant vice president of
The Farmers & Merchants Savings
Bank, Lone Tree. She has been with
the bank since 1983 and works with
consumer and real estate loans.

Iowa Bankers Group 11 Annual Meeting
February 22-23, Burlington
Visit us in our hospitality room at
The Holiday




Mr. Witry previously held the
positions of assistant vice president
and cashier of the Hudson State
Bank prior to its merger with the
0 Waterloo Savings Bank in Decem­
ber 1986.
Federal Reserve Bank of St. Louis

United States Check Book Company
In Nebraska Call 402-345-3162 Out of State Call WATS Line 1-800-228-9246

Northwestern Banker, February, 1987


Io w a N e w s

Staff Changes in Indianola
Peoples Trust & Savings Bank,
Indianola, announced that Everett
P. Brown and R. Milton Hennick
joined the staff of the bank January
2. Both men had previously been
with The National Bank of Waterloo
in Waterloo.

correspondent services to communi­
ty banks throughout central and
southwestern Iowa. The National
Bank of Waterloo provides data pro­
cessing and other correspondent
bank services to 106 banks in North­
east Iowa.
On December 31, 1986, Peoples
Trust & Savings Bank was acquired
by Iowa National Bankshares Corp.,
a bank holding company in Waterloo
which also owns The National Bank
of Waterloo and Midway Bank &
Trust in Cedar Falls.

Named in Waterloo
Kelly I sherwood has been named
a trust officer of Peoples Bank and
Trust Company
Mr. Brown has been named presi­ in Waterloo.
He brings 16
dent and director of the bank. He
of trusthad previously been vice president
of correspondent banking at The Na­ related experi­
tional Bank of Waterloo and has ence with heavy
experience in in­
over 20 years banking experience.
Mr. Brown succeeds Jam es v e s tm e n t r e ­
Davies, who has served as president search and port­
and chief executive officer of Peo­ folio m an ag e­
ples Trust & Savings Bank since ment. As a trust
July, 1984. Mr. Davies, who expects officer for other
to retire in the spring after 35 years financial institutions, he has a num­
of service, will continue with the ber of skills.
bank on a part-time schedule as a
consultant in several areas.
Advanced in Ames
From 1964 to 1968, Mr. Brown
Nancy Linden has been advanced
worked as an agricultural loan offi­
assistant cashier at First Na­
cer and farm manager for Boone
State Bank and Trust Company, tional Bank, Ames. She joined the
Boone. He then joined the Norwest bank in 1979 in the bookkeeping
Bank in Omaha in its correspondent departm ent and most recently
banking department, serving rural served as head bookkeeper.
banks in a five state area. Prior to
joining The National Bank of Water­
loo in 1984, Mr. Brown was execu­ First National, Clarion,
tive vice president, trust officer and Buys Failed Latimer Bank
a director of Peoples State Bank in
The Latimer Bank & Trust was
Missouri Valley.
declared insolvent and closed on
Mr. Hennick has been named January 15 by state Superintendent
senior vice president of Peoples of Banking William R. Bernau. The
Trust & Savings Bank in the opera­ FDIC, acting as receiver, sold the
bank to The First National Bank of
tions and data processing area.
Mr. Hennick had worked for The Clarion for a premium of $121,200.
National Bank of Waterloo since The Latimer bank, founded in 1855,
1961 in several positions including and its offices at Alexander and
auditor, cashier, and most recently, Coulter were re-opened January 16
senior vice president of data pro­ under the name of The First Na­
cessing where he was responsible for tional Bank of Clarion.
O. Jay Tomson, chairman of the
marketing new services to corres­
pondent banks. Prior to his work at First National of Clarion, said his
The National Bank of Waterloo, he bank assumed approximately $22
worked for nine years at Norwest million in deposits, as well as $4.5
million in portfolio loans, all the in­
Bank Des Moines as auditor.
Among his duties with Peoples vestments, cash and due, and cer­
Trust & Savings Bank, Mr. Hennick tain other assets. The FDIC re­
will be developing and marketing tained about $10 million of the failed
Banker, February, 1987
Federal Reserve Bank of St. Louis

