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y < A Vol. 9 No. 14 Des Moines, lowa July 28,1980 Banker “ Draws the Line” on Capital NE OF the recurring criticisms O directed to federal regulatory authorities during the series of Leadership Conference seminars sponsored by the American Bankers Association, to bring area bankers together with the regulators, has been the charge of a two-tier system of regulation. The bankers who per ceive regulation taking this direct ion, state that federal regulators are constantly urging and harassing smaller banks to maintain a higher level of capital, while permitting major banks in the largest cities to operate on a much lower capital ratio. At the recent Chicago meeting, John E. Ryan, director of the Fed eral R eserv e’ s supervision and ■ regulation, de* IR h S fended Fed policy H i on bank holding H U p , company appli- H | J H flj cations in which B f c / y SKL large banks are Mpy-'v '^ permitted ratios as low as 3 % and B H F a B 4%, while smaller banks under $100 P. D. DUNLAP million are required to have 8% capital. He said the 8% ratio is “ de fensible” in several ways because of a broader base in portfolio and cus tomers of larger banks, the higher level of management expertise and a more diversified economic base. He was challenged, in turn, by an Indiana bank president to show why some larger institutions couldn’t weather the past decade when they were so diversifed and flexible. The Fed’s theory “ doesn’t fly,” the banker stated, while smaller banks are told to move up to an 8 % base while Bank of America and Citibank are permitted very low ratios. One banker who finally said he’d had enough and refuses to have any more to do with the Comptroller’s pressing demand for more capital is Paul D. Dunlap, president of Hawkeye Bancorporation, Des Moines, which owns 24 Iowa banks, has an application pending with the Fed to acquire Capital City Bank of Des Moines, and currently has $1 billion in assets. Mr. Dunlap says Hawkeye has been pursued unnecessarily by the regional comptroller’s office in Kansas City for more capital for its Clay County National Bank in Spencer. His recent letter to that office follows: Mr. John Rogers Deputy Regional Administrator of National Banks Kansas City, Mo. Dear Mr. Rogers: For four years . . . your office has com plained that the Clay County National Bank, Spencer, capital to loan ratio is not within its peer group average. As a result you have re quested additional capital be injected into the bank and dividends paid by the bank be reduced. Your position is untenable. We have supplied hundreds of pages of information over the past four years showing Clay County National Bank as one of the highest asset quality and consistent earning banks in the state of Iowa. The bank meets all other peer group averages including capitaliz ation. On April 30,1980, the bank had assets of $40.4 million, loans of $27.2 million (67% of assets) and capital and reserves of $3.3 million (8.18% of assets). Return on average assets in 1979 was 1.24%. Loan losses were a minuscule .008% of loans outstanding. Clay County National Bank is by all measures a high performance, well managed bank. . . . Spencer is a dynamic community and the surrounding agricultural area heavy in cattle feeding requires a bank to lend fully its funds if the loan demand is to be met. . . . Earlier this year Pratt's Newsletter referred to the fact Congress felt it necessary in the new omnibus banking law to make three separate statements that the Comp troller of the Currency is to follow the law, yet the Comptroller and his underlings daily make statements that they are doing every thing possible to spread Walter Wriston’s Citicorp across the nation regardless of the McFadden Act. The Comptroller’s office in its grab for power under the guise of more competition is willing to sacrifice 13,000 rural banks and destroy the dual system of banking. It is hard for a rural Iowa bank to accept what the regulators are willing to do on the national scene when to us they apply oppressive, smothering, rigid regulations, supposedly justified by “ Congress made us do it!” “ Truth-in-regulation” is needed far more than “ truth-in-lending.” What is said in your Washington office as to the new exam ination procedures, how capital adequacy is viewed; the weight to be given to good man agement; the strength a bank