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SP OCTOBER 1988 New Officers for Iowa Bankers Association Special Ag Section: • Des Moines to Host ABA Ag Bankers Conference • 10 Features of Agriculture in the Year 2000 • C EO of Failed Bank Reflects on the Basics • Historic Charts Portray Ag Economy • Banking on Farmer Mac https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis * ^ 1 |1 M S Merchants National Bank investment S ervices* One of the leading Investment Departments in Iowa, MNB offers the following investment opportunities: SECURITIES: For customers or bank portfolios, MNB purchases and sells U.S. Treasury and Agency securities ■ Commercial paper ■ MNB jumbo certificates of deposit ■ Other money market instruments ■ Municipal bonds SECURITY CLEARANCE AND INVESTM EN T SAFE KEEPING: Including the acceptance and payment of a wide range of securities. MNB’s Investment Department also coordinates the timely payment of interest and principal on securities held in safekeeping. • MNB BOND ACCOUNTING: The Warrington Investment System provides correspondent banks with the necessary portfolio reports and accounting records. PUBLIC FUNDS PLEDGING: MNB acts as an approved custo dian for the pledging required to secure public funds deposits. F or the right investment opportunities, call on one of our MNB Representatives today. Donna Lewis Jeanne Whitehill Diane Lucore Joyce Mitchell 3 1 9 /3 6 8 - 4 2 3 0 3 1 9 /3 6 8 - 4 7 1 7 3 1 9 /3 6 8 - 4 2 4 6 3 1 9 /3 6 8 - 4 3 7 9 Security Purchases/Sales Municipal Securities Public Funds Pledging Security Purchases/Sales Bond Accounting Security Purchases/Sales ® Jumbo Certificates of Deposit Merchants National Bank is i Cedar Rapids, Iowa 52401 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member F.D.I.C A BANKS OF IOWA BANK * P Y o g r a i» T ^ t o f C e n t» w*w<gSS^SìSS SS®»«**"’ „«*»«*,««* ^‘% a”í»ñtf»s“!ÍSí“»5> fig&sss*'"*^ needed m-atttis just °S P° Vor tuore fOrder l ÖVtogr g -s S S * - v®as& ""*■* * ts £ ? t s KAembef i 1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ** t ^ owis'w S ^ ^ Ä S A S O “Ninetypercent of our Investment Center dollars come from outside our deposit base...” “To be a leader in our industry and provide new services to our customers — it was this philosophy that prompted Bismarck State Bank to establish the very first Investment Center in June T°m Gunderson,Jr., andKevin Dunnigan with a client. GundersonandDunniganare two ot the six brokers at Bismarckstate Bank. of 1985. “ For years, we stood by as our depositors withdrew money — only to invest with brokerage houses, insurance companjes and other financial entities r in search of higher interest rates. In most cases, bankers were afraid of innovative ideas for fear they might jeopardize their deposit base. Yet, the introduction of the Investment Center has, infact, enhanced our deposit base. Our research has concluded that90% of our Investment Center dollars comefrom outside our deposit base and only 10%from bank deposits. In addition, the Investment Center personnel cross-sell their customers on bank products and services. “The Investment Center concept has far exceeded our expectations in three areas: (1) the percentage of funds we generated from outside our own deposit base; (2) the internal growth of the Investment Center, including the number of brokers we would need; and (3) the growth and earning level of the bank itself — the bottom line! “ We highly recommend the Investment Centers of America.” — Myron Pfeifle For more information on how to establish an Investment Center in your bank, call or write today! ■ I INVESTMENT MUM! CENTERS Investment Centers of America, Inc. First Dakota Building *212 North 4th St. • Bismarck, ND 58501 TOLL-FREE: 1-800-544-7113 North Dakota: 1-800-732-2363) Digitized for(In FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis o Myron Pfeifle, President/CEO BISMARCK STATE BANK BISMARCK, NORTH DAKOTA q 5 N0B3MESTERN OCTOBER 1988 • 95th year • ^ f/ No. 1501 MEMBER OF AUDIT BUREAU OF CIRCULATIONS MEMBER BANK MARKETING ASSOCIATION OLDEST FINANCIAL JOURNAL SERVING THE CENTRAL AND WESTERN STATES ON THE COVER O fficers of the Iowa Bankers A ssociatio n fo r 1988-89 are pictured on the front cover of th is issue. They are iden tified w ith the IBA convention report on page 51. FEATURES 9 Northwestern Banker sale announced Merger w ith Commercial West to form Northwestern Financial Review 15 ABA ag bankers conference Des M oines w ill be host November 13-16 18 Charts portray ag economy H isto rical records trace trends in past decades 22 Agriculture in the year 2000 New Regulatory Compliance Manual Issued by IBAA The Independent Bankers Asso ciation of America has introduced a comprehensive new reference manual for bank regulatory compliance pro cedures. The "IBAA Compliance Deskbook,” designed especially for community banks, covers all aspects of regulatory compliance and is packaged in an easy -to-read , easy-to-use form at. Among the regulations covered are: • The Expedited Funds Availabil ity Act and Regulation CC; • Truth in Lending — Regulation Z; • The Bank Secrecy Act; • Insider Lending — Regulation O; • The Electronic Funds Transfer Act — Regulation E; and • The Community Reinvestment Act — Regulation BB. Special Compliance Action Plans at the end of key chapters help guide bank officers through the regulatory compliance process. Low-cost updates to the "IB A A Compliance Deskbook” will also be provided as bank regulatory changes occur. The price of the "IBAA Compliance Deskbook” is $95 for association mem bers. For nonmembers the price is $195. Banks purchasing two or more copies receive a 15 percent discount. Copies can be ordered by writing to IBAA, RO. Box 267, Sauk Centre, MN 56378, or by calling 1-800-IBASAUK. Dr. Neil Harl lists ten features to look for 26 Failed bank CEO reflects First Wisconsin Expands With Purchase in Arizona Paul Quam revisits basic banking concepts 27 Leveraged buyouts Dr. Doug A ustin and associates relate pointers DEPARTMENTS 33 34 38 39 40 M innesota Twin C ities Illin o is W isconsin South Dakota 40 41 41 43 46 North Dakota Colorado M ontana Nebraska Omaha 47 51 69 69 Lincoln Iowa C onvention Report Des M oines 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. 1501 Northwestern Banker (USPS 397-620) is published monthly by the Northwestern Banker Company, 1535 Linden Street, Suite 201, Des Moines, Iowa 50309. Subscription $2.00 per copy. $24 per year. Second Class postage paid at Des Moines, Iowa. POST MASTER: Send all address changes to Northwestern Banker, 1535 Linden Street, Suite 201, Des Moines, Iowa 50309. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis First Wisconsin Corporation, Mil waukee, Wis., recently announced plans to make its first bank acquisi tion in Arizona in a move aimed at enhancing services to First Wisconsin trust customers in the Southwest. It will purchase Metro Bancorp, Incorpo rated, a $70.3 million one-bank hold ing company, which owns Metropoli tan Bank headquartered in Phoenix. Terms of the transaction were not disclosed. First Wisconsin Corporation opened its first out-of-state trust office in Florida last year and the growth of that office has exceeded projections. The trust department of the newly acquired bank will be supported by accounting, investment, marketing and a wide range of other services provided by units of First Wisconsin Corporation. Northwestern Banker, October, 1988 6 BICS Installs Unique Computerized Recovery System to Avert Disaster ANKS of Iowa Computer Services (BICS), Cedar Rapids, la., a re gional banking service bureau, has installed a unique computerized disas ter recovery system that reduces the amount of time customers in six states are without data processing services in the event of a disaster. According to BICS President and Chief Executive Officer Brian Scott, "contingency planning has been a key function in the banking industry for many years, but as more and more computers are used to speed banking operations, the need for speed in the disaster recovery process has also increased.” BICS processes electronic banking transactions for 14 Banks o f Iowa banks and 50 other banks in Iowa and five other states. These transactions include deposits and withdrawals made to and from more than 200 automated teller ma chines (ATMs), and point-of-sale ter minals. Entries can include mortgage, commercial and installment loan pay ments, and the savings, checking, and general ledger transactions entered in about 1,800 computer terminals. B Large Volumes Handled In addition, BICS handles the dayto-day transactions o f its affiliate banks and their correspondents for a d a ily a v e r a g e v o lu m e o f a b ou t 1 ,000,000 transactions. According to Mr. Scott, BICS busi ness volume equates to that of a bank with assets of more than $6.0 billion, serving more than 200 locations and over 3,000,000 accounts. All of this data — from the banks themselves and from ATMs — is trans mitted to the BICS service center via private leased telephone lines connect ing the various sites throughout the midwest. Since there are many situations similar to this, banking officials have worked for years to devise systems to eliminate the chaos that could occur if a natural or man-made disaster ren dered a service center like BICS in operative. Repairs might take days or even weeks, so Mr. Scott says the goal of Banks of Iowa and BICS is to get their system operational as soon as possible — measured in hours and minutes. Profit Planning Asset/Liability Management Consumer »Compliance Regulatory Compliance Organizational Review Other Consulting Services — Ronald L. George, President * Call to register for ALM Seminar in October. Af Midwest Management Consultants 9140 West Dodge Road, Suite 270 Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Omaha, Nebraska 68114 (402) 391-1344 <0 Comptroller Requires Plan A recent directive from the federal office of the Controller of Currency makes it clear that banks must have plans for handling disasters that go beyond traditional m agnetic tape backups of daily transactions, an emergency source of electrical power and an occasional simulated disaster test. To comply with Federal regulations, banks and bank service centers like BICS now must be able to return vir tually every area of a bank that relies on electronic data and information to almost full operating capacity — and do it quickly. In spite of the regulations, Comput ers In Banking magazine surveyed banks last year and found that 30 percent had no disaster recovery plan. And, of those banks which did have a plan, on ly 28 percen t said they thought their plans would work. Service Loss Intolerable According to Mr. Scott, "the ex tended loss of banking services to consumers served by any major finan cial institution using BICS services is just not acceptable for obvious reasons. Every care must be taken first to avoid man-made disasters, and second to re cover quickly from natural disasters. "Furthermore, the courts are now holding banks and individual direc tors of banks liable for losses caused by negligence — including failure to have Superior Performance Banking Through Professional Consulting • • • • • • appropriate plans in place to handle the losses incurred as a result of data processing failure,” he added. US W E ST Provides System The BICS disaster recovery system relies on a network configuration ser vice from US WEST Communications (formerly Northwestern Bell) to make it work. The service called "Command A Link” provides the electronic where withal to quickly — if not instanta neously — reconfigure the complex web of data transmission lines that make up the BICS service network. Lynn Gipple, US WEST Communi cations spokesperson, says that Com mand A Link is "similar to a comput erized railroad stationmaster who, when a bridge is out or traffic backed up, reroutes trains on an alternate line. "In the case of BICS, data transmis sions from, say, Council Bluffs or Des Moines are routed through Command A Link at the US WEST Communica tions headquarters in Des Moines and then routed to another Command A Link center in the Cedar Rapids US WEST Communications offices. "A t the sam e tim e, data from Davenport or Sioux City might be coming directly to the Cedar Rapids US WEST Communications office. All of the data entering the Cedar Rapids facility is then routed to the BICS facility. "But,” Mr. Gipple says, "if a problem develops anywhere in the system, Command A Link is able to analyze available circuits and reroute the m h O 7 transmissions so they reach the BICS center with no break in service.” Additional Backup ^ ^ ^ 0 0 # • ^ ^ ^ Hi Hi 0 In the event of a major disaster affecting the BICS services center, Command A Link can be operated 'off site’ by BICS personnel. Depending on the magnitude of the disaster, the BICS disaster recovery system might also use the specialized facilities and services of COMDISCO Disaster Recovery Services, Inc. of Rosemont, 111. COMDISCO is the largest organiza tion in the United States dedicated to providing emergency and contingency data processing services to companies such as BICS. Equipment at COMDISCO’s Rose mont headquarters — or at any of seven remote facilities — duplicates the data processing setup at BICS. "All we have to do,” Mr. Scott says, "is tell Command A Link to send information that normally comes to Cedar Rapids to Chicago instead. "It only takes a matter of minutes — a few hours at the most — for the entire BICS system to be up and run ning in Rosemont. Our customers might not even know there was a problem.” Only System in Iowa The arrangement between BICS, US W E ST C om m u n ica tio n s and COMDISCO is the only such disaster recovery program now operating in Iowa. According to Mr. Scott, it’s also unusual because the Command A Link portion of the network is in daily operation and is, itself, backed up by having similar systems both in Cedar Rapids and Des Moines. Mr. Scott says, "Because the US WEST Communications Command A Link system is handling many routine operations on a day-to-day basis, we don’t have to worry that we’ve install ed a piece of equipment that sits idle most of the time, works fine during occasional tests, and then fails in a crunch. We know, because we’re using it every day, that it won’t fail when we need it the most.” The new disaster