bank’s loans, with First National
having an option to return any un­
desired loans within 90 days, and to
purchase any FDIC retained loans
at a 10% discount. FDIC injected
$7,178,000 into the assuming bank,
which took this in the form of a
6.25% interest-bearing note. First
National of Clarion was the only bid­
Mr. Bernau said the Latimer
Bank was subjected to “excessive
loan losses, both agricultural and
commercial. Contributing to this
was poor loan selection and misman­
agement of the loan portfolio.’’ Mr.
Bernau told reporters at a Des
Moines press conference that the
Koch family that had owned the
bank for some time was “a fine fami­
ly’’ that had worked hard to remedy
the bank’s problems, saying “they
had done everything they could to
save the bank after it was identified
(about 18 months ago) as having
near-terminal problems.’’
First National Bank of Clarion,
founded in 1887, has deposits of $50
million, with capital, surplus and un­
divided profits and reserves exceed­
ing $6 million. The president and
CEO of The First National Bank is
Robert B. Bartholomaus.
Mr. Tomson also is chairman and
CEO of the $60 million asset Citi­
zens National Bank of Charles City,
which announced an agreement re­
cently to assume by merger the
Commercial Trust & Savings Bank
in Charles City, which has about $45
million in assets.

Retired in Missouri Valley
After a 27-year banking career,
Robert E. Brown has announced he
will retire as
p re sid en t and
CEO of the First
National Bank
in Missouri Val­
ley, effe ctiv e
March 1.
M r. B row n
began working
a t th e b an k
aM„ d Chh a ; heTd
many offices over the years, includ­
ing service as a director. He was pro­
moted to president and CEO in
1983, succeeding Richard Day, who
became chairman.
He will remain at the bank as a
director and perform duties in bank
marketing, advertising and consult­
ing work.


Statement of Condition
December 31,1986

I p lp iiii


Cash and Due From Banks
Federal Reserve Funds Sold
U.S. Government and its Agency Securities
Municipal Securities
Other Marketable Corporate Obligations
Federal Reserve Bank Stock
Bank Premises and Equipment
Interest Accruals
Other Assets





Capital Stock
Undivided Profits

$ 122,683,397.34

Total Capital Funds
Federal Reserve Funds Purchased and Securities
Sold Under Agreement to Repurchase
Reserves for Interest, Taxes, and Other Liabilities



$ 397,850,000.00

V.O. Figge
Chairman of the Board

Edward L. Carmody
Senior Vice President


Mel Foster, Jr.
Pres., Mel Foster Co., Inc.
Robert G. Lenertz
Senior Vice President


James Kahl Figge
Office of the President

Thomas A. Gildehaus
Executive Vice Pres., Deere & Company
Lloyd G. Schermer
Pres., Lee Enterprises

John Kahl Figge
Financial Consultant
Richard R. Horst
Senior Vice President and Cashier

Charles R. Von Maur
Petersen-Harned-Von Maur

Thomas Kahl Figge
Office of the President
Richard E. Kautz
Senior Vice President
Robert V.P. Waterman
Lane and Waterman

Joseph S. Kimmel, Jr.
Pres., Republic Electric Co.
Henry C. Wurzer
Kahl Properties

Davenport Bank and Trust Company
203 West Third Street • Davenport, Iowa • 52801

Resources Exceed One Billion Dollars
Federal Reserve Bank of St. Louis

Northwestern Banker, February, 1987


Io w a N e w s

forms once the Internal Revenue ^
Service issues final regulations as a
result of the Tax Reform Act of
Pension (SEP) plans offered are sim­ 1986.
ple and easy to administer.
• The toll-free consulting service, Two Join Hampton Firm
(800) 346-3961, offered by CWF is
First Midwestern Financial Cor- ®
staffed by five individuals, including poration, Hampton, has announced
the attorney who developed the these two appointments:
plans. Direct contact by subscribers
James W. Davids to credit admin­
with these pension consultants will istration director and Paula J. q
result in a quick response time to Rother to bank operations auditor/
questions. The number should be administrative assistant.
utilized immediately by all current
Mr. Davids was manager of the
IBA retirement plan program sub­ Mason City office for First Bank
scribers for all pension and IRA System Ag Credit Corporation since £
1983. Prior to that he was employed
The IBA sponsored IRA/SEP by the Farm Credit System. At
seminars, which were recently held First Midwestern, a bank manageat three locations across Iowa, were ment/consulting firm, his duties will
conducted by CWF and received include audit and review of lending q
great reviews. More IRA seminars departments, and overline functions
are scheduled for February and of banks under management con­
March, and SMP/SEP Seminars will tract.
be held in late April or early May.
Ms. Rother was internal auditor
Those already subscribing to the for two years with Security Savings %
IBA retirement plan program may Bank, Eagle Grove, then worked in
continue to use forms already con­ the audit and controller’s depart­
tained in their bank’s inventory. The ment for Brenton Banks, Inc., Des
IBA will notify subscribers of any Moines. Her duties will deal with
necessary changes regarding the bank operations and recordkeeping. #

