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Honolulu Awaits IBAA Convention

• The Future for Agriculture and Ag Banks—Survey
• Directors’ Financial Statement Responsibilities
• ABA Community Bankers Conference Program
Federal Reserve Bank of St. Louis

Top B an k s in D
Ranked by Demand

N e w V o r l'

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o iim uDallas
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Look at the company
w e keep.
A recent list compiled by American Banker
(Nov. 24, 1987) ranks the country's top 100
banks in domestic correspondent balances.
That prestigious list includes Merchants
National Bank of Cedar Rapids.
Now, if it sounds like we're bragging, we
are. Because w e're proud of our quality
financial products and our outstanding staff.
Most of all, we're proud o f you — our
customers — for trusting us to serve your
correspondent needs.
Yes, w e are in good company. Because w e
have y o u on our distinguished list o f clients.

Jerry Trudo

Dick Retz

Bob Louvar

319/ 398-4306

319/ 398-4806

319/ 398-4204

Dennis Earhart Terry Martin Andy Appleton
319/ 398-4789

319/ 398-4320

319/ 398-4314

Doug Bass
319/ 398-4837

Correspondent Division

Merchants National Bank
Cedar Rapids, Iowa 52401
Federal Reserve Bank of St. Louis

Member F.D.I.C

is i


‘Reprinted with permission, American Banker, ISiov. 24, 1987.

First Bankers
Brings the
New Dawn...

The investment brokerage competition is
making a lot of money in your
community. Recent statistics show that
Commerical Banks hold only 32% of the
financial assets in the United States. First
Bankers Securities Corporation believes
that with our help you can control more
of the assets in your market and
translate that control into profits for
your Bank. Our professionals have the
hands-on experience and the system to

put you into the full-service brokerage
business . . . profitably. Together we
open an Investment Center in your
Bank. Our job is to make this Invest­
ment Center earn returns for you year in
and year out while we handle the
details. For more information on First
Bankers Securities Corporation's Invest­
ment Center Program, contact James R.
Rowlette, Jr. at (800) 952-7899
(National) or (800) 325-3030 (Iowa).

First Bankers Securities
Investment Center
Federal Reserve Bank of St. Louis

Program • Bank Trust Asset Management • Asset Management Consulting

Homer Livingston Resigns
LaSalle National Bank Posts

FEBRUARY 1988 • 95th year • No. 1493


THIS inviting scene shows the full beauty of Honolulu’s famous Waikiki Beach
viewed from the ocean. Cover photo was furnished through the courtesy of Inter­
national Travel Associates, Des Moines.



Honolulu welcome awaits IBAA!

Strong program, beautiful land draws high attendance


The future for agriculture and ag banking

Exclusive survey among nine selected ag banking leaders


Community Bankers Conference

Nearly 1,000 anticipated for Beverly Hills meeting


Financial statement responsibilities

Dr. Doug Austin reviews directors duties, liabilities


Well done, Tom Olson!

Exclusive interview with retiring IBAA president


Bank Promotions
Convention Calendar
Corporate News
Twin Cities
North Dakota
South Dakota


Nebraska Ad Campaign
Accentuates Positive
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

Diane Nelson

No. 1493 N orthw estern B anker (USPS 397-620) is published m onthly by th e N orthw estern
B anker Company, 1535 Linden S treet, Suite 201, Des Moines, Iowa 50309. S ubscription
$2.00 per copy. $24 per year. Second Class postage paid a t Des Moines, Iowa. PO ST­
M ASTER: Send all address changes to N orthw estern B anker, 1535 Linden S treet, Suite
201, Des Moines, Iowa 50309.

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

Homer J. Livingston, Jr. an­
nounced his resignation January 12
as chairman and
North America,
Inc. and as presi­
dent and CEO of
LaSalle National
Corp., Chicago.
Mr. Livingston
will remain with
the organization
as a member of H.J. LIVINGSTON, JR.
the board of LaSalle National Bank
and as an advisor to the ABN/
LASALLE management team.
“Four years ago I was asked by
ABN Bank (Algemene Bank Neder­
land, N.V.) to join this organization.
My task was to implement a stra­
tegy to unite ABN’s North Ameri­
can operations and to establish
LaSalle National Bank as a major
midwest banking force. The bank
has just completed its third year of
record earnings and branch profits
have exceeded our most optimistic
goals. I feel I have completed my
assignment and plan to investigate
new opportunities.”
P. Jan Kalff, member of ABN
B ank’s m anaging board said,
“These goals have been achieved
and a management team is in place
that will build on our success. We
value Homer Livingston’s experi­
ence and knowledge, and in order to
continue to benefit from his exper­
tise, we’ve asked him to stay on as a
board member and an advisor.”
Until a permanent successor is
named, the North American opera­
tions will be run by a team consist­
ing of Aldert Blank, vice chairman
of ABN/LASALLE North America,
Inc., Harrison Tempest, president
and CEO of LaSalle National Bank,
and R. Arthur Arnold, executive
vice president and manager of the
New York branch of ABN Bank.
The group will report to Robert Wilmouth, chairman of LaSalle Nation­
al Bank, and also new chairman of
LaSalle National Corp., parent of
LaSalle National Bank and the
LaSalle Bank of Lisle, is a subsi­
diary of Algemene Bank Nederland
N.V. LaSalle National Corp. is also a
member of the ABN/LASALLE
group, th e N o rth A m erican
13-branch network of ABN Bank.


• Austin Associates Foresees Slower
Pace for Mergers and Acquisitions
HE pace of commercial bank
mergers and acquisitions is ex­
pected to slacken, at least temporar­
ily, according to Dr. Douglas V.
Austin, a nationally regarded au­
thority on commercial banking
structure and mergers and acquisi, tions.
“Mergers and acquisitions among
<9 commercial banks will probably
I diminish throughout the first half of
1988 for several reasons,” Dr. Aus­
tin noted. “The stock market col­
lapse in October reduced the market
# value of most bank stocks, render­
ing stock swaps more expensive and
dilutive for the acquiring organiza­
tions. Secondly, transactions involv­
ing large regional and super-regional
# banking organizations which were
recently, or are about to be, con­
summated require time for buyers to
fully absorb and integrate people
and systems. Finally, money cen­
ter organizations continue to be
plagued by foreign loan losses, poor
earnings, and weakened capital posi­
tions; in effect, removing them from
the pool of buyers,” he added.
“These conditions, however, are
temporary,” says Dr. Austin. He
identified several market conditions
and forces which will fuel additional
mergers and acquisitions among re­
gional and super-regional banking
organizations in the latter half of
1988. Among those conditions
which Dr. Austin identified as hav­
ing the greatest influence on com­
mercial bank combinations are:
(1) The general attractiveness of
the Midwest as a diversified indus­
trial and agricultural business
region with a large pool of deposit
and loan business;
(2) The higher profitability levels
of regional banks in the Midwest,
which make them attractive acquisi­
tion candidates;
(3) The drive of super-regionals to
achieve proportions of size which
make them immune from becoming
takeover targets, and which allow
them to take advantage of econo­
mies of scale when absorbing new
(4) Lower stock prices of potential
targets resulting from the October
stock market crash;
(5) Changes in state laws allowing
Federal Reserve Bank of St. Louis

regional interstate expansion; and
(6) The potential lifting in 1988 of
restrictions which have precluded
commercial banking organizations
from acquiring healthy thrift organi­
Dr. Austin is president and chief
executive officer of Austin Associ­
ates, a Toledo, Ohio-based financial
institution consulting firm. The
firm, with offices in Chicago, India-

napolis, Springfield, 111., and Rich­
mond, Va., has served as an invest­
ment banking advisor in more com­
mercial bank merger and acquisition
transactions than any other invest­
ment banking firm. The firm special­
izes in working with community
banking organizations (those gen­
erally having assets less than $500
million) in the areas of mergers and
acquisitions, bank stock valuations,
strategic planning, marketing EDP
consulting, and general management
consulting. Dr. Austin has prepared
a monthly article for readers of the
N o r t h w e s t e r n B a n k e r since May,

Now the largest regional
processor in the Midwest
shows you exactly
what we provide.
If you’re not getting this,
you’re not getting what you deserve.
Full on-line capabilities for all applications with
CIF, G/L and platform automation interface.
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for your protection, compliance, and peace of mind.
Cost effective pricing to meet your needs.
Free initial and on-going training on all applications.
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For more information on how we can help you succeed in meeting
your goals, eliminating the concerns inherent in data processing and
all at a very cost effective price contact:
Dick Ormond
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Customer Group

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PO. Box 1847
Cedar Rapids, low a 52406

Northwestern Banker, February, 1988


the bank in 1986, has been promote«^
to assistant vice president.
In the operations department,
these promotions were announced:
Gilbert R. Hill to operations officer
and manager of the funds m anage^
ment area. Mark A. Korte to assis­
Cross, Jr., and Keith D. St. Pierre, tant operations officer in the Elec­
both vice presidents. Each of the tronic Payment Services Depart- \
three retirees had more than 30 ment. Jeffrey T. Grasser and
years of service with First National. Patricia J. Smith to corporate s e r^
Mr. Cross started in the bond de­ vices officer.
partment, then transferred to the
Lenise S. Rudnick was elected a fi­
correspondent division over 30 years nancial services officer for the Plaza y
ago. He traveled extensively in facility.
Iowa, as well as in Illinois, Minne­
sota and western states. Mr. St.
Pierre served in the division about Information Technology
15 years, working with banks in Illi­ Buys Systems Company
nois and Indiana. Mr. Clark moved
Donald F. Dillon, president of In­
to the correspondent bank division
Technology, Inc. of Lin^i
seven years ago, serving as depart­
the nation’s leading pro­
ment head the past two years.
vider of computer software to the fi­
United Missouri Bank of Kansas nancial services industry, has an­
City, n.a.: Michael D. Wynn has nounced the acquisition of McDon­
joined the bank as a vice president nell Douglas Banking Systems Com^
in the correspondent banking divi­ pany, based in Birmingham, Ala.
“With the purchase of McDonnell
sion, serving banks in Oklahoma
and Arkansas. He was associated Douglas Banking Systems Com­
previously with financial institu­ pany,” said Mr. Dillon, “ Informa­
tions in Kansas and Missouri. Mr. tion Technology Inc. adds over 50
Wynn holds a B.A. degree from financial institutions to our list of
Southwest Missouri State Univer­ software users.
“ It is a case of the industry leader
sity in Springfield.
In conjunction with Mr. Wynn getting bigger and better by com­
joining the bank, two other banking bining the talents of the two com­
officers have been assigned new ter­ panies. Currently, about 1 out of 10
ritories: J. Robert Hardin, vice commercial banks, along with S&Ls
president, now calls on banks in and credit unions in America, run on
metropolitan Kansas City and ITI software. With the addition o1
northeast Kansas. Joseph E. James, McDonnell Douglas Banking Sys­
vice president, has started traveling tems Company, we will be providing
computer software to 1 out of 7
to banks in northern Missouri.
Four other well-known UMB cor­ banks in America,” Mr. Dillon re­
respondent bank officers continue ported.
Both Information Technology,
their present territory assignments:
Jack E. Beets, vice president, has Inc. and McDonnell Douglas Bank­
responsibility for the southeastern ing Systems use computer hardwar
sector of Kansas; Rahn E. Tieman, manufactured by UNISYS.
According to Dale M. Jensen,
vice president, covers the western
sector. Lora Hackman, assistant ecutive vice president of ITI, “Th
vice president, travels southern Mis­ merging of ITI and McDonnel
souri. Richard H. Muir, vice presi­ Douglas Banking Systems makes
dent, continues his coverage of excellent technical sense.” IT
banks in Iowa, Nebraska and Colo­ becomes even stronger and becaus
of the synergy of technical talent, w
James J. Waterman has been pro­ look forward to even greater break
moted to senior vice president in the throughs in product development.”
Existing clients of both firms will
operations department and con­
tinues as cashier for the bank. He not be inconvenienced by the mer
ger, the two executives said. Ser­
joined United Missouri in 1973.
In the business development de­ vices will continue without interrup­
partment, Craig L. Anderson, who tion. The acquisition will double the
joined the bank in 1986, has been number of ITI employees and will
promoted to vice president and add significant revenues to IT I’
Kevin P. Hennessy, who also joined gross sales.

Bank Promotions
ROMOTIONS and other an­
nouncements have been made
by the following banking institu­
Continental Illinois Corporation,
Chicago: S. Waite Rawls III, joined
the holding company’s senior man­
agement team February 1. He was
expected to be elected a vice chair­
man at the January board meeting.
Mr. Rawls, 39, moved from New
York where he was a managing di­
rector in Chemical Bank’s Global
Securities and Foreign Exchange
Group. At Continental, he will head
a new area that will comprise the
bank’s risk management and mar­
ket-making business.
Federal Reserve Bank of Chi­
cago: Robert J. Day has been redes­
ignated chairman of the board and
Marcus Alexis has been named de­
puty chairman. In addition, Mr.
Alexis was appointed to a second
three-year term as a board member.
Mr. Day is chairman and CEO of
USG Corporation. Dr. Alexis is dean
of the College of Business Adminis­
tration at the University of Illinois
at Chicago.
Edward D. Powers chairman and
CEO of Mueller Company in Deca­
tur, 111., and Barry F. Sullivan,
chairman and CEO of the First Na­
tional Bank of Chicago, have been
reelected to the Chicago Fed board
for a second three-year term.
First National Bank of Chicago:
Dennis J. Duffy, assistant vice pres­
ident, has been named head of the
Community Banking unit of the
Midwest Financial Institutions divi­
sion. He will report to William J.
Bowne, vice president and head of
the division. Mr. Duffy joined the
bank in 1961. Most recently, he was
in the mortgage banking division of
the real estate department, and
prior to that spent 11 years in cor­
respondent banking.
Mr. Duffy succeeds John M.
Clark, vice president, as head of the
Community Banking unit. Mr. Clark
was dne of three widely-known vice
presidents who retired at the end of
1987 after working together for
many years serving correspondent
banks in upper midwest states. Also
retiring at year-end were Clarence E.

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

Another first from TRW... the TRW Gold
Report...the first on-line credit report to in­
clude a derived credit risk score as part of your
inquiry. Validated by actual use with many
large customers during the past yeai; this
innovative credit-granting tool helps you pre­
dict consumer delinquencies or bankruptcies.
The TRW Gold Report:

■ Saves you money by quickly identifying
consumers with marginal payment habits.

© TR W Inc. 1987. TRW is the name and mark of TRW
Federal Reserve Bank of St. Louis


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history on consumer applicants.
The TRW Gold Report...the superior
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For more information on how you can put
this premier credit-granting tool to work for
you, contact your local TRW representative
or call: 800.872.4566, ext. 225.

TRWCredit Data
600 City Parkway West, Suite 300
Orange, CA 92668
Attention: Customer Support



Convention Calendar
State Conventions & Schools
Feb. 26—CBA Annual Security Seminar, Den­
Apr. 21-22—CBA Lending Conference, Den­
May 5-6—CBA Annual Legal and Compliance
Conference, Denver.
June 1-4—CBA Annual Convention, Broad­
moor Hotel, Colorado Springs.
Sept. 15-18—Independent Bankers of Colo­
rado Annual Convention, Beaver Creek at
Vail, Avon.
Feb. 24-25—IBA Consumer Credit Confer­
ence, Adams Mark Hotel, St. Louis, Mo.
Mar. 23-24—IBA Bank Operations Confer­
ence, Holiday Inn, Decatur.
Apr. 11-13—IBA Real Estate School.
May 4-5—IBA Trust Conference.
May 22-27—IBA Illinois Bankers School,
Southern III. U.
May 25-26—IBA Springfield Visit/Golf Outing,
June 8-10—IBA Annual Convention, Fairmont
Hotel, Chicago.
June 12-17—IBA Agricultural Lending School,
III. State U., Normal.
June 19-24—IBA Internal Auditing School,
III. State U., Normal.
June 19-24—IBA Intermediate Internal Audit­
ing School, III. State U., Normal.
July 17-22—IBA Commercial Lending School,
III. State U., Normal.
July 24-29—IBA Consumer Lending School,
III. State U., Normal.
Aug. 14-19—IBA Bank Compliance School,
DePaul U., Chicago.
Aug. 21-26—IBA Trust School, DePaul U.,
Aug. 22-26—Independent Community Banks
in Illinois School for Community Bankers,
Class I and II, Illinois Wesleyan Univer­
sity, Bloomington.
Sept. 16-19—Independent Community Banks
in Illinois Annual Convention and Exposi­
tion, Adams Mark Hotel, St. Louis, Mo.
Feb. 24-26—IBA Midwest Mid-Winter Man­
agement Conference, Snowmass Club,
Snowmass, Colo.
Mar. 9-10—IBA Bank Management Confer­
ence, Marriott Hotel, Des Moines.
Mar. 9—IBA Legislative Briefing and Recep­
tion, Marriott Hotel, Des Moines.
Mar. 20-25—IBA Consumer Credit School,
Drake U., Des Moines.
Apr. 9-13— IBA Washington, D.C. Trip.
Apr. 18-20—IBA Marketing Conference, Uni­
versity Park Holiday Inn, West Des
May 11-13—Iowa State NABW Conference,
Holiday Inn University Park, West Des
May 23-24—Iowa Young Bankers Associa­
tion Annual Conference, University Park
Holiday Inn, West Des Moines.
June 12-17—IBA Ag Credit School, Scheman
Center, Ames.
June 19-24—IBA Iowa School of Banking, U.
of Iowa, Iowa City.

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

July 21-23— Iowa Independent Bankers As­
sociation Convention, Inn Resort Com­
plex, Okoboji.
Sept. 18-20— IBA Annual Convention, Con­
vention Center, Des Moines.
Feb. 21-26— MBA Bank Operations School,
Radisson Arrowwood, Alexandria.
Mar. 8-9— MBA CLS Program for Graduates,
Twin Cities.
Mar. 22-23— MBA CEO Leadership Pro­
gram, Radisson Plaza, Minneapolis.
Apr. 11-14—MBA Bank Compliance School,
Minneapolis Athletic Club.
Apr. 24-26—Tri-State Trust Conference,
Holiday Inn City Center, Sioux Falls.
May 3— MBA Advanced Productivity/Cost
Containment Program, St. Paul.
May 3-6—MBA Washington Legislative
Conference, Washington, D.C.
June 6-7— MBA Annual Convention, Duluth.
June 19-24—Minnesota School of Banking,
St. Olaf College, Northfield.
July 24-29—MBA Midwest Banking Insti­
tute, U. of Minn., Morris.
July 31-Aug. 5— MBA Commercial Lending
School (Second Year only), St. Olaf Col­
lege, Northfield.
Aug. 25-28—Independent Bankers of Min­
nesota Annual Convention, Breezy Point.
Oct. 2-7— MBA C om m ercial Lending
School, Radisson Arrowwood, Alexan­
Feb. 25— MBA Essentials of IRA (Beginners),
Sheraton Hotel, Billings.
Feb. 26— IRA’s: A Closer Look (Advanced),
Sheraton Hotel, Billings.
Mar. 11—MBA Women Bankers Conference,
Holiday Inn, Billings.
Mar. 24-25—MBA-AIB Educational Confer­
ence, Park Plaza Hotel, Helena.
Apr. 22— MBA Marketing Seminar, Holiday
Inn, Billings.
Apr. 29— MBA Compliance Seminar, Holiday
Inn, Billings.
May 19-20—MBA Trust Conference, Colonial
Inn, Helena.
May 23-24—MBA Commercial Bankers Con­
ference, Outlaw Inn, Kalispell.
June 9-10—MBA Retail/Real Estate Bankers
Conference, Copper King Inn, Butte.
June 21-24—MBA Annual Convention, Out­
law Inn, Kalispell.
Feb. 23-25— NBA Human Resources Con­
ference, Omaha Red Lion (23), Grand Is­
land Holiday Inn— Midtown (24), North
Platte Holiday Inn (25).
Mar. 8-10— NBA Bank Directors Confer­
ence, Lincoln Hilton (8), Kearney Ramada
Inn (9), Ogallala Holiday Inn (10).
Mar. 23-24— NBA Ag Outlook Conference,
Kearney Holiday Inn.
May 19-21 — NBA Annual Convention, Red
Lion, Omaha.
June 9— NBA Bank Presidents Golf Outing,
Lochland Country Club, Hastings.
June 13-17— NBA Committee Retreats, W il­
June 26-28— NBA Washington Legislative
Visit, Washington, D.C.

Nov. 10-12— Nebraska Independent Bank-,
ers Association Annual Convention, Villa-1
ger Motor Inn, Lincoln.
North Dakota:
Feb. 26— NDBA Advanced Loan Documenta-g|
tion, Bismarck.
Mar. 8— NDBA Compliance Seminar, Bis­
Apr. 8— NDBA Lender Liability Seminar,
Apr. 11-13— NDBA Washington L e g is la tiv e
Conference, Washington, D.C.
Apr. 12-13— NDBA Comprehensive Training
School for Teller Trainers, Jamestown.
May 10— NDBA Asset/Liability Management
Seminar, Fargo.
May 11—NDBA Bank Investment S e m in a r^
June 13-14— NDBA Annual Convention,
Grand Forks.
June 5-10—North Dakota School of Banking,
U. of North Dakota, Grand Forks.
Aug. 25— NDBA The Bankruptcy Battle Fea-^
turing Chapter 12, Bismarck.
Sept. 20— NDBA Negotiation Strategies and
Skills for Bankers, Bismarck.
Sept. 21— NDBA Loan Negotiation and
Workout Skills, Bismarck.
Oct. 20-21— NDBA Human Resource C o n fe r^
ence, Bismarck.
Sept. 7-9— Independent Community Bankers
of North Dakota Convention, Kirkwood
Motor Inn, Bismarck.
South Dakota:
Apr. 6-7—SDBA Agricultural Credit Confer­
ence, Ramkota Inn.
Apr. 9—SDBA Teller/Staff Seminar, Howard
Johnson’s, Rapid City.
Apr. 16—SDBA Teller/Staff Seminar, Holiday
Inn City Centre, Sioux Falls.
Apr. 24-26—Tri-State Trust Conference, Holi­
day Inn City Center, Sioux Falls.
May 15-17—SDBA Annual Convention, Ram­
kota Inn, Sioux Falls.
Feb. 21-28—WBA Mid-Winter Retreat, Krys­
tal Cancún Hotel, Cancún, Mex.
Mar. 6-12—WBA Personal Banking School!
Westwood Conference Center, Wausau.
Mar. 15-16—WBA Bank Marketing Confer­
ence, Holiday Inn, Stevens Point.
Apr. 11-12—WBA Agricultural Bankers Con­
ference, Holiday Inn, Stevens Point.
May 1-3—WBA Legislative/Regulatory Con­
ference, Westin Hotel, Washington, D.C.
May 22-27—WBA General Banking School,
Session 1, St. Norbert College, De Pere.
June 5-11—WBA Commercial Lendin
School, St. Norbert College, De Pere.
June 13-15—WBA Annual Convention, Pfis­
ter Hotel, Milwaukee.
July 31-Aug. 6—WBA Consumer Credit
School, St. Norbert College, De Pere.
Aug. 7-12—WBA Basic Banking School, St.
Norbert College, De Pere.
Aug. 7-12—WBA School of Lending Princi­
ples, St. Norbert College, De Pere.
Feb. 25-26—WBA Annual Ag Lenders Insti
tute, Laramie.
Feb. 11-12—WBA Annual Credit Conference,
Hilton Inn, Casper.
June 12-14—WBA Annual Convention, Jackson Lake Lodge, Moran.
Nov. 5—WBA IRA Seminar, Hilton Inn, Cas

ABA—American Bankers Association
AIB—American Institute of Banking
BAI— Bank Adm inistration Institute
BMA— Bank Marketing Association
CFP—College for Financial Planning
IBAA— Independent Bankers Association
of America
NABW— National Association of Bank
Women, Inc.
RMA— Robert Morris Associates

National Conventions & Schools
Feb. 16-19—ABA National Funds Manage­
ment and Financial Markets Conference,
Sheraton Harbor Island, San Diego, Calif.
Feb. 21-24— BMA National Sales Confer­
ence, Hilton/W alt Disney World, Lake
Buena Vista, Fla.
Feb. 21-24—ABA National Trust and Finan­
cial Service Conference, Washington Hil­
ton and Tower, Washington, D.C.
Feb. 22-23— BAI Investment Banking for
Commercial Bankers, New York.
Feb. 25-28—ABA National Community
Bankers Conference, Century Plaza, Los
Angeles, Calif.
Mar. 6-9— BMA Community Bank CEO Mar­
keting Seminar, M arriott’s Marco Beach
Resort, Marco Island, Fla.
Mar. 6-9— RMA Credit Department Manage­
ment, Tampa, Fla.
Mar. 7-10— BAI Cost Accounting Workshop,
Chicago, III.
Mar. 13-16— BAI Community Bank Presi­
dents Forum, Naples, Fla.
Mar. 13-17— IBAA Annual Convention,
Sheraton-Waikiki, Honolulu.
Mar. 20-23— RMA Commercial Loan Docu­
mentation, Baltimore, Md.
Mar. 21-25— KBA/NBA School of Banking
Fundamentals, Holiday Inn, Manhattan,
Mar. 22-23— BAI Residential Mortgage
Lending, Chicago, III.
Mar. 28-29— BAI Asset/Liability Manage­
ment Seminar, Chicago, III.
Mar. 28-30— BAI Bank Security and Fraud
Workshop, Chicago, III.
Apr. 7-8— RMA Real Estate Lending, Chi­
cago, III.
Apr. 10-13— RMA F inancial Statem ent
Analysis, Washington, D.C.
Apr. 11-12— IBAA Long Range Planning
Seminar, Opryland Hotel, Nashville,
Apr. 13-14— RMA Cash Flow Analysis, Kan­
sas City, Mo.
Apr. 14-17— IBAA The Assemblies for Bank
Directors, The Greenbriar Hotel, White
Sulphur Springs, W. Va.
Apr. 16-19— BAI Community Bank Presi­
dents Forum, Hilton Head, S.C.
Apr. 17-20— BMA Corporate/Commercial
Marketing Conference, Boston Marriott,
Long Wharf, Boston, Mass.
Apr. 17-22— KBA/NBA PDP Commercial
Lending School, Holiday Inn, Manhattan,
Apr. 18-22—BAI Basic Bank Auditing, Chi­
cago, III.
Apr. 18-22— BAI intermediate Bank EDP
Auditing, Chicago, III.
Apr. 21-23—CFP Financial Planning Prac­
tice Series, Philadelphia, Pa.
Apr. 24-27—ABA National Retail Banking
C onference, San F ra n c is c o H ilto n
Apr. 24-27— BMA Research and Planning
Conference, Capital Hilton, Washington,
Federal Reserve Bank of St. Louis

Apr. 25-26— IBAA Community Bank Owner­
ship and the Bank Holding Company
Workshop, Hilton Palacio del Rio, San
Antonio, Tex.
Apr. 27-29—ABA National Corporate Bank­
ing Conference, W aldorf Astoria, New
Apr. 28-29— BAI Advanced Loan Documen­
tation, Chicago, III.
May 1-4— BMA Advertising Conference,
Westin Chicago, Chicago, III.
May 3-4— BAI Commercial Loan Documen­
tation, Milwaukee, Wis.
May 6—CFP How to Maximize Your Profits
Through Successful Seminar Giving, San
Francisco, Calif.
May 6— RMA Loan Review, Atlanta, Ga.
May 10-13— BAI Intermediate Bank Audit­
ing, Chicago, III.
May 11-12— RMA Cash Flow Analysis, Chi­
May 12-13— BAI Loan Review Managers
Workshop, Chicago, III.
May 12-13— BAI Supervising Bank Opera­
tions, Chicago, III.
May 13—CFP How to Maximize Your Profits
Through Successful Seminar Giving, Cin­
cinnati, Oh.
May 16-20—BAI Bank Accounting and Fi­
nancial Applications, Boulder, Colo.
May 17-18— IBAA Bank Internal Auditing I
Seminar, Radisson Hotel, Denver.
May 17-19— BAI Commercial Credit Analy­
sis, Chicago, III.
May 18—CFP How to Maximize Your Profits
Through Successful Seminar Giving,
Philadelphia, Pa.
May 19-20— BAI Improving Profits Through
Expense Reduction, Chicago, III.
May 20—CFP How to Maximize Your Profits
Through Successful Seminar Giving, Or­
lando, Fla.
May 22-25—ABA National Operations and
Automations Conference, Georgia World
Congress Center, Atlanta, Ga.
May 22-27— BMA Essentials of Bank Mar­
keting School, U. of Colorado, Boulder.
May 22-27— BMA Advanced School of Bank
Marketing, U. of Colorado, Boulder.
May 22-June 3— BMA School of Trust and
Personal Financial Services Marketing,
U. of Colorado, Boulder.
May 22-June 3— BMA School of Bank Mar­
keting, U. of Colorado, Boulder.
May 23-25— BAI Risk Assessment/Anticipatory Auditing, Chicago, III.
June 2-3— BAI Keys to Retail Lending,
Milwaukee, Wis.
June 4-8— National AIB Conference, Mar­
rio tt’s Orlando Center, Fla.
June 5-9—ABA National Corporate Trust
Workshop, Hyatt Regency, Crystal City,
Arlington, Va.
June 6-7— BAI Introduction to Loan Review,
Denver, Colo.
June 6-8— BAI Community Bank Audit Con­
ference, St. Louis, Mo.
June 6-9— RMA Agricultural Credit Analy­
sis, St. Louis, Mo.
June 7-8— IBAA ESOPs and Other IncentiveDriven Systems Seminar, Sheraton Park
Place Hotel, Minneapolis.
June 8-9— BAI Audit of Loan Administration
and Loan Review, Denver, Colo.
June 9-10— IBAA Internal Auditing I Semi­
nar, Sheraton Park Place Hotel, Minnea­
polis, Minn.
June 12-15— BMA Distribution Systems
Strategy Conference, Hyatt Grand Cy­
press, Orlando, Fla.

