Full text of The Northwestern Banker : October 16, 1967, No. 1060

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

■

Oldest Financial Journal West o f the Mississippi

Ho. 1060________ _______________ Des Moines, Iowa________

October IB , 1367___________

An Analysis of Future of Small Bank

small bank inherently by virtue of
size alone is in practice incapable
of effective competition.
The small bank in competition
with the larger units faces poten­
tially formidable odds. The larger
unit enjoys the opportunity for
econom ies of sca le , the possibility
of utilizing advanced technology,
the privilege of its own research
and the advantage of well estab­
lished
management development
and su ccession . Stemming from the
prestige which size alone can
confer, the larger bank has a
superior capacity to deal as equals
with big business and big govern­
ment.
Offsetting these disadvantages
the small bank enjoys flexibility
and the opportunity to tailor its
services more precisely to its
market. Banking is a personal
business and we serve our cu s­
tomers one person at a time.
We believe our customers want to
keep banking on this personal
basis. The many current variations
o f the “ you have a friend at Chase”
theme provides confirmation for
this view.
The flexibility which the small
bank enjoys is readily apparent.
Its management can decide, test,
implement and evaluate in the time
it requires a decision to percolate

Bankers who feel that the
small bank is vulnerable to ag­
gressive competition and that it
cannot survive in our rapidly
changing economy should take
heart and heed the suggestions
made by Willis W. Alexander, Jr.,
new ABA vice president and pres­
ident of the Trenton Trust Com­
pany, Trenton, Missouri. Mr. A lex­
ander has this to say:
People who say the small
bank cannot survive cite the in­
creasing
frequency of mergers
between small banks and larger
institutions. The decreasing num­
bers of the small banks is also
mentioned. It seems to be a part
o f the conventional wisdom (per­
haps more conventional than w is­
dom) that the small bank cannot
effectively compete in the ever
changing market and that lacking
this competitive ability, cannot
survive.
The accuracy of this view,
important as it is to those of us
in the smaller banks, has sig n ifi­
cant administrative, legislative and
judicial implications.
It is not difficult then for
those o f us from the small banks
to acquire a complex as we listen
to the Oft-repeated argument that
size permits efficien cy and sp ecia l­
ization which leads irresistibly to
dominant supremacy for the larger

unit. This line of reasoning has
gained such currency as to appear
an unquestioned fundamental of the
present day scene.
There are many of us who do
not accept the conclusion that the
small banks are a vanishing breed,
an inefficient and economically
indefensible anachronism protected
and preserved only by restrictive
merger, branching and chartering
statutes and p olicies. The number
o f small banks in the United States
is rather impressive; 89% of our
banks have le ss than $25 million
in deposits and 72% are under
$10 million.
The profitability of the under
$25 million deposit bank as mea­
sured by the after tax net income
as a ratio of total assets compares
quite favorably and in some cate­
gories exceeds that of the larger
bank as reported by the FDIC.
Frequently, as in at least one
geographic area, the economies of
scale available to the larger bank
are dissipated by the apparent
compulsion to branch extensively
in order to meet local demands for
service. The Boston Federal R e­
serve Bank found this to be the
case in a recent study o f its area.
The foregoing does not repre­
sent that the small bank is more
efficien t than the larger one. But
neither does it suggest that the

Small B a n k s ...
(Continued to back page)

The myriad tools of modern banking
and men who know how to use them.
G o o d re a s o n s w h y o v e r half the b a n k s in Iow a are
— M N B c o rre sp o n d e n ts
Jam «« E. C oquillette
P reeld en t

9

W

C
RA
AP
P ID
ID S
S
CE
ED
DA
AR
R R

M W «« f 0. C

T H E F U L L . S E R V I C E B A N K F O R T H E B A N K S O F IO W A


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

*

We're here to help
you get what you want

IOWA-DES MOINES
NATIONAL B A N K
Bob Buenneke

Member Federal Deposit Insurance Corporation

president and trust officer of the
First National Bank of Dubuque and
Thomas Killion who recently joined
the trust department of Dubuque’ s
First National.

