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■F /o l. 10 No. 37 Des Moines, Iowa January 4,1982 forecasting C & I Loans Is ‘ I f f y ’ y JOHN D. MANGELS • resident, Robert Morris ’ .ssociates and President, Rainier National Bank, Seattle, Wash. N THE PAST, the task of pro viding a reasonably accurate recast of C&I loans for the bankg system has been relatively easy hen compared • some o f the ore unstable dicators of our jsiness. Now, /en that foreist has joined ie ran k s o f ron g ly quai led predictions hich must be J. D. MANGELS receded by the 'ord “ if” reiterated a number of mes. For example: 1. The tax legislation enacted arlier this year constitutes a radical hange in the treatment of corporate epreciation and other incentives so lat cash flow projections may be Itered considerably. 2. Another “ if” factor is the preant level of interest rates. 3. The market for commercial aper and bankers acceptances has rown so huge in recent years, and o many new entrants are using this irm of financing, it is a problem to now how to divide up 1982’s total stimated demand for short-term no growth for the first three months and then a rather modest increase in credit between bank loans and these the second quarter of 1982. It other instruments. doesn’t appear that the economy is 4. And, finally, complicating thegoing to pick up steam until the last ability to forecast is the highly am half of the year, quite possibly hit biguous percentage of such loans be ting an annualized growth rate of ing granted by non-bank subsid 10 % in the last quarter. iaries of bank holding companies. Our interest rate scenario in As a starting point in looking at dicates that both mortgage rates 1982, we first need to estimate the and long-term bond yields will be 1981 volume of C&I loans for all conducive to a much larger volume commercial banks. One could just of corporate and personal borrowing use the business loans of the weekly as we move into the third quarter. reporting banks as a proxy for the This could quite possibly give a whole system. Through November, significant boost to all forms of com 1981, such loans had been increasing mercial bank lending, not including at a 9.3% annual rate. However, we the business category. at Rainier tend" to think that the But, candidly, what we don’t money center banks are receiving a know how to assess in regard to that greater proportion of C&I loans period is how the personal tax cuts than many of the medium and smal are going to be handled by in ler size institutions around the coun dividuals in either reducing out try, and that the increase is standing debt or adding to various misleading. A more likely range is types of savings accounts. Other somewhere between I-V 2 and 9%. and newer forms of savings such as Using average-for-the-year figures, the IR A accounts and all savers cer this means that such loans will be up tificates could add considerably someplace between $23 and $27 bil more funds, alleviating pressure on lion (or, going year-over-year from interest rates even if banks ex December, around $32 billion). We perience higher loan volumes. tend to be a bit conservative, believ What this all adds up to, all ing that C&I loans will have shown a qualifiers considered, is that this definite tapering off in the fourth form of business credit should in quarter of 1981 after a surge in the crease much more slowly than it did second and third quarters, and that during the second and third quarters we’ll end up at around a 7% gain. of 1981. Our projected range for A s we move into our estimate for 1982 is between 5-Vfe and 8-1/ 2% 1982, we are working from an eco growth, with a “ best guess” esti nomic outlook that forecasts little or mate of around 6- / 2%, with in- C A L L ON T H E “P E R F O R M A N C E T E A M 99 where com m on transactions are handled uncomm only well. H IM FIRST N A T IO N A L LIN C O L N 13th & M Street • Lincoln, Nebraska 68501 • Member, F.D.I.C. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis IOWA . C o m e to us we’re first in Iowa because we put Iowa first. Desopines "Opportunity Talks..: Cl Robert Scoff, Correspondent Danker An Affiliate of Northwest Bancorporation D A N U U ^ Member FDic dividual banks going more or less depending on their aggressiveness and individual pricing strategies. Such a percentage growth is just slightly less than the anticipated underlying rate of inflation in 1982, so that the real volume of such loans would probably decline very modest ly* In conclusion, let me say, lest you think we are chagrined at all the var iables and the increasing difficulty in forecasting virtually anything, that nothing could be further from the truth. These are extremely exciting times for bankers. Uncertainty has a way of stimulating innovation and competition, of which our customers will be the ultimate beneficiary. And the best and the boldest will be the most profitable. □ Iowa News Call (515) 245-3131 or toll-free (800) 362-2514 IS m employed by the Chevrolet Motors Division since 1961, most recently as assistant zone manager for Iowa. DES MOINES: Henry H. Byers, 90, died last week of a heart ailment. Mr. Byers formed Bankers Service Co. in Des Moines in January, 1948, after moving from Omaha where he had been associated since 1925 with The Charles E. Walters Co. Both firms were engaged in the bank brokerage business. Mr. Byers sold the firm more than 10 years ago. Nebraska News The Cornhusker Chapter of Bank Administration Institute will meet January 19, 6:30 p.m., at Knolls Country Club in Lincoln. Bert Evans, PhD, and an economist for the University of Nebraska, will d iscu ss the 1982 agricu ltu re outlook. CEDAR RAPIDS: Peoples Bank and Trust Co. has recently announc ed the promotion of the following six officers: Margaret E. Billings and Marilyn L. Jonas to vice presidents; Cornie W. Bender and Elaine A. Ott to assistant vice presidents; Diane L. Evans to trust officer, and Mary McCuen Ernst to marketing officer. GERING: Joe Huckfeldt, president of Gering National Bank and Trust Co., and a group of local investors have purchased controlling interest of the bank and of Pioneer Savings Co., pending Federal Reserve ap proval. DES MOINES: Larry Wenzl, president of Capital City State Bank, has announced the recent election of Thomas J. Clark as senior vice president and cashier, responsible for bank operations. Mr. Clark has been K EARN EY: First National Bank and Trust Co. has recently announced the following promotions: Tom Stuckey to senior vice presi dent and senior loan officer; Mel Wiens to senior vice president and Jon Abegglen to vice presidents Newly elected officers are Dorothy " Bragg in personnel and Bob Neville in operations. LINCOLN: George A. Framptoti, 87, retired president of Cornhusker.^ Bank, died recently. He was this bank’s president from 1948 to 1975>g remaining as its vice president anct> chairman until his death. His daugfi^ ter, Alice M. Dittman, is currently president of the bank. Mr. Frampton, who began his banking career in Denton in 1914, founded the Iowa State Bank in Des Moines in 1941* and served as its president until, December, 1946. He later moved toLincoln. Minnesota News ALBER T LEA: Arthur S. Lund, 89, chairman of the board of Security State Bank,, died recently at St. John’s Lutheran Home. He is sur vived by his wife, Feme, and two sons. W HEATON: Gordon C. Donnelly,; president o f State Bank of Wheaton, has been elected Minnesota director, of the Independent Bankers Asso ciation of America. Mr. Donnelly, who succeeds Russell Hanson of Benson, will serve a three year term. Illinois News G a ry S teven son n b li ■V H f ■> i J ft 4'f iL ^ ** * GARY STEVENSON Vice President https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Your Man on the First Team . 