recovery system was a significant expense for BICS, "But,” Mr. Scott says, "these costs are minimal when you consider the risk of a major computer disaster — millions of dollars in daily transactions carried out by Banks of Iowa and other banks, businesses and the millions of individ ual customers we serve.” □ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Unbeatable Support. LaSalle National Bank supports you. With more than half a century of e x p e r ie n c e ... innovative p ro d u c ts... responsive service... and deep commitment to the market. Our goal is to help you enhance your overall performance. LaSalle takes a consulting approach to correspondent banking, working closely with you to develop strategies that improve prof its, growth and efficiency We offer individualized service and comprehensive capabilities, including: • multiple investment consulting • credit and financial services • global trade finance • merger and acquisition financing • trust, treasury and many other services In addition, LaSalle ensures dependable, cost effective safe keeping, investments, loan overlines and the other standards of correspondent banking. As your Midwestern neighbor, we share your perspective and regional loyalties. As a Chicago bank with international resources, LaSalle can share money-center banking opportunities as well. Through our affiliation with ABN Bank, a leading global institu tion, we offer many advantages well worth investigating. Get acquainted with LaSalle’s Correspondent Bankers. Call Wayne Bismark or Del Rogers at (312) 443-2769. Wayne, Del and the LaSalle Correspondent Banking team will give you unbeatable support—with better service, better products and better ideas. LaSalle National Bank 135 South LaSalle Street Chicago, Illinois 60603 Member FDIC Member of the ABN/LASALLE group ABN O LA SALLE Your Correspondent Banking Bridge c 1988 LaSalle National Bank Northwestern Banker, October, 1988 8 RM A Offers New Training utilize the entire M E N T O R program to provide consistent training for all of its commercial lending relation ship managers and credit support people, regardless of their location within the organization. A s in terstate banking becomes more of a reality, this consistency will become a more valuable asset to an organization. “ But M E N T O R can be just as ef fective when used in a more selective manner,” he added. “ For example, banking training officers can select a single course—or several courses— to fill specific bank training needs from any or all of the three M E N TOR tracks.” A FTER years of research and p la n n in g , R o b e rt M o rris Associates recently launched M E N TOR, a new and unique training pro gram designed to meet the needs of commercial lending professionals at all levels. R M A is the national association of bank loan and credit officers. According to 1987-88 National R M A President William H. Sayre, the M E N T O R program was devel oped in response to the everincreasing training needs of R M A ’s 3,100 member financial institutions nationwide. “ The primary purpose of R M A is service to commercial len ding and credit professionals. And a major part of this commitment is training—from entry level through senior management,” Mr. Sayre noted. He is executive vice presi dent, Fidelcor, Inc. and Fidelity Bank, Philadelphia. Mr. Sayre said the M E N T O R training system was designed to meet two key attributes of today’s bank training environment. One, the training needs of banks and thrifts have become increasingly complex and, two, the training marketplace has grown more sophisticated. “ The M E N T O R concept is revolutionary in that it is extremely comprehen sive while being totally flexible,” he explained. “ This is what our members have told us they want and need. “ For example,” Mr. Sayre con tinued, “ a banking organization can Three M E N T O R “ Tracks” R M A ’s M E N T O R program is composed of three tracks: analytical, lending and management. The ana lytical track focuses on basic com mercial banking skills: financial ac counting, financial analysis, loan documentation and professional communication. The lending track covers ad vanced credit analysis, advanced lending and corporate finance, and sales techniques for commercial len ding. The management track gets into the areas of sales management, decision-making, human resources, current management issues, and similar topics of interest to seniorlevel commercial lenders. Clarence R. Reed, R M A ’s execu tive vice president, stressed that It'S 10 P.M. D o You Know W here Your Collateral Is? Why send someone from your audit ing department thousands of miles to check on inventory used as loan collat eral? Instead, call us. An SLT professional is always nearby to provide full inven tory control services or spot checks. Our nationwide staff can also keep track o f insurance policies, lease con tracts and other documents in borrow ers' possession. For over 50 years, SLT has helped banks reduce credit risks on collateral loans. To find out how our proven, computerized system can help you, mail coupon or call 1-800-325-7118. Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Please rush information about SLT services for financial institutions. City State/Zip Phone SLT Warehouse Company I J ) ljl 1015 Loc u st St reet St. Louis, Missouri 63101 freedom of choice and flexibility are at the heart of R M A ’s M E N T O R program. “ M E N T O R can be used to supplement programs already being run by a bank. Or it can be used as the foundation for a bank’s entire commercial training program,” he said. Mr. Reed also noted that there are no long-term commitments or contracts associated with the M E N TOR program. Since no two banks have exactly the same training requirements, R M A is offering many of the M E N TOR courses in three flexible for mats: 1. In-bank training, taught and administered by R M A ; 2. Open-enrollment, sponsored na tionally by R M A and offered at the local level by R M A ’s chapters and groups, or subchapters. 3. Taught and administered directly by a bank using materials purchased from R M A . Each course is developed by ex perienced education and training consultants under R M A ’s direct supervision. Before it can become part of the M E N T O R program, each course is again reviewed by active banking p ractition ers, te ste d , evaluated, and revised to ensure that it meets its objectives and banks’ training needs. The final result is a sequence of courses that cover the essential skills commercial loan and credit of ficers must have to make a positive contribution to their bank’s bottom line. A number of M E N T O R courses are available now; most of them con tain pre- and post-tests. Others cur rently are being developed. Those available now are • Financial Accounting • Business Writing for Bankers • Using Credit Information in Risk Assessment • Commercial Loan Documenta tion (available 9/1/88) • Uniform Credit Analysis • Advanced Lending and Cor porate Finance (available 9/12/88) • Sales Techniques for Commer cial Lenders • Sales Management for Com mercial Lenders For more information about M E N TO R , and to learn more about the courses currently