holding com pany gives its banks; that the “ peer group analysis” is merely a tool in the arsenal and not to be used in an inflexible mode is unrec ognizable when it comes out of the Kansas City Regional Office applied by your exam- CALL ON THE “PERFORMANCE TEA M ” where common transactions A * -f https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis are handled uncommonly well. IIIIH H H III FI RST NATIONAL LI NCOLN 13th & M Street • Lincoln, Nebraska 68501 • Member, F.D.I.C. 2 iner. Your application cannot be reconciled to the many press releases telling the public how great is the enlightened procedure. Our Company and our bank in Spencer are drawing the line. We will no longer respond or discuss with you the fact we are not in your peer group risk asset ratio. We intend to do absolutely nothing in regard to cutting our dividends or injecting capital. Take whatever course you wish. We will resist the blind, incoherent, misapplied and burden some application of bureaucracy with all the resources we have. Respectfully, PaulD. Dunlap President When asked about the letter, John Burt, regional administrator in Kansas City, stated only that it was an unsolicited letter and he would have “ no comment.” Mr. Dunlap reports he has had no re sponse from any federal office con cerning the letter but has 20 letters from other bankers supporting his position. In a similar vien, Iowa superin tendent of banks, Tom Huston, has taken sharp issue with the Federal Reserve System on several points. In the first instance, his depart ment, after careful investigation, had given the principal of an Iowa one-bank holding company approv al on the application for a stated management fee for the subsidiary state chartered and supervised bank. Within a short time, the Fed undercut that decision by notifying the principal the fee was denied, thus leaving the banker with two conflicting orders. Mr. Huston has made it plain to the Fed that he has regulatory authority over the state bank in question, and if the Fed has any reason for a different opinion contact him instead of the bank. In a talk this month to Iowa bankers, Mr. Huston also warned about the Fed’s apparent effort to run rough-shod over state depart ments and state banks with its memos of understanding, its deter mined efforts—not authorized by Congress—to tamper with bank structure, and its even greater con trol over interest rates after Reg Q phase-out—via its money supply controls. □ Frank Farrar Offers to Take Over Kansas Bank Frank L. Farrar, a well-known banker with interests in 20 banks in six upper midwest states, has made application to the Federal Reserve Bank of Kansas City for approval of M .S.B. Holding Co., of which he is the principal stockholder, to acquire 85% of the stock of Mission State Bank & Trust Co. of Mission, Kan. Mr. Farrar, a former governor of South Dakota, will put in $2 million of capital, while the holding com pany and current owners also will contribute $2 million each for a pool of $6 million capital under the new financing. Mission State had assets of $101 million last year-end and has been seeking additional capitali zation. A Kansas City Fed official said a decision would be made with in a few days. Iowa News B ank on a BANKERS’ BANKER C all 1-800-362-1688, toll-free in Iow a Several dozen Iowa bankers are expected to attend the annual Iowa Bankers Association Instalment Lending School, to be held August 11-15 at Drake University in Des Moines. The school is designed both to introduce the relatively inexperi enced banker to the instalment area and to update the resources of the more experienced lender. Officers and employes of IB A active or asso ciate members are eligible to partici pate in the school. CLINTON: The First National Bank has received consent from the administrator of national banks to locate an office in the 1600 block of Lincolnway here. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis COLFAX: Charles M. Stinson, president of the First National Bank here, has been elevated to chairman of the board, the office vacated by the retirement of Howard E. Bell. * V A ► ASK JERRY TRUDO to make MNB work for you. 0 Toll free 1- 800 - 332-5991 Merchants ^ National Bank 151 Member F.D.I.C. A 'BANKS OF IOWA' BANK The new president is James W. Eiler, most recently vice president in charge of lending at the Univer sity Bank & Trust Co., Ames. D ALLAS CENTER: Roger Winter hof has been named president of the Brenton State Bank here succeeding R oger R inderknecht who was named president of the Jefferson State Bank. Mr. Winterhof former ly served as cashier of the Dallas Center bank before moving to the Brenton First National Bank in Davenport in 1972. He was most re cently senior vice president. DES MOINES: Voldemars Vanags has been named second vice presi dent, investment services, at the Iowa-Des Moines National Bank. Most recently he was a second vice president in the correspondent banking department. Named to the position of international banking officer were Thomas J. Naughton and James G. Oettinger. DUBUQUE: The First National Bank of Dubuque has received con sent from the regional administrator of national banks to locate a CBCT unit at 3355 Asbury here. KALONA: New officer appoint ments at the Farmers Savings Bank L « 4r> yt. <• sjfi $ W V* Carleton D. Beh Co. Supplement to Northwestern Banker Newsletter 7-28-80 Investment Bankers/Financial Consultants A NEW ISSUE SALE DATE: July 17,1980 $1,765,000 GRINNELL, IOWA MOODY’S: A General Obligation Bonds Dated: June 1,1980 Denomination: $5,000 Both principal and semiannual interest (J u n e l and December 1, first coupon due on Decernber1,1980) payable at the Treasurer’s Office, Grinnell, Iowa. IN THE OPINION OF COUNSEL INTEREST ON THESE BONDS IS EXEMPT FROM ALL PRESENT FEDERAL INCOME TAXES AND ALL PROPERTY TAXATION IN THE STATE OF IOWA. MATURITIES $ 70,000 75,000 80,000 85,000 90.000 95.000 100,000 110,000 115,000 120,000 6.50% J u n e l,1982 J u n e l,1983 J u n e l,1984 J u n e l,1985 J u n e l,1986 J u n e l,1987 J u n e l,1988 6.40% J u n e l,1989 6.25% J u n e l,1990 6.40% J u n e l,1991 5.10 5.25 5.40 5.55 5.70 5.85 6.00 $125,000 6.10 145,000 6.25 150,000 130,000 135,000 140,000 6.60% J u n e l,1992 6.80% J u n p l,1993 7.00% J u n e l,1994 7.10% J u n e l,1995 7.25% J u n e l,1996 7.40% J u n e l,1997 6.60 6.80 7.00 7.10 7.25 7.40 6.40 LEGALITY TO BE APPROVED BY AHLERS, COONEY, DORWEILER, HAYNIE & SMITH, ATTORNEYS, DES MOINES, IOWA Grinnell, the principal City of Poweshiek County, is located in the central part of the State of Iowa, approximately 50 miles east of Des Moines. The City serves as the financial, industrial, shipping and trading center for the surrounding prosperous and productive agricul tural area. Grinnell is the home of Grinnell College, one of the Nation’s foremost liberal arts colleges. The City also serves as the division point for the several sizable utilities, Iowa Southern Utilities and General Telephone Co. DeKalb Hybrid Seed Co. and Cargill Seed Co. maintain large processing plants within the City. The City is also the home of the Grinnell Mutual Reinsurance Co., Cornland Manufactur ing Co., Ahrens Manufacturing Co. and Donaldson Manufacturing Co. Industry in the City employs approximately 2,300 persons of the 8,685 total population. There are two banks located in Grinnell with total deposits as of December 31,1979, in excess of $63,690,000. Transportation facilities are provided by U.S. Highway No. 6, U.S. Interstate No. 80 and State Highway No. 146. These bonds are being issued under the provisions of Chapter 384, Code of Iowa, 1979, as amended, to pay the costs of reconstructing, improving and equipping the former junior high school building as a Grinnell Community Center to provide administrative offices, public meeting and recreation facilities and an auditorium. In the opinion of counsel, these bonds are legal and binding general obligations of Grinnell, Iowa, and all taxable property located therein is subject to the levy of sufficient taxes to pay the principal of and interest on the bonds without lim it as to rate or amount. r* FINANCIAL STATEMENT Actual and assessed value of taxable property, 1979 Direct debt, including this issue Total direct and overlapping debt $89,531,121 2,785,000 4,373,400 Population, 1975 Census: 8,685 - Direct debt per capita: $320.67 Total debt per capita: 503.56 Tax collections have approximated 102.18% of taxes levied for the past five years. We own and offer subject to prior sale and change in price and subject to our attorney’s approving opinion: The information contained herein is not guaranteed, but is derived from sources we deem reliable and is that on which our purchase of these bonds was based. Offered subject to prior sale and change in