712/ 277-1500 F irs t N ational B a n k m Sioux City • A BANKS OF IOWA’ BANK AURORA: Robert J. O ’Connor has been promoted to senior trust officer and Paul M. Greene has been pro moted to trust officer by the board of The Old Second National Bank. Mr. O ’Connor joined the bank in 1973 in the trust department. Mr. Greene practiced law for two years before joining the trust department of the bank in 1979. CHICAGO: Jackson W. Smart, Jr., chairman of Central National Bank !has announced the recent promotion Supplement to Northwestern Banker Newsletter 1-4-82 Carleton D . Beh Company Investment Bankers / Financial Consultants 1300 Des Moines Building / Des Moines, Iowa 50309 5 1 5 /2 8 8 -2 1 5 2 NEW ISSUE $ 530,000 IOWA FALLS, IOWA Water Revenue Bonds, Series 1981 Dated: December 1,1981 Denomination: $5,000 Both principal and seminannual interest (June 1 and December 1, first coupon due June 1,1982) payable at the O ffice of the City Treasurer, Iowa Falls, Iowa. IN THE OPINION OF COUNSEL THESE BONDS ARE EXEMPT FROM PRESENT FEDERAL INCOME TAXES, IOWA FRANCHISE TAX AND ALL PROPERTY TAXATION IN THE STATE OF IOWA MATURITIES $10,000 20,000 20,000 20,000 25,000 25,000 30,000 30,000 35,000 11 1/2 % June 1,1982 June 1,1983 June 1,1984 June 1,1985 June 1,1986 June 1,1987 June 1,1988 June 1,1989 June 1,1990 $35,000 11% June 1,1991 1 1 1/4 % 9.00 9.00 9.25 9.50 9.75 10.00 10.25 10.50 10.75 $40,000 June 1,1992 11.25 $50,000 11 Vi % June 1,1993 11.50 $55,000 11 % % June 1,1994 11.75 $65,000 12% June 1,1995 12.00 12% % 11.00 $70,000 June 1,1996 12.25 LEGALITY TO BE APPROVED BY AHLERS, COONEY, DORWEILER, HAYNIE & SMITH, DES MOINES, IOWA. Iowa Falls, the largest City In Hardin County, is located in the central part of the State of Iowa about 95 miles northeast of Des Moines. The Ci ty serves as a trading center for the surrounding prosperous agricultural area which contains some of Iowa’s most productive land. Agriculture is the predominant economic base of the area, however, the City has shown industrial and commercial growth. Major employers in Iowa Falls include Farmland Foods, Inc., Weaver Construction Co., and Ralston-Purina Co. Iowa Falls has two banks with deposits ex* ceeding $67,738,000. Transportation is provided by the Chicago Northwestern and the Illinois Central railroads, Interstate Highway No. 35, U.S. Highway 69 and State Highway No. 3. The City owns and operates a modern 24-hour airport and the population is presently estimated at 6,174. The bonds are being issued to provide funds to pay a portion of the cost of improvements and extensions to the Municipal Waterworks. EARNINGS STATEMENT The following operating statements were extracted from the official audits of the City: Years Ending 6-30: 1981 1980 Receipts: Water Sales $201,314.00 $196,135.00 Other Income 3,832.00 4,416.00 Total $205,146.00 $200,551.00 Operating & Maintenance $123,251.00 $123,057.00 Operating Profit $ 81,895.00 $ 77,494.00 The following is a Pro Forma Operating Statement: Actual 1981 Adjustment Water Sales $201,304.00 $40,263.00 Other Income 3,832.00 Total $205,146.00 Operating & Maintenance 123,251.00 Operating Profit $ 81,895.00 The pro forma operating profit for fiscal year ending June 30, 1981, amounting to $122,158.00 provides the Amount Average annual principal and interest $78,179.00 Maximum annual principal and interest 82,400.00 1979 $158,014.00 1,646.00 $159,660.00 $123,567.00 $ 36,084.00 Pro Forma $241,577.00 3,832.00 $245,409.00 123,251.00 $122,158.00 following coverage: Coverage 1.56X 1.48X We own and offer subject to prior sale and change in price and subject to our attorney’s approving opinion: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Division of I c=| r Hutton & Company Inc. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 Call our Bond Departm ent Getting it done for you. Tom Steffens Vice President John Henderson Vice President Tony Paugoulatos Jim McLaughlin Asst.Vice President Asst.Vice President Dave Wittenborn Rick Patton Bond O fficer Bond Representative 2 3 4-2462 2 3 4-2463 23 4-2 6 47 234-2691 2 3 4-2 6 73 i | î Commerce Bank of Kansas City 10th and Walnut 2 3 4-2877 (816) 234-2000 MEMBER FDIC S ' # ^ of M. Susanne Twomey to vice presi dent and manager of the compliance and control division. Ms. Twomey began her banking career eight years ago and was most recently ser ving as second vice president. North Dakota News The N DBA will host its 1982 Bank Management Conference Jan uary 13-14 at the Holiday Inn, Jamestown. It is one of special value for bank directors. James Lewis, bank management committee chairman and president of The National Bank of Harvey, will preside at the