June 13-15— BAI Call Report Preparation,
Chicago, III.
June 16-17—BAI Real Estate Law and Loan
Documentation, Chicago, III.
June 19-24— KBA/NBA PDP Intermediate
School of Banking—Session II, Ramada
Inn, Kearney, Neb.
June 21-24— BAI Basic Trust Auditing, Chi­
cago, III.

ABA Insurance Program
Has First Anniversary
Heavy banker enrollment, new
programs, program enhancements
and strong state bankers associa­
tion support contributed to making
the first year of the American
Bankers Association-sponsored in­
surance program a praiseworthy
success, according to ABA Presi­
dent Charles H. Pistor, Jr.
The year’s highlights were:
• participation of 949 banks in the
program as of January 1, 1988, with
premiums totalling more than $25
• addition of trust errors and
omissions liability insurance to the
product line;
• introduction by the Progressive
Companies, the program’s primary
carrier, of SAFE, a loss prevention
program that also earns reduced pre­
• development of a package of
new coverages for fiduciary liability
and employee benefit plan liability,
IRA/KEOGH plan operations and
brokerage services;
• simplification by Progressive of
the renewal process so that all of a
bank’s policies are synchronized to
have the same effective dates;
• increasing of the coverage limit
of the combination safe depository
policy of $2 million; and
• endorsement or active support
of the program by 27 state bankers
Banker enrollment has substan­
tially exceeded the goals that ABA
set when the program was created.
Mr. Pistor said. The enthusiastic
banker support of the program has
resulted in the accomplishment of
its most important goals—increas­
ing the availability of coverage and
promoting long-term stability in the
Currently, 27 state bankers asso­
ciations are supporting the ABAsponsored program. “The active
participation of the state associa­
tions has played an integral part in
the success of the program,’’ ABA
President Pistor said.
Northwestern Banker, February, 1988

Money (‘lianges hands *
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oney makes the world go
round, they say.
And at Travelers Express, we
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Diane Booth, Controller in a
Wisconsin Savings and Loan, puts
it this way: “Our satisfaction with
Travelers Express is from the quality
o f service we have received, the costsaving features o f the program, and
the friendliness and cooperation
And James L. Smith, a bank
president in Pennsylvania, reports
that the Travelers Express Official
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through reduction in supplies cost,
and provides additional interest
income. The system has worked
flawlessly ” he adds.
Service is another popular
feature of our Official Check pro­
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Loan, for example, Vice President
Larry Conville says,6We appreciate
the way Travelers Express responded
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And from Ronald N. Linglass,
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savings association: T am confident
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© 1988 Travelers E xpress C o m p a n y , In c .
Federal Reserve Bank of St. Louis

Money in Motionsm
In Minnesota (612)591-3000 (800) 328-5678




Exec. V.P.

Vice Pres.

Independent Bankers Gather in Hawaii






ONOLULU beckons members of the Independent
Bankers Association of America to their 58th annual convention, to be held March 13-16 at the Sheraton-Waikiki Hotel.
IBAA President Thomas H. Olson, president, Lisco
State Bank, Lisco, Neb., will preside over the gather­
ing. He will be succeeded in that office by J.R. Nunn,
president, Citizens Bank, Tucumcari, N.M.
O.J. Tomson, president of Citizens National Bank,
Charles City, la., is the IBAA’s vice president, and will
succeed Mr. Nunn as president-elect.
Nominated as the new vice president of the IBAA is
Philip Vallandingham, president of the First State
Bank in Barboursville, W. Va. Slated to take office as
treasurer is Ed Sheldon, president of the National
Bank of Bremerton in Bremerton, Wash. He succeeds
Merle L. Graser, CEO, First National Bank, Venice,
Guest speakers scheduled to appear include Comp­
troller of the Currency Robert L. Clarke; FDIC Chair­
man L. William Seidman; Frank Mankiewicz, Wash­
ington political analyst and strategist and vice chairman of Hill Knowlton Public Affairs; Farm Credit Ad­
ministration Chairman Frank W. Naylor, Jr., and
futurist Jeffrey Hallett, associate publisher of The
Trend Report.
Registration begins on Sunday morning, March 13,
but no events are planned for that day. The convention
opens Monday morning at 8:00 with the Young Bank­
ers Breakfast, which will feature comedienne Jeanne

Federal Reserve Bank of St. Louis


Robertson and the University of Nebraska Scarlet and
Cream Singers.
On Monday, special interest sessions will be con­
ducted, including:
• Forecasting Community Banking in the 19908Consultant and professor Dr. Douglas Austin will em­
phasize products and services that will contribute to a
bank’s success.
• Community Bank Ownership and the Bank Hold­
ing Company—Attorneys William P. Johnson and
John J. Kendrick will give practical, unbiased answers
on permissible activities under bank holding company
• Establishing a Sales Culture in Your Bank—Mike
Morrow of Sheshunoff and Company will share in­
• Future of Small Banks—Session will be led by
IBAA Senior Bank Officers Seminar leader Dr. An­
thony M. Santomero of the Wharton School. He is Pro­
fessor of Finance at the University of Pennsylvania.
• Effective Management of People—John Schmitz,
staff management consultant, will emphasize that
delegating is one of your most important responsibili­
• Employee Benefit Plans—Dr. Robert L. Sellers,
chairman of Banking Consultants of America, will pre­
sent a session on Employee Stock Ownership Plans
(Turn to page 26, please)




Northwestern Banker, February, 1988




The future
for agriculture
ag banks


iV A \\V

A Northwestern Banker Survey

is the most likely scenario for agriculture in
the upper midwest in the next five years? Will

farm owners and operators recover completely from
the severe depression that befell the ag industry the
past five years? Where will community banks that
serve farmers fit into this picture for the next few
years? What will be the challenges—the opportunities
that await farmers and bankers in the immediate fu­
These important questions were placed before a se­
lected panel of nine experienced ag bankers recently by
the N o r t h w e s t e r n B a n k e r , and their thoughtful re­
sponses are shared with our readers in this exclusive
survey report. Each of the nine participants is identi­
fied in the accompanying box, listing the name of his
bank and his industry affiliations.
The survey questionnaire was made up of two parts,
with five questions in each part. The responses follow:

Part A
Q . 1 How do you assess the following for farm own­
ers the next 1-5 years? (Showing the number of votes
by the nine respondents in each area)
Long-Term Debt
A bout Same

Grain Prices
A bout Same

Farm Real Estate
A bout Same

Farmers’ Clout
D ecrease
A bout Same


Livestock Prices
D ecrease
A bout Same

In their comments, the bankers generally agree that
federal farm payments will decrease in the years
Mr. Adams: I feel long-term debt will increase
because when the secondary market gets passed
through Congress, and if the Farm Credit System gets
its funding, land prices will be stabilizing and there
will be a consolidation of the smaller farms. I think the
result will be that long-term debt will increase.
Grain prices will improve over the next 1-5 years.
belief is partially based on the assumption that
Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

the world moisture will be more restricted in several
areas around the world, which will cause lower grain 9
yield—creating a higher demand. Livestock prices are
very high at this time and, hopefully, they’ll remain
the same for the next 1-2 years, and then probably go
Farm real estate prices will increase, in my opinion, #
particularly if inflation heats up. We are seeing land
prices beginning to stabilize, and the consolidation of
the smaller units. I think there will be enough pressure
to increase real estate prices.
As far as farmer’s clout in the industry, it will re- #
main about the same, because even though the number
of farmers is decreasing annually, I think Congress
still has the imput from the food industry that it is
necessary to handle agriculture so that we can retain
the lowest prices of food, comparatively speaking, to •
other countries and to continue to use food surpluses.
Mr. Breeze: Scaling down of long-term debt will
begin to level off by 1990 but, until then, more debt
will be “wrung out” of agriculture. We cannot hope for ^
grain prices to improve, based on latest information;
therefore, our farm customers have to decrease input
costs, which is occurring. A large share of efficient pro­
ducers have made dramatic adjustments in their opera­
tions, such as selling land in an effort to reduce debt q
load. Our customers in the past years have sold over
5,400 acres to achieve better cash flow. This survival
strategy has helped us avoid farm bankruptcy and
farm loan losses—so far, none the past five years. In
addition, we have been growing at an 8-10 % rate per £
year in loans outstanding.
Mr. Burns: Eventually, the recent drop in the value
of the dollar should help improve the grain export pic­
ture. This will be reflected in higher grain prices, if the
export improvement develops. Land prices have re- ^
bounded from recent lows in our area and would be ex­
pected to follow the trend in grain prices.
Livestock feeding profits have been very high the
past 15 to 18 months, due to rising livestock prices and
cheap feed. Cattle numbers are down and prices for ®
fats may stay at the high end of the market range;

® however, much higher replacement costs, and the po­
tential for increased feeding costs, have reduced profit­
ability. Hog numbers should increase and the market
price decrease.
Mr. Gerhart: With respect to farmers’ clout, I under^ stand Iowa and Kansas may be losing one Congres­
sional seat each to California and Florida.
Mr. Goodman: Long-term debt should increase as
more young farmers will be buying farms. Grain prices
^ should increase, since less will be produced because of
present low prices. Livestock prices should remain the
same. There will be an increase in animals, but there
will be a greater demand. Real estate prices have bot­
tomed out and there should be a greater demand for
a real estate. Farmers will always have a certain amount
of clout as an industry.
Mr. Lindholm: Agriculture will remain one of our
most important industries. A viable agriculture is in
the best interest of ourselves as a nation and as indivi^ duals. Our current substantial restructuring of debt
also has resulted in a substantial restructuring of man­
agement perspective. Agriculture is building a solid
base for long-term performance. A gradual reduction of
government is possible over the long-term. Erratic
0 government, or drastic reduction of assistance, could
create a second wave of tragedy, and government as­
sistance must continue in the feed grain supports,
although gradual reduction may be both necessary and
appropriate over the long-term.
Mr. Peterson: The farm community has a new re­
spect for debt. Neither borrower nor lender will be will­
ing to commit to new debt without positive evidence of
repayment capacity and adequate equity in security to
assure that collection problems of the last few years
% will not be repeated.
Mr. Souder: The American public is getting tired of
hearing about the “downtrodden” farmer. Ag com­
modity marketing will gravitate toward more of a free
enterprise structure.
Mr. Tubbs: Restructuring present real estate loans
with reduced balances, plus conservative mood of pur­
chasers, cause real estate balances to decline. Grain
prices are going nowhere so long as world production
continues to increase; and, historically, cheap grain
# eventually means cheap livestock. Real estate prices
may increase, but not dramatically. Fewer farmers
suggests reduced political clout, but farmers who re­
main will be better organized and closer to a consensus
on the direction agriculture should be moving.

Q. 2 What do you anticipate will happen with federal
farm programs in the next five years?
Mr. Adams: My feeling is that even though Con# gress wishes to phase these out, they will still play a
very important part in the agricultural sector, and will
taper off only when agricultural prices start to in­
crease. I believe that the food shortages of the 1970’s
are going to reappear, which will in turn drive up farm
• prices and perhaps reduce federal subsidies to the agri­
cultural programs.
Mr. Breeze: The present Farm Security Act will ex­
pire in 1990. I anticipate a gradual phase-out to
smooth out this economic transition. Fewer funds will
® be available even this year and next year. I do feel we
will have a “Farm Program” to adjust production
Federal Reserve Bank of St. Louis

after 1990, but it will be less attractive to the farm pro­
Mr. Burns: If grain prices improve, the farm pro­
grams will become less of a factor in the cash flow pic­
ture and in total farm income. The 10 -year CPR pro­
gram and an improvement in export grain movement
should help the grain carryover problem. I would not
expect to see much change in the current programs,
and would feel that any changes made would be in the
direction of lowering program costs to the govern­
Mr. Gerhart: The farm programs will be phased
down somewhat.
Mr. Goodman: Federal farm programs have reached
an all-time high. I look for less farm aid in the next five
years. Farmers who remain farmers will become better
business managers and will be able to control produc­
tion and should not need as much farm aid.

Participants in Ag Survey
ARTICIPANTS in this special outlook survey for
agriculture and ag banks are listed below with
their title and name of bank, as well as banking indus­
try ag committees and activities with which they are
• Mel Adams, president and CEO, Adams Bank &
Trust ($116,800,000 assets), Adams, Nebr. Past
president, Nebraska Bankers Association; member
ABAIBAA Ag Task Force.
• David R. Breeze, senior vice president, First Trust
and Savings Bank ($120,000,000 assets), Taylorville,
111. Member Illinois Bankers Association ag commit­
tee and 1986 Ag Conference committee; lecturer at
IBA Ag Banking School; speaker at ag banker meet­
• Philip M. Burns, president, Farmers & Merchants
National Bank ($36,000,000 assets), West Point,
Nebr. Chairman, Nebraska Bankers Association
lending committee.
• H.L. Gerhart, Jr., president, First National Bank
($24,000,000 assets), Newman Grove, Nebr. Former
president Independent Bankers Association of
America and now member IBAA board; Member
ABA/IBAA Ag Task Force; former chairman IBAA
Ag Committee and now member of committee; cur­
rent director of Federal Reserve Bank of Kansas City.
• Robert B. Goodman, vice president, The State Bank
of Viroqua ($43,000,000 assets), Viroqua, Wis. Cur­
rent chairman Wisconsin Bankers Association Ag
Section and member of the committee since 1983.
• Paul E. Lindholm, president and CEO, Farmers &
Merchants State Bank ($24,000,000 assets), Clarkfield, Minn. Current chairman of executive commit­
tee of ABA Ag Bankers Division.
• Leslie W. Peterson, president and CEO, Farmers
State Bank ($22,000,000 assets), Trimont, Minn.
Past President Minnesota Bankers Association; for­
mer chairman MBA ag committee; former chairman
ABA Ag Bankers Division.
• Charles E. Souder, vice president and ag rep., First
Security Bank & Trust Co. ($106,000,000 assets),
Charles City, la. Current Chairman Iowa Bankers
Association Ag Committee.
• Edward L. Tubbs, chairman, Maquoketa State Bank
($100,000,000 assets), Maquoketa, la. Currently
Iowa superintendent of banking; former president
Iowa Bankers Association; founding committee
member and former chairman of MASI.
Northwestern Banker, February, 1988





Mr. Lindholm: A gradual reduction probably will
continue as in the current farm bill.
Mr. Peterson: The government will gradually reduce
the dollars committed to the support of agriculture.
This will result in reduced net income to midwest
farmers, unless the market gives it to them.
Mr. Souder: About the same for ’88-’90. Maybe less
money spent by the government to accomplish reduced
production; i.e., pay lower diversion and/or set-aside
payments, but keep some acres out of production. For
1991-92 there will hopefully be more emphasis on alter­
nating markets/uses of ag commodities, but spending
less on the farmer himself.
Mr. Tubbs: There will be more emphasis on conser­
vation reserve type programs and subsidies for ex­
ports. Total government outlay for farm programs
probably will be reduced, with increased emphasis on
free markets. The transition will be difficult, and num­
bers will continue to decline.


another adjustment to lower land costs in order to
bring a reasonable profit back into agricultural produc­
Mr. Peterson: Continued overcapacity to produce
with government sending false signals to the market­
place through farm programs.
Mr. Souder: Grain oversupply. Stubbornness of
farmers not to explore new avenues of marketing/cropping alternatives.
Mr. Tubbs: Subsidized foreign competition for world
markets and reduced direct payments from the Trea­
sury. For some, the debt crisis has not been resolved.

Q. 4 What will be agriculture’s biggest opportunity
in the next five years?
Mr. Adams: I believe continued efficiency in farming
and the need for more of America’s ag products on the
world markets will present opportunity. If we can get
the trade barriers broken to where we can compete, we
can get our distribution problem of agricultural pro­
ducts improved. Then, the opportunity for our young
farmers in the next five years will be very rewarding.
Mr. Breeze: Stronger domestic demand. Also, less
Q. 3 What will be agriculture’s biggests stumbling
farm debt to service and lower land prices will enable
block or problem in the next five years or more?
our producers to compete in the shrinking world mar­
Mr. Adams: The main stumbling block that comes to
mind is the tremendous surpluses we have on hand.
Mr. Burns: If crop prices improve, real estate would
Once these surpluses are depleted, then agricultural
seem to be an opportunity for those who have posi­
prices will come back, but these surpluses can’t be
tioned themselves properly to take advantage of the re­
dumped on the world market all at once. It is going to
duced real estate costs. Government programs which
be a problem of how to deplete the surpluses. There is
have removed acres from production, and a lower value
another possibility that weather changes around the
for the dollar in international trade, could set the stage
world will create lower yields in foreign countries,
for higher grain prices in two to three years.
which may relieve the problem.
Mr. Gerhart: Sell the public on eating more beef and
Mr. Breeze: 1. Profitability for the average-size,
pork via leaner cuts.
family-type producer, based on the ability to overpro­
Mr. Goodman: There will be fewer farmers and the
duce, and former import countries now being able to
ones who remain will have a greater share of the indus­
produce for themselves the food needed.
2 . The need to replace worn-out machinery for a try.
Mr. Lindholm: Adapting to new, higher production
large percentage of farmers, yet the lack of sufficient
techniques will benefit if the costs are kept under con­
cash flow to warrant the purchase.
Mr. Burns: Cash flow continues to dictate the suc­
Mr. Peterson: For the first time in years there is op­
cess of any farming operation. Uncertainty relative to
for new people to enter agriculture to replace
government programs will continue to be a concern in
an aging farm population. New entrants will need some
the immediate future, but could become less of a fac­
capital or outside backing. They will need to be excel­
tor, depending on grain prices as time passes.
lent managers of the financial and operational segMr. Gerhart: Low grain prices, due to world-wide
ments of the business to obtain control of a land base
over-supply of grain.
and obtain financing. With these qualifications, there
Mr. Goodman: CREDIT! Since this last recession,
should be opportunity in agriculture.
many banks and lending institutions took a great
amount of losses and some even failed. Credit policies
Mr. Souder: Diversify grain only operations to in­
are much stricter now and will remain so.
clude livestock. Investigating alternative crops/crop
Mr. Lindholm: It is possible that we will need
Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis










These 9
in the


Mr. Tubbs: Biotechnology and the opportunity to

9 produce better products more efficiently. Capital will

be available to those who qualify, at an interest rate
below prevailing rates of the last decade.

- Q . 5 How do you assess the opportunities for young
^persons to get started in farming in the next five
years? Will (or should) anything different have to be
devised or offered to get them started?
Mr. Adams: I feel that the opportunity for young
^ people to get started in farming will be the most diffiw cult of any time in the history of our country. This is
due to bankruptcy laws and the continued restrictions
on lenders and their reporting practices. The margins
that would be required in order to eliminate risk will
^m ake it more and more difficult for young people to ob­
tain credit. This is unfortunate, because it reduces the
competitiveness in agriculture. The only way people
will be able to enter the farming arena will be if they
have grown up on the farm and inherit major equities
^ t o continue. For this picture to be different, there will
have to be a way devised for lenders not to go through
practices we now face with our current legislation,
such as prenotification and Chapter 12 .
Mr. Breeze: The opportunities are good if a finan­
c i a l l y viable or economic unit can be assembled. The
aid of the Illinois Farm Development young farmer
program (lower interest rates) will help.
Mr. Burns: Although real estate costs are much
more reasonable, it remains very difficult for young
•persons to get started. However, “very difficult” is
better than “impossible,” which was the situation
faced six or seven years ago. We’re facing a situation
where it takes a family member of an established
farmer before a real opportunity exists to start farm­
i n g , due to sharing equipment, etc. I do not anticipate
much change.
Mr. Gerhart: It will be difficult, unless a partnership
arrangement is available with a relative or friend.
Mr. Goodman: I think young people should have the
•opportunities to get started in farming in the next five
years and this can happen. We need more help from the
government to obtain guaranteed loan programs. The
lending institutions are better equipped to service
these loans and, if done properly, the loss ratio should
• b e minimal.
Mr. Lindholm: Opportunity will increase for those
who have the benefit of family financial resources, the
ability to manage well, and the willingness to work
hard with some degree of sacrifice for future benefit.
•Special subsidy and extension of credit for beginning
farmers does not have a good record for long-term suc­
Federal Reserve Bank of St. Louis



cess. Entry into farming will need to be on a sound eco­
nomic basis, with some financial reserves for those
times when weather or markets will continue to cause
at least temporary setbacks.
Mr. Peterson: The opportunities should be available,
and the process would be greatly facilitated if the
FmHA would get back to financing beginning farmers
as it did in the past, and place less emphasis on being
the lender of last resort to marginal farmers.
Mr. Souder: Great opportunity if one has a lot of
money and no debt! Lowering bankruptcy exemptions
and repealing the double jeopardy law to allow banks
to maintain a security interest in the collateral they
loaned against would help.
Mr. Tubbs: The next five years will provide the best
opportunity in several decades for beginners. Machi­
nery costs are nominal, land costs are reasonable both
for renters and buyers. For those who recognize that a
farm must be run like a business, there is a future in

Part B
Q. 1 How do you assess the next 1-5 years for commu­
nity banks in the following areas? (Showing the num­
ber of votes by the nine respondents in each area)
Loan Losses
A bout Same


Ratio of Ag
To All Loans
A bout Same


D ecrease
A bout Same


Number of
Number of
Farm Customers
Community Banks*
A bout Same
A bout Same
* = one response unm arked th is category.