IOWA NEWS
ALDEN: E. L. Ackerman of the
Alden State Bank has awarded a
contract for enlarging and com­
pletely remodeling the bank to
Mulford Construction Services, Inc.,
Hampton, and the Kirk Gross Com­
pany, Waterloo. Plans include re­
moving the second floor of the
building and adding a drive-up
window.
CEDAR RAPIDS: JosephV .Zastera,
vice president and director and also
one of the founders of the United
State Bank, died October 7. He was
a lifelong resident of CedarRapids.
DUBUQUE: The First National Bank
of Dubuque recently sponsored a
Trust Forum at the Dubuque Golf
and Country Club. The featured
speaker was Howard B. Bouton of
the First National Bank of Chicago.
The topic of Mr. Bouton’ s speech
was “ Planning a Personal Invest­
ment Program.’ ’ A lso speaking at
the forum was Donald Runger, vice
WANTED
Auditor — immediate opening at the
Nevada National Bank, Nevada,
Iowa. Salary open. Contact —
Kermit J. Anderson, President

DES MOINES: Gary Stevenson has
been assigned to the correspondent
bank department of Bankers Trust
Company as assistant to Homer
Jensen, vice president and head o f
the department. Mr. Stevenson, who
will be calling on banks in Iowa,
has been with Bankers Trust one
year.
DES MOINES: JohnR.Harmeyer has
been elected vice president and
cashier of Plaza State Bank. He
joined the bank two years ago as
vice president in charge of install­
ment. loans. Previously, he was
with Capital City State Bank and
National Bank of Des Moines. He
su cceed s Smith W. Brookhart, III,
vtrho has been named vice president
and cashier of Peoples Bank and
Trust Company, Branson, Mo.

an open house. J. L. Campbell, Sr.,
has been the bank’ s president since
1943. J. L. Campbell, Jr., is the
bank’ s vice president.
HUMESTON: The board of direc­
tors of the Citizens State Bank
has announced the acceptance of
the resignation of K. W. Richard,
president. He has been associated
with the bank for the past 14 years.
Roy Meadows has been named
temporary president.

4'

f-i

■4

LAMONI: The city of Lamoni swim­
ming pool bonds in the amount of
$45,000 have been sold to the low
bidder, the State Bank of Lamoni.
The bank’ s bid specified interest
at 4%.

EARLY: Donald W. K elley has
been elected to the board of the
Early Savings Bank. He was e le c­
ted vice president and cashier of
the bank in September. Mr. Kelley
has been with the bank since
December, I960.

WATERLOO: Five Waterloo men
have filed an application for a
national bank charter with the
Comptroller of the Currency. The
bank, to be known as Crossroads
National Bank, would be located
at the new Crossroads Shopping
Center at La Porte Road and High­
way 412. Initial capital would be
$1,000,000. Applicants are: Dr.
D. D. Felcher, Richard E. Lynch,
Dr. F . H. Reuling, Howard H. Rath
and Robert A. Young, Jr. The bank
would open in 1969 when the C ross­
roads Center is completed.

FA YE TTE : R obertlsensee of Mason
City, and his associates, have pur­
chased controlling interest of the
State Bank of Fayette from Gene
Hervey, president.

WILLIAMSBURG: The board of
directors of the Farmers Trust and
Savings
Bank
recently named
Dorothy M. McCarty assistant cash­
ier.

HUMBOLDT: The Humboldt Trust
and Savings Bank recently ob­
served its 40th anniversary with

N EB R A S K A NEWS

*r

>

4

m

n

A complete report on the six

Tom Cannon is em phatically Earnest
Call him "Earnest," if you like. Tom won't mind. He's proud to
belong to the earnest crew of correspondent bankers at
Commerce Trust. And he's proud that one bank in every nine
throughout the nation depends on Commerce Trust. If you
take banking as seriously as Tom Cannon does, get in touch
with him soon.

(ommerce 'Trust (ompany

4

4»

Kansas City's Oldest and Largest Bank

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Member Federal Deposit Insurance Corporation

&

*

LINCOLN

...EDP Accounting with a
Personal Touch

F I R S T N A T IO N A L B A N K £ T R U S T C O M P A N Y O F L I N C O L N
12th & N S tre e t • L IN C O L N , N E B R A S K A • Member: F.D .I.C .