program starting with noon luncheon. After a wel come by N DBA President Tom Roney, president of Foster County Bank & Trust, Carrington, the first address will be given by Richard E. Gandrud, chairman of Mid-America Bankers Service Co. and president, Pope County State Bank, Glendive, Minn., on “ M A B S C O -W h a t It Will D o for You.” He will be assisted by Bryan K. Koontz, executive direc tor, W isconsin Bankers Assn., Madison. Harry Argue, NDBA exec, dir., and a representative of Fidelity Management & Research Co., Bos- • • Don't gam ble when choosing o correspondent bonk. Com e to the professionals. UNITED CENTRAL BANK OF DES MOINES. N A ■ M EM BER FDIC ■ (S IS ) 245-7111 AFFILIATED W ITH UNITED CENTRAL BANCSHARES, INC. TOLL FREE NUMBER £ (800)362-1615 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ton, will discuss “ M A B SC O ’ s Money Market Fund.” The after noon will conclude with talks on D&O Liability Insurance by Dennis R. Erdman, reg. dir. of mktg. for MGIC, Minneapolis, and Bankers’ Blanket Bonds” by Ed Neuberger, v.p. MGIC Indemnity Corp., Mil waukee. Thursday’s program starts with the Economic Development Com mission review by a commission member; Federal Legislative and Regulatory Report by John J. Gill of the A B A in Washington, D.C., and BankPac Report by Roger Berglund, executive vice president, Dakota Western Bank, Bowman. The program con clu d es w ith Asset/Liability Management Stra tegies for 1982 and Beyond by Dr. James V. Baker, pres. & ceo, James Baker and Co., Oklahoma City. dent at the First National Bank in Thermopolis. He succeeds Joe Barber who recently resigned as president. Montana News BILLINGS: A. Leroy Leavitt, presi dent of Montana Bank of Bozeman, N.A., has been named senior vice president of Montana Bancsystem, Inc. His duties will include credit quality and bank administration. Prior to moving to Bozeman he was senior vice president of United Bank of Greeley, Colorado. G R E A T F A L L S : The Federal Reserve Bank of Minneapolis has approved the application by Inter national Bancorporation, Columbia Fads, to acquire The Vidage Bank. FARGO: David D. Gordon was recently named to succeed C.S. Miller as president, Fargo National Bank & Trust Company, effective January 1. Mr. Gordon has been with the bank since 1968, a director since 1976 and executive vice presi dent and trust officer since 1978. Mr. Miller will continue as president of Northern Plains Bancshares, Inc., the holding company for the bank. Wyoming News MOORCROFT: John J. Roller, previously vice president at Newcas tle National Bank, has recently been elected president of Moorcroft State Bank. He succeeds Ray Wardell who resigned as president to pursue private business interests. Mr. Warded was responsible for helping organize the Moorcroft State Bank in 1975. SHOSHONI: Bob Crocker has been named managing officer of the First State Bank announced Joseph R. Lyman, chairman. Mr. Crocker has been with the bank since 1979, and before that was assistant vice presi ASK S T A N FA R M ER to make MNB work for you. Toll free 1- 800- 332-5991 Merchants A National Bank 151 Member F.D.I.C. A BANKS OF IOWA BANK 4 BANK PLACEMENT SPECIALISTS (Our 33rd year) Call experienced professionals to locate the right candidate for your vacancy . . . or the right “move-up” for yourself. CORPORATE RECRUITERS MIDWEST BANKING DIVISION 202 S. 71 st Street 402/393-5515 Omaha, Nebraska 68132 SERVING PROFESSIONALLY Banking, Financial & Business Personnel, Iowa and Nationwide Capital Personnel Service 714 U.C.B. Building, 515-283-2545 Des Moines, Iowa50309 PARTIAL LIST OF AVAILABLE POSITIONS POSITIONS WANTED Ag Lender w ith solid community bank experience............ ...........................................................................Salary $30,000 Number Two Man w ith heavy installm ent background and operations wants to relocate in Iowa or southwest Min nesota .............................................................. Salary $28,000 Cashier w ith lending experience wants to relocate from Il linois to a progressive bank in m id w e s t... .Salary $28,000 Installment Lender with operations and general lending experience wants position in northern Iow a........................ ...........................................................................Salary $24,000 Operations person with three years of multi-bank holding company experience, wants new situ a tio n .......................... ...........................................................................Salary $17,000 Commercial lender with operations background wants new situation as number tw o man in progressive Iowa bank...................................... ..........................Salary $30,000 Trust Officer with 12 years experience........ Salary $30,000 W rite or call Malcolm Freeland, Freeland Financial Ser vice, Inc., 246 Insurance Exchange Bldg., Des Moines, Iowa 50309. Phone 515/282-6462. Employer pays fee. COMMERCIAL LENDER - NB bank seeks “ seasoned” in dividual with 5 + yrs of solid lending exp. Exposure to Agriculture is a definite + . $30 - $35K. C.E.O. • Northern bank seeks officer fam iliar with all facets of banking w ith emphasis on Agriculture. In surance exp a + . Excellent benefits and salary. $35 -$40. COMMERCIAL LENDING OFFICER - Excellent oppty ex ists for experienced comm’l lender who can lend assistance and m aturity to a young, energetic staff. Heavily Ag related position w ith a lot of comm’ l activity. $25-$30K. SR. BRANCH MGR. - IL based S & L seeks individual w ith 2-4 years of solid S & L exp. Strong administrative and operational skills required to maintain a high stan dard of customer service. Must have strong managerial abilities. To $12K. ^ ^ #2 AG LOAN OFFICER • Need highly motivated, im pressive Ag Lender looking to move into #1 spot. In surance exp a + . Excellent promotional oppty. $25K. FOR FURTHER INFORMATION RESPOND IN CONFIDENCE TO: FOR SALE Bank Division ooo 0(10 Mosler Model FSW 1848 walk up teller unit. Never been used. Available immediately. First National Bank, Minden, Nebraska 68959. Phone 308-832-2030. (FS) ® of Iowa, Inc. 317 6th Ave. Des Moines, IA 50309 (515) 244-4414 ALL FEES COMPANY PAID t POSITION AVAILABLE POSITIONS AVAILABLE SENIOR LOAN OFFICER— Experience in ag lending ($50 m illion bank) in community of 8,000 population in northern Iowa. Salary open. Write File OBS, c/o Northwestern Bank er. (PA) PERMANENT OR TEMPORARY—Sale or lease, financial facilities. Available immediately: 14'x60' in Nebraska, 14'x50' w ith 2 DUWs in Illinois, 14'x60' mobile-type in Missouri, 9'x12'teller buildings available, 14'x60' in Wyom ing. Permanent facilities to 4000 sq. ft. SON CORPORA TION, Box 684, Wichita, KS 67201, (316) 942-8167, call col lect. (FS or L) BANKSFORSALE BANK OWNERSHIP CHANGES —Our Specialty— SELLERS - if you already have a buyer for your stock and there is a question of whether or not it is a fair price - we can make an indepen dent appraisal. BUYERS - if you are about to purchase controlling interest in a bank and there is a question of whether or not it is a fair price - we can make an independent appraisal. Those wishing to buy or sell - we can do the job for you if you are serious. CROWN BANKING SERVICES 325 W . Prospect Avenue Mt. Prospect, Illinois60056 (312)392-5151 PiUTOfTlPiTED SYSTECTIS □F IDUJfljnC. “When it com es to • insurance knowledge , • insurance experience • insurance SERVICE , more and more bankers com e to us Serving Banks throughout the Midwest. 301 N. Ankeny Blvd., Suite 220 Ankeny, Iowa 5 1 5 -9 6 4 -1 3 5 8 WANTED: Employee benefits person capable of taking over aggressive benefits department in W yoming’s largest trust department. Salary commensurate w ith ability. Ex cellent benefits package. Position open immediately. Fur nish resume to: James Watson, VP/Sr. Trust Officer, Wyoming National Bank, P.O. Box 2799, Casper WY 82602. EOE/MF_______________________________________ (PA) IMMEDIATE OPENING available in western Montana in mid-sized bank for an installm ent loan manager. Collec ting experience a must. Knowledge of student loans helpful. Write file OBX, c/o Northwestern Banker. (PA) LOAN OFFICER—Experience in installm ent, agriculture, and commercial lending for this growing $18 m illion south central Nebraska bank. Some trust