available, con tact R M A ’s Account Manager, c/o the R M A N ational O ffice in Philadelphia, (215) 665-2810. « # 9 Across The Desk from the Publisher v O 0 Hi fljj, # Dear Readers: W e announced in the September 26 issue of our Weekly Newsletter that the “ Northwestern Banker Is Being Sold,” an announcement that was made by me with greatly mixed emotions. This October, 1988 issue of the N orthwestern B anker will conclude my 43-year career with this publication, a span of more than four decades in one industry, with one company. These years have been a genuine blessing for me because they have afforded me the opportunity to work in the publishing field that I love, with all of you for whom I have the greatest respect and admiration, and the added opportunity for my wife, Peggy, and me to develop the deep and life-long friendships we enjoy with so many of you. Now, it’s time for this 69-year-old publisher to leave behind the grueling 64 deadlines a year that must be met with our magazine and newsletter, and to look ahead to more personal projects that have been my goal for some years—three small books of a personal nature that won’t mean anything to anyone else ex cept, hopefully, family members, and some important church work to which I ’d like to give the more solid ef fort it deserves. A s all of you know from your demanding day-to-day work schedules, one cannot climb these personal mountains without properly disposing of the responsibilities that brought us to this point. * 0 <§ 4I§ • ® ® * * W ith that in mind, we have concluded arrangements to sell the N orthwestern B anker to Paul Blackburn of Minneapolis. Paul is president and owner of Finan cial Communications, Inc., which owns Commercial West weekly publication, of which he is publisher. He is also publisher of the Commercial West Bank Direc tory. This sale to Paul Blackburn also will include our Weekly Newsletter and the Iowa and Nebraska Bank Directories. Paul Blackburn is a native of Jefferson, la., where he was born July 13, 1948. He was graduated from the Drake University College of Journalism in Des Moines in 1972, and then moved to Minneapolis/St. Paul where he had a successful career in marketing with several business firms. His most recent position before purchasing Commercial West in 1987 was a seven-year stint as director of marketing services for Deluxe Check Printers, Inc., at its national headquarters in St. Paul. W e think this sale is a very positive step for it will combine the 94-year-old strength of the N orthwes tern B anker in its ten-state area with the nearly 90 years of similar readership enjoyed by Commercial West in its area, that in some states overlaps with ours. In this day when so many challenging changes are occurring within the financial industry, this com bination of two well-known banking publications in the upper midwest will afford the opportunity to give our readers broader, more in-depth coverage of the fastmoving financial news. A t the same time, the younger staffs on both publications can combine to bring our several thousands of readers the personalized news https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis that has been our trademark for nearly a century. Feature articles and surveys that address the oppor tunities, the problems and the personalities that Eire of interest to you bankers on the daily firing line will con tinue to be a hallmark of the merged publications. Paul Blackburn has announced that he will drop the Commercial West name, since it represents the desire of the early owners to serve the news interests of all lines of commerce and industry in its territory. He will retain the N orthwestern part of our name to identify the broad territory he wishes to serve, and the magazine’s full, new name will be N orthwestern Financial Review . This will allow the magazine to en compass the broadening scope of the present financial industry. Ben Haller, Jr. Paul Blackburn This merger will give the continuing magazine one of the best, if not the best, paid circulation figures in the nation among the regional banking publications. In addition to the states of Iowa, Nebraska, Minnesota, South Dakota, North Dakota, Montana, Wyoming, Colorado, Illnois and Wisconsin in which the two magazines circulate, Paul Blackburn recently added the state of Michigan. When he asked my advice recently about his opportunity to acquire the circula tion of the Michigan Investor I urged him to do so. W ith this basis of states, N orthwestern F inancial Review will serve the interests of commercial bankers in a significant number of states. A s it was with several other individuals and com panies who expressed their desire to acquire the Northwestern B anker , my concern other than the usual personal financial interest was two-fold: First to make sure that our long-time loyal readers would be well-served by the decision made, and second, that every effort would be made to accommodate our employ ees into the staff of the acquiring organization. I can honestly say, after visiting with Paul over the past several months and reviewing his well thought-out game plan for the future, that the continuing interests of our Northwestern Banker readers will be in good hands. In addition, all of our staff will join with Paul’s staff to assure this continuity of service to you. Our Des Moines office will be retained where it is now located. A C R O SS T H E D E SK . . . (Turn to page 70, please) Northwestern Banker, October, 1988 10 United Missouri Bank Makes Officer Promotions United Missouri Bank of Kansas City, N .A . has announced the pro motions of Jack E. Beets and J. Robert Hardin to the positions of senior vice president in the cor respondent banking division. J.E. BEETS J.R. HARDIN Mr. Beets services the corres pondent banks in southeast Kansas. He joined United Missouri in 1947 as a clerk in the transit department and has held positions of assistant cashier, assistant vice president and vice president in correspondent banking. Mr. Beets has attended the Graduate School of Banking at the University of Wisconsin. Mr. Hardin is responsible for bank customers in the metropolitan n Can’t Pla e Insurant e? Kansas City area and sections of Kansas. He joined United Missouri in 1981 as an assistant vice presi dent. He previously was associated with other local financial institu tions. He holds a bachelor’s degree in economics and finance from Avila College. He also has attended the Graduate School of Banking in Madison, W is. Also in the commercial banking division, James B. McLaughlin was elected to vice president and Todd E. Gaffney to commercial banking officer. Mr. McLaughlin develops and maintains commercial accounts through the Plaza location. Mr. Gaff ney serves commercial customers in the metropolitan Kansas City area. The following promotions have taken place in the trust department of U M B : Donald P. Edinger, Allen Klopp and Mark P. Herman to senior vice presidents. M r. Edinger manages the per sonal trust and probate division, a d m in is t e r in g trusts and es tates. He joined UM City Bank in 1978 and moved to U M B in 1983. PreviD.P. EDINGER Insure Your Ikmm wers at the B< rs t Price *Larg Volume Policies * A iií¡luities, Variables, ^ F n iv e r s a l Life B IL L S H E R M A N , C L U Call (800) 821-5434 in Missouri (800) 892-5890 IA C Group, bank insurance specialists since 1952. Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ty. Other trust appointments in clude: Richard A . Caspermeyer to vice president, administering personal trusts and probate estates. J. Michael Gulley to vice presi dent, managing the investment data base. Lou Ann Bradshaw to trust in vestment officer and Bruce Schmidt and Edward W . Williams to assis tant trust investment officers. Melanie Graham Aim to trust of ficer and Lorri B. Willms to assis tant trust officer. Nancy T. Reynolds to trust opera tions officer and Janet F. Clements to assistant trust officer in the security transfer department. United Missouri Bank also an nounced these promotions in the Bankcard Division: Thomas G. Dage to vice president and assistant manager, commercial development area. Michael E. Henderson to assis tant vice president and credit manager, and Claudia D. Farrell to assistant vice president and assis tant operations division manager. Laura L. Davis to assistant cashier, supervising the customer service department and managing the central records department. Kelli S. Kimbrough to bankcard officer developing new MasterCard and Visa business in the metro area, and Matthew R. Vawter to bankcard officer, soliciting and servicing com mercial businesses in the Midwest. Rocky Mountain Bank Note Names New Vice President IAC Broköif-.i»[üi^ vice: *H ig h -r^sk Insurance and an LL.B. from Emory Universi A. KLOPP M.P. HERMAN ously, he was a trust examiner for the State of Missouri. He holds a B A degree in Journalism and an L L .B . from the University of Missouri-Columbia. Mr. Klopp manages the admini strative area of the employee benefit plan services. He joined U M B in 1981 after 26 years in the U.S. A r my, retiring as a Lt. Col. in 1975. He holds a B A degree in Business A d m in istra tio n from N o rth w e st Missouri State University. Mr. Herman manages the legal staff of employee benefit plan ser vices. He has been with United Missouri since 1984. He has a B A degree from Vanderbilt University Larry A. Dietz has been p r o moted to the post of vice president — general man ager of the Com p u t e r P r in t e d P ro d u cts D iv i s io n o f R o c k y M ountain Bank N ote, D en ver, L.A. DIETZ C olo. The u n it prints installment loan coupon books, real estate mortgage books and credit line check books for financial institu tions. In addition, Mr. Dietz serves as general manager of the company’s Pueblo operations, which consists of commercial printing and office prod ucts sales. <1 11 10th Edition of Dr. Harl’s Planning Book Is Published The 10th edition of Dr. Neil E. Harl’s "Farm Estate & Business Planning,” a valuable reference manual to farmers, a ccou n ta n ts, la w yers, in su ra n ce agents and lenders, will be available Oct. 15. More than 150,000 copies of this reference classic have been sold since the first printing in 1973. This edition features the latest changes in both federal and state laws and regulations affecting farms and farm estates. Dr. Harl, a professor at Iowa State University, Ames, is nationally recog nized for his expertise in economics and agricultural law. He is the author of more than 240 articles in legal and economic journals and more than 525 articles in various farm and financial publications. His advice is widely sought in government, legal and eco nomic circles. "The business of farming demands business planning,” Harl says. "Estate planning is needed to avoid fragmen tation and loss of capital.” Some of the new topics Dr. Harl covers in this 10th edition are compli ance on government payment limita tions, the tough corporate liquidation rules, revised rules governing em ployee benefit plans, handling Conser vation Reserve Program payments, cancellation and forgiveness of install ment payments, estate freezes and the impacts of bankruptcy. The 400-page book, published in soft cover, may be ordered by sending $24.95 to: Century Communications Inc., 6201 Howard St., Niles, 111. 60648. BMA Schedules National Meeting in San Francisco Bank Marketing Association will hold its 1988 National Marketing Conference entitled "Gateway to the 90’s: Your Bridge to the New World of Financial Marketing,” Oct. 30 - Nov. 2 at the Hilton Square Hotel, San Francisco. BMA expects more than 2,000 fi nancial executives from across the country and around the globe to attend the world’s most prestigious financial services marketing conference, now in its 73rd year. Attendees will hear what it truly means to cope with difficulty and sur vive hardship when Charlie Plumb, an ex-POW of the Vietnam War, kicks off the conference. A native of Kansas https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis City, Mr. Plumb is a former Navy fighter pilot whose jet was shot down while flying a cover mission over North Vietnam in 1967. After his cap ture he spent six years locked in an eigh t-by-eigh t foot prison cell in Hanoi. Mr. Plumb distinguished him self am ong fellow prisoners and was awarded the Purple Heart and the Silver Star. He is also the author of two books, I ’m N o Hero and The Last Domino. F o llow in g Mr. Plum b, keynote speaker Martin L. Cohen, consultant, lecturer, psychiatrist, and chairman/ CEO of Cohen Brown Management Group, Los Angeles, will deliver a motivating presentation on meeting the challenges of the future. BMA has tapped experts from with in and outside bank marketing to speak at this year’s conference. Presentations and panel discussions will address a wide-ranging list of topics facing financial marketers. And, for its 21st year, BMA will recognize financial institutions world wide for the most outstanding achieve ments in marketing and corporate communications in its "Golden Coin Awards” competition. ANNA LEE SCOTT WOULD LIKE TO GIV E YOU A PIECE OF HER MIND. As part of the BICS 10-Point Service and Support System, you get your very own executive account manager. One of these is Anna Lee Scott. Her job is to make sure BICS gives your bank state-of-the-art data processing...and more. One way is with our management consulting service (point #6). We put our minds to work for you so you can serve customers better, operate more efficiently and keep ahead of your competition. To find out how the BICS 10-Point Service and Support System can give you 100% support, 100% of the time, call 1-800-421-0059 or 1-800-332-5242 (in Iowa). 1 0 0 % SUPPORT. 