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m l i » FEBRUARY 1988 Honolulu Awaits IBAA Convention • The Future for Agriculture and Ag Banks—Survey • Directors’ Financial Statement Responsibilities • ABA Community Bankers Conference Program / https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Top B an k s in D Ranked by Demand flank 6/87 N e w V o r l' ~4..™^---:r r '::v o iim uDallas a iia s NA rst TReP ^ /wICBank NÄ 5 S e cSecurity u n tv P D .c a ^ific ; # i~N ~ ïa ï r i7 r .i.n- —a , ------- U , 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member F.D.I.C is i A BANKS OF IOWA BANK ‘Reprinted with permission, American Banker, ISiov. 24, 1987. First Bankers Securities Corporation 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 C O R P O R A T IO N https://fraser.stlouisfed.org 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 MEMBER OF AUDIT BUREAU OF CIRCULATIONS MEMBER BANK MARKETING ASSOCIATION OLDEST FINANCIAL JOURNAL SERVING THE CENTRAL AND WESTERN STATES ON THE COVER 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. FEATURES 11 Honolulu welcome awaits IBAA! Strong program, beautiful land draws high attendance 12 The future for agriculture and ag banking Exclusive survey among nine selected ag banking leaders 19 Community Bankers Conference Nearly 1,000 anticipated for Beverly Hills meeting 20 Financial statement responsibilities Dr. Doug Austin reviews directors duties, liabilities 24 Well done, Tom Olson! Exclusive interview with retiring IBAA president DEPARTMENTS 6 8 23 28 29 31 32 35 36 38 38 Bank Promotions Convention Calendar Corporate News Illinois Chicago Minnesota Twin Cities Wisconsin North Dakota South Dakota Wyoming 38 39 41 42 44 45 47 58 58 Montana Colorado Nebraska Omaha Lincoln Nebraska Ad Campaign Accentuates Positive Iowa Des Moines Index of Advertisers NORTHWESTERN BANKER 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Homer J. Livingston, Jr. an nounced his resignation January 12 as chairman and CEO of ABN/ LASALLE 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 ABN/LASALLE. 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. 5 • Austin Associates Foresees Slower Pace for Mergers and Acquisitions HE pace of commercial bank T 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 organizations; (4) Lower stock prices of potential targets resulting from the October stock market crash; (5) Changes in state laws allowing https://fraser.stlouisfed.org 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 zations. 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, 1987. 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. Guaranteed same day disaster recovery service for your protection, compliance, and peace of mind. Cost effective pricing to meet your needs. Free initial and on-going training on all applications. ATM, POS and on-line teller windows with checkless transaction capability. (to name just a few). 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 Sr. Vice President Customer Group 1-800-332-5242 (In Iowa) 1-800-421-0059 (Out of Iowa) ÈTH E ¡ B IE S ¡B A N K IN G IS Y S T i 4333 E d g e w o o d Rd n e PO. Box 1847 Cedar Rapids, low a 52406 319/595-6600 Northwestern Banker, February, 1988 6 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 formation Technology, Inc. of Lin^i seven years ago, serving as depart coin, Nebr., 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 rado. 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 's ROMOTIONS and other an P nouncements have been made by the following banking institu tions: 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 https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Inc. ■ Saves you time by providing you with a uniform method for evaluating the credit history on consumer applicants. The TRW Gold Report...the superior predictor...the only credit risk model which analyzes the most current, accurate, and comprehensive credit information available anywhere—the TRW Credit data base. 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 8 f Convention Calendar \ State Conventions & Schools Colorado: Feb. 26—CBA Annual Security Seminar, Den ver. Apr. 21-22—CBA Lending Conference, Den ver. 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. Illinois: 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, Springfield. 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., Chicago. 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. Iowa: 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 Moines. May 11-13—Iowa State NABW Conference, Holiday Inn University Park, West Des Moines. 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 https://fraser.stlouisfed.org 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. Minnesota: 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 dria. Montana: 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. Nebraska: 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 ber. 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 marck. Apr. 8— NDBA Lender Liability Seminar, Bismarck. 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^ Fargo. ” 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. Wisconsin: 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. Wyoming: 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 per. 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, Kan. 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, Tenn. 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, Kan. 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 Towers. Apr. 24-27— BMA Research and Planning Conference, Capital Hilton, Washington, D.C. https://fraser.stlouisfed.org 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 York. 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 cago. 