IBA M erges Retirem ent Plan Program
N order to offer an expanded re­
tirement plan program, the Iowa
Association has merged its
retirement plan program with Collin
W. Fritz & Associates, Brainerd,
The IBA said the following are
just a few of the benefits now avail­
able to members as a result of the
• Retirement plans and services
offered by the IBA through CWF
will be made available to current
IBA retirem ent plan program
subscribers as well as new subscrib­
ers at an attractive, introductory
• Payment of the initial fee and
subsequent annual renewal fee will
entitle the subscriber to the use of
the prototype for the plan to which
they have subscribed, utilization of
a toll-free consulting service and re­
ceipt of a monthly pension newslet­
• Individual Retirement Account
(IRA), Standardized Master Plan
(SMP) and Simplified Employee

Seventh at Town Clock Plaza
Kennedy at Wacker
Jackson and White at 22nd
Asbury at Hales Mill Road



DECEMBER 31, 1986
Cash and Due from Banks...................
Time Deposits with
Financial Institutions........................
Federal Funds S o ld ...............................
Investment Securities
U.S. Treasuries and A gen c ie s .........
State and Political Subdivisions . . .
Other Investment S e c u ritie s ...........
Loans, Net of Unearned Income
($317,000) ............................................
Reserve for Possible Loan Losses .
Net L o a n s ...........................................
Bank Premises and Equipm ent...........
Other A s s e ts ...........................................
TOTAL A S S E T S .................................
Deposits ..................................................
Federal Funds Purchased and
Securities Sold under Agreements
to Repurchase ...................................
Other L ia b ilitie s .....................................
Total Liabilities .................................
Common S to c k .......................................
Surplus ....................................................
Undivided P ro fits ...................................
Total Stockholders E q u ity ...............
STOCKHOLDERS’ E Q U IT Y .............

$ 12,257,000

William G. Kruse

Beverly J. Anderson

Trust Department

Chairman of the Board and
Chief Executive Officer

Mark J. Wlllging


J. Bruce Meriwether

Vice President Personnel and Manager
Personal Banking


Unda L. Budde

Vice President Trust Officer and
Trust Department Manager

Paul J. Gisch

Senior Vice President Special Lending

Vice President Manager Real Estate

Vice President Trust Investments



$ 4,800,000

Thomas J. Stecher
Senior Vice President Operations

Richard A. Bean
Senior Vice President Finance

Francis A. “ Chip”
Murray, Jr.
Vice President Manager West Dubuque

John M. Hansen
Shirley A. Christensen

Bird Chevrolet Co.

Trust Officer


Senior Vice President Investments and Cashier

Thomas W. Buelow

Gladys A. Huenake

Paul L. Britt

Vice President Loan Administration

Assistant Vice President

President, Dubuque
Stamping & Mfg. Inc.

Leo M. Mallle

Assistant Vice President Consumer Lending Manager

Babka Publishing Co.

Paul J. Gisch

Mary A. Piersch

Senior Vice President Special Lending

Dale P. Repass

Personal Banking Officer

Philip T. Kelly

Vice President Commercial Lending

Alan L. Schuster
Personal Banking Officer

President, Communications
Properties, Inc.

Mark E. Small

William G. Kruse


John S. Nlgg

Chairman of the Board and
Chief Executive Officer

C. Michael Reilly

Data Services Officer

John W. Law

Vice President Marketing and
Business Development,
Non-Bank Services

Scott A. Tlbben

John W. Law Co., Retired

David W. Spahn
Vice President and

Agricultural Loan Officer

Mary K. Santjer
Assistant Controller

Banker, February, 1987
Federal Reserve Bank of St. Louis

Roger J. Rhomberg
Rhomberg Fur Co.