price. https://fraser.stlouisfed.org Des M o in e s B uild in g • Des M oines, Iowa 50309 • 515-288-2152 Federal Reserve Bank of St. Louis 607 M a rq u e tte Ave. • M in ne a p o lis, M in ne so ta 55402 • 612-332-8825 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I < hd % Single System Banking with ELI NOW ACCOUNTS P P J | N ow ! r e l f i Bank Data Processing Professionals National Bank of Waterloo Waterloo, Iowa 50704 Member FDIC include Larry E . Kern to senior vice president; Eileen Yotty, vice presi dent; Margaret Miller, assistant vice president; Gary A. Kallaus, cashier, and Delores Spitzer, assist ant cashier. T-^ V/ KEOKUK: Richard A. Bishop, president of the Security State Bank, has been named a regional executive for Northwest Bancorporation, Minneapolis, effective A ug ust 1. J. Agnew Rovane, senior vice president, will become the bank’s new president. SPILLVILLE: Funeral services for Charles J. Andera, 84, were held earlier this month in Spillville. He was retired from the Citizens Sav ings Bank there after 40 years of service. Nebraska News V '> Eft 4 V- >r The regional administrator of na tional banks has reported the follow ing CBCT unit application activity for Nebraska banks: Overland National Bank of Grand Island, Highway 281 and 13th Street, approved; First National Bank & Trust Co., Lincoln, 13th and High Streets and 48th and Van Dorn, approved; The Omaha Na tional Bank, 12039 Blondo St., filed. HASTINGS: Lloyd R. Kitrell has been elected chairman and chief execu tive officer o f the C ity National Bank & Trust Co. He joined the bank as president and chief executive officer in 1973. O. J. McDougal, executive vice president of the bank since 1973, was elevated to president and chief operating officer. OCONTO: The Farmers Bank here will celebrate its 75th anniversary on Saturday, August 2, with an open house. YORK: August C. “ Jack” Holmhttps://fraser.stlouisfed.org Federal Reserve Bank of St. Louis V { P h o n e M ilt H e n n ic k at 1-800-772-2411. quist III has been named president of the York State Bank & Trust Co. He joined the bank in March after serving as president of the Bank of Nebraska in LaVista. He was execu tive vice president of the First Na tional Bank, Columbus, and was with the National Bank of Com merce in Lincoln for 16 years. Minnesota News ALDEN: The First National Bank of Alden has received consent from the administrator of national banks to open a facility at the intersection of U.S. 69 and West Main Street in Albert Lea. chairman and chief executive officer at LaPorte (Ind.) Bank & Trust Co. M r. D eR osier join ed N ational Boulevard’s correspondent division in 1969. CHICAGO: Archer National Bank of Chicago has received consent from the administrator of national banks to open a facility at 47 Street and Kedzie Avenue. CHICAGO: Thomas has been elected vice director of education Bankers Association. IBA as director of 1978. J. Dammrich president and of the Illinois He joined the education in South Dakota News PHILIP: Philip Bancorporation, Inc. has filed for permission from the Federal Reserve Bank of Minne apolis to become a bank holding company by acquiring the majority of common stock in the First Na tional Bank of Philip. HOPKINS: Northwestern National Bank West here has received con sent from the administrator of na tional banks to establish an office in Plymouth. PIERRE: The state banking com mission was recently reorganized. Elected chairman was Charles H. Burke, president of BankWest, N .A ., Pierre, and Beverly Zigler was re-elected secretary to the com mission. James I. Deam, president of the American State Bank, Yank ton, was re-appointed to the com mission for a term to expire in July, 1983. Illinois News READY NOW ARLINGTON HEIGHTS: Toll way-Arlington National Bank of Arlington Heights has received con sent from the administrator of na tional banks to open an office at 450 Higgins Road in Elk Grove. A R L IN G T O N H E IG H T S : A n application by the First Arlington National Bank in Arlington Heights for an office at Arlington Heights and Rand Roads has been denied by the administrator of national banks. AURORA: Organizers of the pro posed Citizens National Bank of A urora have received charter approval from the administrator of national banks. Agent for the corp orate reorganization is Charles R. McKirdy. CHICAGO: H. Peter DeRosier, vice president at National