Mr. Adams: I believe loan losses will stay the same
for the next five years because it will take that long to
amortize the losses. As a matter of fact, the first or sec­
ond year the loan losses may increase before they start
to decrease.
The ratio of ag loans to other loans will decrease.
Banks will be looking for more diversification until the
risks associated with ag lending are reduced.
Capital accounts will be about the same or decrease.
I am not looking for them to increase in the agricul­
tural sector because I believe ag banks still have loans
to charge off for 3-5 years.
Northwestern Banker, February, 1988


“A more sophisticated farm loan officer will evolve to serve
the more demanding business-oriented farm producer.”
— David Breeze

The number of community banks will decrease
because so many non-bank institutions are getting into
the banking field and will force consolidation of the
small community banks into larger clusters.
By the same token, I think the farm customers will
decrease because the efficiency on smaller farms just
cannot compete with the larger farms.
Mr. Breeze: A real ‘wringing out’ of excessive debt in
agriculture is taking place, which is good for the indivi­
dual borrower, but reduces by some $25 billion the
amount outstanding in farm credit.
A more sophisticated farm loan officer will evolve to
serve the more demanding business-oriented farm pro­
The number of credit-worthy farm loan customers
will decrease. Also, a Bimodel structure in the size of
the farm business is developing.
Mr. Gerhart: Many bad loans have been charged off.
Lenders and borrowers will be cautious about new
debt. Many ag banks have little other market available
than ag loans. Earnings should improve slightly, but
many banks are still pushed to service holding com­
pany debt. The numbers of banks will continue to de­
crease due to mergers and, as older farmers retire,
fewer new farmers will be able to start.
Mr. Goodman: Loan losses should decrease because
of tighter credit. The ratio of ag loans to others should
remain about the same; probably larger loans, but
fewer of them. There will be more capital invested in
farming in the next five years. Community bank num­
bers will decrease because of bank mergers and acquisi­
tions. Also, farm customers will decrease in number
and there will be fewer farms, but they will be larger.
Mr. Lindholm: The trend toward fewer people in­
volved in agriculture will continue. Consolidation of
banks will continue, and farmers will identify those
community banks that have both ability and desire to
service agriculture.
Mr. Peterson: Farm numbers will continue to de­
cline, as will the credit outstanding to agriculture.
There will be a shrinking market for the services banks
offer to agriculture and the economies of scale will dic­
tate the consolidation of rural banks to attain neces­
sary levels of profitability.
Mr. Souder: Country banks are starting to get well
but they also have to offer competitive services, which
means they may become part of a large holding com­
pany. This, in essence, takes the “local image” out of
the bank when a small bank can no longer remain inde­
Mr. Tubbs: Consolidation and mergers will continue
to reduce the number of banks, but the number of bank
offices or service outlets may not change much. The
trend toward fewer farmers that began 50 years or
more ago won’t stop, either. Farm credit lines will be
fewer and larger. The general level of management for
both farmers and banks will increase. Well managed
banks will still be profitable, and rural banks will still

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

make farm loans. In most cases, it’s the only game in

Q. 2 How do you assess competition in the next 1-5
years from the following—regional and/or national
banks, other financial institutions, Farm Credit Sys­
Mr. Adams: Regional and/or national banks will cer­
tainly become a larger factor in competition, along
with non-bank banks.
As far as other institutions are concerned, it is
strictly my opinion that it is in the hands of the f
government and how they treat their bail-out; such as
refunding their losses and giving them laws to shore
up these institutions.
The Farm Credit System could be a major factor,
depending on what powers it receives other than its re- q
cent bail-out to fund its losses. It will have to go
through a major reorganization, and many of its func­
tions will become redundant to services being offered
in the private sector.
Mr. Breeze: Regional banks, with some exceptions, £
will not be a competitive force. Credit unions will play
a more important role, both in receiving deposits and
in extending farm credit. The FCS will be positioning
itself for greater efficiency and become more competi­
tive. However, there are many “scars” left by the Sys- #
tern from the standpoint of the agricultural borrower.
Mr. Burns: Regional/national banks are not a major
competive factor for rural banks. Other financial insti­
tutions provide more competition for deposits. Not
just other banks and thrifts, but easier access for #
customers to money funds, all of which will mean
higher costs for deposits.
The FCS will be a major competitor for banks on
agricultural loans. Borrowers now deal with the same
loan officer for long-term needs through the Federal #
Land Bank and for their short-term borrowing needs
through the PC A. The PC A will probably offer lower
loan rates than many banks feel they can offer.
Mr. Gerhart: S&Ls continue to offer higher deposit
rates even though they are losing money, because they •
are loosely regulated. The FCS will become more com­
petitive for loans because of huge government subsi­
dies. It is already lending at an average of 2.8% below
the cost of funds.
Mr. Goodman: There will always be competition •
with other regional banks, but I do not expect it to
change in the next five years. These other financial in­
stitutions will be the toughest competitors, such as
Sears. They are not regulated like banks and can
operate with a great deal of latitude. With all of its pre- ®
sent problems, the Farm Credit System will be the
least competitive.
Mr. Lindholm: Our experience in Minnesota is that
the regional/national bank type is not interested in
serving agriculture in the small communities. Perhaps ®
the competition from other financial institutions will


be much tougher than the competition for loans in the
small communities.
Leadership in the FCS is a critical factor. It will take
many years for the Farm Credit System to establish
credibility after the disasters caused by encourage­
ment of unrestricted lending and the heavy debt taken
on by farm customers.
Mr. Peterson: Regional/national banks will seek the
large farm operations with sufficient credit needs and
necessary management expertise to justify service of
'the loan from a distance. Other financial institutions
will not aggressively seek farm credits except for farm
real estate, especially if a secondary market becomes
available. The FCS will play a reduced role until it
resolves its own internal problems. With restructuring
'and government aid, they could become extremely
Mr. Souder: Regional banks are not too big a prob­
lem if a country bank can keep its image localized (if
the main customer base doesn’t know it’s owned by a
>big bank). There could be real competition from Sears
and others like them. People see them as being “all
right up to now’’ so why not use them. The FCS is no
problem. Many people have lost a lot of faith in the
regulatory/managerial ability of FCS.
> Mr. Tubbs: Regional banks are better equipped than
national banks to handle the larger ag and ag business
credit lines that are bankable. Our biggest challenge
comes from other financial institutions. Unless the
attitude of legislators and regulators changes so we
*can compete with the same rules, they are a threat.
Competition from the Farm Credit System depends
on how it is restructured. It will definitely be a factor
to contend with. Subsidized competitors always are a

“Smaller banks margins will be so
narrow that they will have to offer
• additional products such as insurance,
securities, real estate brokering.”
— Mel Adams





Q. 3 Where and how can community banks develop
new business or recover former customers to grow and
remain competitive?
Mr. Adams: The number one thing is the expansion
of bank products. In my opinion, particularly the
smaller banks’ margins will be so narrow that they will
have to offer additional products such as insurance,
securities, and real estate brokering. Otherwide, all of
the community banks will have a difficult time to continue in business, and will either become a branch or
non-existent in the next five years.
Mr. Breeze: A. Establish a Sales Marketing Plan. B.
Establish Farm and Firm Visits by officers with a
planned sales presentation.
Mr. Burns: Offer more services and offer them bet­
ter. Banks need fewer restrictions in offering insur­
ance, real estate and other financial services. If banks
are granted the authority to offer these new services, it
will benefit the banks and bank customers alike.
Mr. Gerhart: The Secondary Market for farm real
estate loans could: 1. Develop some new business. 2 .
Federal Reserve Bank of St. Louis

Help agricultural banks retain their present produc­
tion loan borrowers.
Mr. Goodman: Congress must give banks more tools
to compete. We must have other products, such as
security sales, that we can market.
Mr. Lindholm: Farmers need a lender who really
cares about them and can provide knowledgeable and
substantial financial assistance. A community bank
with a long-term knowledgeable commitment to agri-

(biggest threat is) “The population
decline in rural towns and reduced
numbers of farmers and people who
service agriculture.”
— Edward L. Tubbs

culture will have good success and be sought out by
farmers needing such assistance. Obtaining funds to
service such an enterprise will be difficult and will
create a new environment for community bankers.
Some will withdraw from servicing agriculture, and
this will lend opportunity to banks which have a stra­
tegy for success in rural communities.
Mr. Peterson: With a shrinking farm population and
rural business community, the opportunity to grow is
greatly reduced. There will be opportunity for some
rural banks in expanded services to present customers,
and in working for business development within their
Mr. Souder: Use flexibility-enhancing alternatives
like MASI. Cooperate with other independents for
competitor services, credit cards, etc. Hire good talent
who understand personal relationships.
Mr. Tubbs: Be a leader in local industrial and retail
development. This automatically creates new business.
The Farm Credit System is vulnerable right now. Go
after the farmers with management ability. Identify
your strengths and specialize. Marketing is increasing­
ly important. Don’t be bashful!

Q. 4 What is the biggest threat to community banks
in the next 1-5 years?
Mr. Adams: The biggest threat is the expansion of
the Farm Credit System (the non-bank bank powers),
without our ability to compete with similar products.
This is a difficult time for banks, because many banks
believe that commerce and banking have to be
separated to some degree, but it will be a real challenge
to become imaginative.
Mr. Breeze: Lethargy — waiting for prospective cus­
tomers to come into the bank...and this might not hap­
pen! Banking is going through a transition.
Mr. Burns: Our single biggest threat might be the
FCS. If they are put in a position of having a competi­
tive advantage by being able to offer loans at more at­
tractive rates than banks, it will be difficult for many
community banks to survive on a long-term basis.
Mr. Gerhart: A depressed farm economy. A govern­
ment-subsidized Farm Credit System competing for
loans. A government-subsidized thrift industry
(FSLIC bailout). Aggressive mutual fund industry.
Mr. Goodman: The present laws that limit banks
from competing with other lending institutions.
Mr. Lindholm: If the people in the community send
Northwestern Banker, February, 1988

their money out of the community to financial institu­
tions where the funds are not used for agriculture or
commerce within the community itself.
Mr. Peterson: There are two threats: First, the abili­
ty to remain profitable servicing a shrinking economy
in many rural communities. Second, another down­
turn in the agricultural economy that will cause a se­
cond wave of debt restructuring and loan losses.
Mr. Souder: Not expressing an honest desire an d ef­
fort to work with agricultural lending and the farming
way of life. Not keeping the customer as the top priori­
tyMr. Tubbs: The population decline in rural towns
and reduced numbers of farmers and people who ser­
vice agriculture. Big farmers can easily by-pass local
suppliers an d banks. When people leave, service indus­
tries also suffer. Factors beyond our control (world and
national economy, inflation, national debt, etc.) will be
a constant threat.

economy have made it necessary for all bankers to
sharpen their lending skills. Hopefully, the worst of
the ag problems are behind us, and bank earnings
should improve as fewer funds are allocated to loan
loss reserves. Through these tough times, banks have
learned to cut costs and overhead, and will operate
more efficiently in the future.
Mr. Gerhart: A Secondary Market for farm real
estate loans.
Mr. Goodman: Mergers and acquisitions, giving the
community banks larger lending capacity to cover a
greater area.
Mr. Lindholm: Stockholders and managers of com­
munity banks who have a vision and a realistic
strategy of success for their bank and their com­
Mr. Peterson: Following the crisis of the past four
years, our customer base has a new respect for debt
and leverage. The recognition that management is a
key to success will bring a different attitude toward
growth and expansion on which community banks may
be able to capitalize. Bankers also have been re-edu­
cated in the past four years and will be forced to be
more aggressive in community development to remain
Mr. Souder: Personal relationships—going about
business believing an d practicing the approach that
“what makes you a better customer will make us a bet­
ter bank.”
Mr. Tubbs: Their down-home roots. They still know
the people best, but customers won’t stay unless the
local bank is competitive.

Q. 5 What will be the biggest gain or positive factor
for community banks in the next 1-5 years?
Mr. Adams: In the present environment, the biggest
positive factor is its service. Regardless of what size of
bank, personal service and personal banking customer
service will remain one of the biggest factors for com­
munity banks in the next five years.
Mr. Breeze: 1 . Positive—identify the needed changes
to take place in the individual bank by management,
and 2 . Mergers will add to greater efficiency for the
distribution of a farm credit delivery system.
Mr. Burns: The recent problems in the agricultural

Don't go into
the markets ^




✓ Tzgm

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Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis









• Los Angeles Will Host

ABA 1988 Community Bankers Conference
EARLY 1,000 community bank executives are ex­
pected to take part in the American Bankers As­
sociation 1988 National Conference for Community


Bankers, February 25-28, at the Century Plaza Hotel
in Century City, home of Universal Studios and close
to Beverly Hills and Hollywood.
Sponsor of the annual conference is the ABA Com­
munity Bankers Council, whose chairman is John A.
Berg, president of The Bank Wayzata in Wayzata,



Mr. Berg said general session speakers will include
% Comptroller of the Currency Robert Clarke; ABA Pres­

ident-Elect Thomas Rideout, vice chairman, First
Union Corporation, Charlotte, N.C., and three other
guest speakers. Mr. Berg noted that a conference first
will be Sunday morning’s Fellowship Breakfast pro# gram with John Amatt, manager of Canada’s first
Mount Everest expedition, describing “Climbing Your
Own Everest.’’
Thursday, Feb. 25
8:00 Golf Tourney (buses depart 7:00 a.m.)
1:00 Registration. Exhibits Open
6:30 Opening Reception.
Friday, Feb. 26
7:00 Breakfast with Exhibitors
8:00 General Session
“Managing Change: Beyond the Rhetoric”—
Don Harrison, senior consultant, O.D. Re­
sources, Inc., Atlanta, Ga.
9:30 Coffee with Exhibitors
10:00 Workshops—Series I
11:15 Workshops (repeat)
12:30 Luncheon—“How to Improve Service Quali­
ty ’’—Dr. Leonard Berry, Foley’s Federated
Professor of Retailing and Marketing Studies,
Texas A&M University, College Station, Tex.
2:30 Peer Groups
4:00 Wine and Cheese with Exhibitors


Saturday, Feb. 27
7:00 Breakfast with Exhibitors
8:00 General Session
Federal Reserve Bank of St. Louis

“A Word from Washington’’—Robert Clarke,
Comptroller of the Currency
“The Future of Banking’’—Thomas Rideout,
President-Elect ABA
9:30 Coffee with Exhibitors
10:00 Workshops—Series II
11:15 Reception in Exhibit Hall
12:00 Luncheon—“Ahead of the Game: Dealing with
Deregulation’’—Jack Jackson, President, Jack
Jackson and Associates, Inc., Fort Worth,
1:45 Workshops (repeat)
3:00 Peer Groups
8:30 After-Dinner Dance
Sunday, Feb. 28
7:30 Early Bird General Session
“ High Performance Banking ’88 ’’—Alex
Sheshunoff, president, Sheshunoff & Com­
pany, Inc., Austin, Tex.
9:00 Fellowship Breakfast Program—“Climbing
Your Own Everest’’—John Amatt, President,
One Step Beyond, Calgary, Alberta.
Series I - Friday
Strategic Planning for Community Bankers—Mark
Mandula, Senior Vice President, Douglas Austin
and Associates, Inc.
Creative Portfolio Strategies—Larry Stephens, Princi­
pal, Bill Bayuk, Senior Vice President, Griffin,
Kubik, Stephens & Thompson, Inc.
Marketing Issues and Opportunities—Paul Simoff,
Vice President, Douglas Austin and Associates, Inc.
Auditing the Fee Income Pricing Program of your
Community Bank—Phillip White, Ph.D., Associate
Professor, University of Colorado.
Understanding the Regulatory Process—Michael Mancusi, Executive Vice President, The Secura Group.
ALM: Interest Rate Risk—Cliff Myers, President and
CEO, Sendero Corporation.
Series II - Saturday
Internal Loan Review and the Loan Loss Reserve—
Michael Mancusi, Executive Vice President, The
Secura Group.
15 Ways to Make More Money—Harry Miller, Presi­
dent, Profit Technology Corporation.
Guidelines for Directors’ Exams—William H. Bran­
don, Jr., President and CEO, First National Bank
of Phillips County, and Forrest L. Ward, National
Tax Director, Arthur Young & Company, Inc.
Incentive Compensation: Cure-all or Headache?—
Peter Faletti and Maureen Harty, Principals, Faletti
and Associates, Inc.
Developing Market Plans—Phillip White, Ph.D., Asso­
ciate Professor, University of Colorado.
Recent Developments in Asset Liability Manage­
ment—George K. Darling, President, George K.
Darling & Associates.
Northwestern Banker, February, 1988


The board of directors has



Special R e ad in g for
D irectors, M a n a g em en t

Written especially for
T he N o rth w estern B an k er

President and CEO
Austin Associates
Toledo, Ohio
Department of Finance
College of Business Administration
The University of Toledo
Toledo, Ohio

OW THAT 1987 is behind us, for better or worse
financially at your bank/bank holding company,
your management and board of directors are turning to
a better 1988. The year 1987 may have been good for
your bank/bank holding company or, as it was for ap­
proximately 33% of all banks in 1986 west of the Mis­
sissippi, it could have been an unprofitable year.
Either way, you certainly hope that 1988 will be a bet­
ter year financially for your operation.
However, before you start proceeding into 1988
wearing your “rose-tinted glasses,” let us review your
responsibilities as a board of directors to the accuracy
and disclosure of your 1987 financial statements.
Regulatory Financial Statements
There are several constituencies for whom you must
prepare financial statements and, as such, they must
be accurately prepared to fully disclose your opera­
tions in 1987. If you bend the truth, it may end up
boomeranging back on you in a court of law sometime
in the near future; especially if future shareholders buy
your securities based upon the “accuracy” of your
1987 financial statements.
The first constituency is (or are) the state and/or fed­
eral regulatory agencies to which you must report. As
a national commercial bank, you must report your
year-end financial numbers to the Office of the Comp­
troller of the Currency. If you are a state chartered
bank, you must report to your state banking depart­
ment as well as to either the F.D.I.C. or the Federal
Reserve System. If you are a bank holding company,
you may have to report to the bank regulator as well as

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

the Federal Reserve, which is your bank holding com­
pany supervisor. There is no lack of state and/or fed­
eral regulatory agencies to whom you have to report.
Your first responsibility is to make sure the num­
bers add. This may sound ludicrous, but it is not. Ap­
proximately 10 years ago, one of the F.D.I.C.’s re­
gional directors told me he had to send back approxi­
mately 70% of all Call Reports that had been turned in­
to the region because the assets did not equal the lia­
bilities plus stockholder’s equity. This means simply
that the balance sheet did not balance. Furthermore,
someone should make sure that your income statement
is prepared according to GAAP and that it fully dis­
closes all income received and expenses incurred, in­
cluding the nasty question of all — the accrual adjust­
After making sure that the balance sheet balances,
and the income statement portrays factually and accu­
rately how you did in 1987, have it double-checked by
someone who did not prepare it. The first checkpoint is
to compare your December 31, 1987 Call Report with
the September 30, 1987, June 30, 1987, March 31,
1987, and December 31, 1986 Call Reports to see if
there are any major variations which cannot be ex­
plained by inflows and outflows from the bank/bank
holding company. Secondly, take your year-end 1987
income statement and compare it to the June 30, 1987 1
income statement, as well as the income statement for
1986, and check for the same types of variations which
may indicate preparation inaccuracies, rather than sig­
nificant changes in your operations.
I am not a C.P.A., although I carry a C.F.A. designa­
tion, and I believe that most banks should utilize exter­
nal auditors in the preparation of their financial state­
ments for submission to the regulatory agencies and
others. Even if you do not use your outside C.P.A. firm
to prepare the financial statements, you should double­
check all of the financial statement numbers before
they are submitted to the regulatory agencies. In 1986,
it was estimated that over 25% of all financial state­
ments submitted to the banking supervisory agencies (
had to be amended. Amendments were mostly because
of adjustments made by the accountants after the end
of the year which significantly changed the perfor­
mance during the year end and, thus, not only affected
the income statements, but also the balance sheet. If^
your accountants come in March or April and find the






problems, then what you have submitted to the regula­
tory agencies at the end of January, 1988 will be wrong
and if published or used for other significant purposes,
such as the sale of securities, mergers or acquisitions,
you can easily be in a potential liability position.
One area of the preparation of the financial state­
ments for the regulatory agencies that is not normally
carried out to the fullest degree is the preparation of all
statements in accordance to the instructions. We ex­
amine a large number of financial statements each year
and find obvious preparation errors, not only on the
basic call report and income statement, but through­
out the subsidiaries schedules. This is another reason
why someone who is not in charge of preparation
should review and audit the financial statements prior
to their submission to the state and/or federal regula­
tory agencies.

Accuracy is a Sign of Ability
You all know there is a CAMEL system out there.
• This CAMEL system has as its hump, the initial M for
“Management.” Management includes not only the
competency of the senior management but also the
supervisory quality of the board of directors. The fail­
ure to accurately portray and fully disclose the finan• cial condition of your bank/bank holding company on a
regular basis to the state and/or federal regulatory
agencies will highlight to the agencies the inability of
your bank to operate in a modern, competent, manner.
You will not get any “brownie points” if your financial
® statements are prepared properly, but you sure can get
into the doghouse if your financial statements are pre­
pared inaccurately or are not fully disclosed and, es­
pecially, if this occurs on a regular basis over time.
Furthermore, if your financial statements are pre® pared inaccurately on a regular basis, then this should
give you more than just a good clue as to the compe­
tency of your controller/cashier. A commercial bank/
bank holding company is a financial intermediary and,
if it should do anything properly, it should be able to
® balance its books and prepare its financial statements
in accordance with generally accepted accounting prin­
ciples. If the individuals in charge of preparing the fi­
nancial statements cannot get them right, and I am
not talking about a simple error at just one time, but a
9 regular stream of inaccurately prepared financial state­
ments, then you should replace your controller/cashier
with someone who has a good command of modern
banking accounting and audit practice.
Shareholder Disclosure
Directors and officers often ask me how much they
should disclose to their shareholders. My answer is
that the shareholders are the owners of the firm and
they are entitled to know how the firm has done and
• that includes the bad news as well as the good news.
Keep in mind that if you don’t tell them the bad news,
and they find it out, you are out of a job. In fact, you
may be more than out of a job — you might be in deep
trouble from a legal standpoint.
The standards vary for shareholders disclosure from
state to state. In Ohio until recent years, state char­
tered commercial banks only had to disclose a con­
densed balance sheet to their shareholders. They only
had to publish a condensed balance sheet, but even
• worse, they did not even have to report an income
statement to their own shareholders. I have never
Federal Reserve Bank of St. Louis

figured out why a commercial bank should not disclose
to its shareholders as much about their financial condi­
tion and performance as their shareholders deserve to
know. The shareholders are the owners, the directors
are the supervisors of the banking organization on
behalf of the shareholders. If the news is bad, the
shareholders should hear about it early, rather than
late and, if the information supplied to the share­
holders is factually inaccurate, not completely dis-

“The standards vary for share­
holders disclosure from state to
closed, or misrepresented by the officers, staff and
board of directors of the banks, then all of the em­
ployees and especially the board of directors are open
to liability from shareholders suits. If the news is bad,
you better tell them now rather than later. If the news
is good, why not tell them all the good news. Finally,
there are very few businesses, whether banks or bank
holding companies or funeral homes, that have a finan­
cial condition and performance picture that is com­
pletely good or bad. Therefore, the financial state­
ments that you give your shareholders can portray
exactly where you have been, where you are now, and,
hopefully, where you plan to go. You can also indicate
through the rhetoric that goes with the financial state­
ments what you believe the future will entail.
Assuming you wish to disclose meaningful financial
information to your shareholders, here is the minimum
I would suggest you disclose:
1. Balance Sheets. These would be comparable balance
sheets for at least a three-year period of time, indi­
cating trends and examinations of data over a three
year time sequence;
2. Income Statements. At least two years of income
statements reflecting the operations of the organiza­
3. Statement of Change in Stockholder’s Equity. This
statement indicates to your shareholders how the
shareholder equity has changed over the period of
time analyzed in the financial statements;
4. Statement of Change in Financial Position. This
fancy statement simply means sources and uses of
funds for your banking organization indicated
where it receives its resources and how it uses them
during the period of time analyzed;
5. Footnotes. Some organizations with fewer than 500
shareholders do not issue financial statements
under generally accepted auditing principles
(GAAP). If the statements are prepared in accor­
dance with GAAP, then you must issue notes to the
financial statements. If you do not prepare your fi­
nancial statements according to GAAP, then you
do not have to disclose notes to the financial state­
ments but, at the same time, your financial
statements may be by their very nature misleading.
If you send your shareholders only a single balance
sheet and single income statement, covering the period
under analysis and no comparables, then how can your
shareholders know how you have done this year in rela­
tion to last year? Please do not assume that they have
kept last year’s report. Most of your shareholders canNorthwestern Banker, February, 1988


“If, for som e reason, you have not disclosed properly, it can *
impact upon your ability to merge or acquire other
institutions in the future.”
not even read the report you have just sent them. As
you are quite aware, most of your shareholders are not
brilliant accountants and/or financial advisors. You
need to assist them by telling them exactly how you
have done in your annual report and you also need to
assist them in comparing how you have done this year
with last year (or several years ago) by including such
data within the report.
If your organization has more than 500 share­
holders, you report to your banking regulatory agency
under a form F-2 , and are subject to S.E.C. type dis­
closure rules as promulgated by your federal regula­
tory agency; or, if you are a one-bank holding company
or a multi-bank holding company subject to S.E.C. reg­
istration and disclosure standards, your financial
statements may have to be more fully disclosed than
what is mentioned above. For you as directors, make
sure that your legal counsel is on top of what your dis­
closures are. If, for some reason you have not disclosed
properly, it can impact upon your ability to merge or
acquire other institutions in the future, and may be a
violation of the Securities Laws p e r se. Violations of
the Securities Laws cannot be cured easily. The best
way to stop a problem with the Securities Laws is to
make sure you comply properly the first time.
Problem Areas for Disclosure
If your financial condition is adequate, and let’s say
you are a CAMEL 1 or CAMEL 2 and you are not
under any Administrative Orders from your state
and/or federal regulatory agencies, you probably have
nothing additional that you should disclose at the end
of the year. On the other hand, if you are a “problem
bank” and have an Administrative Order in place, you
may have to disclose such order. There are probably as
many interpretations of when to disclose Administra­
tive Orders as there are attorneys in the United States.
Since you have to have faith in someone, contact your
bank legal counsel and rely on his or her opinion as to
whether you have to disclose an Administrative Order.
• If you are under a Memorandum of Understand­
ing, that may be less onerous than under a Cease and
Desist Order.
• If you have been assessed civil money penalties,
even the most liberal lawyer will probably tell you that
you will have to disclose this to your shareholders.
• If you have requested capital forebearance, you
have received same, this may have to be disclosed.
• If you have fired your president or had a major em­
bezzlement, fraud, or misappropriation of funds, you
may have to disclose this to your shareholders.
• If you are an S.E.C. registered bank holding com­
pany, reporting under the Securities and Exchange
Act of 1934, a “material” change in your operations
will force a disclosure on an 8-K Form. This means that
the firing of the president, the uncovering of a
“material” embezzlement, fraud, or other violation of
law, or the signing of an Administrative Order such as
a Cease and Desist Order, or being assessed civil

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

money penalties, may be considered as material.
Your legal counsel should determine whether you
should disclose this, but you must rely on your legal ^
counsel and you should have his or her opinion in writ­
ing so that if you end up being wrong, you will know
where to go to look for legal malpractice liability cover­
age. My suggestion to you is that if you think there is
anything wrong or there is really a problem with your 0
institution, then you probably should disclose it rather
than have someone find out the hard way. If they find
out, it can do more damage to your organization than if
you let them know about it ahead of time. Sometimes
the best defense is a good offense in this regard.
Media Disclosure
In addition to disclosing your financial performance
to your own shareholders, the regulatory authorities
and, in some cases, the securities authorities, you have
the opportunity to disclose the information through *
the mass media to the general public. The information
they should receive is essentially what you give your
shareholders, but you have to work harder at dissemi­
nating this information. You, as directors of a bank,
should understand that most reporters do not know’
very much about finance, since most of them came out
of programs in communications and journalism. If
they knew what an asset was or a liability was, they
would be in banking or accounting, not journalism.
Phrased alternatively, if you don’t think you know*
much about banking and finance, you should take a
look at the average reporter. You should make the
assumption that the reporters for your local news­
paper, radtio, and/or television know absolutely noth­
ing about a balance sheet and income statement or*
anything about banking. If you make that assumption,
rather than assuming that they do know something
about finance, accounting and banking, then you will
have the right posture for placing your financial state-,
ments in the most favorable light for your organiza­
Utilize your annual reports as a media public rela­
tions opportunity and sit down with the reporters and
explain exactly what went on, what is good and what is^
bad, and what you plan to do for the next fiscal period.
Furthermore, bring them all together and answer all of
their questions honestly and fairly, but control the en­
tire situation by outlining exactly what took place in
your financial institution the previous year.
You should develop a public relations posture for
your organization and utilize the financial statement
disclosure announcement as the opportunity to con­
vert the press over to your side. They can be, and often
are, enemies of your banking institution, so when you^
have the opportunity to work with them rather than
against them, contact these mass media personnel and
work with them so they can do a story which is favor­
able to you and other financial institutions in the area.
This is especially true where your organization is doing|
quite well among a group of other banks or savings and



“You are the supervisors of the
institution on behalf of the share­


loan associations whose financial condition is relative­
ly weak and those financial performance has been dis­
mal. There is a tendency for reporters to slouch around
in the world of yellow journalism and to paint all finan­
cial institutions with the same bad brush. If you have
0 done a good job in your organization, flaunt it and
make sure that the newspaper reporters, radio and tele­
vision personnel, and the other mass media reporters
understand that you have done an outstanding job in
relation to others. You can never tell when you will
• need to raise additional securities, or when you will
need some help from these reporters when things are
not going well.
Who Controls Whom?
The last area to discuss before we close this com• mentary is who is in charge of making sure all the dis­
closures are accurate, fully disclosed, honestly por­
trayed, and not misrepresented to your shareholders
and the public.
C ongratulations, board o f directors, you win again !