1 0 0 % OF THE TIME. IT H E I BÊCS 'b a n k in g SYSTEM 4333 Edgewood Rd. N.E. P.O. Box 1847 Cedar Rapids, Iowa 52406 319/395-6600 A Banks o f Iowa subsidiary Northwestern Banker, October, 1988 12 IBAA Asks Immediate Growth Limit on Insolvent Thrifts The Independent Bankers Associa tion of America has requested that the Federal Home Loan Bank Board en force a growth limit for insolvent and undercapitalized savings and loans and to impose a cap on the interest rates they pay on deposits. Such a move by the Bank Board, the regulator of the nation’s thrift indus try, "is urgently needed if the integrity of our financial system is to be main tained,” IBAA President J.R. Nunn said in a letter to Bank Board Chair man Danny Wall. Mr. Nunn applauded the efforts of Senate Banking Committee Chair man William Proxmire, D-Wis., and Rep. Jim Leach, R-Iowa, to address the problem of runaway insolvent thrifts in Congress. Congressman Leach gave details of his plan to impose such curbs on failing thrifts when he addressed the Iowa Independent Bankers at their annual convention in July at Lake Okoboji, la. It would require thrifts with negative figures to reduce their deposits on a formula basis tied to the extent of their statement fig ures, and would then allow modest to normal growth as thrifts regained strength into positive figures up to 6% equivalent capital. Farmers Mutual Hail Announces Promotions William A. (Bill) Rutledge, secre tary of Farmers Mutual Hail Insur ance Company of Iowa, Des Moines, has been elected senior vice president and manager of the reinsurance de partment. He will continue his duties as secretary of the firm. Steven A. Rutledge, member of the board of directors of Farmers Mutual Hail, has been elected assistant vice president and assistant manager of the reinsurance department. Founded in 1893, Farmers Mutual Hail Insurance Company of Iowa pro- W.A. RUTLEDGE S.A. RUTLEDGE Don't kno w w ho to ca ll for those sp ecial m oving n e e d s? CTS has been successfully serving the computer dealer/lessor & banking industries since 1979. We provide a complete, worry-free, moving service for ATMs & all D.P. equipment local or nationwide. Our specialized moving services & discount program can save you valuable time & money. ■ ■ ■ ■ Padded air ride, van service (requires no special pre-packaging) Air freight for smaller or time sensitive items Nationwide packing Storage arrangements Call one of our courteous coordinators for a prompt quote and let CTS handle it. National Iowa Facsimile — 1-800-831-0030 - 712-673-2354 - 712-673-2683 COMPUTER TRANSPORTATION SERVICES. LTD 107 M a in • P .O . 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Bank Building Corporation is a St. Louis-based design/ firm, specializing in the Unified Facilities Development process for financial institutions. The firm is currently celebrating 75 years of service to the financial industry. Northern Trust Names New Senior Vice President At its meeting last month, the board of directors of The Northern Trust Company, C h ic a g o , ap proved the nam ing of Richard B. S t e b b in s as a senior vice presi dent in corporate R.B. STEBBINS finance. Mr. Steb bins is responsible for coordinating Northern Trust’s efforts in developing corporate finance, and expanding mergers and acquisitions and private placement activities in commercial banking. Prior to joining Northern Trust, Mr. Stebbins was associated with First National Bank of Chicago, Kidder Peabody and m ost recently, with Merrill Lynch Capital Markets where he was managing director of its Midwest Financial Institutions Group. ^ ^ w £ £ 0 0 • q q £ £ (9 NO MATTER HOW YOU LOOK o company, anywhere in the United States, can do as much to make your credit insurance operations more profitable and problem free than North Central Life. "America’s Number One Credit Insurance Service Organization” North Central Life Insurance Company NORTH CENTRAL LIFE TOWER, 4 45 MINNESOTA STREET, BOX 64139, ST PAUL, MN 5 5164 In Minnesota call 800-792-1030. All other states 800-328-9117. Protection all ways https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Charles Lindberghmade the first solo non-stop flight acrosstheAtlantic Ocean, Oscarwas If born andUnited Bank opened its Missouri CorrespondentBankingDivision. United Missouri announced Correspondent Banking Services in ’27. 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Box 419226, Kansas City, Missouri 64141-6226 816-556-7900 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 15 Des Moines will host ABA Ag Bankers Conference at the des M oiNEs^\arrioti November 13-16 ES MOINES will be host to the 1988 American Bankers Association National Agricultural Bankers Conference, November 13-16, at the Marriott Hotel in downtown Des Moines. Between 750 and 1,000 bankers 0 and spouses are expected to register for this important meeting. Planning Committee Chairman Murray Lull, who is also president of the Smith County State Bank and Trust Company in Smith Center, Kan., stressed the central HI location of Des Moines in the heart of the midwestern farm states and its accessibility by auto travel from the entire upper and lower midwest area of the nation. This accessibility by the Interstate system and other major highways should encourage banks to capitalize on such # low-cost transportation by registering two or three offi cers from each bank. "This conference will help agricultural bankers devise the strategies they will need to meet any challenge in today’s complex new era of ag banking,” Mr. Lull said. He # added, "It will give bankers valuable insight since experts bring the state of the industry to the conference.” Sessions will include the latest information on legisla tive, regulatory and USDA programs affecting crops for 1988 and 1989. In addition, ag bankers will learn the • latest techniques for handling farm loans which may have to be rescheduled because of the dry weather. The Iowa Bankers Association, through Executive Vice President Neil Milner and Senior Vice President Wes Ehrecke, have worked closely with ABA in scheduling the • National Ag Bankers Conference into Des Moines. Mr. Ehrecke said there are a number of interesting points and dining/entertainment places in Des Moines for visitors (see accompanying story). With the theme, "Your Untapped Potential,” this year’s ® conference will help agricultural bankers cultivate new business opportunities. For instance, sessions will include the latest information on the new Farmer Mac, the secondary market for agricultural mortgages and rural housing. Experts in secondary market finance will focus ® on how banks can benefit by participating as an ori ginator, a pooler, or a purchaser of secondary market loans. * Other profit opportunity sessions will include: D q « F e e Income: a positive approach to fee collection and the possibilities offered to banks under new laws; • Farm Land Management: operational aspects of farmland management and how banks can market these services. ® • Leasing: the operational aspects of leasing, staffing, marketing and decision making; https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • Agri-business Lending: financing non-production ag ricultural business, the "typical” business operating and capital cycle, and pro forma information; • Beating the Competition: the vital role customer service plays in a competitive market and how ser vice quality must be nurtured if banks are to survive; and, • Madison Avenue Moves to the Country: How one of the most successful marketing programs came about and how the producer groups were convinced to use it. "In order to fully develop their untapped potential, bankers must weed out the competition, improve their customer base, refine their profit outlook and focus on expanded powers from Congress to offer new products and services,” Mr. Lull said. "At this conference,” he added, "bankers will gain the techniques and strategies they need to do just that.” Veteran farm broadcaster Orion Samuelson will offer his perspective on agriculture today, touching on subjects ranging from weather-affected crops to exportation of surplus crops. Mr. Samuelson is host of the "U.S. Farm Report,” which is broadcast from WON Radio, Chicago. The registration fee is $655 which is discounted to $525 for ABA members. For more information, contact ABA’s Banker Education Network at 202/663-5430 or write the Registration Coordinator, American Bankers Associa tion, 1120 Connecticut Avenue, N.W., Washington, D.C. 20036. The program follows: Sunday, Novem ber 13 A .M . 