Boulevard Bank, has been appointed head of the correspondent bank division. He fills the position vacated by George Dearborn, who will become vice io w a -nebrasI a BANK DIRECTORY ‘P ublished b if No r t h w e s t e r n B a n k e r DES M O IN E S COMPLETE INFORMATION O N A L L BAN KS IN IOWA and NEBRASKA ACCURATE' DEPENDABLEPOCKET S IZ E - The co m p le te ly re-edited 1980 editions of the Iowa Bank Directory and the Nebraska Bank Directory are available now. Up-to-date Usings of officers, statement figures, and other vital facts about all Iowa and Nebraska banks. Now only $10 for the Iowa edition and $6 for the Nebraska edition. Write the North western Banker today for your copies. The address is 306 Fifteenth Street, Des Moines, Iowa 50309. 3 4 SIOUX FALLS: Western State Bank has received consent from the state banking commission to change its name to Western Bank. PARTIAL LIST OF AVAILABLE POSITIONS W EBSTER: The Day County Bank here has increased its amount of capital stock from $125,000 to $150,000. #2—Generalist needed fo r new charts. Want an ag gressive go-getter. $27,000 Two ISU Grads, with ag lending experience, wish to relocate in central Iowa area. COLORADO SPRINGS: Construc tion was scheduled to begin this summer on a new facility for the Garden of the Gods Bank, one of the first passive solar bank buildings in the country, according to Stephen S. Laine, president. Completion is planned for the spring of 1981. Iowa Law Grad, with seven years private practice, wants to join trust department of progressive bank. MISSOULA: George Henry, a Dillon banker and former vice pres ident at the First National Bank of Minneapolis, is recovering from a stroke at Community Rehab Center, Fort Missoula, 59801. Phone (406) 543-6378. Wyoming News CHEYENNE: W yoming Bancorporation has entered into an agree ment in principle for private place ment of an $8 million issue of 8.5 % convertible subordinated deben tures due in 1992, according to David R. Johnson, president. Texas Commerce Bankshares of Houston and Standard Security Life Insur ance Co. are the two principals in the purchase. The transaction is subject to Federal Reserve Board approval. W AN T ADS Rates 50 cents per word per insertion. Ad $2 for file numbers. Identity of file number advertisers cannot be revealed. Payment in advance, please. NORTHWESTERN BANKER 306-15th St. Des Moines, Iowa 50309 V- TRUST OFFICER— Experience needed. W ill event ually take full responsibility fo r department. $21,000 Colorado News Montana News A OFFICER—W ill have total and complete responsi bility for industrial bank. A ll types of lending. $18,000 Operations Officer, with excellent experience, w ill re locate in upper midwest. DENVER: Organizers of the pro posed The First National Bank of the Southwest here have received charter approval from the adminis trator of national banks. Agent for the new bank is Theodore D. Brown, chairman and chief executive officer of The First National Bancorporation, Inc. m CASHIER— Four to six years operational experience needed. Excellent location, good opportunity. $21,000 Instalment Loan Officer, in $14 m illion department, seeks new position in upper midwest. Write or call Malcolm Freeland, Freeland Financial Service, Inc., 306 Fifteenth Street, Des Moines, Iowa 50309. Phone (515) 244-8163. Employer pays fee. (PW) POSITION AVAILABLE AG OFFICER—Two years experience needed. Be#1 in department. Must be able to work with little super vision. $22,000 VP—Commercial lending. Must have strong lending and supervisory experience. $28,000 OPERATIONS—Ag bank in Minnesota. Oversee all operations. EDP experience a plus. $15,000 FOR FURTHER INFORMATION RESPOND IN CONFIDENCE TO: Bank Division m Commerical Loan Officer, with ag experience, needed by com munity bank in eastern Iowa. Cashier for newly-chartered bank in midwest town of 25,000. ROBERT HALF of iowa, inc. 317 6th Ave. Des Moines, IA 50309 (515) 244-4414 AG BANKING CAREERS Auditor, w ith CPA or bank auditor degree, wanted by $45 m illion Iowa bank. AG LENDING REP... Io w a ..........................$17-18,000 CEO wanted by Iowa community bank to replace retir ing president. CREDIT M A N A G E R ...O hio........................