You are the supervisors of the banking institution
on behalf of the shareholders. You are responsible that
all of the financial statements of your organization are
prepared accurately, fully disclosed, honestly por­
trayed, and do not misrepresent the performance and
condition of your institution. It does not make a dif­
ference whether you are a bank or bank holding com­
pany, or if you are registered with the S.E.C. or not.
There is no way to pass the buck beyond you to anyone
else. If your financial statements are not correct, you
are at fault.
Now that you know you are in the barrel, how can
you possibly get enough support to peek over the top?
You should designate your audit committee of the
board of directors as the official watchdogs of the fi­

elected vice chairman. Continuing as
a director, he will also function as a
liaison officer with the parent com­
pany, Inter Innovation AB, and be
involved in strategic and long-range
planning to assure continued rapid
tions for debt and equity financings, growth for the company.
as well as providing financial advi­
The former president, K. Watts,
sory services to clients nationwide.
who retired at the end of 1987, was
J. Parker Lapp has been named made an honorary member of the
president of the Equipment Finance board.
Group, also based in Chicago. His
Mr. Samuelsson currently is
group offers equipment financing president of Ventronic, Inc., a Cali­
under vendor programs, financing fornia high-tech company. He
service for leasing companies and served previously as president of
other finance companies, and financ­ Xerox-Sweden, a firm which em­
ing for companies in the broadcast ploys about 1,100 persons and has
and other media industries.
annual sales of approximately $100
Inter Innovation LeFebure, Cedar million. A resident of the United
Rapids, la.: Arne E. Samuelsson has States for the past eight years, Mr.
been appointed president and will Samuelsson has held various man­
agement posts with Xerox and IBM
assume office April 1.
In a related move, Executive Vice in both Europe and the United
President George X. Miller was States.

ROMOTIONS and other an­
nouncements have been made
® by the following firms:
Farmers Mutual Hail Insurance
Company, Des Moines: Donald R.
Duwelius has been promoted to se^ nior vice president-Crop Hail De­
partment and appointed a director
of the company, effective January 1.
Mr. Duwelius, who joiiied the firm in
1954, was an assistant vice presi0 dent in charge of crop hail office
operations and underwriting.
Heller Financial, Inc., Chicago:
Mitchell F. Vernick has been named
president of the Capital Markets
# Group, based at Chicago headquar­
ters. His group arranges syndica­
Federal Reserve Bank of St. Louis

nancial statements. They should work in close correla­
tion with your outside C.P.A. firm, as well as your
internal controller/cashier in the preparation and dis­
semination of all financial statements to the appro­
priate regulatory and securities agencies. Your audit
committee should be comfortable with the condition of
all of the financial statements, their scope, factual ac­
curacy, and their honest portrayal of your condition
and performance.
External auditors should report directly to your
audit committee of the board of directors regarding
financial statements and any problems thereon.
Your internal controller/cashier should have the abil­
ity to come to the audit committee in case there are
any problems in the development of and/or statistics
within the financial statements.
Finally, your internal auditor should have direct ac­
cess to your audit committee in case he or she finds
problems with the financial statements as prepared by
the internal accounting staff.
Before you disseminate the financial statements to
the state and federal regulatory agencies, your share­
holders, the general public, and the state and/or federal
securities agencies, they should be reviewed by the
audit committee on behalf of the board of directors and
should be signed off by your internal staff as well as
the external auditors. It does not hurt to spend an ex­
tra day or two to make sure that your financial state­
ments are proper before they are disseminated. It is
very hard to get toothpaste back into a tube. It is
easier to keep it in the tube in the first place and not
try to get it out until the next day. You as a board of
directors should act as the final hurdle before the finan­
cial statements are released. You should not delegate
this responsibility to the management and not be re­
sponsible for the financial statements which are your
direct responsibility. If you do not have the time or
don’t understand the financial statements, then get
professional assistance to help you determine the
quality of such financial statements.


Northwestern Banker, February, 1988


“ Well done,
Tom Olson!” •

HEN Thomas H. Olson was installed as presi­
dent of the Independent Bankers Association of
America at the annual convention in Orlando last
April, we said of Tom, “ Independent, in Tom’s case,
means being self-reliant in any game where equality for
all is the rule, but also means being genuinely emphathetic and understanding of others’ needs, while giving
complete cooperation to achieve those goals that re­
quire working together for the common good.’’
Events of the past year have proved that the confi­
dence expressed by that statement in a long-time
friend was not misplaced. That previous article re­
ferred also to the “old-fashioned’’ values instilled in
Tom and other family members by his parents, Harold
and Helen Olson. Harold was president of Lisco State
Bank after purchasing it in 1934, then served as chair­
man in more recent years until his death a couple of
years ago. Tom Olson joined his father at Lisco State
Bank in Lisco, Neb., in the western part of the state in
1960 and has served as its president since 1971.
The earlier article referred to also quoted Tom as he
looked ahead to his year as IBAA president. He
stated, “We have two top priorities in IBAA today.
The first is developing a secondary market for place­
ment of real estate ag loans. The other, equally impor­
tant, is closing the non-bank bank loophole which is
allowing other types of financial enterprises to bleed
off the lifeblood of our small banks—their deposits and
customers’ investment money—without having to
abide by the regulatory rules we play by, and with no
regard for the communities from which they extract
this money. In turn, this makes it highly important for
us to have expanded powers from the Congress.’’

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

1988 Goals and Priorities
The obvious question to Tom Olson was “How did
you make out on your goals and priorities?’’ As New
York’s famous A1 Smith used to say, “Let’s look at the
record!’’ Tom replied this way:
“HR 27, the Competitive Equality Banking Act, ®
closed the non-bank bank loophole and included the
loan loss amortization feature, which had been high on
our agenda for some time. We would have preferred no
grandfathering, as the bill provided, but we were glad ^
to have HR 27 enacted into law last year.
“Second, the creation of the secondary market as
part of the Farm Credit System refinancing bill
(passed by the House and Senate prior to Christmas
and signed into law January 6 by President Reagan ^
last month) is a real plus for the industry, especially for w
ag markets and specifically for rural areas. We don’t
know what effect this will have on the Farm Credit
System, but our customers will have the opportunity
now for long-term ag real estate loans at fixed rates of £
interest. To me, th a t’s really important. If we have cus­
tomers with that type of loan they can depend on, then
they can do proper planning, knowing they can control
their interest rate.
“Third, within our association and apart from legis- £
lation, we are looking more at services for members.
For example, we now have more than 300 banks in
IBAA Bancard Inc. Also, our IBAA/Barclays Visa
Travelers Cheques program has produced $250 million
in sales through more than 1,800 banks participating 0
at 3,400 outlets. In addition, our St. Paul ‘Total Insur­
ance’ offers D&O multicover policy coverages and risk
management assistance. Other services IBAA pro­
vides members include the Travelers Express Money
Orders (1 million sold in 1987) and Official Checks 0
($750,000 profits shared in 1987). Other insurance pro-













grams round out a complement of insurance coverages.
All of our banks that have been involved in these have
found extremely good service and profitability with
them. Many more banks have applied recently.”
Looking ahead, Mr. Olson added, “One other service
we’re looking at is providing educational opportunities
for our banks and the people working for them. Our
mini-seminars are well received and attendance is up.
All these are presented with the community banker in
“Also, we want our leaders to become involved at
the national level with the Federal Reserve and other
agencies so our membership will become better ac­
quainted with these offices and their processes. We en­
courage members to run for various elective positions,
including the Federal Reserve director positions.”
Unfinished Business
The key area of unfinished business, Tom says em­
phatically, is “No extension of the moratorium! Keep
the Promise! We intend to do our best to hold Congress
to it. I appeal to all bankers to tell their Congressmen
we very much favor new powers through added ser­
vices and products. We see increased competition in
the market place and spreads narrowing, so we’re going to Congress to pursue these issues. In our case,
IBAA is interested in two areas:
“ 1 . Securities powers. Specifically, we want broader
mutual fund authority, underwriting of commercial
paper, municipal revenue bonds, mortgage-backed
securities and the securitization of other credits. I
know we can provide mutual fund business through
brokers, but why shouldn’t we do it ourselves? I t ’s
more profitable!”
While emphasizing the need for expanded powers,
Tom also stresses “We’d like to push for securities
powers rather than the repeal of Glass-Steagall. If the
latter is done, they (major institutions) become
deposit-takers and drain our communities. So, our em­
phasis will be on broader powers, but not the repeal of
2 . Referring to other unfinished business, President
Olson said, “Loan amortization is not used very well,
in our opinion, because of interpretation of the law as
to the intent of Congress. This is where we’re having a
difficult time. We’d like the regulators to have a
broader interpretation to help more banks.” HR 27,
signed into law by President Reagan last August, per­
mits qualifying ag banks to amortize ag loan losses
over a seven-year period.
One other area of unfinished business is the continu­
ing rumble about potential merger of the FDIC and
FSLIC funds. Tom Olson says, “We will strongly op­
pose merger of the FDIC and FSLIC. We would surely
hate to see this and would strongly oppose it.”

Working Relations Between IBAA and ABA
We asked Tom a pointed question regarding rela­
tions between IBAA and ABA: “What do you think it
will take for IBAA and ABA to work together to
# achieve these new powers, such as the cooperation (in
1986-87) that gave us the Ag Secondary Market?”
In his usual intense style, Tom responded immedi­
ately, “Communications are going to be very impor­
tant. I would hope both associations have a better
• understanding and respect for each other’s positions. I
think it’s important for ABA to recognize that we’re
Federal Reserve Bank of St. Louis

the only ones who represent community banks ex­
clusively; for example, if they would understand our
opposition to repeal of Glass-Steagall. If they could
change their posture on Glass-Steagall we would be in
accord on powers and, believe me, together we could
get the job done.”
A final question was: “Who do you see as communi­
ty banks’ principal competitor(s) among the other
types of financial and general businesses that want to
compete with banks?” Here’s how Tom views that
“First would be credit unions. They have their tax
advantage and structure, their ability to gather
deposits through ‘common interest.’ We don’t feel it so
much here in western Nebraska, but other banks do
wherever credit unions appear in industrial areas,
government offices and so forth. They have tax advan­
tages that are not allowed to us. The employer pro­
vides space and the credit union doesn’t pay for it.
Credit unions just don’t have the same cost basis, but
they earn more and go untaxed.

“No extension of the moratorium! I
appeal to all bankers to tell their Con­
gressmen we very much favor new
powers through added services and
products. We’re going to pursue this.’’
“Second would be savings and loans. As you know,
they don’t have the same capital requirements as
banks. We see so many s&ls with little or negative
capital seeking deposits at a rate above what sound
banks will offer. They should n ot be permitted to offer
rates at a level considered unacceptable.
“Third, I would say, would be the fact that banks no
longer finance automobiles. The auto makers captive
companies offer very low rates that don’t properly
reflect the true cost of the auto. This is just plain un­
fair competition.”
Reflections on Presidency
Those who know Tom Olson know that when he’s
away from his desk in the bank he would rather be
astride a favorite horse on his ranch than riding a jet to
Washington, D.C., to testify before another commit­
tee. But he doesn’t regret the time devoted to his
association the past several years. “Being president of
the IBAA,” Tom stated enthusiastically, “has been
one of the greatest learning experiences I ’ve ever had.
No banker can afford not to be involved today in his
association—in legislation and learning to operate bet­
ter. The old-fashioned coattail riders among us will be
passed by in today’s economy and they will be the
losers, instead of benefiting from the work done by
others, because they are uninformed.”
Tom Olson has devoted thousands of hours and
miles of travel in his year as president and in previous
offices with IBAA to not only become better informed
himself, but motivated by an intense desire to help his
fellow independent bankers to become better informed
—about their communities, their own business, their
government and the laws that regulate all of them.
Those fellow bankers who have benefitted from his
unselfish service know they have had a thoroughbred
leading their pack this past year!
Northwestern Banker, February, 1988


Names synonymous with correspondent
banking at Drovers. Almost 1 5 0 years
combined experience.

Frank Bauder

Joseph Migely


President & CEO

John Crotty, Jr.

Max A. Roy

Sr. Vice Pres.

Sr. Vice Pres.

Knowledgeable years...handling Overline
Loans, Capital Requirements, Investments
and Safekeeping. So consider Drovers for
your correspondent needs. You’ll find a
continuity of policy. And a continuity of
people. Like Lrank. And Joe. And John. And

(Continued from page 1 1 )
and Executive Incentive Compensa­
tion Plans.
• High Performance Banking—
Alex Sheshunoff will look at
strategies to enhance your bottom
• Regulators Panels—Represen­
tatives of the FDIC, Office of the
Comptroller of the Currency and the
Federal Reserve will address regula­
tory and consumer legislative con­
• IBAA Bankcard—A nuts and
bolts workshop designed to help
management decide if credit cards
are right for the bank and instruct
how you can get started as a credit
card issuer.
• Peer Group Round Table
D iscussions—Mike Morrow of
Sheshunoff and Company will be
• Agricultural Panel—Experts examine the ag economy and make
suggestions for improving ag port­
On Tuesday and Wednesday the
general sessions will be conducted,
leaving afternoons free for recrea­
Monday evening an opening re­
ception will be held in the Coconut
Grove of the historic Royal Hawaiian Hotel, featuring food of the
South Pacific cultures.
Tuesday night the Late Show will
be sponsored by Kirchman Corp. of
Orlando, Fla. and include the Skiles
and Henderson Show and the Clyde
Pound Orchestra. The show is
preceded by the Second Annual
IBPAC Dessert Reception.
Wednesday evening the President’s Reception will be followed by
the annual banquet, which will fea­
ture the “This is Hawaii” ex­
travaganza with a cast of 30.











Call toll free 1 -8 0 0 -6 2 1 -S 9 9 1
In Illinois 1-SOO-572-249S

Cole Taylor Bank/Drovers
47th and Ashland Avenue
Chicago, Illinois 6 0 6 0 9
3 1 2 -9 2 7 -7 0 0 0

“Be sure to join John Crotty and
Max Roy at the Drovers hospitality suite,
Sheraton-Waikiki, during the I B A A
Convention March 15, 1988. ”

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

New Banking Advisors


Among the 13 bankers named by
the American Bankers Association
to take to the road as ABA’s Na­
tional Banking Advisors for the pro­
gram’s ninth season are two from £
the upper midwest. They are:
Leonard F. De Baker, president of
M&I First National Bank, Stevens
Point, Wis., and Gary E. Lloyd,
senior vice president, First National %
Bank, Grand Forks, N.D..

He previously spent 25 years at
Abraham & Straus, a division of
Federated D epartm ent Stores,
where he held several management
This certificate was presented as a positions in credit, collections,
token of gratitude for Mr. Kane’s security and credit fraud preven­
role in assisting the Secret Service tion.
In the past year, Mr. Kane has
to apprehend a number of credit
held numerous fraud seminars for
In his role as credit coordinator personnel in credit, security and cus­
and liaison between the secret ser­ tomer service departm ents at
vice staff and other credit bureaus, various credit granting companies.
Mr. Kane participated in a “Sting” The purpose of these seminars is to
operation which resulted in the ap­ keep the credit industry apprised of
prehension of 45 credit fraud sus­ new fraud schemes.
pects and 39 indictments.
“This operation was successful,” ABA Banctraining Lists ’88
Mr. Kane explained “due to the use
of Trans Union’s computerized Videotraining Curriculum
Business development, customer
“WATCH” system.” “WATCH”
enables Trans Union to record ac­ relations and supervisory skills will
tivity on any specific identity used be the key subject areas for the six
video classes in the American Bank­
anywhere in the United States.
In this case, nine fraudulent iden­ ers Association’s 1988 Banctraining
tities were circulated by the fraud video systems curriculum.
operators nationwide. The fraud
Each training videotape will pro­
activity originated in New York vide step -b y -step in s tru c tio n
and traveled to California, Texas through simulated bank situations.
Delaware, Oklahoma and Atlanta.
Accompanying each videotape will
Because of the reliability of the be a leaders’ guide, discussion ques­
WATCH system, the secret service tions and reproducible participant
was able to pick up the fraud appli­ worksheets to facilitate the prepara­
cations within hours after being pro­ tion and presentation.
cessed by Trans Union.
The six classes for 1988 are:
Mr. Kane also assisted the Dis­ “Cross-selling Skills for Tellers,”
trict Attorney’s office of Nassau “Telephone Communication Skills,”
County, New York in its search of a “Knowing Your Products: Features
credit fraud suspect who fled juris­ and Benefits,” “Cooling the Hot
Customer,” ‘Keeping Your Cool
Mr. Kane has been Trans Union’s Under Fire,” and “Do’s and Don’ts
director of security for three years. of Good Supervision.”

• United Missouri Offer to Purchase
Centerre Is Rejected, Then Withdrawn
N OFFER by United Missouri
Bancshares, Inc., Kansas City,
to purchase Centerre Bancorporation, St. Louis, for $257.4 million
was rejected by Centerre directors
last month. R. Crosby Kemper,
^ chairman of UMB holding company,
said he was disappointed with the
Centerre rejection and subsequently
withdrew his offer.
The United Missouri proposal
^ was based on an earnings multiple of
more than 11 times Centerre’s aver­
age earnings for the past five years,
according to a UMB statement, and
more than 17.5 times 1987 earnings.
0 Mr. Kemper said his proposal was
more relevant than one based on
book value plus a premium, which
was the basis Centerre Chairman
Clarence C. Barksdale said should
% be used for any negotiations.
Mr. Kemper said Centerre’s book
value “is supporting more than $185
million in problem assets. Even
though those problem assets are off• set by almost $80 million in allow­
ance for possible loan losses, the
shortfall of more than $100 million
equals more than $12.75 per share,
which makes Centerre’s stated book
# value questionable.”
Mr. Barksdale said Centerre di­
rectors “found United Missouri’s of­
fer totally inadequate in that if
failed to recognize the true value of
• Centerre’s common stock.” He said
the “value of UMB stock proposed
to Centerre shareholders currently
would be about $34 a share... Cen­
terre’s (January 22) stock price of
• $35.50 was higher than the offer.
More important, that valuation rep­
resented less than 80 percent of our
1987 year-end book value of
News reports stated that Mr.
Kemper and his family have a five
percent stake in Centerre, the larg­
est block of stock in the cross-state
rival. Mr. Kemper stated he intends
® to retain his Centerre stock.

Trans Union Security
* Director Receives Award
Harold Kane, director of security
for Trans Union Credit Information
Co.’s New York Division, has been
4) presented a certificate of apprecia­
tion from the U.S. Secret Service.
Federal Reserve Bank of St. Louis

Superior Performance Banking
Through Professional Consulting

Organizational Reviews
Profit Planning
Asset/Liability Management
Loan Administration Analysis
Other Consulting Services
—Ronald L. George, President

Af Midwest Management Consultants
9140 West Dodge Road, Suite 270

Omaha, Nebraska 68114 (402) 391-1344
Northwestern Banker, February, 1988


Illinois Independents Revise Name;
Now Accept Individual H.C. Banks
BROADENING of membership
rules and a change in name
became effective January 1, 1988,
for the Independent Community
Banks in Illinois. Based on a mem­
bership vote taken at the ICBI con­
vention in late September, 1987, the
organization’s name now is Commu­
nity Bankers Association of Illinois.
It continues to headquarter in
Springfield with Robert Wingert as
its executive director. President of
the association is C. Dean Easton,
president of Pontiac National Bank
in Pontiac, a $90 million asset bank.
At the same time, the several ser­
vice entities of the organization
have been changed are now known
• Community BancService Corpo­
ration, Inc.
• Community Banclnsurance Ser­
vices, Inc.
• Community Bankers Employee
Benefits Trust, which provides fully
insured group medical, life, health
and dental plans to member institu­
tions and employees.
• Community BankPac.
Under the revised membership
categories, banks purchased by outof-state holding companies may still
be eligible for membership, indivi­
dual banks within Illinois bank hold­
ing companies may apply for mem­
bership, and savings and loans could
be accepted in the future as mem­
bers, although there are no plans for
this now.
Banks in contiguous states that
have reciprocity with Illinois may
presently purchase Illinois banks.
Then, in 1991 the state will be open
nationwide for out-of-state acquisi­
Mr. Wingert said, “If an Illinois
bank is purchased by an out-of-state
holding company and our board de­
termines the bank is still eligible for
membership, then it can remain or
become a member of our association.
Another option we now have is to let
an out-of-state bank become a finan­
cial associate member, which is non­
voting. This class of membership is
entitled to all the services of the as­
sociation, such as attending semi­
nars, annual meetings, using insur­
ance and other services, but does not
have voting privileges.”
Mr. Wingert cited the example of
United Missouri Bank, which head­

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

quarters in Kansas City and also is
in St. Louis. UMB purchased three
Illinois banks in early 1987 and
because of its committed correspon­
dent bank service has been accepted
for financial associate membership
in the CBA.
“The criterion for membership,”
Mr. Wingert said, “is in the mission
statement of our constitution. One
of the provisions is that a bank must
operate in concert with the spirit of
independent banking; that is, serv­
ing the local community and not act­
ing only as a branch tunneling
money out-of-state; or abandoning
the local market as branches some­
times do.”
A great number of acquisitions
have taken place among Illinois
banks and bank holding companies
as well as by out-of-state holding
companies in recent months. Mr.
Wingert said “We now have banks
within multi-bank holding compa­
nies that are members, while other
banks in the same holding company
are n ot members. We offer a 15%
dues discount if all banks within a
holding company become members.
Similarly, if all banks in a chain
bank ownership become members,
then the 15% dues discount also ap­
When asked if this broadening of
membership qualifications repre­
sents a philosophical change within
the association, Mr. Wingert said,
“No, it is really more a perceived
change than a real one. We still ex­
press a preference for local owner­
ship. These revisions are a reflection
of the change taking place and we
are adapting to it. A line is still be­
ing drawn on membership eligibility
and our board won’t just accept
Mr. Wingert said ICBI leaders
wanted to change the organization’s
name so as to include the word “as­
sociation” and to substitute “bank­
ers” for “banks.” This follows a
trend, he stated, that has developed
among eight or ten other state inde­
pendent banker associations, such
as Ohio, Michigan and Florida. Ohio
is another state to date that has
broadened its membership qualifica­
tions as Illinois has done.
Mr. Wingert added, “We could
take in s&ls as financial associate
members under our new member-

Illinois Bankers Association

President—Jack Emmons
Exec. V.P.—W. J. Hocter
Community Bankers Association of Illinois

President—C. Dean Easton
Exec. Dir.—Robert J. Wingert


ship rules but we haven’t pursued
this avenue and have no plans to do
so at this time. There are a lot of ^
good thrifts out there that serve
their communities in the way we’re
philosophically oriented. ’’

IBA Consumer Credit
Conference to Be Held


The Illinois Bankers Association
will sponsor its 1988 Consumer
Credit Conference, “Developing Ex­
cellence in Consumer Banking,” on ®
February 23-25 at the Adam’s Mark
in St. Louis. This popular conference
will feature fine speakers, work­
shops, exhibits and an excellent
spouses’ program.
Fees are as follows: Members and
associate members—$165 for first
attendee and $140 for each addi­
tional; Non-members—$330 for first _
attendee and $280 for each addi- 9
tional. Within one week of the con­
ference or at the door, fee is $25 ad­
ditional. Spouse tour of St. Louis—
$40; fashion seminar—$25.
The complete program follows:
Tuesday, Feb. 24
7:30 Early registration and cash
Wednesday, Feb. 25
7:30 Registration.