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 million; • 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 miums; • 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 associations. 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 marketplace. 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 * moreeflocienlfywhenjou * use our Official Checks. oney makes the world go round, they say. And at Travelers Express, we make money go 'round. With our Official Check pro gram, for example. 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 Check program saves them money 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 gram. At an Alabama Savings and Loan, for example, Vice President Larry Conville says,6We appreciate the way Travelers Express responded to our operations needs'' M And from Ronald N. Linglass, Vice President of a Maryland savings association: T am confident that your product is the finest on the m arket' To find out for yourself why our Official Checks receive so much official praise, contact our Official Check marketing department. MersExpress © 1988 Travelers E xpress C o m p a n y , In c . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Money in Motionsm In Minnesota (612)591-3000 (800) 328-5678 11 T.H. OLSON President J.R. NUNN Pres.-Elect K.A. GUENTHER Exec. V.P. O.J. TOMSON Vice Pres. Independent Bankers Gather in Hawaii ^ ^ 0 # % # ONOLULU beckons members of the Independent H 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, Fla. 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 R.L. CLARKE L.W. SEIDMAN https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D.V. AUSTIN 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 regulations. • Establishing a Sales Culture in Your Bank—Mike Morrow of Sheshunoff and Company will share in sights. • 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 ties. • Employee Benefit Plans—Dr. Robert L. Sellers, chairman of Banking Consultants of America, will pre sent a session on Employee Stock Ownership Plans IBAA CONVENTION PROGRAM. . . (Turn to page 26, please) F.W. NAYLOR J. HALLETT F. MANKIEWICZ Northwestern Banker, February, 1988 12 mm «amai ABB The future for agriculture and ag banks sm iV A \\V A Northwestern Banker Survey is the most likely scenario for agriculture in W HAT 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 ture? 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 Increase 2 Decrease 5 A bout Same 2 Grain Prices Increase Decrease A bout Same Farm Real Estate Increase 6 Decrease 0 A bout Same 3 Farmers’ Clout Increase 0 D ecrease 5 A bout Same 4 4 1 4 Livestock Prices Increase 0 D ecrease 5 A bout Same 4 In their comments, the bankers generally agree that federal farm payments will decrease in the years ahead. 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. This belief is partially based on the assumption that https://fraser.stlouisfed.org 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 down. 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; 13 ® 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis after 1990, but it will be less attractive to the farm pro ducer. 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 ment. 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 P 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 identified: • 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 ings. • 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 14 M. ADAMS D.R. BREEZE P.M. BURNS 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. R.B. GOODMAN another adjustment to lower land costs in order to bring a reasonable profit back into agricultural produc tion. 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 ket. 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. trol. 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 portunity 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 uses. Mr. Lindholm: It is possible that we will need https://fraser.stlouisfed.org Northwestern Banker, February, 1988 Federal Reserve Bank of St. Louis ^ ^ ^ f £ * # ® 15 These 9 bankers participated in the survey P.E. LINDHOLM - 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis E.L. TCIBBS L.W. PETERSON 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 agriculture. 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 Increase Decrease A bout Same 0 8 1 Ratio of Ag To All Loans Increase Decrease A bout Same 1 4 4 Capital Accounts* Increase D ecrease A bout Same 3 0 5 Number of Number of Farm Customers Community Banks* Increase 0 Increase 0 Decrease 8 Decrease 8 A bout Same 1 A bout Same 0 * = 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 16 “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 ducer. 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 pendent. 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis make farm loans. In most cases, it’s the only game in town. ^ 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 tem? ^ 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 17 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 competitive. 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 problem. “Smaller banks margins will be so narrow that they will have to offer • additional products such as insurance, securities, real estate brokering.” — Mel Adams 0 0 # # 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 . https://fraser.stlouisfed.org 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 communities. 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 18 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 munity. 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 viable. 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 ^ blindfolded. ^ ....... ^ ... ✓ Tzgm ................................^ ....................... , . ............ Get detailed analysis and advice -• from The Brock Report— g- America's most complete commodity marketing service, / / For your FREE three-week trial offer, w rite or cal The Brock Report 2050 W. Good Hope Rd., Milwaukee, W l 53209 / Circulation: (800)558-3431 In Wisconsin: (414)351-5500 https://fraser.stlouisfed.org Northwestern Banker, February, 1988 Federal Reserve Bank of St. Louis • ® ® • ® ^ ^ 19 • Los Angeles Will Host ABA 1988 Community Bankers Conference EARLY 1,000 community bank executives are ex N 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, Minn. J.A. BERG R.L. CLARKE 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 A.M. 8:00 Golf Tourney (buses depart 7:00 a.m.) P.M. 1:00 Registration. Exhibits Open 6:30 Opening Reception. Friday, Feb. 26 A.M. 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) # P.M. 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 A.M. 7:00 Breakfast with Exhibitors 8:00 General Session https://fraser.stlouisfed.org 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 P.M. 12:00 Luncheon—“Ahead of the Game: Dealing with Deregulation’’—Jack Jackson, President, Jack Jackson and Associates, Inc., Fort Worth, Tex. 1:45 Workshops (repeat) 3:00 Peer Groups 8:30 After-Dinner Dance Sunday, Feb. 28 A.M. 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. Workshops 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 20 The board of directors has Financial Statement Responsibilities • Management Consulting 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 By DR. DOUGLAS V. AUSTIN President and CEO Austin Associates Toledo, Ohio and Professor Department of Finance College of Business Administration The University of Toledo Toledo, Ohio OW THAT 1987 is behind us, for better or worse N 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 https://fraser.stlouisfed.org 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 ments. 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 21 • • • • 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. 0 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 https://fraser.stlouisfed.org 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 state.” 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 tion; 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 22 “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 https://fraser.stlouisfed.org 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. 0 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 tion. 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 23 • “You are the supervisors of the institution on behalf of the share holders.”_________________________ 0 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 ! ® ® _ 9 ^ 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. Corporate ROMOTIONS and other an P 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 https://fraser.stlouisfed.org 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. □ J Northwestern Banker, February, 1988 24 “ Well done, Tom Olson!” • By BEN HALLER, JR. Publisher HEN Thomas H. Olson was installed as presi W 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1988 Goals and Priorities w 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- 25 • • • • ^ 9 ^ ^ q 9 0 • • 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 mind. “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 Glass-Steagall.” 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 https://fraser.stlouisfed.org 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 competition: “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 26 FRANK BAUDER. JOSEPH MIGELY. JOHN CROTTY. MAX ROY. Names synonymous with correspondent banking at Drovers. Almost 1 5 0 years combined experience. Frank Bauder Joseph Migely Chairman 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 Max. IBAA PROGRAM. . . (Continued from page 1 1 ) and Executive Incentive Compensa tion Plans. • High Performance Banking— Alex Sheshunoff will look at strategies to enhance your bottom line. • 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 cerns. • 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 moderator. • Agricultural Panel—Experts examine the ag economy and make suggestions for improving ag port folios. On Tuesday and Wednesday the general sessions will be conducted, leaving afternoons free for recrea tion. 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. 4 £ # # # # ® ® ® ® Call toll free 1 -8 0 0 -6 2 1 -S 9 9 1 In Illinois 1-SOO-572-249S COLE TAYLOR BANK 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 https://fraser.stlouisfed.org 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.. 27 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 frauds. 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 diction. 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, A 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 $43.56.” ® 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. https://fraser.stlouisfed.org 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 28 Illinois Independents Revise Name; Now Accept Individual H.C. Banks BROADENING of membership rules and a change in name A 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 as: • 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 tions. 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 https://fraser.stlouisfed.org 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 plies.” 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 everybody.” 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 P.M. 7:30 Early registration and cash bar. • Wednesday, Feb. 25 A.M. 7:30 Registration. ILLINOIS NEWS. . . (Turn to page 34, please) 29 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 Alvin G. Wilner 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 division. * 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. https://fraser.stlouisfed.org 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, 111. * * * 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 STATION ATM. 