*

group meetings of the Nebraska
Bankers A ssociation will be pub­
lished, with pictures, in the Novem­
ber issue of Northwestern Banker.
Malcolm Freeland, publisher, at­
tended each of the meetings.
*
MARTELL: Alan Haugner has been
named vice president of the Martell
State Bank. He is a graduate of the
University of Nebraska and has
been associated with State Secu­
rities in Lincoln the past fouryears.
P

1^-

-J r

*

4

*<•

OMAHA: Mrs. M. M. Harvey, widow
of the late Kenneth Harvey who
was president of Douglas County
Bank for many years, has been
named chairman of the board of the
bank. She continues as a senior
vice president. Her son, Jack K.
Harvey, was elected vice-chairman,
and continues as executive vice
president. Duane C. Chunka was
named first vice president and
comptroller. Charles A. Prai was
elected assistant cashier. C. E.
(Jack) Hogzett, a 25-year veteran
in the field of loans and finance,
has joined the staff as a vice
president.
SCHUYLER: Remodeling of the
exterior of the Schuyler State Bank
is now underway. Plans ca ll for
the removal of the second story of
the building and then covering the
surface with marble. The present
bank building was erected in 1885.

M IN N ES O TA NEWS
if

*

■*

in capital, and $50,000 each in
surplus and undivided profits.
ASHBY: David Redfield, Jr., began
his new duties today as assistant
cashier at the First State Bank.
He was assistant cashier with
Security State Bank, Kenyon, where
he started banking in 1962.
FULDA: Herbert O. Lee has been
elected assistant cashier at the
Citizens State Bank. He was for­
merly assistant cashier of O’ Con­
nor Bros. State Bank at Renville.
HOKAH: Controlling interest in
the Commercial State Bank has
been sold to E. E. (Ray) Bentdahl,
effective November 1, according to
C. S. Johnson, president. Mr. Bent­
dahl, age 30, presently is vice
president and cashier of Rushford
State Bank in Rushford, Minn.
MINNEAPOLIS: DeWalt H. Ankeny,
J r., has joined the trust depart­
ment o f First National Bank as
assistant vice president.
MINNEAPOLIS: L. K. Torgerson
has been promoted from assistant
corporate counsel to vice president
and trust officer at National City
Bank.
ROCHESTER: Willard Blumhardt
has resigned as assistant vice
president of Northwestern National
Bank to become vice president of
First National Bank of Winnetka,
111.

ALBERT LEA: Three local men
have filed an application with the
banking division of the Minnesota
Commerce department for a state
bank charter. The bank would be
located in Albert Lea and known as
the Skyline State Bank. Incorpora­
tors are W. H. Olson, Homer L.
Blake and Gordon R. Quinlivan.
Total capitalization of $250.000
would be divided with $150,000

SOUTH D A K O T A NEWS

C O LO R A D O NEWS
Group meetings for the Colorado
Bankers A ssociation start today
as follow s: October 16--Grand Junc­
tion; 17th—Cortez; 18 th—Alamosa;
l9th-C olorado Springs; 23rd--Stratton; 24th—Fort Morgan; 25th--Greeley, and 26th—Denver.

B U L L E T I N ...
BURLINGTON, IA.: E. A. Hayes,
president, Burlington B&T, has an­
nounced that controlling stock in
the bank has been transferred to
Hawke ye Bancorporation, Red Oak,
la ., which was recently authorized
as a holding company by federal
authorities. PaulDunlap, president,
Houghton State Bank, Red Oak, and
Myron Weil, president, First Na­
tional, Clinton, are the principals
in Hawkeye Bancorporation. Mr.
Dunlap has an interest in six Iowa
banks. Mr. Dunlap and Mr. Weil will
become directors of Burlington B&T
in the near future. Mr. Hayes and
Don B ell, vice president of the
Burlington B&T and president, New
London State Bank, will continue
as directors of the Burlington bank
and will become directors of Hawkeye Bancorporation,

HUDSON: F. Clarence Larson, 57,
died in a Hawarden, Iowa, hospital
recently following an illness of
two months. He was a director of
the State Bank of Hudson.
WINNER: Willard Lynch, 47, died
October 6 from injuries suffered
in an automobile accident which

your capital city correspondent gives you

THE RIGHT COM BINATION
for all your correspondent banking

EX P ER IEN C E / KNOW LEDGE / SER V IC E

k

occurred east o f Mission, S. D., on
October 4. Burial was in Thedford,
Nebr., October 9. Mr. Lynch was
president o f Farmers State Bank,
Winner, and also a director of the
Guardian State Bank, Alliance,
Nebr.

Personal Attention
to A ll Your
Correspondent Needs
C A LL

402
AREA C00E

341-8765

■*


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

PHO N E

308 4 7 7 -8 9 11 - L IN C O L N , N E B R A S K A

68501

■ H>1 i
Rational

BANK

National Bank of Commerce
M e m b er F D I C

7Áe

OM AHA.