9:00 to Registration 7:30 p.m. 10:00Musical Fellowship 11:00 P.M. 6:00 to Opening Reception 7:00 After the reception, enjoy a relaxing dinner at an area restaurant, or watch big-screen NFL football — Minne sota Vikings vs. Dallas Cowboys — at the Marriott Monday, N ovem ber 14 A .M . 7:00 to Registration 5:00 p.m. 7:30 Continental Breakfast 8:00 Opening General Session Welcome and Opening Remarks — Murray Northwestern Banker, October, 1988 16 10:00 10:30 11:00 Noon Lull, 1988 Conference Chair and President, Smith County State Bank and Trust Com pany, Smith Center, Kans. Welcome to Iowa— Honorable Terry E. Branstad, Governor (invited). "National Perspective on Agriculture — The People’s Viewpoint” — Orion Samuelson, Vice President, Agricultural Services Director, WGN Radio, Chicago, 111. "D om estic A g ricu ltu ra l P olicy — W hat Should the Next Four Years Bring?” — Peter C. Myers, Deputy Secretary, of Agriculture, USDA (invited), Washington, D.C. Coffee Break General session continues. "View From the Hill — The House Agricul ture Committee Perspective” — A member of the House Ag Committee will bring you up to date on proposed changes in agricultural leg islation and credit. Concurrent Sessions "Fee Income — Income for the Future” — W illiam F. Staats, Professor o f Banking, Louisiana State University, Baton Rouge, La. "Farm Land Management — Earn Extra Dol lars With Your Agricultural Expertise” — Gary P. Britt, Assistant Vice President, Sovran Bank, N.A., Richmond, Va. "Leasing — Give Your Customers and Your Bank More Options” — Daniel J. Edinger, President, Telemark, Inc., Syracuse, N.Y. "Agri-business Lending: Financing Opportu nities for Banks” Luncheon with Guest Speaker. "World Trade Perspective — What’s Up for Agriculture after GATT?” — Sen. Richard Lugar (R., Ind.). RM. 1:30 2:30 3:00 Morning concurrent sessions repeated. Refreshment break. General session continues. "How Commodity Market Trends Will Affect You and Your Customers” — Wayne D. Pur cell, Professor of Agricultural Economics, Vir 5:00 6:30 ginia Polytechnic Institute and State University, Blacksburg, Va. "The Legal and Regulatory Environment — Cautions, Concerns and Compliance” Champagne Reception with Exhibitors Reception hosted by Valley National Bank (one block from Marriott). Tuesday, Novem ber 15 A .M . 7:00 to Registration. 5:00 p.m. 7:30 Continental Breakfast with Exhibitors. Exhibit Hall Open. 8:30 General Session. "Beating the Competition — It’s Do or Die” — David M. Kohl, Professor, Virginia Polytech nic Institute and State University, Blacks burg, Va. "Legislative Update — From the Halls of Congress to the Corridors of the USDA” — Floyd E. Stoner, ABA Manager, Community and Agricultural Banking, Government Rela tions, and Rusty Jesser, ABA Federal Legisla tive Representative. 10:30 Coffee Break with Exhibitors. 11:00 Concurrent Sessions. "Establishing New Farmers” — Ms. Kelli Evans, President, National Future Farmers of America, Alexandria, Va. "How Ag Bank Management Styles Differ — Or Do They?” — Sanford Belden, Managing Director, Minnesota First Bank, Minneapolis, Minn., and Jay Godwin, President, First State Bank of Canadian, Canadian, Tex. "New Customers/Best Customers — How to Have Your Cake and Eat it Too!” — Mike Moebs. Chairman, Moebs $ervices. Wads worth, 111. "FmHA Guaranteed Loans — The Secondary Market and the Claims Process” — Honor able Vance L. Clark, Administrator, Farmers Home Administration, USDA. Washington, D.C. Spouses’ Program Sunday, November 13 P.M. 1:00 Musical fellowship service, Second Floor, Marriott Hotel. 2:00 Spouse Hospitality Center—Savery Hotel, Second Level. 3:00 Iowa’s Antiques—Gwen Znerold. Savery Hotel, Des Moines Room. 4:00 Skywalk Walking Tour. Assemble Savery Hotel, Terrace Room. 7:00 NFL TV Game—Marriott, Third Level. Monday, November 14 A.M. 7:30 Continental Breakfast—Savery Hotel, Second Level. Tour buses leave Savery Hotel at Fourth Street entrance. 8:00 Amana Colonies—Nostalgic look backward at communal living, farming; quaint shops, foods, antiques. 9:00 Discover Des Moines—Civic Center, Botanical Center, Iowa State Capitol, Terrace Hill (Governor’s Mansion), Hoyt Sherman House (1877 Victorian mansion) for lun cheon. P.M. 5:00 Exhibits/Champagne Opening Reception—Marriott, Third Level. 6:30 Reception—Valley National Bank, 6th & Walnut. Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Tuesday, November 15 A.M. 8:00 “ A Company Called You” —Savery Hotel, Terrace Room. Noted Iowa psychologist Dr. Charlene Bell will present dynamic session on lifestyles, stress and self management. 9:45 “ Surviving Stress” —Savery Hotel, Room 308. Dr. Gary Rosberg, well-known counselor and consultant in Des Moines, conducts class on preventing and dealing with stress. 9:45 Craft Session: Corn Husk Dolls—Savery Hotel, Des Moines Room. 9:45 Craft Session: Quilting—Savery Hotel, Iowa Room. P.M. 12:30 “ Food, Fun and Fashion” —Younkers Department Store Tea Room, 5th Floor. 5:15 Exhibit Hall Reception—Marriott, Third Level. Wednesday, November 16 A.M. Hospitality Center opens. 10:00 Closing General Session—Marriott, Second Level. □ # ft Dining, Shopping Touring Guide B ANKERS and spouses attending the ABA Na tional Agricultural Credit Conference in Des Moines will have a wide range of interesting tours, dining places, and downtown and area shopping stores and malls. The following is by no means a complete list, but it represents some of the many places enjoyed by visitors and residents alike. The downtown enclosed skywalk system links all major buildings in the event of inclement weather. The telephone area code for the Des Moines and central Iowa area is 515: Downtown Restaurants • Guido’s Restaurant, main floor Savery Hotel, 4th & Locust, 2841272. Elegant dining. • Allies Restaurant and Quenelles Restaurant, Marriott Hotel, 7th & Locust, 245-5500. • Kaplan Hat Co., 307 Court Ave., 243-1414.1920’s motif; casual to elegant dining. • Spaghetti Works, 310 Court Ave., 243-2195. Italian and American menus. Informal. • Babe's Restaurant and bar, 417-6th Ave., 244-8319. Italian and traditional. Informal. Near Downtown • The Imperial House Restaurant and Lounge, 1901 Ingersoll, 2439649. Fine dining. • Noah’s Ark Restaurant and Lounge, 2400 Ingersoll, 288-2246. Informal. Near Airport Points of Interest: • Living History Farms, 2600 N.W. 111 St., Urbandale, 278-5286. A working farm showing Indian life, farming in 1800s with animals, and farming with early steam power. Features 1880s