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 Nomore Hn =J 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Marquette Bank Minneapolis Member FDIC Investment Department 341-6558 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 O 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 stitution. 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, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Sartell and Sauk Rapids; Albert Lea, Austin and Mankato; and Dodge Center, R ochester and Winona. 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 Association. 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 ty. 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 32 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 1986. 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 million. * 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 quarter. 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. R.W. SCHOENKE * W.F. FARLEY * * 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. P. MILLER * * * * Northwestern Banker, February, 1988 https://fraser.stlouisfed.org 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 ing. L. MILLER 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 neapolis. 33 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 ted John E. Ganoe and J. Scott Spisenior vice president and head of its Minneapolis-St. ker to new positions on its mergers funds management group. Paul metropoli and acquisitions staff. Mr. Ganoe is Mr. Saklad joined Norwest as its tan area. Minnesota-Wisconsin regional presi vice president and director of stra Ja m e s R. dent in August, 1987. He previously tegic planning and acquisitions. Mr. C am pbell is was president of a mortgage and in Spiker is vice president and acquisi p resid en t and J-R- CAMPBE!-L surance subsidiary of Citicorp, tions analyst. based in St. Louis, Mo. * * * Minnesota News R.C. BROWN D.A. SAKLAD 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 https://fraser.stlouisfed.org 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 nesota. 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 ficer. * * * 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 Minnesota. 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 J.E. GANOE J.S. SPIKER Both report to Les Biller, corpo rate executive vice president and head of strategic planning and ac quisitions for the Norwest Banking Group. 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. Navy. * * * American National Bank, St. Paul, has announced the promotions of Ronald W. Duffey, vice president-bonds & investments; Mary Ann Orfei, a ss is ta n t vice president-bonds & 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 34 Minnesota News ments. 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, ILLINOIS NEWS. . . (Continued from page 28) 8:30 “The Reinvented Bank, and the Banker’’—Kent Stickler, pres., Financial Shares South, Clearwater Beach, Fla. 10:00 “ Increasing Loan Demand’’ —Michael Chy, pres., Per sonal Motivation Institute, Inc., Matteson, 111. P.M. 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 Loans 4:45 Adjourn. 4:45 Complimentary reception. Thursday, Feb. 25 A.M. 7:00 Continental breakfast. 7:45 Early bird workshops: 1 . Home Equity Update Northwestern Banker, February, 1988 https://fraser.stlouisfed.org 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. Charles. Thomas V. Batty has been named senior vice president/cashier. He will be working in the areas of operations, marketing and public rela tions. 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. □ ® ® ® ^ 9 ^ auditor. 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, respectively. 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 counsel. 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. 35 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 1988. https://fraser.stlouisfed.org 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 1988. 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 troller. 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 Corporation. 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 36 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 vice p re s id e n t of 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 https://fraser.stlouisfed.org 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 Bank of Shey- L MOLDENHAUER 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... B 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- # versity. “ 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 lighter.” 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. ” □ ^ ^ ^ ^ ^ £ £ • • 37 • ^ £ ^ Added in Dickinson Three new staff members have joined Community First National Bank and Trust C om pany of Dickinson. Estelle Wolberg will serve as cluster auditor in the bank and a ffilia te banks in Lem mon and Hot Springs, S. Dak. E. WOLBERG 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 M. GANNON B. WOLFE # 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 WISCONSIN NEWS. . . (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 directors. ^ 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 1978. 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. https://fraser.stlouisfed.org 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 program. 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 vice p resident/commercial loan 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 J. HAUFF 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/ Mandan. 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 Neenah. 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 38 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 specialists. 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- * ings. 