James E. Walsh

Edward A. Babka

Vice President Agricultural Lending

Planning and Development
Officer, University
of Dubuque

James A. Kerkhove

John J. Savary

Paul A. Pfohl


Wayne A. Norman

Trust Operations Officer

Assistant Vice President Manager North Dubuque

Daniel E. Welu

J. Bruce Meriwether

James D. White
Director of Manufacturing John Deere Dubuque

N.J. Ylannias
Dubuque Theatre Corp.
Key City Investment Co.

Honorary Directors
Frank A. Fluckiger
Charles J. Spahn
Catherine Wlnall

wit!) You

Over 250 Iowa financial
institutions have used
Kirk Gross Co. services!
Do they know something
you don’t?
Kirk Gross Co. has a solid reputation in Iowa
for designing new financial institutions and
remodeling present ones. If you are thinking
about a new facility, put the responsibility and
worrying in the hands of the TURN KEY
professionals. We keep up on the latest ideas
on planning, designing, construction and
furnishings. That’s why we have completed
more than 250 projects since 1971. The best
part of this unequaled record is that so many
are repeat, satisfied customers. Let Kirk Gross
Co. explain how our complete TURN KEY
program will save you time and money.
Federal Reserve Bank of St. Louis

If you’d like to know what other bankers know
about Kirk Gross Co., call at your earliest op­
portunity. (How about right Now! Phone


4015 Alexandra Drive
RO. Box 2097
Waterloo, Iowa 50704


Io w a N e w s

IRS Says ’86 USDA Payments#
Taxable on ’86 Income

THE enormous sign of Northwest Bank & Trust of Davenport wasn’t intended to break
records; the bank’s needs and the building parameters corresponded to surpass the Times
Square sign by two feet in height.

Iowa Bank Shows Up
Times Square
HE largest electronic message
center in the United States,
North America and the Western
Hemisphere is no longer the famous
Times Square sign housed in New
York City. The title now belongs to
Northwest Bank & Trust of Daven­
The electronic display, positioned
atop the North Park Tower Building
at Northpark in Davenport, vir­
tually adds another floor to the ninestory structure. The electronic mess­
age center provides up-to-the-min­
ute information on products and ser­
vices, as well as the time and tem­
perature in seven foot characters.
Designed and manufactured by
Daktronics, Inc. of Brookings, S.D.,
the installation is four-sided. With a
zipper effect, the four sides of the
sign can work together to display
messages, wrapping words around
the building. Each side can also
operate independently of the others
by flashing words or by moving
characters from the top or bottom of
the display area. Four separate
messages can be shown at any one
time, if desired.
The display is actually a solid
matrix of computer-controlled flood­
lights, seven lamps high by 320
lamps wide. The lamps are selective­
ly lit to form words, graphics and
even moving animation. The sign
has full animation capabilities.

Banker, February, 1987
Federal Reserve Bank of St. Louis

Messages are illuminated with
2,300 spotlights, 55 watts each. The
Venus (TM) 5000 computer-control­
ler, a product of Daktronics, creates
and controls the messages, which
can be read from one mile away in
any direction of the building. Light
and motion are visible from dis­
tances up to three miles.
The sign runs the length of each
side of the building; 72 feet on two
sides and 88 feet on the other sides.
Covering an area of 2,600 square
feet, the sign itself is made of 16,000
pounds of aluminum and steel. The
mounting structure contains 28,000
pounds of steel. All contracting and
installation was done by Iowa firms
and contractors.
A dedication ceremony for the
new sign was held December 2,1986
at the bank. At the ceremony, the
first message to light up the sign
was “Northwest Bank and the Quad
Cities—TOGETHER—we can make
it HAPPEN!” This winning mess­
age came from Debbi Nelson, of the
bank’s discount brokerage depart­
ment, during an employee contest
held at the bank.
The sign was purchased through
Jerry Fisher, a partner with Mid­
west Sign & Animated Displays
Company of Davenport, and Jim
Thomas, owner of Midwest Sign,
who markets for Daktronics in