experience would be helpful. Salary open. Write file OBN, c/o Northwestern Banker. (PA) AG LENDING OFFICER— Northwestern Illinois commer cial bank with deposit of $60MM is seeking an agricultural lending officer. This is a progressive bank looking for a young person with several years experience. Send con fidential reply to File OBY, c/o Northwestern Banker. (PA) $50 m illion bank in central Iowa com m unity of 4,000 seeks an AG LENDER. Salary open. Write file OBZ, c/o North western Banker. (PA) TVg Banking Specialists SINCE 1968 When It comes to agriculture, banking and personnel. . . go to the specialists — go to AGRIcareers, Inc. Progressive bankers pay as to find the people they need. 2 Ag Lend. O ff..............Cent. W l. $16-22,000 Cred. Mgrs. (2).............. Cent. IA . $20-23,000 Ag Loan Off. (2).......................IA . $20-25,000 Ag Loan O ff........................... W l. $18-25,000 Cred. Supv. & Anal..................IA . $18-22,500 Branch Mgrs. (2).................. NE . $18-25,000 Ask the ag banking specialists what’s available without cost or obligation. NEW HAMPTON. IA 50659 MASSENA. IA 5085: I (515) 394-3145 (712) 779-3744 30/7 G4REERS, IN C. / — • THE ORIGINAL AGRICULTURAL RECRUITER J / Commercial Lenders for Florida banks........... Salary Open. Number Two Person for central Iowa com m unity bank. Re quire operations and ag lending background.. .T o $28,000 A Operations Manager for Wyoming bank located in fast growing area...........................................................To $18,000 Number Two Person for $100 m illion midwestern bank. Must be generalist w ith emphasis on agriculture.............. ............................................................................. Salary Open. Insurance Agent for community bank in good midwestern c ity ............................................................................................. ............................................................................. Salary Open. ^ w Ag Position available in good North Dakota to w n .............. .............................................................................. To $18,000. Write or call Malcolm Freeland, Freeland Financial Ser vice, Inc., 246 Insurance Exchange Bldg., Des Moines, Iowa 50309. Phone 515/282-6462. Employer pays fee. POSITIONS AVAILABLE OPERATIONS - all internal operations and cashier duties for $30MM suburban bank. Definite opportunity for ad vancement. $25K COMMERCIAL LENDER - 3 yrs. or more commercial loan experience w ith large bank preferred. Could manage dept, w ithin one year. $30K £ INVESTMENT ANALYSE - tru s t division o f major midwestern bank seeks senior analyst. Prefer experience with financial institution analysis. $28K FINANCIAL OFFICER senior position w ith $400MM eastern bank. Must hold CPA certificate and have bank experience. $Open f CASHIER - challenging position for good operations o f ficer whose career is stymied. Suburban a ffilia te of one of the largest midwestern holding companies. $25K AG LENDER - medium size rural bank w ith 60% of port folio in Agricredits. Prefer college grad w ith Ag Degree and 3-5 yrs. experience. $24,000 ^ MARKETING • major savings and loan has opening for marketing major w ith 1-2 yrs. experience in product development. $20K SENIOR LOAN OFFICER - $250MM wholesale oriented bank has an opening for commercial lender w ith 5 yrs. or more experience. Department head to retire in tw o years. $40 K _ % All inquiries confidential. Salary history and resume' requested. TOM HAGAN & ASSOCIATES of Kansas City P.O. Box 12346, 2024 Sw ift North Kansas City, MO 64116 816/474-6874 “ Serving the Banking Industry Since 1970” Vol. 10 No. 37 Northwestern Banker Newsletter (USPS 873-300) is published weekly by the Northwestern Banker Company, 306 Fifteenth Street, Des Moines, Iowa 50309, (515) 244-8163. Subscriptions $1.00 per copy, $15.00 per year. Second class postage paid at Des Moines, Iowa. Address all mail subscriptions, changes of address (Form 3579), manuscripts, mail items to above address. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M ^
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