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 https://fraser.stlouisfed.org 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, Inc. “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 5350-A. 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. 39 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. • R.L. BUTTERLY E.S. CLAUNCH C.W. BAZYLAK D.E. BAKER 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 R.L. SCHACHER M.E. THOMPSON https://fraser.stlouisfed.org 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 services. 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 correspondent banker. We want to establish a partnership. At NBC we call it relationship banking and it means more than loans, computer work, investments and cash letters. 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. NSC N ational B a n k of Commerce a iilFiRST C o m m e r c e bank. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NBC Center / 13th & O / Lincoln, NE 68508 Phone (402) 472-4115 / MEMBER FD1C • 41 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. 9 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 FP- GILTNER 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 October. 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. https://fraser.stlouisfed.org 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 42 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 terminated. * Robert E. Harris Joins Texas Bankers Association Omaha 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 supervisor. 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 raska. 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 C.R. SWOOPES M.G. SIMON bankruptcy, with a peak of 13 in Northwestern Banker, February, 1988 https://fraser.stlouisfed.org 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 seven years. Prior to that, his business ca reer was centered R E‘ HARR,S 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 fairs. . 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, N.A.). 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 requirements. 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 https://fraser.stlouisfed.org 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 £ department. 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 Lincoln. been for the system’s total loan port C u rren cy to * * * folio. charter a na At Vistar Bank, Vice President tional bank in Curt Denker has been promoted to Lincoln. 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 P.D. KADAVY 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 H. HANSEN S. BARTRUFF 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 sions. ka, based in Omaha. charge of credit administration. His Vice President Mr. Kadavy said that although J.P. PERKINS 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. R.R. JOHNSON M. BREDOW for the new bank. A native of N Northwestern Banker, February, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 45 itjg 0 ! § " W futuri . Nebraska ad campaign accentuates ■J§r the positive! C/ «■«■ap ARlHfßR^ 1 A HARD WORK HAS MADJHEBRASKA’S THIRD LARGEST ^ 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis putting together the information presented in the ads, which deal with various aspects of the state’s economy. 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 created. • “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. p Northwestern Banker, February, 1988 46 Banking on common ground * John Chrystal, Chief Executive Officer, Bankers Trust t's easier to talk Iowa banking with people who live it. People like John Chrystal and the correspondent staff at Bankers Trust. We understand, first hand, the needs of your bank — and your customers. Just as we understand the many challenges facing Iowa banking, today. Like you, we have a stake in Iowa, and Iowa banking. So when you need the services of a correspondent bank, talk to the people who speak your language. Bankers Trust. I Call us for a complete range of correspondent banking services. TRUST SERVICES COMMERCIAL Investm ent M anagem ent Individual/Corporate Services Loans Bank Acquisition Loans O verlines & Participations INTERNATIONAL BANKING Full line of International Services INVESTMENTS Bonds Fed Funds CDs OPERATIONS Banking System s Processing ATM & Debit Card Support Cash Letter Processing Rem ote Processing Support Call 1-800-362-1688 or 515-245-2424 • S e v e n th a n d Locust • D es M o in es 50304 Bankersmist * Member FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 47 Bank Management Conference, Legislative Reception to Be Held HE Iowa Bankers Association T 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 torney. 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, respectively. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis P.M. 12:00 Lunch. “Iowa Forecast”— Ed Tubbs, superintendent of banking. 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 H. PROCHNOW Thursday, March 10 tant gatherings. A.M. 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 now. 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 11:00 Interactive Sessions bankers to meet with legislators as 1 . Community B ankers’ well as be updated on current legis Role in Economic Develop lative issues. Majority and minority ment 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 terest Expense tend. 3. Human Resources Man Fee for both programs, one break agement fast, two luncheons, reception and 4. Marketing for Quality handouts is $175 for members, $200 Assets 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 6 . 401K & 125K Plans tion only, fee is $25 for members, 7. Open Discussions—Com $35 for subscribers, $50 for non mittee Members members and $25 for spouses. P.M. Wednesday, March 9 12:00 Lunch. “The Iowa Ambassa A.M. 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. curities. 