(Turn to page 34, please)


Full-service banking will be avail­
able for commercial and personal
customers, but the bank will empha­
size commercial banking services.
“The Exchange Bank of DuPage
will focus on that area’s commercial
middle market, with an emphasis on
companies with annual sales rang­
ing from $2 million to $100 million,’’
Mr. Kaufman said.
President of the bank will be Law­
rence B. Bloom, who is currently a
senior vice president and commer­
cial banking division head at The
Exchange National Bank. He has
over 20 years of commercial banking
experience and has been with The
Exchange since 1981.
v The bank will open with nine busi­
ness development and customer ser­
Michael M. Karnes has been pro­ vice employees, including three com­
moted to senior vice president of mercial lending officers.
* * *
Amalgamated Trust & Savings
has been elected
Bank. He has served as the bank’s
vice president for the past three senior vice president of Harris
years. Prior to that Mr. Karnes was Bank. He is staff executive in ad­
an investment counselor at Boberski ministration for the operations de­
& Co. He also was senior vice presi­ partment.
Mr. Wilner joined Harris in 1961
dent for Harris Trust and Savings
Bank, where he'worked for 21 years. and has held a succession of posts in
the operations department, includ­
ing head of the check processing

Meanwhile, Bernard J. Lovati has
been promoted to vice president of
the bank. He joined Amalgamated
in April as assistant vice president.
Prior to that he worked as sales and
operations manager at Owen Wagener and Co. and was assistant vice
president/assistant consumer and fi­
nance division manager at National
Boulevard Bank.
* * *
Exchange International Corpora­
tion, parent company of the $2.1 bil­
lion Exchange National Bank of Chi­
cago, has announced it will be open­
ing The Exchange Bank of DuPage,
in Oak Brook.
Ira J. Kaufman, Exchange Inter­
national chairman and CEO, an­
nounced that the bank is scheduled
to open in mid-March or early April.
It will be located on the main level of
the newly constructed Camden
Place office building in Oak Brook.
Federal Reserve Bank of St. Louis



Barbara A. Bernardini has been
promoted to vice president and man­
ager of the residential real estate
and land trust departments of Colo­
nial Bank and Trust Company. She
had been assistant vice president
and assistant manager of Colonial’s
real estate department. Previously,
she worked for the Metropolitan
Trust and Savings Bank of Addison,
* * *
Michael M. Hays has been ap­
pointed assistant vice president for
Kirkpatrick, Pettis, Smith, Polian
Inc. He will serve as a portfolio man­
ager and securities analyst. Mr.
Hays joins KPSP following five
years with International Manage­
ment Group of Cleveland, Oh.
* * *
Patrick L. O’Malley has been
named to the board of directors of
First Colonial Bankshares Corpora­
tion. He has served as chairman
emeritus of Canteen Corporation
since 1981. He previously served as
Canteen’s president, chairman, and
chief executive officer for more than
20 years. Before that, he spent 30
years with The Coca-Cola Co.

Mr. O’Malley is chairman of the
board of the Michigan Avenue Na­
tional Bank, a member of First Colo­
nial Bankshares.



Teamsters Local 705 has com­
pleted an agreement to purchase a
14 percent interest in Amalgamated
Trust & Savings Bank. The pur­
chase price was not disclosed.
Peter Monahan, Amalgamated
general counsel, said the purchase
involved stock previously held by
Dr. Martin L. Gecht, who will be
retiring soon as chairman of Amal­
gamated’s executive committee.
* * *
Michael L. Supera has been
named a director of the Lake View
Trust and Savings Bank, a member
of Lane Financial, Inc. He is the
president of Supera Property Man­
agement Inc. and S#2 Development
Company in Chicago.
* * *
Kendon T. Birchard, president of
the Community Bank of Edgewater,
has announced the bank recently
grew to more than $50 million in
assets. Mr. Birchard attributed the
growth to involvement in communi­
ty activities as well as extended
hours, improved customer service
and competitive interest rates.
The bank has issued more than
$3.2 million in below-market inter­
est loans for the renovation of 18
residential and commercial proper­
ties in the area. It has also recently
completed a $500,000 face lift for
the bank and installed a CASH

Artis Gilmore, star center of the Chicago
Bulls, and R.T. Schroeder, chairman and
president of Boulevard Bank, admire the
NBA All-Star trophy located in the bank lob­
by. Chicago was host city for the 38th An­
nual All-Star Game on February 7, and the
trophy was housed in the bank lobby until
the end of December.
Northwestern Banker, February, 1988




Now, you need a correspondent
who knows all the ins and outs.
Not too many years ago interest rates were stable,
loan demand was strong and borrowers provided
a high quality loan portfolio. Overline assistance
was needed. Marquette Bank was there.
Today interest rates fluctuate, loan demand is
soft and making new loans is a very selective
process. Your investment portfolio now must pro­
vide more o f your bank’s income. Marquette Bank
is there.

Correspondent Bankers and Investment
Counselors teamed in a coordinated effort. People
w ho’ve proven their skills to our customers for
years. People who care about your business and
take the time to understand and execute your
investment philosophy.
If you’re looking for a bank with the experi­
ence to know al[ the ins and outs o f successful
banking, look to Marquette.

Correspondent Services Division/lnvestment Department

Correspondent Services 341-6561
MN Wats 800-862-1452
National Wats 800-328-8155
Federal Reserve Bank of St. Louis

Marquette Bank

Member FDIC

Investment Department

MN Wats 800-642-7582
National Wats 800-328-8013

Norwest Merges Banks in Minn., N. Dak.
N January 4, Norwest Cor­
poration merged all 17 Norwest
banks in the Twin Cities metro­
politan area into a single bank. On
the same day, all Norwest banks and
a trust company in North Dakota
were merged into one statewide
bank, and three Norwest banks in
n o rthw estern M innesota were
merged into one bank.
Mergers affecting Norwest banks
in 20 other Minnesota communities
are expected to take place on or
about April 1.
The mergers are allowed under
new state laws passed early this
year in the two states.
The new Twin Cities metro-wide
bank, called Norwest Bank Minne­
sota, N.A., will have 42 full-service
banking offices, more Twin Cities
locations than any other financial in­
The banks that have merged in­
clude lead bank Norwest Bank Min­
neapolis and Norwest Banks Bloom­
ington, Calhoun Isles, Camden, Cen­
tral, East St. Paul, Hastings, Jor­
dan, Maple Grove, MetroSouth,
Metro West, Midland, Old St. An­
thony, South St. Paul, St. Paul,
Stillwater and University-Midway.
Daniel A. Saklad, Norwest’s Minnesota/Wisconsin regional presi­
dent, said the new Twin Cities bank,
with total deposits of about $5.5
billion, will rank among the top com­
mercial banks in the United States.
Its legal lending limit will be appro­
ximately $95 million.
Also merged on January 4 were
Norwest banks serving Fergus
Falls, Moorhead and Thief River
Falls, into Norwest Bank Minnesota
West, and Norwest banks serving
the North Dakota communities of
Bismarck, Crystal, Fargo, Grafton,
Grandin, Hillsboro, Jamestown,
Mandan, Minot, Tower City, Valley
City and Wahpeton, into Norwest
Bank North Dakota.
Expected to be merged April 1 are
Norwest banks serving Ely, Eveleth, Hoyt Lakes and Virginia, into
Norwest Bank Minnesota Mesabi,
and Norwest banks serving Mar­
shall and Worthington, into Nor­
west Bank Minnesota Southwest.
Also expected to be implemented
about April 1 are applications to
merge Norwest banks serving Du­
luth, Grand Rapids, Silver Bay and
Two Harbors; Litchfield, St. Cloud,
Federal Reserve Bank of St. Louis

Sartell and Sauk Rapids; Albert
Lea, Austin and Mankato; and
Dodge Center, R ochester and
An application to merge Norwest
banks in Faribault, Owatonna and
Red Wing has been withdrawn. It
will be revised to merge only the
banks in Faribault and Owatonna,
leaving the Red Wing bank as a
separate bank.
The only other Norwest bank in
Minnesota not included in merger
plans is Norwest Bank Northfield, a
state-chartered bank.

Elected to MBA Board
Gerald R. Kanne, executive vice
president of Norwest Bank Minne­
sota, Minneapo­
lis, has been
elected to the
board of direc­
tors of the Min­
nesota Bankers
M r. K anne
will rep resen t
MBA District 5,
which includes
the larger banks
in the Twin Cities. He will complete
the three-year term of John C. Nel­
son, formerly of Norwest Bank St.
Paul, who has taken the position of
chairman of Norwest Bank Des
Moines and regional manager for
Norwest in Iowa.

Promoted in Brainerd
Diane Runberg has been pro­
moted to senior vice president of
operations at First American Bank
of Brainerd. She will also serve on
the bank’s management committee,
asset liability committee and strate­
gic planning committees. Ms. Run­
berg has been with First American
for 13 years in a variety of positions
including comptroller/cashier, Bax­
ter office manager, and most re­
cently as vice president/commercial
loan officer.

Named in St. Cloud
At Zapp Bank, St. Cloud, Marcia
L. Puls and Richard O. Holtberg
have been named vice presidents.
Ms. Puls has been with the bank for
five years and is in the planning and
development department. Mr. Holt-

Minnesota Bankers Association

President—James R. Jorstad
Exec. V.P.—Truman L. Jeffers
Independent Bankers of Minnesota

President—Edward Zapp
Exec. Dir.—Norbert McCrady

berg works in operations and has
been with Zapp for three years.
In addition, Duane Otremba has
joined the bank as director of train­
ing. He was previously associated
with Simplified Software Systems
and First American National Bank.

Elected in Mankato
First Bank Mankato has an­
nounced several staff promotions.
Connie A. Halter has been elected
vice president, product service man­
ager. She joined the bank in 1974 as
a teller and most recently was assis­
tant vice president, personal bank­
ing manager.
LaVonne R. Grassel has been
elected assistant vice president. She
has been with the bank since 1972 in
several positions, most recently as
manager of the Madison East facili­
Elected consumer product officers
were Edith A. Lange and Nancy K.
Bellig, formerly personal bankers.
Carol A. Welp has joined the bank
as mortgage product specialist offi­
cer. She previously served as vice
president, real estate officer at Min­
nesota Valley Federal Credit Union.

Elected in Bayport
Hugh Madson has been elected to
the board of directors of the First
State Bank of Bayport. He recently
retired after over 27 years with Aet­
na Life Insurance Company, most
recently as manager of the Minneapolis-St. Paul office. He currently
has his own employee benefits con­
sulting firm.
Northwestern Banker, February, 1988


Nor west Corporation reported re­
cord net income of $48.7 million for
the fourth quarter ended December
31, 1987, up 47.0 percent from $33.2
million earned in the comparable
period a year ago. Net income per
common share in the fourth quarter
was $1.57, compared with $1.00 in
the fourth quarter a year ago, a 57.0
percent increase. On a fully diluted
basis, earnings per share were $1.53,
compared with 97 cents in the fourth
quarter of 1986.
For the year ended December 31,
1987, the corporation reported a net
loss of $29.8 million, which approxi­
mates the amount of loss estimated
for the year when the corporation
announced in the second quarter a
$204 million addition to the allow­
ance for credit losses related to
international credit exposures. This
compares with net income of $121.7 ,
million in 1986. The net loss per
common share was $1.31, compared
with net income per share of $3.64 in
On an organizational basis, the
Banking Group reported record
fourth quarter earnings of $38.7 mil­
lion, compared with $13.1 million in
the same period a year ago. For the
year ended December 31, 1987, the
Banking Group reported a net loss
of $82.2 million, which reflects the
additional provision taken for inter­
national credit exposures. This com­
pared with net income of $55.1 mil­
lion in 1986. The Community Bank­
ing Group achieved significant in­
creases in year-to-year results, es­
pecially outside of the Twin Cities
area, where 1987 earnings were
$51.0 million, compared with $1.5
million in 1986, an increase of $49.5

net income of $49.6 million for 1987,
compared with net income of $202.9
million in 1986. On a per share basis,
primary earnings were $0.73, com­
pared with $3.42 a year ago. These
results are in line w ith the
company’s previously reported net
income expectations of $50 million.
Fourth quarter earnings were
$42.5 million, compared with $54.9
million earned in the same period of
1986. Earnings per primary com­
mon share were $0.69, compared
with $0.92 in last year’s fourth
Major factors affecting 1987 net
income included a provision of $160
million taken in the second quarter
to build reserves for losses on loans
to less developed countries (LDCs)
and a decline in net interest income
on a taxable equivalent basis.
In 1987, the loan loss provision
exceeded net charge-offs by $84.6
million resulting in a reserve for loan
losses totaling $427.0 million at
year-end 1987, compared with
$353.4 million a year ago. As a per­
cent of loans, the reserve was 3.21
percent, compared with 2.36 percent
at year-end 1986.

First Bank System, Inc. reported

First Bank System, Inc. has an­
nounced the following executive offi­
cers of First Bank, the bank created
by the merger of its 32 Twin Cities
bank offices.






Peter Miller has been named
group vice president of trust ser­
vices at Marquette Bank Minneapo­
lis. He was previously vice president —
of the trust services group’s busi- ®
ness development division. Prior to
that he was an assistant vice presi­
dent with IDS Trust Company and
was also employed by Wausau Insu- ^
ranee Companies of Wausau, Wis.


* *

* *

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

Richard W. Schoenke will serve as •
the bank’s chairman. He continues
as a vice chairman of FBS. William
F. Farley will be president of con­
sumer and small business banking.
Alan F. Naylor will be president of •
special industries. Jay B. Walters
will be president of corporate bank­


Harvey R. Peck has joined Mar­
quette’s trust services group as vice —
president and investment officer. A ^
chartered financial analyst, Mr.
Peck has 16 years of investment ex­
perience, most recently as a princi­
pal with Source Financial Group. ^
Prior to that he was with Planners
Financial Services, Inc. and vice
president with Investment Ad­
visors, Inc.
Laurie Miller has been named vice q
president, employee benefits at Mar­
quette Insurance Group. Prior to
joining Marquette, Ms. Miller was
assistant manager of employee
benefits at Great West Life in Min- q

Norwest Corporation has an­ create a group of securities and in­ director of group pension sales at
nounced that a management team vestment subsidiary companies. He Minnesota Mutual Life Insurance
joined Norwest in February, 1975, in Company. He has more than 16
consisting of a
Chicago, where he was president of years of experience in pensions and
p resid en t and
BancNorthwest, now part of the investments.
two executive
Norwest Capital Markets group,
* * *
vice presidents
before moving to Norwest Bank
heads its new
Norwest Corporation has appoin­
Minneapolis in January, 1981, as
bank serving the
John E. Ganoe and J. Scott Spisenior vice president and head of its
new positions on its mergers
funds management group.
Paul metropoli­
and acquisitions staff. Mr. Ganoe is
tan area.
Minnesota-Wisconsin regional presi­ vice president and director of stra­
Ja m e s
dent in August, 1987. He previously tegic planning and acquisitions. Mr.
C am pbell
was president of a mortgage and in­ Spiker is vice president and acquisi­
p resid en t and
surance subsidiary of Citicorp, tions analyst.
based in St. Louis, Mo.
* * *
Minnesota News



chief executive officer of the new
bank, Norwest Bank Minnesota,
N.A., into which 17 Norwest banks
with 42 banking offices in the metro
area were merged, effective January
1, 1988. Mr. Campbell is president of
Norwest Bank Minneapolis, the
largest of the 17 banks being merg­
ed. He will continue as head of cor­
porate banking for Norwest’s Bank­
ing Group.
Executive vice presidents of the
new bank are Robert C. Brown,
president of Norwest Capital Mar­
kets, Inc., and Daniel A. Saklad,
Minnesota/Wisconsin regional presi­
dent of Norwest’s community bank­
ing group. They will continue in
those positions.
The new bank has total assets of
approximately $8.7 billion. It is
headquartered in Minneapolis and
next summer will move its main of­
fices and new banking facilities into
Norwest Center, now under con­
struction in downtown Minneapolis.
Mr. Campbell was named presi­
dent of Norwest Bank Minneapolis
in 1984 after serving as regional
president for Norwest banks in Neb­
raska. He joined the Norwest orga­
nization at Norwest Bank Minnea­
polis in 1964 and was president of
Norwest Leasing and of Norwest
Bank Omaha before being named re­
gional president in Omaha in Octo­
ber, 1982.
Mr. Brown has been president of
Norwest Capital Markets since it
was organized in October, 1984, to
Federal Reserve Bank of St. Louis

Resource Bank & Trust has an­
nounced the promotion of Greyton I.
Becker to senior vice president.
Previously, Mr. Becker was vice
president, corporate secretary for
Resource Companies and Resource
Bank & Trust. Before joining Re­
source in 1975, he was a bank and
trust examiner for the State of Min­
Other promotions announced by
the bank are:
Debra Kay Spence was promoted
from financial services administra­
tor to private banking officer.
Laura B. Williams was advanced
from client service supervisor to
private banking officer.
Kimeri A. Wehrman was pro­
moted from operations coordinator
to assistant cashier and security of­
* * *
Robert K. Richey has been named
managing director of First Financial
Corp., a new
First Bank Sys­
tem subsidiary
that is the only
one of its kind in
The group op­
erates as a con­
sultant for place­
ment of corpo­
rate pension/proR.K. RICHEY
fit-sharing dol­
lars into Guaranteed Investment
Contracts with highly rated insu­
rance companies. With a GIC, a cor­
poration can invest pension or pro­
fit-sharing dollars for a specified
term with guaranteed returns.
Richey previously was vice presi­
dent of marketing at Washington
Square Capital, Inc., a subsidiary of
Northwestern National Life In­
surance Co. Prior to that, he was



Both report to Les Biller, corpo­
rate executive vice president and
head of strategic planning and ac­
quisitions for the Norwest Banking
Norwest has banks in seven
states and is seeking regulatory ap­
proval to acquire a bank in Arizona.
Mr. Ganoe had been manager of
policy, standards and procedures for
Norwest. He joined Norwest in 1983
as controller of its Iowa banking re­
gion, and was chief administrative
officer of the region when he trans­
ferred to the corporate staff in 1985.
Mr. Spiker joined Norwest from
Mark Twain Bancshares, Kansas Ci­
ty, Mo., where he was a senior vice
president in acquisitions. Prior to
that he spent five years in the U.S.



American National Bank, St.
Paul, has announced the promotions
of Ronald W.
Duffey, vice
& investments;
Mary Ann Orfei,
a ss is ta n t vice
& investments;
Kathi Rogers,
a ss is ta n t vice
p re s id e n t a t
American Bancorporation, Inc. and Robert L.
Rosenberg and Gail Scott Doolin, in­
vestment officers-bonds & investNorthwestern Banker, February, 1988

Minnesota News
Mr. Duffey joined American as an
assistant vice president-bonds & in­
vestments in 1984, bringing over 30
years of experience from First Bank
St. Paul.
Mr. Mueller came to the bank as a
credit analyst in 1980, and most re­
cently served as an investment offi­
cer. Ms. Orfei joined American as a
teller in 1978 and was also an invest­
ment officer.
Ms. Rogers joined American Bancorporation in 1976 as an accoun­
ting clerk. Most recently she served
as an accounting officer.
Mr. Rosenberg came to American
National in 1984 as an investment
representative. Ms. Doolin joined
the bank from European American
Bank, New York, where she was a
municipal dealer.
* * *
Commercial State Bank has com­
pleted its move to the 20th floor of
the Minnesota World Trade Center
in downtown St. Paul.
In addition to its executive of­
fices, the bank’s commercial lend­
ing, commercial and residential
mortgage lending, executive and
professional banking, marketing,
(Continued from page 28)
8:30 “The Reinvented Bank, and
the Banker’’—Kent Stickler,
pres., Financial Shares
South, Clearwater Beach,
10:00 “ Increasing Loan Demand’’
—Michael Chy, pres., Per­
sonal Motivation Institute,
Inc., Matteson, 111.
12:00 Remarks by Jack Emmons,
IBA pres. Guest speakerjack Buck, voice of St.
Louis Baseball Cardinals.
2:00 “Getting to the Truth with
Good Communications’’—
Kent Stickler.
3:30 Workshops:
1. Advantages of Marketing
the Secondary Market
2. Quality Management of
4:45 Adjourn.
4:45 Complimentary reception.
Thursday, Feb. 25
7:00 Continental breakfast.
7:45 Early bird workshops:
1 . Home Equity Update

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

finance and credit departments will
occupy the entire 20th floor.
Commercial State Bank will con­
tinue to provide consumer banking
services, personal bankers and teller
transaction services for personal
and commercial checking, savings
and investment customers at its of­
fices at 5th and St. Peter Streets and
in the Bremer Building Skyway in
downtown St. Paul.
The move to the Trade Center per­
mits the bank to consolidate its exe­
cutive and administrative offices
which had been housed at 5th and
St. Peter Streets and in the Hamm
Building nearby. The banking of­
fices at 5th and St. Peter, which in­
clude Commercial State’s drive-up
bank, will undergo a major remodel­
ing, which is scheduled for comple­
tion in late 1988.

The school’s curriculum will focus f
on consumer products, deposit pro­
ducts, home equity, cross-selling
and retail banking. The school will
be developed in coordination with
the ABA Professional Development £
Program and will be limited to an
enrollment of about 60 students.

Added in St. Charles

Two new officers have been hired
by First National Bank in St.
Thomas V. Batty has been named
senior vice president/cashier. He will
be working in the areas of operations, marketing and public rela­
For the past two years Mr. Batty
has worked in the investment field
for Life Investors Insurance Company of Cedar Rapids, la. Prior to
that he was vice president of HawkMBA to Develop
eye Bank & Trust of Grundy Center,
Consumer Banking School
la. for six years.
The Minnesota Bankers Associa­
Stephen A. Tornio has been
tion will develop a new Consumer named senior vice president in
Banking School scheduled to begin charge of credit administration. He
in late 1988 or early 1989. A survey has 17 years of lending experience,
of Association members demon­ most recently at First American
strated 85% support the develop­ Bank & Trust in Marshall, where he
was employed since 1984.
ment of such a school.

2. Compliance
8:45 “ Sustaining Exceptional
Performance ’’—Art Turock,
Art Turock & Assoc., Seat­
tle, Wash.
11:30 Door prize drawing.
11:45 Adjourn.






Keith Leathers and Tom Franger 0
have been named assistant vice pre­
sidents in lending. They have been
with the bank nine and two years,
Sharon M. Schmitt has been #
named assistant cashier. She has
CBAI Appoints Manning
been with the bank 15 years and
heads the bookkeeping and accoun­
Dir. of Govt. Relations
The Community Bankers Asso­ ting department.
ciation of Illinois has announced
the appointment of David Manning Martin Joins IBA Staff
James D. Martin, former Deputy
of Springfield as its director of gov­
ernmental relations. He has been Commissioner of Banks and Trust
serving as a special assistant to Illi­ Companies for the State of Illinois, ^
nois State Comptroller Roland Bur­ has joined the Illinois Bankers Asso- w
ris and has worked in the Illinois ciation as legislative consultant and
Legislature since 1979.
Mr. M artin ’s responsibilities
Promoted in McHenry
while serving in the Commissioner’s ^
Several officers have been pro­ Office included all governmental af­
fairs activities of the agency and the
moted at McHenry State Bank.
Edwin J. Becker, Jr. has been implementation of regional inter­
named senior vice president, and state banking in Illinois. He served
will supervise operations, invest­ on the Illinois Task Force on Finan- ^
ments and facilities. He joined the cial Services in 1985 and 1986 and
has been a member of the Illinois
bank in 1965.
Peter J. Keller, who has been with State Bar Association’s Commercial
the bank since 1974, has been named Banking and Bankruptcy Law Sec­
cashier. He formerly served as audi­ tion Council from 1985 to the pre- q
tor. Carol Scholle was named acting sent.


Wisconsin Bankers Association


President—Richard P. Klug
Ex. Dir.—Bryan Koontz
Independent Bankers Assoc, of Wisconsin

President—Larry Hahn
Ex. Dir.—Donna Coughlin

First Wisconsin Acquires
Rose Holding Co.





First Wisconsin Corporation will
acquire Rose Holding Co., a onebank holding company in Roseville,
Minn. This is the third bank acquisi­
tion agreement First Wisconsin has
reached in Minnesota this year.
Rose Holding Co. owns the
$127-million Roseville Bank, the
largest bank in Roseville, with a
45% market share of bank deposits.
Terms of the agreement call for
First Wisconsin to pay $19.2 million
in First Wisconsin common stock
for the bank.
Following approval of bank regulatory authorities, the Rose acquisi­
tion should be completed in the sec­
ond quarter of 1988. A definitive
agreement has been signed by representatives of both companies. The
bank’s name.and staff will remain
the same.