The Internal Revenue Service
says that all payments from the
U.S. Department of Agriculture ac-_
tually received or made available in 9
1986 must be included in the tax­
payer’s gross income for 1986.
Neil E. Harl, professor of eco­
nomics and authority on farm in- ^
come tax, said the IRS clarified in­
come tax treatment of government
farm program benefits in an an­
nouncement made late last month.
The popular generic commodity £
certificates used last year are to be
reported as income at face value,
Mr. Harl says. The certificates had
been issued in recent months in lieu
of cash for diversion payments, defi- #
ciency payments, and conversation
“ If commodity certificates were
disposed of in 1986, any gain also
should be reported in 1986,” Mr. #
Harl added.
The IRS announcement said pay­
ments actually received or made
available in 1986 are taxable even if
the taxpayer returns the payments #
to USDA for repayment in 1987.
The IRS says the same treatment
applies if the taxpayer does not
cash, deposit or redeem 1986 checks
or commodity certificates until 1987. #
The IRS also reminded taxpayers
that the USDA would be reporting
1986 payments to IRS on Form


ABA Accredits IBA School
The Iowa Bankers Association’s
Iowa School of Banking I and II,
held each year at the University o f^
Iowa, Iowa City, was given accrediation by the American Bankers Asso­
The announcement was made at
the ABA Education Policy a n d #
Development Council’s recent meet­
ing. The school is one of eight accre­
dited banking schools in the nation.
The Wisconsin Consumer Credit
School, sponsored by the Wisconsin#
Bankers Association at St. Norbert
College in West De Pere, was also
given accreditation.
Now that it is accredited, the
Iowa School of Banking I and II will #
be recognized and accepted as a five
credit course by colleges and univer­
Plans are underway for the 1987
session of the Iowa School of Bank- #

In today’s market, knowing
who’s competing for your customers’
loan business is vital. But gathering
and maintaining accurate, up-todate information on your competi­
tion, inconspicuously, is nearly
impossible. Unless you subscribe to
Iowa Public Records Search’s Loan
Activity Bulletin.
The Loan Bulletin is a twice monthly report of all the loan activity
in your county, and every county
Federal Reserve Bank of St. Louis

important to you. Each report contains
all liens filed with the Secretary of
State; the secured party (your com­
petitor); the name of debtor; file num­
ber ;and the date and hour of filing.
And the price is right, too — as
low as $12.50 per county, per month.
To order, or for information on
our other search services (telephone
searches, judgment searches, bank­
ruptcy searches, and more), give us
a call.

We’re Iowa Public Records
Search. We’ll help you compete.

# 2 C o rp o rate P lace
1 501 4 2 n d S treet:
W e st D e s M o ines, Io w a 5 0 2 6 5

Telephone (515) 223-1153

United Bank and Trust in Ames and £
Banks of Iowa, Inc., which owns 14
banks in Iowa, including Valley Na­
tional Bank.

Three Vice Presidents
Named in Council Bluffs

Jeffrey B. Weeden has been pro­
moted to vice
president, cor­
porate tax, of
Banks of Iowa,
He joined the
corporate office
of B an k s of
Iowa, Inc. in
1984 as assis­
tant vice presi­
dent. He is a cerJ- WEEDEN
tified public accountant.



First Interstate Bank of Des
Moines, N.A., has appointed Brian
J. Beverly to as­
sistant vice pres­
ident of invest­
ments. He joins
the bank from
th e
F e d e ra l
B ank of Des
Moines where he
was a s s is ta n t
vice president
and p o rtfo lio
Barbara D. Strank has been

Janet L. Bohnet, Charles N.
Gross and Christine L. Wendlandt
have been pro­
moted to vice
p re s id e n ts of
F irst National
Bank of Council
Ms. B ohnet
has been with
the bank for 17
years and is cur­
rently adminis­
trative assistant
to the president, secretary to the
named commercial loan officer of the board and manager of the loss pre­
bank. She previously held the posi­ vention function.
tion of commercial loan officer at
Manufacturers Bank of Lansing,
Alan E. Gross has been appointed
as manager of retail credit services.
He was the manager of the Morris
Plan, Des Moines, before joining
First Interstate.