3:00 Adjournment. □ 1988 Iowa Group Meetings Group 11 1 4 8 7 6 5 2 12 3 Date Feb. 14-15 Feb. 19-20 May 2 May 3 May 4 May 5 May 16 May 17 May 18 May 19 Location Burlington Sioux City Dubuque Davenport Marshalltown Des Moines Council Bluffs Fort Dodge Okoboji Clear Lake Northwestern Banker, February, 1988 48 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 president-elect 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 bandry. 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. f 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 cations. 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 1981. Northwestern Banker, February, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 49 m Statement of Condition December 31,1987 * i fc l l l á k Í ' iii-' Ä **#*'>* -«««tac A SSETS $ 44,548,660.71 51,500,000.00 874,431,819.86 211,933,891.23 11,551,479.13 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 Loans Bank Premises and Equipment Interest Accruals Other Assets 1, 122, 000.00 274,562,557.58 13,349,735.79 32,911,680.32 20,347,894.84 $1,536,259,719.46 LIABILITIES Capital Stock Surplus Undivided Profits $ 2,400,000.00 35,000,000.00 112,776,538.78 $ 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 Deposits 479,562,421.12 12,404,820.58 894,115,938.98 $1,536,259,719.46 BOARD OF DIRECTORS 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 MEMBER FEDERAL DEPOSIT INSURANCE CORPORATION Resources Approximate One Billion Five Hundred Million Dollars https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 50 Iowa News Group 1 to Meet Feb. 19 and 20 MARINA in South Sioux T HE City, Neb., will be the location for this year’s Group 1 Annual M eetin g , on 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 J- M|LLER group is Russell Spearman, presi dent, Citizens Savings Bank, Sac Ci ty. 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 SSfc ......... . C. LENSING N. MILNER https://fraser.stlouisfed.org Northwestern Banker, February, 1988 Federal Reserve Bank of St. Louis M. LARSON B. JANKLOW E. TUBBS S. KEEHN 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. n 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 these: 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 checks. 4. That he had illegally had his bank pay overdrafts in his personal checking account on three different occasions. 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 moval.” 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 51 All banks are different. That's why your property/casualty insurance and bond coverage must be flexible enough to be tailored to your specific needs. Maybe that's why more and more of Iowa's banks are turning to Iowa Bankers Insurance & Services, Inc. We're your insurance agency, and because our plans are designed by bankers fo r bankers, you can rest assured that your property/ casualty and bond coverage is the best in the banking business. And because you own the agency, your premiums are as affordable as any on the market. With more than 150 years of combined insurance experience on our staff, you can count on IBIS to find the insurance coverage that is exactly right fo r your size, location and circumstances. Realizing that all banks are different is what makes our coverage unequalled. Call Bill, Jim or M erritt at IBIS today 1-800-532-1423, or return the coupon below for more information. I Yes i 1 W • n I w a n t ta ilo r-m a d e co verag e! ■ P le a s e c o n t a c t m e r e g a r d i n g : ■ ____ P r o p e r t y / c a s u a l t y a n d B o n d C o v e r a g e i i l a m a ls o i n t e r e s t e d in: ■ G roup H e a lth / ■ D e n ta l/V is io n ____ C r e d i t o r P r o t e c t i o n I ____ C r o u p L i f e / D i s a b i l i t y in c o m e /A n n u itie s _____ O t h e r N am e T itle R a n lr ■ A rlrlrp ss C itv ___ 1 Z iD Phnne Return to : Iowa Bankers Insurance & Services, Inc., 300 Liberty Building, Des Moines, Iowa 50308 j 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Northwestern Banker, February, 1988 52 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. A. FRUECHTE R.J. WHALEN 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 bank 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 BE SURE TO ATTEND THE 1988 GROUP 11 MEETING FEBRUARY 14-15 in 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 professionalism. 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis # Farmers & Merchants Bk. & Tr. First National Bank o D -o ; o O m u "O ■a n: Over 300 Iowa financial institutions have used Kirk Gross Co. services! Do they know something you don’t? Kirk Gross Co. has a solid reputation in Iowa for designing new financial institutions and remodeling present ones. If you are thinking about a new facility, put the responsibility and worrying in the hands of the TURN KEY professionals. We keep up on the latest ideas on planning, designing, construction and furnishings. That’s why we have completed more than 300 projects since 1971. The best part of this unequaled record is that so many are repeat, satisfied customers. Let Kirk Gross Co. explain how our complete TURN KEY program will save you time and money. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis If you’d like to know what other bankers know about Kirk Gross Co., call at your earliest op portunity. (How about right Now! Phone 319234-6641) KIRK GROSS CO. 4015 Alexandra Drive RO. Box 2097 Waterloo, Iowa 50704 54 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 dents. 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 portfolio. 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 announced. 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 cashier. 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. B. PETERS B. NITCHALS representative to assistant trust of ficer. He will be responsible for ad ministering all employee benefit ac counts. 