Central Wis. Acquires
• Peoples, to Merge with M&l
William H. Rodd, chairman, and
Franklin J. Zagzebski, president of
Central Wisconsin Bankshares, Inc.,
^ a multi-bank holding company head­
quartered in Wausau, along with
Walter Diercks, president of Peo­
ples’ Bancshares of Antigo, Inc.,
have announced that 99% of Peo^ pies’ shareholders had accepted Cen­
tral Wisconsin Bankshares, Inc. of­
fer to acquire a controlling interest
in the Peoples’ Bancshares of Antigo, Inc. The transaction was exf pected to be completed in January of
Federal Reserve Bank of St. Louis

This acquisition brings the total
banking affiliates of Central Wiscon­
sin Bankshares, Inc. to fifteen with
assets approximately $800 million
and banking offices in 29 locations.
Central Wisconsin Bankshares, Inc.
has main offices in the cities of Wau­
sau, Mosinee, Eagle River, Rhine­
lander, New Lisbon, Neillsville,
Marshfield, Ashland, Eau Claire,
Onalaska, La Crosse, and Plover.
On December 2 1 , Central Wiscon­
sin Bankshares, Inc. announced that
it had received shareholder approval
for the merger with Marshall and
Ilsley Corporation, as announced in
July of this year. The company had
previously announced th at its
merger with Marshall and Ilsley
Corporation is expected to be com­
pleted early in the first quarter of

Promoted in Madison
Promotions at First Wisconsin
National Bank of Madison an­
nounced by James R. Lang, presi­
dent and chief executive officer of
the bank, are: Kenneth A. Poniewaz
to senior vice president and cashier,
Jennifer N. Kraemer to first vice
president and Alan D. Indermuehle
to vice president and controller.
Mr. Poniewaz, division manager
of the bank’s controllers and opera­
tions division, had been first vice
president and controller/cashier. Ms.
Kraemer heads the human resources
and community services division of
the bank and had been a vice presi­
dent, and Mr. Indermuehle had been
a vice president and assistant con­

Madison Bank Hosts
Award Luncheon

James C. Bolton, Jr., s.v.p.-business bank­
ing, left, and James R. Lang, pres., right,
First Wisconsin National Bank of Madison,
hosted a luncheon to announce the 1988
Wisconsin Small Business Person of the
Year. Winner David A. Ladd, president of
Walnut Hollow Farms, Inc., is pictured cen­
ter. The award announcement luncheon
was held in the Boardroom of the Madison
Bank on January 7.

First Interstate Acquires
Lending Subsidiary
First Interstate Corporation of
Wisconsin has announced that it
completed the purchase of the assets
and business of the Milwaukee office
of First Interstate Commercial Cor­
poration, an asset-based lending
subsidiary of First Interstate Ban­
corp of Los Angeles. Approximately
$30 million in assets were acquired
from First Interstate Commercial

Changes Told in Minocqua

Robert E. Johnson, president of
First Wisconsin Bank of Minocqua,
Stephen L. LaFontaine has been retired January 1, ending a career of
named assistant vice president and more than 33 years at the bank. Mr.
Johnson has planned to retire since
commercial loan
January, 1986, when First Wiscon­
officer at First
sin acquired the bank, but agreed to
Wisconsin Na­
First Wisconsin’s request to remain
tional Bank, Eau
during a transition period.
Claire. He joined
In addition, Patrick E. Bolger,
the First Wis­
chairman, is retiring after serving
consin Corpora­
more than 23 years on the board.
tion in 1974 and
Succeeding the two men will be
worked at vari­
Laurance H. Bender as chairman
ous locations in
and Dennis J. Bulinski as president.
the Milwaukee
Mr. Bender previously served as
area as a loan
officer and branch manager. His senior vice president of the bank.
most recent position was as assis­ Before coming to Minocqua, he
tant vice president of commercial
lending and business development WISCONSIN NEWS. . .
at First Wisconsin-Waukesha.
(Turn to page 37, please)

Named in Eau Claire

Northwestern Banker, February, 1988

tion/continental breakfast is at 8:30
a.m. and the workshop runs until
4:15 p.m. Fee is $115 per person
before February 12 and $150 after.
For more information contact the
NDBA office.

Elected in Grand Forks
North Dakota Bankers Association

President—John W. Pierson
Exec. Dir.—Harry J. Argue
Independent Community Bankers of N. Dak.

President—C. V. Folkert
Exec. Dir.—Arlene Melarvie

NDBA to Sponsor
Loan Documentation Seminar
The North Dakota Bankers Asso­
ciation will sponsor an Advanced
Loan Documentation Seminar on
February 26 at the Kirkwood Motor
Inn in Bismarck. The course has
been approved for six Continuing
Legal Education Credits. Registra-

Bill G. Lee has been elected presi­
dent of Community National Bank
of Grand Forks.
He most recent­
ly served as ex­
e c u tiv e
p re s id e n t
commercial lend­
ing. Mr. Lee pre­
viously was with
the First Bank
of Fargo as well
as th e S ta te
Bank of Lakota.

tatio n -all reasonable pairings. But
bankers and ted d y b ea rs ?
The 1987 Annual Convention of
the Independent Community Banks
of North Dakota brought together
this interesting couple of groups
when bankers and bears met in Bis­
marck. The ICBears greeted atten­
dees in their rooms at the Kirk­
wood Motor Inn, and served as con­
vention “mascots.”

Northwestern Benker, February, 1988
Federal Reserve Bank of St. Louis

Promoted in Bismarck

Launa Moldenhauer has been pro­
moted to vice president of Kirkwood
Bank & Trust
Co. of Bismarck.
She joined the
bank in 1978 as
marketing repre­
sentative. She
had been em­
ployed previous­
ly by the Farm­
ers & Merchants
enne. Ms. Mol­
Named in Valley City
denhauer managed the bank’s Kirk­
First National Bank of Valley wood Mall Station from 1980 to
City has named Doug Anderson 1983 and has been in the loan de­
cashier and vice president of opera- partment since that time.

ICBND Makes Banking Easier to Bear
ANKERS and the moratorium...
bankers and management stra­
tegies...bankers and loan documen­

tions. He joined the bank in 1984 as #
assistant cashier and was later pro­
moted to cashier and operations offi­
cer. Prior to that, Mr. Anderson
worked as a computer programmer/
analyst for North Dakota State Uni- #

“ I like to do what the conven­
tioneers won’t expect,” says Arlene
Melarvie, ICBND executive director
and the brain behind the bears. For
the 1985 convention she arranged
for each attendee to be greeted with
a pillowcase bearing the words
“Welcome from the ICBND.” Bank­
ers were told they could complete
their pair of matching pillowcases
by attending again in 1986.
For 1987, Ms. Melarvie sought a
related welcome gift and thus came
up with the idea of a stuffed animal.

“All people have a child instinct in
them and love stuffed animals, ’’ she
explains. She set out to audition
stuffed toys with the primary
qualification being “cuddliness.”
The Santa Bear used by Dayton’s
d e p a rtm e n t s to re w as M s.
Melarvie’s model and led her to Ani­
mal Fair of Minnesota, which pro­
vided the bears. T-shirts were
printed separately.
A human-sized ICBear also
greeted convention guests, and
passed out coupons from the North
Dakota Mental Health Association
“good for one hug.”
The bears proved so popular that
the ICBND plans to use them in
various capacities in the future.
When Governor Sinner’s wife de­
corated their house with bears for
Christmas, the association naturally
presented her with an ICBear for her
collection. Other appearances by the
bankers’ bear are in the works.
Ms. Melarvie believes the value of
the ICBears is that they meet a need
for humor in the workplace. She
says, “The banking industry is
changing so rapidly...bankers are
saying banking isn’t fun anymore. I
wanted to help keep things a little
In Bismarck, bankers embraced
the bears wholeheartedly, plush to
pinstripes, proving Arlene Melarvie
is right: “Life is never so serious you
can’t take time to laugh. ”














Added in Dickinson
Three new staff members have
joined Community First National
Bank and Trust
C om pany
Estelle Wolberg will serve
as cluster auditor in the bank
and a ffilia te
banks in Lem­
mon and Hot
Springs, S. Dak.
She was pre-

support resource to management
and lending personnel at the bank
and affiliates in Lemmon and Hot
Springs. He previously served at
Production Credit Association in
Belle Fourche and Rapid City, S.
Dak. and as assistant vice presi­
dent-senior loan specialist for the
First Bank System.
Brian Wolfe has joined the bank
as retail banking manager. He has
been employed by First Bank, East
Grand Forks for the past four years,
most recently as manager of the re­
tail banking department.

IOLTA Update



# viously associated with North­
western Bank and Trust Company,
Helena, Mont., and with the Federal
Reserve Bank of Minneapolis.
Mark Gannon will serve as a key
(Continued from page 35)
® served as a vice president at North­
ern Trust Company, Chicago, in the
bond department.
Mr. Bulinski has spent his entire
* career of 23 years at the bank, work^ ing his way up from teller to vice
president in charge of lending. In
1978, he was elected to the board of
Honors for the longest associa­
tion with the bank go to Mr. John­
son, 56, who joined it as a book­
keeper in 1954. He became a teller
later that year, an assistant cashier
^ in 1959, a vice president and director
in 1964, executive vice president and
cashier in 1970 and president in
Mr. Bolger joined the bank as a
^ director in 1964, was named a first
vice president in 1965, president in
1968 and chairman in 1976.

Valley Announces Changes

Valley Bancorporation has an­
nounced several staff changes.
Federal Reserve Bank of St. Louis

Penny Barry, IOLTA Coordina­
tor for the North Dakota Bar Foun­
dation, has replied to recent con­
cerns of banks participating in the
In the case when service charges
on IOLTA accounts exceed accrued
interest, banks should bill the North
Dakota Bank Foundation/Lawyer
Trust Account Committee to cover
excess charges.
Concerned over detailed reporting
requirements for the IOLTA pro­
gram, the Bar Foundation is draft­
ing a uniform statement which can

be used in lieu of a handwritten
report or sending a copy of the IOL­
TA account statement. Also, inter­
est remittances can now be electro­
nically transferred by a majority of
the state’s banks into the North
Dakota Bar Foundation, Inc., IOL­
TA Account, which is maintained at
the Bank of North Dakota in Bis­
marck. The account number is 45-00897.

Appointed in Bismarck
At Bismarck State Bank, Jerry
Hauff has been appointed assistant
p resident/commercial
o fficer.
Prior to his em­
ployment with
the bank, Mr.
Hauff worked as
a secondary vo­
catio n al a g ri­
cultural instruc­
tor for Killdeer
Public Schools
and adult farm management instruc­
tor for Und-Williston branch. He
also worked as an agricultural credit
loan officer, commercial credit loan
officer and branch manager for
Farm Credit Services of Bismarck/

James J. Mueller has been named was data processing manager for the
vice president/office manager of the Radford Company in Oshkosh.
corporate services offices of Valley
Trust in Madison. Previously he was WBA to Hold Personal
vice president of Valley Trust Com­
Banking School, March 6-12
pany, Madison.
Also named vice president/office
The Wisconsin Bankers Associa­
manager in Madison was Joan A. tion’s Personal Banking School will
Burke, who will manage the per­ be held March 6-12 at the Westwood
sonal trust office. She has been with Conference Center in Wausau. This
the Valley organization for 19 years. 200-level course is an intensive pro­
Kurt R. Mueller has joined Valley gram developed for bankers who
Trust in Green Bay as assistant vice have a basic understanding of
president and trust officer. Prior to matching bank services to customer
joining Valley, he was a trust officer needs. It will provide tools and tech­
with the Marine Trust Company in niques for bankers to successfully
sell and cross sell financial products.
At Valley Systems, Inc., AppleCourses for 1988 include Under­
ton, Jane Kolosso has been appoin­ standing the Customer, Selling
ted Vboss education coordinator. Bank Services, Products and Ser­
She will train all Valley Bank em­ vices, Awareness of Competitors,
ployees in Vboss, a financial auto­ Tax Planning Principles, Invest­
mation software package designed ment Management and Develop­
by Valley Systems. Ms. Kolosso was ment of Financial Objectives.
previously an elementary school
The registration deadline for this
principal in Green Bay.
school was February 5. However,
Also at Valley Systems, William future sessions will be held. For
Gerend has joined the company as a more information, contact the WBA
programmer analyst. Previously he office.
Northwestern Banker, February, 1988


South Dakota Bankers Association

President—Larry Ness
Exec. V.P.—J. M. Schwartz
Independent Community Bankers of S. Dak.

President—R. Kent Thompson

Elected in Sioux Falls
First Bank of South Dakota,

N.A., Sioux Falls, has announced of­
ficer elections. Cathy Galindo and
Pamela S. Rippentrop have been
elected consumer product officer;
Lisa M. Maurer, account officer, and
Cynthia M. Reiter, real estate pro­
duct officer.
Ms. Galindo joined the bank as a
bookkeeper at South Branch in
1969. Ms. Rippentrop came to the
bank in 1979 and has held various
positions in secretarial, telemarket­
ing and customer service. Both most
recently served as consumer product
Ms. Maurer joined the bank in
1986 as a banking officer trainee and
was named account specialist in the
the time the bank closed, its depos­
its totalled about $4.1 million and
its assets totalled about $5.1 mil­
lion. The Shoshoni bank’s sole office
will not reopen.

client area last July. Ms. Reiter %
came to First Bank in 1985 as a
mortgage loan processor. She was
named a consumer product spe­
cialist last July.

Retired in Fulton
Wayne Slade has retired from Ful­
ton State Bank. He began working •
at the bank in 1949 and has held
many offices and served as a directtor. He will continue in that capacity
as well as serving as a consultant to
the bank. An open house was held in •
his honor at Fulton State Bank on
January 27-29.
ployee benefits officer in the trust ®
department. Mr. Clune has 16 years
of experience in trust services and
o’perations, including, four years as
employee benefits officer at First ^
Trust Company of Montana in Bill- *

Added in Cheyenne
Neil Severinson has joined Norwest Bank Cheyenne as vice presiWyoming Bankers Association
dent/manager of the trust depart­
President—William Ruegamer
ment. He previously served as vice
Exec. Dir.—Gretchen Tea
president and trust division man­
ager at the Central Bank of Grand
Junction. Mr. Severinson’s 15-year
Shoshoni Bank Closed
career in the trust area includes
.The First State Bank in Shoshoni being vice president and trust offi­
was closed on December 18. The cer and First National Bank of Boul­
FDIC approved the transfer of in­ der and Central Bank of Colorado
sured deposits and fully secured or Springs.
In addition, B. Nevling Clune, Jr.
preferred deposits of the bank to
First State Bank of Thermopolis. At has joined the bank staff as em­

Montana Bankers Association

President—James Bennett
Exec. V.P.—John T. Cadby
Montana Independent Bankers

President—Sidney K. Brubaker
Ex. Sec.— Joseph E. Thares

MBA Offers IRA Seminars
The Montana Bankers Associa­
tion will sponsor two IRA seminars

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

on February 25 and 26 at the Shera­
ton Hotel in Billings. Both will be
conducted by Universal Pensions,
“Essentials of IRAs,’’ on the
25th, is a beginners seminar suited
for officers, front-line and newly
placed IRA personnel, or as an up­
date or refresher course for experi­
enced managers.
“ IRAs Today,’’ on the 26th, is de­
signed to look at more complex
issues the bank faces with an IRA
program. Emphasis will be placed
on the latest IRS interpretations on
issues such as required minimum
distributions for account-holders
aged 701/2 or older, beneficiary op­
tions under new regulations, ap­
plication and effect of the Tax
Reform Act of 1986, proper com­

Promoted in Sheridan
Carla J. White has been elected
cashier at Sheridan National Bank.
Ms. White was one of the original
staff members when the bank •
opened in 1984, and began as a parttime bookkeeper. She became opera­
tions officer in 1985 and was elected
assistant vice president later that
year. Prior to joining the Sheridan •
Bank, she was employed by the
Bank of Laramie for 11 years.
pliance procedures, and recent ®
changes to 1RS Forms 5350 and
For more information on these
seminars, contact the MBA.

Elected in Billings
At First Interstate Bank of Bill­
ings, Susan M. Riplett and Gregory ^
L. Schmidt have been elected assis­
tant vice president. Ms. Riplett,
a.v.p. in commercial lending, started
with the bank in 1981 and previous­
ly was a commercial lending officer. £
Mr. Schmidt joined the bank in 1983
and had also worked in Seattle,
Wash, and in Los Angeles and San
Francisco in group insurance and
pension plans. He was elected a.v.p. q
and trust officer.


Colorado Bankers Association

President—Jon Coates
Exec. V.P.—D. A. Childears
Independent Bankers of Colorado

President—W. Drew Lamoreux
Exec. Mgr.—James P. Thomas

First Interstate of Denver
Elects Officers
The Board of Directors of First
Interstate Bank of Denver has an­
nounced the recent promotion and
election of 29 officers.
Roberta L. Butterly and Edward
® S. Claunch were elected senior vice
presidents in trust banking services.
Ms. Butterly, who joined the bank
in 1964 as an accounting clerk, is
manager of trust operations.
Mr. Claunch, who joined the bank
in 1974 as a senior trust officer, is
now responsible for the bank’s trust
and related services to employee
benefit, foundation, endowment and
® other specialized tax-exempt institu­
tional accounts.
Officers elected to vice president
are Ronald L. Schacher, corporate
^ banking; Mark E. Thompson, corpo^ rate banking; Charles W. Bazylak,
vice president; and Dennis E. Baker,
legal services.

Mr. Schacher joined the bank in
1985 as an assistant vice president
in the agri-business department.
Mr. Thompson joined the bank in
1985 as an assistant vice president
in energy banking.
Mr. Bazylak, who joined the bank
in 1969 as a loan officer in the dealer
loan department, now manages
loans in the credit administration/
special assets area.
Mr. Baker, who joined the bank in
January 1986 as assistant vice
president and counsel in the legal
division, is now vice president and
counsel. From 1983 to 1986, Mr.
Baker was assistant regional coun­
sel for First Interstate Bancorp.






Elected to assistant vice presi­
dent were Jean A. Weaver, cash
management services; Mary Beth
Bochsler, corporate banking; Heidi
I. Heidrich, corporate banking; John
R. Mallory, legal services; Mark D.
Perkins, loan review; Paul L. Chiar­
elli, retail banking; Terry L. Reiff,
treasury; and Barbara H. Bleakly,
trust. Cherryl C. Gordon and Mary
Jane Simmons were elected senior
trust officer.
Newly elected officers are Janet
H. Wilhelm, cash management ser­
vices; Debra L. Bray, corporate
banking; Kevin F. Brunkow, cor­
porate banking; John P. Flanagan,
international banking; Thomas C.
Wallace, corporate banking; Pamela
J. Smith, loan review; Peter W.
Forbes, Terrel F. La Roche, Philip F.
Lankford and Shawn M. O’Neal, in­
vestments; and Marji A. Carlstedt,
Suzanne M. Flavin, and Glenn T.
Rippey, trust.

United Bank of Denver
Promotes Eight

Federal Reserve Bank of St. Louis

Richard A. Kirk, chairman and
chief executive officer of United
Bank of Denver, has announced the
promotion of eight employees.
David B. Kinney and Marlene K.
McDaniel were promoted to vice
president. Martha A. Sullivan and

Cheri A. Whalen were named assis­
tant vice president. Randilyn L.
Buck was promoted to corporate
trust officer, James T. Martin to in­
vestment banking officer, Charlotte
T. Petersen to investment officer
and Candace G. Spaid to consumer
banking officer.
Mr. Kinney joined United Bank of
Denver in 1981 and currently is a
fixed income manager and senior
management analyst with Capital
Management. Ms. McDaniel joined
the bank in 1981. She works in mar­
keting services as manager of sales
support and training.
Ms. Sullivan currently works in
check services. She joined United
Bank of Denver in 1985. Ms.
Whalen, who works in asset manage­
ment services’ real estate invest­
ments area, joined the bank in 1983.
Ms. Buck, previously with United
Bank of Grand Junction, joined
United Bank of Denver this year.
She works in the corporate trust ser­
vices division of asset management
Mr. Martin joined the bank in
January of this year. He currently
works in investment banking. Ms.
Petersen, an investment analyst
with United Capital Management
joined the bank in 1986. Ms. Spaid,
who works in credit approval, joined
United Bank of Denver in 1978.

Deluxe Completes Purchase
Of Current, Inc., of Colorado
Deluxe Check Printers, Incor­
porated, St. Paul Minn., has an­
nounced that it completed the acqui­
sition of Looart Press, Inc. and its
operating subsidiary, Current, Inc.
from Primerica Corporation on
December 31, 1987, for approxi­
mately $180 million in cash. Current
is expected to have sales of more
than $125 million in 1987.
“Our interest in Current goes
back several years,’’ said Harold V.
Haverty, president and CEO of
Deluxe. “Current is a leading direct
mail marketer of greeting cards, sta­
tionery and related products. The
acquisition ties in with Deluxe’s in­
terest in selling products through
direct mail.”
Current, which is based in Colo­
rado Springs, is the nation’s largest
direct mail marketer of greeting
cards. It also produces and sells a
variety of quality stationery and
related products for personal and
household use.
Northwestern Banker, February, 1968

Alot of folks
want to be your

We want
to establish
a partnership.
At NBC we call it relationship banking and it means
more than loans, computer work, investments and cash
It means people.
People with expertise and an interest in your
success. People who honor their commitments and stand
behind the service they offer.
That means not just looking for the easy solution
but the best one. It means a willingness to reconsider a
position when the situation merits it.
Relationship banking also means that, unlike other
correspondents, we don’t compete directly for business
with the banks we serve. The relationship is too important
to us.
Of course, the relationship we’re seeking also
includes providing the full range of correspondent
products and services you expect, from check clearing and
cash management to investment services and complete
regulatory compliance and forms processing.
If this kind of correspondent service makes as much
sense to you as it does to us, we’d like to talk with you,
because the first step in any successful business
relationship is a get-acquainted session.
Call us at (402) 472-4115. We’ll tell you a lot more.
Just as important, we’ll listen to you.


N ational B a n k of Commerce


iilFiRST C o m m e r c e bank.
Federal Reserve Bank of St. Louis

NBC Center / 13th & O / Lincoln, NE 68508
Phone (402) 472-4115 / MEMBER FD1C



Patricia J. Stamm has been ap­
pointed a loan officer for the bank.
She joined Ralston Bank in 1979
and has worked in several areas in­
cluding customer service, loan secre­
tary and loan administration.


President—Donald E. Blaha
Exec. V.P.—Stan Matzke, Jr.
Nebraska Independent Bankers Association

President—James A. Bohart
Exec. V.P.—Kurt Yost

• Giltner Reappointed to
Advisory Council




F. Phillips Giltner, vice chairman
of the First National Bank of Omaha,
has been reap­
pointed as the
Tenth Federal
Reserve District
re p re se n ta tiv e
to the Federal
Advisory Coun­
cil. The 12-mem­
ber Council is
com posed of
leading bankers
from across the
nation who meet quarterly to advise
the Board of Governors of the Fed­
eral Reserve System in Washington,
D.C. Mr. Giltner was named to the
post by the Federal Reserve Bank of
Kansas City.

Promoted in Springfield
Karen J. Greenawalt has been
promoted to vice president and cash­
ier and elected to
the board of di­
rectors of the
Springfield State
Bank, Springfield. She joined
the bank last
June as cashier
and loan officer.
Prior to that, she
was a loan offi­
cer at the Union K.J. GREENAWALT
Bank & Trust Co. of Lincoln.

Elected in Cook

Lynn C. Hazen and Lori J. Panko
have been elected officer of the
Farmers Bank of Cook. Ms. Hazen
will serve as loan officer, with pri­
mary responsibility for student and
personal loans. She has been with
Fuss Honored for 40 Years
the bank four years in loan adminis­
at North Loup Valley Bank
tration. Ms. Panko will be opera­
On December 17, Wilbur Fuss tions officer, with duties in customer
was honored by North Loup Valley service, accounting, IRAs and CDs.
Bank in North Loup for his 40 years She joined the bank in 1982 and has
of service on the bank’s board of di­ been a teller and loan assistant.
rectors. Mr. Fuss was an original
stockholder of the bank and was un­ Promoted in Bellevue
animously appointed to the board on
First National Bank of Bellevue
May 2 , 1947.
has promoted Terry L. Zaback and
The board adopted a resolution Bernie Pilachowski to vice presi­
honoring Mr. Fuss and presented dents and Kathleen K. Bagley to
him with a clock-pen desk set. He cashier. All three were previously
will continue to serve as a director of assistant vice presidents. Mr. Za­
the bank.
back will manage commercial lend­
ing and Mr. Pilachowski will man­
Wisner Bank Observes 100th age installment lending. Mrs. BagPromotes Two
ley will serve as personnel officer
The Citizens National Bank of and supervise bank operations.
Wisner will celebrate their centen­
nial on October 17, 1988. A number Shickley Bank Observes
of events have been planned
throughout the year to mark the Centennial
This past October, the Shickley
occasion, including an open house in
State Bank celebrated 100 years of
The bank has promoted Vice Pres­ service. On October 25 the bank
ident Jeff Johnson to president, and hosted a pork chop supper for over
Assistant Vice President Sandra 400 customers and area residents,
followed by a free dance.
Stigge to second vice president.

NIBA Holds Legislative Dinner

Changes Told in Ralston
Steven G. Getzfrid has joined the
staff of the Ralston Bank, Ralston,
_ as an operations officer. His prior
9 experience was with Citizens State
Bank, Lincoln; Occidental/Nebraska
Federal Savings and Loan, Fremont,
and most recently as a bank exami^ ner with the State of Nebraska De­
partment of Banking and Finance.
Federal Reserve Bank of St. Louis

THE Nebraska Independent Bankers Association sponsored its annual Legislative Dinner
in Lincoln last month. Thirty dignitaries and over 100 guests were in attendance for the
evening affair which included a reception, dinner and brief program. Taking part in this
year’s program were, from left: Lt. Gov. Bill Nichol; NIBA Pres. Jim Bohart, exec, v.p., Har­
vard State, and Sen. Bill Barrett, speaker of legislature, Lincoln.
Northwestern Banker, February, 1988

1985 and six each in the past two q
years. Iowa lost 30 banks in the
same period, losing 3 in 1984, 11 in
1985, 10 in 1986 and 6 in 1987.
The Omaha liquidation office has
180 employees hired on a temporary, £
contractual basis. An FDIC spokes­
man said some would be transferred
to other FDIC liquidation offices,
while the rest of the staff would be

Robert E. Harris Joins
Texas Bankers Association

Dale Heimann has resigned as
president of Douglas County Bank
& Trust Co. to
p u rs u e o th e r
business inter­
ests. He served
as p re s id e n t
since 1979. Dur­
ing his tenure
the bank’s as­
sets increased
from $57 to $147
million, capital
and re s e rv e s
grew from $4.4 to $11.7 million, and
deposits surpassed $5 million. The
bank opened new facilities at 145th
and West Center Road and at 93rd
and West Dodge during this period.
Deryl Hamann, currently chair­
man of the executive committee, will
assume the position of chief execu­
tive officer. He is an attorney with
the Baird, Holm law firm and chair­
man of four other banks. A search is
being conducted for a new president.
* * *

the bank as a teller and was later
hired as a regional development
trainee. Most recently she served as
the second shift output services
Mr. Simon joined the bank in
1965 as a sorter and computer opera­
tor, was promoted to shift super­
visor in 1969, and is now third shift
output services supervisor.