Banker, February, 1987
Federal Reserve Bank of St. Louis



Norwest Bank Des Moines has
elected five new members to its
board. The new members are: Mary
Andringa, vice president of Vermeer
Manufacturing Company, Pella; S.J.
Brownlee, president and owner of
S.J. Brownlee Farms, Inc. and
Brownlee Management, Inc., Emmetsburg; Gary G. DeKoter, CPA,
president and CEO of Harker’s Inc.,
Le Mars; Charles C. Edwards, Jr.,
president and publisher of The Des
Moines Register, and James H.
Kent, president of Kent Feeds, Inc.,





Mr. Gross was also promoted to
commercial loan officer. He has 13
years banking experience.
Ms. Wendlandt is currently re- ®
sponsible for managing the con­
sumer banking area. She has eight
years banking experience.

Promoted in Dubuque


Dubuque Bank and Trust Com­
pany has announced the promotions
of John K. Schmidt to vice presi­
dent, finance, and Jacquie M. Man- %
ternach to auditor.

Jack Krantz, president and owner
of Adventurelands of America, Inc.,
has been elected to Brenton Na­
tional Bank of Des Moines’ board of
directors. He has been president of
Adventureland Park since 1971.





Richard O. Jacobson has been
elected a member of Valley National
Bank’s board of directors. He is
president of Jacobson Warehouse
Company, Jacobson Larson Invest­
ment Company and Jacobson Enter­
prises, Inc. He is also a director of



Mr. Schmidt joined the bank in
1984 as auditor. Ms. Manternach O
has been with the bank since 1978.

Iowa News


Ed Spetman Dies
Ed H. Spetman, chairman and
chief executive officer of Council
Bluffs Savings
Bank, died Janu­
ary 18, after a
short illness, at
the age of 63.
He was named
chairm an and
CEO in 1982. In
1963, he became
the bank’s presi­
dent. He had
served the bank
for over 40 years and under his
leadership, Council Bluffs Savings
Bank became the largest in South­
west Iowa, growing to an asset size
of over $200 million. He served the
bank as executive vice president,
vice president and cashier, auditor
and assistant cashier.
Mr. Spetman was also a director
of Banks of Iowa, Inc., the state’s
largest bank holding company. He
also served on its executive board.
Affiliated with many banking as­
sociations, he served on the state
banking board from 1970-78 and
was president of the Iowa Bankers
Association from 1965-66. He also
served on the American Bankers
Association’s national agricultural


a Difference
in Banks

Two Named in Sioux City
Kent Handel and Michael H. Zim­
merman have been elected vice
presidents of The Security National
Bank of Sioux City.

Trust, confidence, loyalty ... words our customers
use to describe how they feel toward Valley
National Bank.
Valley Bank is experiencing substantial growth
... in deposits,, and
... in earnings.
That’s because .we maintain a highly skilled staff,
offer top service, and perform well financially.
We welcome your inquiry ...
Remember, there is a difference in banks.



Mr. Handel joined the bank in
1982. He later served as manager of
the personal trust area of the bank’s
trust division and was named trust
officer in 1984. He will be working in
the trust services division of the
Mr. Zimmerman joined the bank
in 1984 and was later named senior
mortgage loan officer. He will be
working in the bank’s real estate
mortgage department.
Federal Reserve Bank of St. Louis

Valley National Bank Id
Main Office-Sixth and Walnut

M em ber FDIC


For Professional Correspondent Service
call 1-800-622-7262

Northwestern Banker, February, 1987


Io w a N e w s

Hired in Denmark
The Farmers Savings Bank,
W ever,
hired Michael D.
Miltenberger as
a loan officer for
its Denmark of­
Mr. M ilten­
b e rg e r
worked for the
past 10 years as
a controller for
Farmer’s Coop­
eratives in Iowa and Missouri.

Iowa College Foundation
Gives Mid-Year Report
Roger A. Hughes, executive direc­
tor of the Iowa College Foundation,
headquartered in Des Moines,
stated in his semi-annual report last
month that total giving for ICF’s
first six months of the 1986-87 fiscal
year totaled $484,154, an increase of
4.6%, or $21,186 over the same
period a year earlier. However, the
number of donors was down from
421 to 417.
There would have been a substan­

tial increase in numbers of donors
and amount pledged but for the fact
that in the 1985-86 year the number
of Iowa banks contributing to ICF
dropped to 234, compared to 350
contributing banks in 1983, thus re­
flecting the crisis situation in Iowa
Mr. Hughes stated in his semi-an­
nual report, however, that he pre­
dicts “ 1987 will be a major year in
the history of ICF.”