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 board. 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. Bank. 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. He 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 representative. be based on the audited book values Brent Peters of INBC and the Oelwein State has been promo R. WILLIAMS Bank as of December 31, 1987. The ted from trust Northwestern Banker, February, 1988 https://fraser.stlouisfed.org 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 thorities. 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 £ 0 0 0 # • • ® ® ® ^ ^ # 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 pany. 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. Eichelberger. 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis There Is a Difference in Banks Trust, confidence, loyalty ... words our customers use to describe how they feel toward Valley National Bank. Valley Bank is experiencing substantial growth ... in deposits, ...loans, and ...in earnings. That’s because we maintain a highly skilled staff, offer top service, and perform well financially. We welcome your inquiry ... Remember, there is a difference in banks. Valley National Bank « Main Office-Sixth and Walnut M em ber FDIC A "BANKS OF IOWA” BANK For Professional Correspondent Service call 1-800-622-7262 55 56 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 Your 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 . D. COFFIN K. PRUISNER 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) 294-4817. Elected in Davenport J.T. LONG M. VOORHEES Northwestern Banker, February, 1988 https://fraser.stlouisfed.org 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 port. 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 loans. 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. s -WEABLE 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 1969. 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 company. “Performance and Profitability’’ William Bux is the theme for the ABA’s National ton II received Retail Banking Conference to be special recogni held April 24-27 at the Hilton tion for his near W . BUXTON 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. 57 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. FIRST NATIONAL BANK OF DUBUQUE Seventh at Town Clock Plaza Kennedy at Wacker Jackson and White at 22nd Asbury at Hales Mill Road OFFICERS and DIRECTORS STATEMENT OF CONDITION DECEMBER 31, 1987 ASSETS 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 ................................. LIABILITIES AND STOCKHOLDERS EQUITY 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 ............... TOTAL LIABILITIES AND STOCKHOLDERS’ E Q U IT Y ............. i ST https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis $ 11,780,000 5,890,000 20,100,000 70,263,000 14,936,000 1,312,000 106,136,000 (1,200,000) $104,936,000 3,726,000 3,917,000 $236,860,000 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 President Linda L. Budde Unda K. Kress John W. Law Co., Retired Paul J. Gisch Vice President Manager Real Estate Department Personal Banking Officer Asst. M gr./W est Dubuque Office J. Bruce Meriwether Lynn K. Stoffregen University of Dubuque, Retired 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 $199,479,000 Vice President Business Loans and Leasing Leo M. Mallie 15,378,000 4,862,000 $219,719,000 $ 4,800,000 4,800,000 7,541,000 17,141,000 $236,860,000 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 Office 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 Office Edward A. Babka Mark E. Small David W. Spahn Auditor Vice President and Controller 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 Directors President, Babka Publishing Co. Paul L. Britt President, Dubuque Stamping & Mfg. Inc. President Wayne A. Norman Roger J. Rhomberg President, Rhomberg Fur Co. James E. Walsh President, Bird Chevrolet Co. James D. White Vice President Deere & Co. N.J. Yiannias President, Dubuque Theatre Corp. President, 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 FIRST NATIONAL BANK - DUBUQUE, IOWA 52001 Northwestern Banker, February, 1988 58 mote international activities w orld# wide. * * * 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 representatives from all First In Norwest Card Services and terstate Interna J.D. McGOWAN Bankers Trust of Des Moines are tional offices, competing heavily for credit card and works to coordinate and pro- Northwestern Banker, February, 1988 https://fraser.stlouisfed.org 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 director. -------------------------------------------- • INDEX OF ADVERTISERS February, 1988 f BIOS Banking System, T h e .................... Bankers Trust Co., Des Moines ............ Brock Report, The .................................. Burlington B a n k s.................................... 46 18 52 Cole Taylor Bank/Drovers, Chicago .. . . 26 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 53 Iowa Bankers Insurance & Services, Inc............................51 Marquette Bank M inn e a po lis........................ Merchants National Bank, Cedar Rapids . . Midwest Management Consultants, Omaha 30 National Bank of Commerce, Lincoln Norwest Corporation, Minneapolis . . 40 60 27 Office Concepts, Ltd., W aterloo........ 48 Texas Instrum ents.............................. Travelers Express Co., Inc................... TRW C orp o ra tion ................................ 59 Valley National Bank, Des Moines 55 * 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. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Tex a s In str u m en ts 36094 © 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. mm^ma sat NORWEST BANKS Members FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis
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