Record Data, a subsidiary of
TRW, Inc., has announced the ap­
pointment of Patrick W. Beck to
state manager/operations for its
Nebraska Regional Service Center
which services Nebraska and Iowa.
Mr. Beck has held positions as
plant manager and chief title officer
for several major title companies in
Texas before joining Record Data
last October.
Record D ata’s Nebraska Regional
Service Center is located at The Ex­
change Building, 1905 Harney
Street, in Omaha.

Cynthia R. Swoopes and Martin
G. Simon have been named opera­
tions officers at Norwest Bank Neb­
FDIC Will Close Omaha
While attending the University of Liquidation Office
Nebraska, Ms. Swoopes worked at
The FDIC plans to close its
Omaha bank liquidation office June
30 and transfer to the Kansas City
office the $145 million in assets that
are in the hands of the Omaha office.
The liquidation office was set up in
1984 to handle the growing load of
liquidation of loans and other assets
acquired from 34 banks that failed
in Nebraska and Iowa in a four-year
period of time. From 1983 through
1987, Nebraska lost 31 banks to
bankruptcy, with a peak of 13 in

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

Robert E. Harris joined the Texas*
Bankers Association February 1 as
executive vice
president. Mr.
Harris held the
same post with
the Oklahoma
Bankers Asso­
ciation for the
p ast
Prior to that,
his business ca­
reer was centered
in his home state of Nebraska. Born
in Holdrege, he attended the Univer­
sity of Nebraska, McCook Junior
College and Kearney State College.
Mr. Harris began his career as an
agriculture news writer for the H ast­
ings D aily Tribune, later joining*
Kansas-Nebraska Natural Gas Com­
pany in Hastings as manager of pub­
lic relations and governmental af­
Mr. Harris joined the staff of the*
Nebraska Bankers Association in
October, 1974, as executive vice
president, serving in that position
until his election August 1, 1979, as^
senior executive vice president oU
First National Bank & Trust Com­
pany of Lincoln (now FirsTier Bank,
A year later he resigned that posi-^
tion to accept appointment Septem­
ber 15, 1980, as executive vice presi­
dent of the Oklahoma Bankers Asso­
ciation. Mr. Harris said at that time
he felt he could best serve the indus-^
try as a banking trade association
executive rather than through an in­
dividual bank. His subsequent
leadership activities with the OBA,
as well as his previous work with th e^
NBA, have brought him nationwide
recognition. He was instrumental in
the founding of Banclnsure, an in­
surance outlet now owned by several
state banker associations through^
out the midwest.

A powerful, modern, top-of-the-line electronic data processing system is not beyond your reach,
regardless of the size of your institution.
We have one for you. Two, in fact.
First National Bank of Omaha’s Information Processing System is as versatile, efficient and powerful
as you’ll find anywhere. And it’s available to you. Dozens of banks are already linked with us electronically
to receive the full competitive benefits of this state-of-the-art service.
Our In-House Processing System, established in your institution, is fully controlled by your management
and functions on your timetable. Staff time is conserved, overhead reduced, processing costs stabilized
and services improved. It’s designed for optimum efficiency in financial institutions of varying sizes and
Our EDP services are your most affordable and valuable option. Give us a call; we need to talk.
Michael J. Dooley • National Marketing Director • First National Bank of Omaha
One First National Center • Omaha, Nebraska 68102 • (402) 341-0500

first n a tio n a l b a n k
of omaha
Federal Reserve Bank of St. Louis

one first national center
omaha, nebraska 68102

son will assume the duties of corpo- 9
rate banking manager previously
held by Mr. Perkins.
In addition, Marjorie Bredow was
elected vice president. She is man­
ager of the bank’s cost accounting £
Mr. Perkins joined FirsTier Lin­
coln in 1968. After two years in the
central credit department, he joined
the commercial lending division.
Mr. Johnson joined the commer­
cial division in 1985, and Ms. Bre­
dow came to the bank in 1967.
* * *
Hugh Hansen has been elected
president and chief operating officer
of First Commerce Bancshares, Inc.
OR WE ST Corporation repor­ Omaha, he joined Norwest in 1969 He has been affiliated with the orga­
ted January 28 it has filed an at Norwest Bank Omaha. He has, nization more than 28 years, serving #
application with
bachelor’s and master’s degrees as executive vice president since
the U.S. Comp­
from the University of Nebraska/ 1978. His primary responsibility has
troller of the
been for the system’s total loan port­
C u rren cy
* * *
charter a na­
At Vistar Bank, Vice President
tional bank in
Curt Denker has been promoted to
manager of the commercial/execuThe new bank,
tive lending department. He has
Norwest Bank
been with the bank since 1983, and
N eb rask a/L in in banking for 11 years.
/ I
coln, N.A., will
Manager of Consumer Lending
be N o rw e s t’s
Michael L. Mattson was elected con­
first banking facility in Lincoln, the sumer loan officer at Vistar. Loan
state capital.
Analysis D epartm ent Manager
Norwest announced last year that Scott A. Meradith was elected loan
it intended to enter the Lincoln analysis officer. Manager of Support
market, either through acquisition Services Operations Valerie Meyer
or with a de novo charter. Its state­ was elected operations officer.
During his tenure with First Com­
wide bank, Norwest Bank Nebraska,
* * *
merce, Mr. Hansen has served as f
has 15 banking offices in Grand Is­
At FirsTier Bank Lincoln, John president and CEO of three First
land, Hastings, Norfolk and Omaha.
Other Norwest subsidiaries with of­ P. Perkins has been appointed vice Commerce affiliated banks—First
National Bank of Kearney, Overland
fices in Nebraska include Norwest president—loan
National Bank of Grand Island, and
Financial, a consumer finance com­ adm inistration.
North Platte State Bank, as well as 9
pany, and Norwest Mortgage, a resi­ He will be re­
senior vice president of First Na­
dential real estate mortgage lender. s p o n sib le for
tional Bank & Trust in Fremont. He
In the Lincoln application, Nor­ loan d e v elo p ­
was graduated from Midland Col­
west designates Paul D. Kadavy as ment, planning
lege in Fremont.
president and chief executive officer and asset quali­
The First Commerce Bancshares %
of the new bank. He was senior vice ty for the bank’s
board also promoted Stuart Bartpresident of Norwest Bank Nebras­ five lending divi­
ruff to senior vice president in
ka, based in Omaha.
charge of credit administration. His
Vice President
Mr. Kadavy said that although
primary responsibility is to provide
the application is subject to regu­ Rodney R. Johnanalysis and staff support to NBC 0
latory approval, he expects the bank
as well as other First Commerce
to be fully operational sometime this
banks. Mr. Bartruff joined the Na­
spring and that a grand opening will
tional Bank of Commerce in 1979 as
be planned for mid-year.
a loan analysis officer. He trans­
He said the bank will occupy ap­
ferred to the Overland National in #
proximately 8,850 square feet of
1983, serving there as vice president
leased space on the first two floors
and ag loan officer. He returned to
of the historic CenterStone Building
NBC in 1985 as vice president in
in downtown Lincoln.
charge of loan service administra­
Mr. Kadavy moved to Lincoln
tion. He is a graduate of the Univer- #
last August to begin preparations
sity of Nebraska.
for the new bank. A native of


Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis


itjg 0 ! § "


futuri .

ad campaign
the positive!

ARlHfßR^ 1



^ 1 1 . unique advertising campaign designed to tell
the people of Nebraska more about Nebraska was
unveiled last month by the Nebraska Press Associa­
tion and the Nebraska Bankers Association, the cam­
paign’s primary sponsors.
“In Nebraska, we are fortunate to have a state that
is productive, well-educated, healthy, physically
attractive, and successful in ways we often don’t even
recognize,” said Gov. Kay Orr, who was the special
guest at a reception held to launch the campaign.
“These ads should cause all Nebraskans to be even
more aware of our many successes as a state and to feel
proud of our many accomplishments,” she said.
The campaign, consisting of a series of six news­
paper ads which will be carried as a public service by
• the 203 daily and weekly newspapers across Nebraska
over the next several months, was specifically created
to enhance the pride Nebraskans should have about
their home state.
The campaign was conceived and developed by
• Bailey Lewis & Associates, a Lincoln-based advertis­
ing agency which donated its creative time on the cam­
paign. The Nebraska Bankers Association paid the
$12,000 production costs for the ads, and the Nebraska
Press Association is supporting the effort by asking
• its membership to provide space in their newspapers to
run the ads at least one time each.
“The press often is accused of focusing on the bad
news and downplaying all the good things that are
happening,” said Arlen Miles of O’Neill, president of
• the Nebraska Press Association. “With this campaign,
community newspapers throughout Nebraska will be
printing what we’re always being asked to print —
more good news,” he added.
“We hope this ad campaign will encourage Nebras• kans to develop a statewide spirit of unity and pride,”
said Jim Lauerman, president of Bailey Lewis & Asso­
ciates. The theme of the campaign is “Let’s Get Into A
Positive State.”
NBA President Don Blaha, president, First Na® tional Bank of Ord, said the bankers association
reacted very positively to the ad campaign when it was
first presented last summer. “The ads do a good job of
presenting facts and figures about our state that we all
need to be more aware of,” said Mr. Blaha.
® Bailey Lewis & Associates worked closely with the
Nebraska Department of Economic Development in
Federal Reserve Bank of St. Louis

putting together the information presented in the ads,
which deal with various aspects of the state’s
In the fine print of the ads pictured with this article
are some positive, telling statistics about Nebraska.
For example, these Nebraska facts are featured:
• “Let’s All Support...” (top left). Ranks among top
five states in cash receipts for ag commodities. Recent­
ly produced a record 954 million bushels of corn (11%
of U.S. total) with total cash crop marketing of $3.3 bil­
lion and $4.6 billion in livestock marketing. Cattle and
calf production is 12 percent of U.S. total, placing Neb­
raska second only to Texas.
• “Graduate Level...” (top center). Graduation rate
of high school students second highest of any state in
nation. Students score among top six of all states on
SATs. Ranked 15 among states in spending for educa­
tion in grades 1 -12 .
• “America Has A...” (top right). Sixth highest life
expentancy rate in nation (73.88 years). Third in ratio
of hospital beds to population, with medical costs only
73% of national average.
• “Among the Things...” (lower left). Over 763,000
Nebraskans currently at work in the state; unemploy­
ment of only 5%. Over past five years, 53,000 new jobs
• “Hard Work...” (lower center). More than 16 mil­
lion nonresidents travel through the state each year,
contributing $1.3 billion to the economy. Tourism is
third largest industry of the state, increasing 30%
since 1980 and employing 35,000.
• “Just Imagine...” (lower right). The good news:
9.8% growth in metro employment in past two years
alone. Designated as second best manufacturing en­
vironment in contiguous 48 states. Ag production of
$8 billion ranks Nebraska #5 nationally. Passage of tax
incentive legislation has produced company invest­
ments of over $1 billion and over 9,100 new jobs. 25%
growth in state’s service industries.
The ads feature this credit line listing the partici­
pants in the campaign: “A message on behalf of Neb­
raska presented by this Newspaper, the Office of the
Governor, and your hometown FDIC insured Full-Ser­
vice Bank. Created by Bailey Lewis & Associates, Lin­
coln and Omaha.”
The Nebraska Bankers Association mailed copies of
all six ads in the campaign to CEOs of Nebraska banks
last month.
Northwestern Banker, February, 1988


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Bank Management Conference,
Legislative Reception to Be Held
HE Iowa Bankers Association
will present its Bank Manage­
ment Conference

President—Clair Lensing
Exec. V.P.—Neil Milner
Iowa Independent Bankers

President—Tom Huston
Exec. Dir.—Diane Gibbs

Consumer Credit School
Set for March 20-25
The Iowa Bankers Association
Consumer Credit School will be held
March 20-25 at Drake University in
Des Moines. This 200-level school
was developed in cooperation with
the American Bankers Association.
It is designed to give students a
knowledge of consumer credit as an
integral part of retail banking;
deepen comprehension of the mana­
gerial aspects of consumer credit
operations, especially loan portfolio
management, and develop and refine
students’ administrative and human
relations skills.
Tuition for the school is $700,
which includes room, meals, case­
book and study materials. For more
information, contact the School Re­
gistrar at the IBA office.

Added in Hampton
Kevin W. Krause recently joined
0 the Hampton-based First Midwes­
tern Financial Corporation as vice
president. He has a degree in finance
and a law degree from the Universi­
ty of Iowa. Mr. Krause will serve as
# a legal advisor as well as assist in
the consultation of the corporation’s
nine subscribing banks. He previ­
ously served as Franklin County A t­

Advanced in Bussey
At the State Bank of Bussey,
Cashier Linda Furman has been pro­
m oted to vice president. She is suc­
ceeded as cashier by Assistant Cash­
ier Jaci Rozenboom. LeAnn Powers
has been promoted to assistant
cashier. The three have been on the
'bank staff for 12 , 11 and eight years,
Federal Reserve Bank of St. Louis

12:00 Lunch. “Iowa Forecast”—
Ed Tubbs, superintendent of
1:30 “Lender Liability Aware­
ness’’—Arthur Davis, Des
Moines atty.
3:30 Legislative Briefing/Legislativ e
L e a d e rsh ip —Wes
Ehrecke, s.v.p., IBA.
6:00 Legislative reception.

and Legislative
Briefing & Re­
ception on March
9-10 at the Mar­
riott Hotel in
Des Moines. Se­
nior bank offi­
cers are encour­
aged to attend
these two impor­
Thursday, March 10
tant gatherings.
Heading up the list of speakers
for the Bank Management Confer­ 8:00 Continental breakfast.
8:30 U.S. and International Eco­
ence is Dr. Herbert V. Prochnow,
nomy’’—Dr. Herbert Proch­
former president of The First Na­
tional Bank of Chicago and founder
9:45 “Enhancing Your Manage­
and first director of the Graduate
ment Responsibilities,’’ “D
School of Banking in Madison, Wis.
& O U p d a te ’’—Howard
The legislative briefing/reception
Hagen, Des Moines atty.
will provide the opportunity for
bankers to meet with legislators as
B ankers’
well as be updated on current legis­
lative issues. Majority and minority
leaders from both chambers as well
2. Increasing Non-Interest
as a number of Iowa’s administra­
Income/Controlling Non-In­
tive officials have been invited to at­
Resources Man­
Fee for both programs, one break­
fast, two luncheons, reception and
4. Marketing for Quality
handouts is $175 for members, $200
for subscribers and $225 for non­
5. Uses of the One-Bank
members. Fee is $20 additional at
Holding Company
the door. For the Legislative Recep­
. 401K & 125K Plans
tion only, fee is $25 for members,
Open Discussions—Com­
$35 for subscribers, $50 for non­
members and $25 for spouses.
Wednesday, March 9
12:00 Lunch. “The Iowa Ambassa­
dor Program’’—Cliff Wilson,
9:00 Registration opens.
pres, of the Iowa Ambassa­
10:00 Welcome—Clair Lensing.
dor Program.
10:10 “ Investm ent O pportuni­
1:00 “ Creating the Five-Star
t i e s ’’—Ken B r e tth o r s t,
B ank’’—A rt Pulis, pres.
chmn., First St. Louis Se­
Pulis & Assoc., Inc.
3:00 Adjournment.

1988 Iowa Group Meetings

Feb. 14-15
Feb. 19-20
May 2
May 3
May 4
May 5
May 16
May 17
May 18
May 19

Sioux City
Des Moines
Council Bluffs
Fort Dodge
Clear Lake
Northwestern Banker, February, 1988


Iowa News

Tom Smith is Candidate for
President-Elect of the IBA
Thomas R. Smith, 65, chairman of
Brenton Bank & Trust Company in
M arshalltow n,
has announced
his candidacy
for the office of
of the Iowa Ban­
kers Association
for the election
to be held in
August prior to
the IBA’s 102nd
annual conven­
tion in September.
Mr. Smith has spent his entire
banking career of 39 years with the
Brenton organization, most recently
as president and CEO at Marshall­
town from September 1, 1973 to
August 1, 1987, and chairman since
that date. Mr. Smith retired recently
from day-to-day responsibilities in
the bank but is continuing on an ac­
tive basis as chairman.
He has been actively involved for
many years in the work of the Iowa
Bankers Association and the Ameri­
can Bankers Association. He was
treasurer of the ABA for the two-

year term of 1977-79. Mr. Smith said
relinquishing the pressures of daily
business “will allow me to devote
maximum time to giving to the IBA
and to Iowa whatever I can for the
banking career I have enjoyed in
this great state.”
Mr. Smith is a native of North
Dakota, where he was born Sep­
tember 2, 1922. His parents moved
the family to northeast Iowa when
Tom was five years old. After atten­
ding school in Volga, he entered
Iowa State College (now Iowa State
University) in 1942, but left school
that year to join the Army. He
served with the 69th Infantry Divi­
sion in the European Theatre as a
Technical Sergeant. He returned to
Iowa State and was graduated in
1949 with a degree in Animal Hus­
He was hired personally in 1949
by W. Harold Brenton, president
and founder of Brenton Banks, and
was assigned to the Brenton
“home” bank at Dallas Center,
where he later became cashier. He
moved to the Brenton bank in Perry
in 1958 as cashier, was named execu­
tive vice president in 1961 and presi­
dent in 1963. After 10 years, during
which time the Perry bank went

Committed to
making your
bank stand
apart from the

from $7 million deposits to nearly ^
$20 million deposits, Mr. Smith was
elected chairman of the board at
Brenton National of Perry and was
moved to Marshalltown to become
president and CEO of Fidelity Sav- f
ngs Bank (now Brenton Bank &
Trust Company) on September 1,
1973. He held that position until last
August 1, when he became chairman
of the board. In his 14-year term as f
president at Marshalltown, the
bank’s deposits doubled from $35
million to $71 million.
In addition to his position as
chairman of Brenton Bank of Mar- f
shalltown, Mr. Smith continues as
chairman of the board at Perry and
as vice president and a director of
Brenton Banks, Inc., which is head­
quartered in Des Moines.
Throughout his career, Tom
Smith has continuously devoted
time to agriculture. He has been a
long-time supporter of 4-H and FFA
activities and was awarded the 4-H f
Alumni Recognition Award in 1978.
He was inducted into the Iowa Agri­
cultural Hall of Fame in 1981 and
has received numerous other awards
for his ag endeavors, as well as his #
civic work in each city he has
worked. He continues his personal
interest in farming as vice president
and secretary of Barnes Farms, Inc.,
a family company.
Mr. Smith served as a director of
ABA, as chairman of the ABA Ag
Committee in 1971-72, as chairman
of the community banking division
in 1973-74 and again from 1977-79#
when he was ABA treasurer.
Throughout his years as an ag ban­
ker, Mr. Smith has been in demand
as a speaker on ag banking and
other areas of agriculture. He h a s#
authored articles in the N o r t h ­
w e s t e r n B a n k e r and numerous
other banking and business publi­
He is a past president and cur-®
rently is serving as chairman of the
Iowa State University Alumni
Achievement Foundation. He has
served for more than ten years on
the ISU Board of Governors and®
currently is on the search committee
for a new director of development.

Promoted in Hawkeye


Leon J. Deitzenback has been pro­
moted to executive vice president of
Citizens Savings Bank, Hawkeye.
He joined the bank in 1978 and was
elected vice president and cashier in f

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis


Statement of Condition
December 31,1987

fc l l l á k Í ' iii-' Ä

**#*'>* -«««tac

$ 44,548,660.71

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

1, 122, 000.00


Capital Stock
Undivided Profits


$ 150,176,538.78

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


V.O. Figge
Chairman o f the Board
Edward L. Carmody
Senior Vice President

James Kahl Figge
Office o f the President

John Kahl Figge
Financial Consultant

Thomas Kahl Figge
Office o f the President

Mel Foster, Jr.
Pres., Mel Foster Co., Inc.

Thomas A. Gildehaus
Executive Vice Pres., Deere & Company

Richard R. Horst
Senior Vice President and Cashier

Richard E. Kautz
Senior Vice President

Joseph S. Kimmel, Jr.

Pres., Republic Electric Co.

Robert G. Lenertz
Senior Vice President

Charles R. Von Maur
Petersen-Harned-Von Maur

Robert V.P. Waterman
Lane and Waterman

Henry C. Wurzer
Kahl Properties

* Davenport Bank and Trust Company

Resources Approximate One Billion Five Hundred Million Dollars
Federal Reserve Bank of St. Louis


Iowa News

Group 1 to Meet Feb. 19 and 20
MARINA in South Sioux
City, Neb., will be the location

for this year’s
Group 1 Annual
M eetin g ,
February 19 and
2 0 . G roup 1
Chairman James
W. Miller, chair­
man of the Pio­
neer Bank in
Sergeant Bluff,
will preside. Se­
cretary of the
group is Russell Spearman, presi­
dent, Citizens Savings Bank, Sac Ci­
R eg istratio n and exhibitors
displays are open beginning at 7:00
p.m. Friday evening. On Saturday
you may register between 8:00 and
11:30 a.m. or between 5:30 and 7:30
p.m. Friday night’s social hour, 8:00
to 10:00, will be hosted by the Sioux
City Bankers Association. Gene
Hagen, president, Security National
Bank, is president of that group, and
Max Larson, president, First Na­
tional Bank, is vice president.
Saturday begins with the NABW
Breakfast at 8:30. Speakers will be
Ann Schulz, president of the North­
west Iowa NABW Group, and Silas
Keehn, president of the Federal Re­
serve in Chicago.
Following 11:30 luncheon, the
North High Swing Choir will enter­
tain. Bill Janklow of Dougherty
Dawkins, Inc. in Minneapolis, is the
afternoon speaker. Giving remarks


......... .

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis





at the business meeting will be IBA
President Clair J. Lensing, IBA Ex­
ecutive Vice President Neil Milner
and Iowa Superintendent of Bank­
ing Edward L. Tubbs.
Saturday evening’s entertain­
ment includes social hour at 6:30,
banquet at 7:15, dancing with Mr.
Tune Reel to Reel at 8:00, and casino
night with auctions at 9:30 and
1 1 :00.

John Van Dyke Case Goes to
OCC, Federal Reserve Board
A final decision is not expected
for about four months from federal
regulatory authorities on whether
Sioux City banker John Van Dyke
Jr. should be suspended from his of­
fice as president of Toy National
Bank and assessed $15,000 in civil
money penalties. An administrative
law judge ruled on January 12 in
Washington, D.C, against Mr. Van
Dyke on four allegations made by
the Office of the Comptroller of the
Currency, but held in Mr. Van
Dyke’s favor on a fifth allegation.
Judge James L. Rose then recom­
mended against removing Mr. Van
Dyke from his office as president of
Toy National Bank.
The OCC suspension order was
issued June 19, 1987, until a final
resolution of the order is made by
the Federal Reserve Board.
The allegations brought against
Mr. Van Dyke by the OCC were
1. That he illegally borrowed $85,

344 from a trust for which he and his
bank were co-trustees.
2. That he violated a $100,000
limit on bank loans to “insiders.”
3. That he had been involved in a
“check-kiting scheme” and that he
knowingly wrote insufficient funds
4. That he had illegally had his
bank pay overdrafts in his personal
checking account on three different
5. That he had illegally pledged
stock as collateral for two different
loans at the same time.
Judge Rose agreed with the OCC
on the first four allegations, accord­
ing to Dean DeBuck, information of­
ficer for the OCC, and that these
were civil violations of banking
laws, adding that the “check-kiting”
allegation also appeared to be a cri­
minal violation. He concurred in the
OCC’s assessment of $15,000 civil
money penalty. However, Judge
Rose stated in his decision that the
OCC charges against Mr. Van Dyke
met only two of the three criteria
needed for removal from office. He
said Mr. Van Dyke had violated
banking laws in transactions and ac­
tivities during the 1985, 1986 and
1987 period presented, but the OCC
had failed to show that these had
caused “serious” or “substantial”
loss to the Toy National. Therefore,
while he upheld the first four allega­
tions and the civil money penalty,
“these acts do not establish all the
elements necessary to require his re­
Mr. DeBuck said the OCC dis­
agrees and stated, “We think the
judge’s opinion in that matter was
too narrow.”
Mary Curtin, a Minneapolis attor­
ney who represented Mr. Van Dyke,
was reported in a Sioux City news­
paper as stating that “the judge de­
clined to remove Mr. Van Dyke from
the Toy National Bank because,
although he found these violations,
he did not believe that Mr. Van
Dyke’s actions evidenced any dis­
honesty on his p a rt.. .and he did not
believe the actions intended to or did
harm the Toy Bank.”
Federal banking laws require the
Comptroller of the Currency himself
to make a final decision on the civil
money penalties ruling. The law also
requires that any removal action re­
sides in the power of the Federal Re­
serve Board. The OCC attorney and
Ms. Curtin are expected to file com­
ments on the administrative law


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the coupon below for more information.

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Return to : Iowa Bankers Insurance & Services, Inc.,
300 Liberty Building, Des Moines, Iowa 50308


Iowa Bankers Insurance & Services, Inc.
Owned by all banks in Iowa fo r th e b e n e fit o f Iowa banks.
An affiliate of the Iowa Bankers Association
Federal Reserve Bank of St. Louis

Northwestern Banker, February, 1988


Iowa News

judge’s ruling with Comptroller
Robert L. Clarke and the Federal Re­
serve Board within coming weeks.
These comments, technically known
as exceptions, will be considered and
the rulings are then anticipated
within about four months, according
to Mr. DeBuck.
The sale of substantially all of the
$300 million of assets and liabilities
of Toy National Bank to Norwest
Bank Sioux City was announced in
the January issue of the N o r t h ­
w e s t e r n B a n k e r and that merger
has been completed.
Although Toy National Bank
charter no longer exists, the FRB
ruling can be important for a ruling
adverse to Mr. Van Dyke would pro­
hibit him from holding any staff po­
sition or director position with any
FDIC-insured bank in the future,
unless permission is given by a regu­
lator, according to Mr. DeBuck.