Member Federal Deposit
Insurance Corporation

**

I
I

4

S E C U R IT Y

N A TIO N A L

B A N K

Sioux City, Iowa

Small Banks. . .
(Continued from page one)
through the various management
levels of the larger organization.
The advantages o f this ability to
move rapidly in or out of the
operational area is ob viou s.
The myth that there is no place
for the small bank in the scheme of
the future is well entrenched in
our traditional line of reasoning
which equates size with power
and automatically imputes optimal
efficien cy to the result. Banking’ s
markets are diverse in size and
com position. It would appear that
some markets may require only the
small bank unit. Experience also
suggests that even the larger mar­
kets have requirements which the
smaller bank can most effectively
serve.
The small bank can compete
if its management is good — is
dedicated — is motivated. The key
to competitive ability is not n eces­
sarily a function of s iz e . It lies
more nearly in the ability and
attitude of management. Capable
management will see in the small
bank a unique opportunity to devel­
op, to adapt continually, to inno­
vate and to grow in both profit­
ability and in size. The small
bank
provides
an outstanding
training ground for “ full service
p eop le.” The opportunity to see
the whole picture is much superior
to that afforded in the larger insti­
tutions. The inter-relations between
various activities is more readily
apparent. The results are immedi­
ately and obviously associated
witn the actions from which they
flow .
Capable management in the
small bank truly must discipline
itself to find time to manage. It
must recognize that its su ccess
lie s in getting things done through
people. It must be capable of

sufficient disinvolvement from the
day to day operations clearly to
perceive the whole picture, both
future and present. To accomplish
this, the manager must learn to
delegate authority and responsi­
bility.
The management in the small
bank must perform the true manage­
ment function of planning and
setting goals, establishing programs
to achieve these ob jectives, moti­
vating people to stretch themselves
to accom plish, and finally directing
and controlling results. Once we
determine that we will manage, we
quickly become aware that in our
bank people lies the key to our
su cce ss.
The small bank may in truth
present either a dilemma or an
opportunity.
Which it becom es
depends entirely on the attitude
and the capacity of the manage­
ment.

Revise Rules On
Stock Disclosure
Two banking agencies proposed
a revised regulation that would
require fuller disclosure of the
ownership of bank stocks.
The Federal Reserve Board
fixed November 6 as the deadline
for receipt of comments on a pro­
posal which would require d is­
closure of stock held by wife, minor
children or relative who lives in the
same home of every bank director,
officer and principal stockholder.

AVAILABLE
Experienced loan officer, 8 years
banking and finance — agriculture
and business degree. Prefer p o si­
tion with investment opportunity.
Write F ile B LX, in care of the
NORTHWESTERN BANKER, 30615th St., Des Moines, Iowa 50309.
POSITION WANTED
Experienced Ag Man seeks chal­
lenging position in progressive
Iowa bank. Grad, of I.S.U., age 44.
R eferences. Write F ile CSK, in care
of the NORTHWESTERN BANKER,
306 - 15th, Des Moines, Iowa 50309.
FOR SALE
Loan application forms for the
modern agricultural banker. Sam­
ples on request. Farm Business
Council, Inc., P.O. Box F, Urbana,
Illinois 61801.
BANK OFFICER OPPORTUNITY
Immediate opportunity for opera­
tions officer in rural $2y2 million
bank in Red River Valley. Some
agriculture loan and insurance ex­
perience desirable. Good future
potential. Send resume, picture
and if desired, state salary require­
ments. F ile RRV, in care of the
NORTHWESTERN BANKER, 306 15th St., Des Moines, Iowa 50309.
POSITION WANTED
Specialist in overlines and cattle
loans desires work. Offers years
o f banking experience. Intense
desire to please. Backed up by
staff of specia lists in all phases
of banking. For immediate action
call Max Roy in Iowa City 338-5224
or at La Salle National Bank, 135
South La Salle Street, Chicago,
Illinois 60690. STate 2-5200 (area
code 312).

4

mi

%

4

4

i

#

‘-V

4

CENTRAL

NATIONAL

BANK

A ND

TRUST

COMPANY

M em ber Federal D eposit Insu ran ce C orporation

No. 1060 Northwestern Banker is published five times monthly by the Northwestern Banker Company, 306 Fifteenth Street, Des
Moines, Iowa 50309. Subscriptions 50# per copy, $6 per year. Second c la ss postage paid at D es Moines, Iowa. Address all mail
subscriptions, changes o f address (Forms 3579), manuscripts, mail items to above address.


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

*■