Elected in Sioux City


First National Bank in Sioux City
has elected Pat
Kuchel as mar­
keting officer.
A gradute of
College, Ms.
Kuchel joined
the bank last
year as market­
ing director.

Elected in Mason City

Deluxe Check Completes
Data Systems Acquisition


William L. Cody has been elected
Deluxe Check Printers, Incorpo­
as cashier of First Interstate Bank, rated, St. Paul, Minn, has completed
Mason City.
the acquisition of A.O. Smith Data
He joins the
Systems, Inc. for $71.5 million in ^
bank from the
cash. A definitive agreement on the
First Interstate
purchase had been reached with
Bank of Maren­
A.O. Smith Corporation, the parent
go where he was
company of DSI, on November 26.
controller and
DSI was expected to have sales o f^
t r u s t officer.
about $34 million in 1986.
Prior to that, he
“This acquisition ties in directly
was a staff audi­
with Deluxe’s strategy to expand its
tor with McGladmarket and product lines,” said
rey, HendrickW-L- CODY
Harold V. Haverty, president a n d £
son & Pullen in Mason City.
chief executive officer of Deluxe.
“DSI will provide Deluxe with an
important additional service to offer
its financial institution customers.
It will also give Deluxe an opportu-#
nity to participate in the growth of
services related to all aspects of the
payments system — automated
teller machines and point-of-sale
systems, as well as checks.”
DSI, based in Milwaukee, is a
leading supplier of electronic funds
transfer software and processing
services, particularly software and
services for autom ated te lle r #
machines and point-of-sale equip­

Committed to
making your
bank stand
apart from the

Bankers Trust Company., Des Moines
Burlington Group 11 M eeting............


Carpenters Pension Fund of Illinois .


Davenport Bank & Trust Company .. .
First National Bank, D ubuque..........
First National Bank, O m aha..............


Gross, Kirk Co., W aterloo ..................


IAC Group, Kansas C ity........................................................47
Iowa Bankers Insurance & Services, Inc............................ 6
Iowa Public Records Search, Inc......................................... 43
Merchants National Bank, Cedar R ap id s ........................ 2 #
Norwest Corporation, Minneapolis................................... 48
Office Concepts, Ltd., Waterloo......................................... 46
Plus System, Inc., D enver................................................... 3
Swords Associates Inc., Kansas City ............................... 22
United States Check Book Co., O m aha............................ 37 A
Valley National Bank, Des Moines.................................... 45
Van Wagenen & Co., G.D......................................................21

Banker, February, 1987
Federal Reserve Bank of St. Louis

You might even call it "free" income,
because it's the extra profit your bank earns by
providing your customers IAC credit protection.
Remember too that these fee-based risk man­
agement services also protect your bank's assets.
Think about it: You offer your customers the
valuable service of financial security while
enjoying asset protection and adding to your
bank's profit base.
What's more, our National Training Department
w ill schedule a series of in-bank seminars to
help the people in your loan department
become confident and comfortable in their
role of Financial Advisers to your customers.
Also keep in mind that IAC offers you a full line
of bank-designed products that range from
Credit Life and Collateral Protection to Deferred
Compensation programs for bank executives.
W hat it all adds up to is that you have a lot to
gain from IAC—including fee income that you
could almost consider "free" income. Give us a
call for the facts.
A Full Service Company for The Full Service Bank

Individual Assurance Company
1600 O ak St. • Kansas City, M O 64108
Phone toll free in Missouri (800) 892-5890,
other states (800) 821-5434.
Federal Reserve Bank of St. Louis

We KnowTheWay
To Lands Of Opportunity
In today’s economic climate, you have
to search for opportunities around every
bend. And now more than ever, it takes
a strong financial leader to help make sure
the best ones don’t get away
At Norwest Banks, we understand the
needs and opportunities facing bankers
today After all, we’ve operated banks of our
own in more than 100 different markets
over the last 50 years. And when you come
to us for correspondent banking, we make
that experience work for you.
We can provide the specialized services
you need in your marketplace—no matter
how large or how small it may be. And
whether that means ATM access, credit
cards, investment alternatives, or traditional
correspondent bank services, we’ll work
with you to get the job done.
Talk to us today about our full line of
services. When it comes to correspondent
banking, we know the way. ■

We Know The Way We Are Norwest.
Members FDIC
Federal Reserve Bank of St. Louis