Dividend Increase Voted
Directors of Iowa First Bancshares Corp., Muscatine, declared a
45 cents per share dividend to share­
holders of record December 23,
1987, and payable January 8, 1988.
George A. Shepley, chairman of

Iowa First Bancshares, said this
represents a 28.5 percent increase
over the previous payment. Mr.
Shepley said the holding company’s
consolidated earnings after tax will
approximate $1,000,000. Iowa First
Bancshares is a publicly held com­
pany which owns 100 percent of the
stock of First National Bank of
Muscatine and First National Bank
in Fairfield.



for the past several years.
Barry Fruechte, vice president,
Nicholas G. Volk has been elected has been elected to the bank’s board
executive vice president of Farmers of directors.
Albert Fruechte joined the New
Savings Bank in Walford. He previ­
ously held the title of vice president Albin Savings Bank as a bookkeeper
since 1980. Prior to joining the bank 62 years ago on April 5, 1926, after
staff, he was an examiner for the graduating from a business college
in Illinois. Mr. Fruechte recalls, #
State of Iowa.
“My father was a director of the
at that time and talked me into
Executive Changes Are
taking the job to help out while the
Made at New Albin Savings cashier was ill. I never left!’’ Mr.
Albert Fruechte, 82, has been Fruechte was reared on a farm a t #
named chairman of the board at Eitzen, Minn., near New Albin. He
New Albin Savings Bank, replacing was later elected a vice president
Paul Meyer, who resigned that post and has served as president since
last November due to poor health. 1983.
Mr. Whalen has been with th e #
Succeeding Mr. Fruechte as presi­
dent is Raymond J. Whalen, 50, ex­ bank for his entire banking career,
ecutive vice president at the bank 23 years.

Elected in Walford


BURLINGTON AT THE HOLIDAY (Jet. of Hwys. 34 & 61)
Join your fellow bankers for important information and great entertainment!

The Players offer a variety of
musical style, laced with
humor. They perform music
from the 1950s and ’60s.
Now in their eighth year,
they have achieved local
recognition for quality and
Don’t m iss speaker John Langhorn: “ Predicting Professional Success in the World of W ork’’

The banks of Burlington hope to see you February 14-15 at the Holiday
Burlington Bk. & Tr.

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis


Farmers & Merchants Bk. & Tr.

First National Bank



-o ;








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institutions have used
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for designing new financial institutions and
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4015 Alexandra Drive
RO. Box 2097
Waterloo, Iowa 50704


Iowa News

Named in Waterloo
At Waterloo Savings Bank,
David A. Fegley and Randall G.
Ledger were named vice presidents.
They will retain their current re­
sponsibilities in real estate and agri­
cultural lending, respectively. Both
were formerly assistant vice presi­
Rick A. Thuesen, CPA, was
named vice president and controller.
He will continue his previous duties
as controller, in charge of account­
ing and internal control, and assume
additional responsibilities in connec­
tion with the bank’s investment
James H. Jensen was named vice
president, Metro Realty and Farm
Management. He was formerly
assistant vice president in the farm
management division.
Richard C. Buenneke and David
Mulnix were named assistant vice
presidents. Both were formerly con­
sumer loan officers. Mr. Buenneke
will retain his current responsibility
for indirect consumer lending. Mr.
Mulnix remains responsible for com­
pliance, collections and student
loans in addition to his consumer
lending duties.

Promoted in Eldora
Promotions at Hardin County
Savings Bank in Eldora have been
Trust Officer Linda J. Barcus was
advanced from assistant vice presi­
dent to vice president, as was Carol
A. Drury. Denise Murdock was ad­
vanced from teller to assistant
In December, the bank opened a
branch office in New Providence. It
opened offices in Union and Liscomb
in 1982. The bank will celebrate its
120 th anniversary this year.



representative to assistant trust of­
ficer. He will be responsible for ad­
ministering all employee benefit ac­
Robert L. Nitchals has been pro­
moted from assistant auditor to
auditor of the bank. He joined the
staff in 1986.

Changes Told
in New Hampton
Grant L. Anderson has been pro­
moted to assistant vice president of
the Security State Bank, New
Hampton. He joined the bank as a
farm loan trainee in 1986.
The Security State Bank ob­
served its 50th anniversary last
June, 1987. Total deposits and capi­
tal reached all-time highs during the
past year.
Security board of directors mem­
ber Lloyd D. Snyder passed away on
December 29. He was a retired part­
ner in the Blue Line Oil Company
and was serving his 20th year on the

Iowa Natl. Bankshares
to Acquire Oelwein Bank

R. Scott Fetner, president of Iowa
National Bankshares Corp., the
Waterloo-based bank holding com­
pany, has announced that a letter of
intent has been signed for the pro­
posed acquisition by INBC of the
Oelwein State Bank. The Oelwein
Advanced in Council Bluffs
State Bank is the largest bank in
Three promotions have been an­ Fayette County with total assets of
nounced by Council Bluffs Savings approximately $66 million and
capital of over $6 million.
Under terms of the letter of in­
Roger H. Wil­
tent, the Oelwein State Bank would
liams has been
become a wholly-owned subsidiary
advanced to ag­
of INBC through a transaction in
ricultural loan
which INBC will exchange newlyo ffice r.
issued common stock and cash for
joined the bank
the common stock of the Oelwein
in 1985 as an ag
State Bank. The exchange rate will
be based on the audited book values
Brent Peters
of INBC and the Oelwein State
has been promo­
Bank as of December 31, 1987. The
ted from trust

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

actual amount of stock and cash to
be paid by INBC to each sharehol­
der will be determined by the share­
holders of the Oelwein State Bank
based on a definitive agreement
drawn up in early 1988. The transac­
tion is expected to be consummated
during the latter part of 1988.
Mr. Fetner stated that the Oel­
wein bank is financially sound and
will continue to be locally managed
and community-oriented. Mr. Fet­
ner further stated that Oelwein’s
custom ers will experience few
changes in their present services
since the Oelwein bank currently
uses the data processing systems
provided for loans and deposits by
INBC’s primary subsidiary, The Na­
tional Bank of Waterloo.
Churchill T. Williams, chairman
and one of the original founders of
the Oelwein State Bank in 1946,
stated that the bank would continue
to operate as a state-chartered bank
in Oelwein and will retain its bank­
ing offices in Arlington and Aurora.
Mr. Williams said banking services
will be expanded to include a New
Horizons Club, overdraft checking
lines of credit, and enhanced trust
services. Mr. Williams also stated
that the proposed transaction would
require the approval of Oelwein
State Bank’s board of directors and
shareholders, and is subject to the 1
approvals of banking regulatory au­
Iowa National Bankshares Corp.,
the sixth largest multi-bank holding
company in Iowa, owns The N a-'
tional Bank of Waterloo, Midway
Bank & Trust in Cedar Falls, and
Peoples Trust & Savings Bank in Indianola. The National Bank of
Waterloo, which acquired the Gil- 1
bertville Savings Bank and con­
verted it into a banking office in
1986, recently announced that it
was in the process of purchasing the
First Community Bank & Trust in 1
Traer and the First National Bank
of Tama County in Dysart, which
will also become offices of The Na­
tional Bank of Waterloo.

Elected in Maynard
Albert L. Kimer has been elected
to the board of directors of M aynard^
Savings Bank. He was employed 30
years by the Farmers Home Admini­
stration. Mr. Kimler has completed
various courses in advanced credit
and financial analysis and is a certi-0
fied real estate appraiser.

Iowa News

Aredale State Bank Fails












The Aredale State Bank of Are­
dale, located in Butler County in
north central Iowa, was declared in­
solvent on January 20 by Iowa
Superintedent of Banking Edward
L. Tubbs. Mr. Tubbs said the bank
had $10,178,000 in assets and
$9,900, 000 in deposits. The FDIC,
as receiver, had several interested
parties, two bidders and sold the
bank for a $50,600 premium to First
Security Bank & Trust Company of
Charles City. The failed bank was re­
opened January 21 as an office of
First Security Bank & Trust Com­
Mr. Tubbs said the failure was
due to a combination of insider lend­
ing and poor selection and collection
of ag loans. The bank was purchased
in 1983 by Vernon Halvorson and
Donald Eichelberger, Cedar Falls
businessmen, according to Mr.
Tubbs. They purchased 100% of the
holding company stock from Floyd
Bochmann and his wife, Audrey,
and other local owners. Mr. Bochmann had continued as president
and cashier of the bank since its pur­
chase by Mr. Halvorson and Mr.
First Security Bank & Trust Company in Charles City has $107.6 mil­
lion in assets, with offices in Ionia,
Marble Rock and Rockford. The lat­
ter office was created last spring
when First Security purchased the
failed First State Bank of Rockford.
Aredale has a population of 90 and is
located approximately 25 miles
southwest of Charles City in adjoin­
ing Butler County. Mr. Tubbs said
Butler County had six banks with
$120 million in assets, of which the
Aredale State Bank was the small­
est, with an eight percent share.
Mr. Tubbs said his department
examined Aredale State last Sep­
tember, at which time a large loss
was identified. The bank was ex­
amined again in late December by
the FDIC and after his department
reviewed that report, it was found
that the bank’s remaining $455,000
capital had been exhausted. He then
ordered the bank closed on January
20 .

This was the first bank failure in
Iowa in 1988. The state suffered six
failures in 1987, 10 in 1986, 11 in
1985, three in 1984, none in 1983
^ and two in 1982, for a total of 33
banks in the past six years.

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

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in Banks
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use to describe how they feel toward Valley
National Bank.
Valley Bank is experiencing substantial growth
... in deposits,, and 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.

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Main Office-Sixth and Walnut

M em ber FDIC


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



Iowa News

moved into the holding company as
loan review officer. Before joining
NBW in 1979, he had been with the
The Iowa Bankers Association’s Glenview State Bank in Glenview,
Midwest Mid-Winter Management 111.
Meeting will be held February 24-26
Assuming Mr. Long’s former
at the Snowmass Club, Snowmass position as credit manager will be
Village, Colo. Bankers from Kansas Don Coffin. He joined NBW in 1983
and South Dakota are also invited to as a management trainee and was
the event. Evening programs are promoted to credit analyst in 1986.
planned, leaving daytime hours free
Marilyn Voorhees had been audi­
for recreation.
tor at the bank since 1983.
Representatives from the Office
Kendall Pruisner was an engineer­
of the Comptroller of the Currency ing analyst in research and develop­
and the FDIC have been invited to ment with Deere & Company before
sp eak on re g u la to ry issu e s. joining NBW in 1985. This past Sep­
Representatives from ABA’s ex­ tember he moved into the real estate
ecutive management staff will pre­ area and has been handling property
sent Thursday evening’s program. management. He has been named
Updates on the March 1 moratorium mortgage loan officer.
and the ag secondary market will be
Iowa State to Hold Seminar
given as well.
Wednesday night includes a wine on Determining Ag Costs
and cheese party, and cocktails and
A seminar on “How to Determine
dinner will be served on Thursday
Agricultural Costs’’ will be
and Friday nights. Registration is held February
24 at the Scheman
$150 for bankers or spouses. A pizza Continuing Education Building on
and movie party for young people
Iowa State University Campus.
will be held Thursday night at a cost theThe
seminar will focus on cost ac­
of $20 per person. Contact the IBA counting
methods that can be used
to register.
on the farm or ranch. Participants
will learn how to design their own
NBW Promotes Four
agricultural cost accounting sys­
The National Bank of Waterloo tems, control costs and price pro­
has promoted Don Coffin and Ken­ ducts.
dall Pruisner to officer positions.
Gary Maydew, associate pro­
Jerry Long, credit manager, and fessor of accounting in ISU’s Col­
Marilyn Voorhees, auditor, were lege of Business Administration,
promoted into the holding company, will lead the seminar. He has taught
Iowa National Bankshares Corp.
and developed accounting and tax
Mr. Long, formerly assistant vice courses for many years at I SU, the
president and credit manager with University of Illinois and other uni­
The National Bank of Waterloo, has versities. Mr. Maydew has written
several articles and the book A g ri­

IBA Mid-Winter Meeting
to Be Held Feb. 24-26

bu sin ess A ccou n tin g an d T axation .



The seminar registration fee is
$95, if received prior to February 10.
Two or more individuals from the
same firm, farming partnership or
corporation may attend the session
for $85 each. Registrations received
after February 10 will be $115 and
$105, respectively.
For more information about the
seminar, call Gary Maydew at (515)
294-9450. For registration ques­
tions, call Sheila Arends at (515)

Elected in Davenport



Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis

Charles A. Ruhl, Jr. has been elec­
ted to the board of directors of Brenton First National Bank of Daven­
port. He is executive vice president
of Ruhl & Ruhl Realtors of Daven­

Promoted in Webster City


Alberta Grandstaff has been pro­
moted to the postion of personal loan
officer a t the
First State Bank
in Webster City.
She joined the
bank in 1980 as
a teller. Since
then she has
served as install­
ment loan secre­
tary and most
recently as stu­
dent loan repre­ A. GRANDSTAFF
sentative. She also handles auto,
home equity and other personal

Promoted in Cedar Rapids
Suzanne Weable has been pro­
moted to assistant cashier at City
National Bank,
Cedar Rapids.
She will also
serve as assis­
tant manager of
the bank’s Lindale office. Ms.
W eable p rev i­
ously served as
new acco u n ts
manager at the
Lindale office.
Since joining the bank nine years £
ago she has also served as a teller
and messenger.

Added in Reinbeck
Chris Frischmeyer has joined the®
Lincoln Savings Bank in Reinbeck
as a loan officer. He is a graduate of
Iowa State University and was pre­
viously employed by the Farm Cre­
dit System in Webster City.

Retired in Pella
C.W. Gifford, executive vice presi­
dent of Pella National Bank, was re -#
cognized at an open house held in his
honor on December 30. Mr. Gifford
retired on December 31 after more
than 26 years of service to the bank.

Retired in Indianola
Everett Brown, president of Peo­
ples Trust and Savings Bank, India­
nola, has announced the retirement ^
of Albert J. Greubel from the bank’s w
board of directors and of Guy Risinger and Dr. Margaret Watson
from the bank’s advisory board.
Mr. Greubel has served on the £
board for 17 years. He will continue

Iowa News



on the advisory board. He retired
from farming in 1978.
Mr. Risinger and Dr. Watson
have served the board in an advisory
capacity for the past year. Prior to
that, they were board members for
27 and 10 years, respectively.

Promoted in Alton

The board of directors of the
Alton Savings Bank has announced
the promotion of John H. Krogman
to senior vice president. He
previously served as vice president.
Mr. Krogman joined the bank in
Honored in Indianola
Also promoted at Alton Savings
Eleven staff members of Peoples Bank was Tom Kiernan, formerly
Trust and Savings Bank, Indianola, assistant vice president. He was
were honored at
named vice president. Mr. Kiernan
the bank’s an­
joined the bank in 1978.
nual Christmas
party on Decem­
ber 12 for length
ABA Schedules Retail
of service to the
Banking Meet in April
“Performance and Profitability’’
William Bux­
is the theme for the ABA’s National
ton II received
Retail Banking Conference to be
special recogni­
April 24-27 at the Hilton
tion for his near­
Square, San Francisco. Designed for
ly 60 years with
the bank. Edith Heemstra was hon­ senior-level retail bankers and in­
ored for 30 years of service. Also re­ come producing insurance bank ex­
cognized were Doris Garrison, 25 ecutives, this premier conference
years; Bob Davey, Sara Ripperger will concentrate on strategies to im­
and Eileen Thompson, 20 years; prove sales staff performance and
Ruby Johnson, 15 years; Julie enhance bottom-line profitability.
Poundstone and Carol Putney, 10 Three days of general sessions,
years, and Karen Becker and Carla workshops, peer group discussions,
and a large exhibit hall will high­
Rubendall, 5 years.


light the agenda.
The program of distinguished
speakers includes E. James Morton,
chairman and CEO of John Hancock
Financial Services, who will discuss
the need for regulatory reform in the
financial services industry; Edward
Furash, president Furash & Com­
pany, who will give the keynote ad­
dress; G. Mike Moebs, chairman,
Moebs Services, who will explore
“The Future of Consumer Lending,’’
and Buck Rodgers, former vice
president IBM worldwide market­
ing, speaking on “Delivering Quali­
ty Customer Service.”
The conference also will feature
sessions on such critical issues as
“Delivery System Economics,”
‘‘C reatin g a P ro activ e Sales
Culture,” “Branch Redesign,” and
“Sources of Non-Interest Income.”
In addition, former major league
pitcher and author Jim Bouton will
be on hand to provide lively lun­
cheon entertainment.
The fee is $720; the ABA member
discounted fee is $575. The spouse
program fee is $195. For more infor­
mation and a registration form call
the Banker Education Network
(BEN) at 202-663-5430.

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


DECEMBER 31, 1987
Cash and Due from B anks....................
Tim e D eposits w ith
Financial In s titu tio n s ........................
Federal Funds S o ld ..............................
Investment Securities
U.S. Treasuries and A g e n c ie s .........
State and P olitical Subdivisions . . .
Other Investm ent S e c u r itie s ...........
Loans, Net of Unearned In c o m e .........
Reserve for Possible Loan Losses .
Net L o a n s ...........................................
Bank Premises and E q u ip m e n t...........
Other A s s e ts ...........................................
TOTAL A S S E T S .................................
D eposits ..................................................
Federal Funds Purchased and
S ecurities Sold under Agreements
to Repurchase ...................................
Other L ia b ilit ie s .....................................
Total L iab ilitie s .................................
Common S to c k .......................................
Surplus ....................................................
Undivided P r o f it s ...................................
Total S tockholders E q u ity ...............
STOCKHOLDERS’ E Q U IT Y .............


Federal Reserve Bank of St. Louis

$ 11,780,000

William G. Kruse

Beverly J. Anderson

Rita M. Banter

William G. Kruse

Chairman of the Board and
Chief Executive Officer

Vice President Personnel and Manager/
Personal Banking

Wire Services Officer

Lynn A. Kowalske

Chairman of the Board and
Chief Executive Officer

Teller Services Officer

John W. Law


Linda L. Budde

Unda K. Kress

John W. Law Co., Retired

Paul J. Gisch

Vice President Manager Real Estate

Personal Banking Officer Asst. M gr./W est Dubuque

J. Bruce Meriwether

Lynn K. Stoffregen

University of Dubuque,

J. Bruce Meriwether
Senior Vice President Special Lending

Thomas J. Stecher
Senior Vice President Operations

Richard A. Bean
Senior Vice President Finance

Daniel E. Welu
Senior Vice President Investments and Cashier

Dale P. Repass
Senior Vice President Senior Loan Administrator

Thomas W. Buelow

Vice President Business Loans and Leasing

Leo M. Mallie
$ 4,800,000

Vice President Agricultural Lending

Francis A. “ Chip”
Murray, Jr.

Computer Operations Officer

Vice President Commercial Loans

Trust Department

John J. Savary

Mark J. Wiilging

Assistant Vice President Manager North Dubuque

Vice President Trust Officer and
Trust Department Mgr.

Paul A. Pfohl

Shirley A. Christensen

Assistant Vice President Consumer Lending Manager

Trust Officer

Mary A. Piersch

Trust Officer

James A. Kerkhove

Personal Banking Officer

Richard K. Howard

Gary P. Dolphin

Trust Officer

Personal Banking Officer Manager/West Dubuque

Edward A. Babka

Mark E. Small

David W. Spahn


Vice President and

Data Services Officer

John S. Nigg

C. Michael Reilly

Mary K. Santjer

Vice President Marketing and
Business Development,
Non-Bank Services

Assistant Controller

Jeffrey A. Jochum
Credit Review Officer

William H. Callahan
Personal Banking Officer

Babka Publishing Co.

Paul L. Britt
President, Dubuque
Stamping & Mfg. Inc.


Wayne A. Norman
Roger J. Rhomberg
Rhomberg Fur Co.

James E. Walsh
Bird Chevrolet Co.

James D. White
Vice President
Deere & Co.

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

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

Paul J. Gisch
Senior Vice President Special Lending

Philip T. Kelly
President, Communications
Properties, Inc.

witty You

Northwestern Banker, February, 1988

mote international activities w orld#
* * *
Norman R. Hougham was electee^
senior vice president of American
Federal Savings and Loan Associa­
tion of Iowa at the December meet­
ing of the board of directors. Mr.
Hougham began his career w itl^
American Federal in 1982 as vice
president/branch manager of the 6th
and Grand office. In March, 1987,
Mr. Hougham was named to the
senior management group as v ie #
president and senior operations offi­
cer, responsible for the newly
created operations administration
division. Before joining American
Federal, he was employed by Bren#
ton National Bank of Des Moines
and Capital City State Bank.
First Interstate of Iowa, Inc., customers since Bankers Trust re­
reported net income of $5,091,000, entered the credit card business in
or 43 cents per share, for the year en­ December.
Norwest had bought 3,600 Bank­
ded December 31, 1987, compared to
a net loss of $11,721,000, or 98 cents ers Trust credit card accounts last
per share, in 1986. Oliver H. Hagen, June from Hawkeye Bancorporapresident and CEO, said the signifi­ tion, which had been processing the
cant improvement in earnings was accounts. When Bankers Trust’s ac­
achieved through the reduction of count with Hawkeye expired in
nearly $14,000,000 in the provision December, Bankers Trust nego­
for loan losses and a reduction of tiated a contract with Davenport
more than $3,000,000 in the net cost Bank and Trust Co. to process any
of operation of other real estate. In­ new credit card accounts that
cluded in 1987 net income was extra­ Bankers Trust acquired.
Previously, Bankers Trust credit
ordinary income of $864,000 from
utilization of an income tax opera­ card customers were charged an $18
annual fee and 19.6% annual in­
ting loss carry-forward.
Mr. Hagen said fourth quarter net terest. The bank is now offering
income of $3,268,000, or 27 cents per MasterCard or Visa accounts with a
share, marked the fourth consecu­ $12 annual fee and 15% annual in­
tive quarter of profitability. He at­ terest on balances over $500.
Meanwhile, Norwest is waiving
tributed this to improved credit qua­
lity, additional fee income and cost the 1988 $18 annual fee for the 3,600
control measures, as well as to $831, customers involved. Norwest char­
000 of tax loss carry-forward extra­ ges 19.8% annual interest.
* * *
ordinary income.
Mr. Hagen added that the holding
company’s net chargeoffs decreased
to $7,163,000 from $16,386,000 and
J. Daniel McGowan, II, vice presi­
$17,731,000 in 1986 and 1985, res­ dent international division of First
pectively. Non-performing loans Interstate Bank
also were reduced 45 percent to $14, of Des Moines,
182,000 from $25,614,000 a year ear­ has been a p ­
lier. “Our allowance for loan losses pointed to the
is very strong at $14,136,000,’’ Mr. W orld T rad e
Hagen states, “and covers nearly Service Council.
100% of all non-performing loans.’’ The Council is
* * *
c o m p rised of
from all First In­
Norwest Card Services and terstate Interna­
Bankers Trust of Des Moines are tional offices,
competing heavily for credit card and works to coordinate and pro-

Northwestern Banker, February, 1988
Federal Reserve Bank of St. Louis




Brenton Banks Inc. is re in statin g
dividend payment to shareholders.
The last such dividend was paid in
the fourth quarter of 1985. The
bank’s board of directors declared ^
dividend of 6 cents per s h a r"
payable on February 10 to share­
holders of record on February 1.
Officials said 1987 earnings will
be released in mid-February.
* * *
Loree R. Raker has been elected
vice president and Drake office man­
ager of Hawkeye Bank & Trust. S h ^
will remain the bank’s marketing
-------------------------------------------- •

February, 1988


BIOS Banking System, T h e ....................
Bankers Trust Co., Des Moines ............
Brock Report, The ..................................
Burlington B a n k s....................................


Cole Taylor Bank/Drovers, Chicago .. . .


Davenport Bank & Trust Co.................................................. 49
First Bankers Securities Corp., Mason C it y .................... ^
First National Bank, D u b u q u e ........................................... 57
First National Bank, O m a h a ............................................... 43
Gross, Kirk Co., Waterloo


Iowa Bankers Insurance & Services, Inc............................51
Marquette Bank M inn e a po lis........................
Merchants National Bank, Cedar Rapids . .
Midwest Management Consultants, Omaha


National Bank of Commerce, Lincoln
Norwest Corporation, Minneapolis . .



Office Concepts, Ltd., W aterloo........


Texas Instrum ents..............................
Travelers Express Co., Inc...................
TRW C orp o ra tion ................................


Valley National Bank, Des Moines



T his bank cut processing costs 30%
w ith aT I com puter system.
When J. Sid Dinsdale decided that there
had to be a way his bank could operate
more effectively, he did the smart thing.
He turned to a TI computer Value-Added
Reseller (VAR) that specializes in bank­
ing financial system configuration
and software.
“When we committed to computeriz­
ing, we knew we’d save money by bring­
ing our processing in-house. We figured
the payback would take 30 months, but
with our TI system, we’re already well
ahead of schedule.”

Now, all they have to do is upgrade
their software and add processing power
and terminals where appropriate.

An easy transition.
Project Manager Steve Zey explains.
“Now our TI computer handles all the
transaction accounting in the bank.
Our transition to in-house processing
was smooth.
“Most of our people were using the sys­
tem within a few hours of installation.”

TI service and support won’t leave
you short.
Texas Instruments has been making and
marketing reliable computer systems for
almost 20 years and offers a coast-to-coast
network to back them.

Call 1-800-527-3500.
Find out how your bank’s operations can
benefit from a TI computer system and a
TI reseller’s specialized bank accounting
software. Call the number above for the
TI reseller nearest you.

Investment protection you can take to
the bank.
Protecting the bank’s computer invest­
ment was a key factor in their decision to
go with a TI system.
Federal Reserve Bank of St. Louis

Tex a s

str u m en ts
© 1987 T I

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 M

We Know The Way We Are Norwest.

Members FDIC
Federal Reserve Bank of St. Louis