$23-25,000 AG LENDING OFFICER... SE Minn.......... $16-18,000 W rite or call Malcolm Freeland, Freeland Financial Service, Inc. 306 Fifteenth Street, Des Moines, Iowa 50309. Phone (515) 244-8163. Employer pays fee. (PA) HEAD TELLER— Rockford area with experience as supervisor of teller area with knowledge and experi ence in teller training techniques. Our staff is aware of thisad. Write fill KBU, c /o Northwestern Banker. (PA) COMMERCIAL LOAN OFFICER—$40 m illion central Iowa bank has excellent opportunity for individual with a minimum of four years’ experience. Attractive salary and fringe benefits. Submit resume to Paul Gergen, President, University Bank, Box 1135, Ames, IA 50010. Phone(515) 292-7475._______________ (PA) RETAIL BANKER—Outstanding growth opportunity for right person. We are a large suburban bank in the midwest, with plans to restructure our instalment lending activities into a broader personal banking approach. The individual we are seeking w ill be divi sion chief and a member of the executive committee. Must have excellent credentials. Replies w ill be held in strict confidence. An Equal Opportunity Employer. Write file KBQ, c /o Northwestern Banker. (PA) FOR SALE FOR SALE Burroughs TR-102 electronic teller machines. Upgrad able to on-line; 2-3 years old. Guaranteed. $995 each. NCR 152-70 teller machines. Completely recondition ed. Guaranteed; 15 days free trial. $775 each. NCR 490 desktop check encoders. Full-field. Guaran teed. $875 each. NCR 775 proof machine. Maintenance will transfer. $7900. . • ’___________ C a ll(214)757-7760___________ (FS) Modular ATM building. Can be adapted to most models of automated teller machines. Stone aggre gate exterior; electric heat and airconditioning. Ready for immediate delivery. Contact Financial Products, Inc., Box 1035, Eau Claire, Wisconsin 54701. Phone (515)835-8160.____________________________ (FS) 12’x40’ mobile home converted for use as temporary banking facility. Night drop and drive-up window in stalled; good teller counter. Furnace with central air; available immediately. ALSO, 6’x9’ remote drive-up building w ith heat and air conditioning. Call (319) 291 -5429 or (319) 291 -5468.__________________ (FS) Independent Management Services Specializing in Bank Acquisitions By Independent Investors No Broker Fees Cal 1515-223-1044 Homer Jensen — Dick Buenneke 3737 Woodland Ave. Executive Suite 120 West Des Moines, Iowa50265 LOAN OFFICER... Io w a ..............................$15-20,000 CREDIT SUPERVISOR... Ohio ..................$17-21,000 AG LOAN REP... Iowa ...................... $20-25,000 Since 1968, banks and other ag-related employers have been paying us to find the personnel they need. For more information, give Linda (our banking spec ialist) a call today. 3OH CAREERS, INC. m J AGRICULTURAL PERSONNEL RECRUITERS (515)394-3145____________ New Hampton, IA 50659 SERVING PROFESSIONALLY Banking, Financial & Business Personnel Iowa and Nationwide CAPITAL PERSONNEL SERVICE 714 Central National Bldg. 515-283-2545 Des Moines, Iowa 50309 POSITIONS AVAILABLE JR. AGRI LOAN—Addition to staff of $100MM bank. Prefer ag business orag econ degree.................... 18K JR. COMMERCIAL LOAN—$30MM Iowa bank seeks junior officer with formal credit analysis experi ence. ...................................................................18K PRESIDENT—Opportunity for investment in $15MM bank. Strong ag and commercial experience requir ed............................................. 30K CASHIER— Excellent opportunity for junior officer w ith 2-3 years operations experience.................... 16K EXEC. VICE PRESIDENT— New charter in growing suburban area. W ill have opportunity for #1 spot in two years................................................................... 30K CASHIER—Solid operations background and some knowledge of EDP systems for #2 spot in $20MM rural bank........................................................................... 22K SENIOR AG LOAN—$25MM rural bank with oppor tunity for president’s position in two years...........28K Many additional opportunities for both junior and senior officers. Please forward resume and salary history to: TOM HAGAN & ASSOCIATES OF KANSAS CITY P.O. Box 12346 / 2024Swift North Kansas City, Missouri 64116 _____________ Phone (816) 474-6874_____________ Vol. 9 No. 14 Northwestorn Banker Newsletter [USPS 873-300] is published weekly by the Northwestern Banker Company, 306 Fifteenth Street, Des Moines, Iowa 50309. Subscriptions 25 cents per copy, $8.00 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 <• A Mjt