town of Walnut Hill, including bank, mercantile stores, professional offices, church, blacksmith shop. Tours available. Admission charged. • Iowa State University, 35 miles north of Des Moines. Includes Ag College with extensive farms and livestock; College of Veterinary Medicine; Bio-Tech Center. • Pioneer Hi-Bred International, Inc. world headquarters, Johnston (northwest Des Moines), 270-3497. • State of Iowa Capitol Bldg. Tours daily. • State of Iowa new Historical Bldg., East 6th & Locust. • Court Avenue in downtown Des Moines. Numerous office buildings, restaurants and shops restored to early Des Moines architecture. • Valley Junction (West Des Moines). Two blocks of antique shops, boutiques, ladies' specialty shops, The Dublin Door (authentic Irish goods and clothing), old-fashioned ice cream parlor. Iowa’s finest antique area. • Terrace Hill — Governor’s Masion, 2300 Grand Ave. A classic English-style architectural showpiece; five minutes from center of downtown. For tour information call 281-3604. Restaurants/ Lounges: Downtown Clubs If you are a member of a business club in your city, you may already have reciprocal privileges with the three downtown private business clubs that are open for lunch and dinner (closed Sunday). Call for reservations to: • Bohemian Club, Capital Square Bldg, ground floor, 4th & Locust, 288-5748. • Des Moines Club, Ruan Center, 606 Grand Ave., top floor, 244-2177. • Embassy Club, Financial Center, 666 Walnut St., top floor, 243-0502. P.M. 12:15 1:30 2:30 Luncheon with Guest Speaker. "View From the Hill — The Senate Agricul tural Committee Perspective" — A member of the Senate Ag Committee. Morning Concurrent Sessions Repeated. Afternoon Concurrent Sessions. "Japanese Agriculture — Jane A. Wittmeyer, Legislative Assistant for Idaho’s Senator James McClure, Washington, D.C. "Rural Development” — Honorable Roland R. Vatour, Under Secretary for Small Commu nity and Rural Development, USD A Wash ington, D.C. "Planning for the New Agriculture” — Spon sors o f the A B A Journal o f Agricultural Lending "Commodity Presidents Panel” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • The Pier, 4555 Fleur Drive, 285-6996. Seafood, steaks, spirits. • The Crystal Tree Restaurant and Lounge, 6111 Fleur Drive, 2872032. Fine dining, varied menu, extensive salad bar. Outlying Areas • West Des Moines has several restaurants offering traditional and specialty menus, including Chinese restaurants and others, easily accessible in 12-15 minutes via Interstate 235 from downtown. • The Greenbrier Restaurant and Bar, 5810 Merle Hay Rd. (north part of city), 253-0124. Excellent lounge, elegant dining. Shopping: Downtown Des Moines has extensive shops and boutiques in enclosed skywalk system, as well as: • Younkers Department Store, 7th & Walnut. • Madeline Shepard Ltd., 314-6th Ave. High-class traditional and high fashion clothes for women. • J.C. Penney's Department Store, 500 Walnut St. Outlying Areas • The Silver Fox, 2725 Ingersoll Ave. High fashion. • Dickinson's, 801 73rd St., West Des Moines (at 8th St. exit from I-235 in West Des Moines). • Reichardt’s Clothing, 847 42nd St. Fine apparel for men and women (off 42nd St. exit from 235 in Des Moines). • Town and Country, 855 42nd St. Women's apparel (by Reichardt’s). • Valley West Mall, 35th & Westown Parkway, West Des Moines (35th St. exit from I-235 in West Des Moines, turn north). • Merle Hay Mall, Merle Hay Road & Douglas. • Southridge Mall, S.E. 14th & Army Post Road. Children’s Specialty Stores Ideal for parents and grandparents! • The Enchanted Cottage, 3811 Ingersoll. • The Gingerbread Fashion House Ltd., 532 35th St. • The Red Lollipop, 801 73rd St., West Des Moines (at 8th St. exit from I-235 in West Des Moines...by Dickinson’s above). □ 2:45 3:30 4:00 5:15 Exhibit Hall open. Refreshment break with exhibitors. Afternoon con-current sessions repeated. Exhibit Hall reception. Wednesday, N ovem ber 16 A .M . 7:00 7:00 7 :00 7:30 Registration. Exhibit Hall open. Continental Breakfast with Exhibitors Concurrent sessions. "Siskel & Ebert — Thumbs Up or Thumbs Down on the Economy” — Dr. Barry L. Flinchbaugh. Extension State Leader, Kansas State University, Manhattan, Kans., and Mark A. AG BANKERS CONFERENCE. . . (Turn to page 30, please) Northwestern Banker, October, 1988 18 Historical charts portray American ag economy By BEN HALLER, JR. Publisher IL L IO N S of words have been written about the severity of the early-to-mid ’80s farm recession and the steps taken by state and federal legislators, as well as lenders, to alleviate the terrible stress of that phenomenon on all participants in agriculture. In an ef fort to visualize various facets of ag production and the ag economy, we assembled these charts displaying data based on United States Department of Agricul ture reports. They show historical trends for the number of farms, number of people on those farms, the size of farms, their production, gross and net income, and the volume of ag exports and imports. Figures and charts do not provide a full story or complete answers, but the historical data in these charts do portray dramatically the statistics that underlie some of the problems experienced in this decade and the direction in which agriculture may be headed. While the effect of the farm crunch was devastating to many farmers and their bankers and small town M merchants, it seems to be a culmination of an evolu-* tionary process that has been taking place for more than 40 years; in fact, dating back to 1910. In the four decades following W W I I we have seen a drastic change in the nation’s social pattern. Am ong those changes has been a noticeable reduction in the* numbers of people remaining on farms. A s fewer young people remained on farms, and older farmers retired, the land was purchased in many cases by neighbors who expanded their size as technological advances made such expansion more feasible. * Into this 40-year evolutionary process of farm attri tion, resulting in fewer farmers operating larger acreages, the adverse factors of spiraling input costs and high interest rates were injected by double digit in flation. Those farmers who were part of the land acqui-* sition process at that time were hurt badly; many others were impacted by the adverse effects of high in put costs even though they had little or no debt. During that traumatic period, hundreds of farmers declared bankruptcy, sold off part of their land, or just gave up and sold out for whatever they could get. Agri cultural lenders were hurt as well, with approximately Table 1. Gross and net income from farming (including farm households), off-farm income, and total income of farm operator fami lies, 5-year averages 1910-39, annual 1986. Year 1910-14 1925-29 1935-39 1940 1945 1950 1955 1960 1965 1970 19752 1980 1981 1982 1983 1984 1985 1986 Gross income from farming2 Production 7,774 13,621 10,697 11,340 25,374 33,103 33,476 38,894 46,549 58,834 100,598 149,300 166,300 163,600 153,000 174,800 165,800 159,539 3,790 7,520 5,824 6,858 13,062 19,455 22,171 27,376 33,650 44,452 75,043 133,100 139,400 140,000 140,400 142,700 133,700 122,052 expenses Operators’ net farm income -Million dollars 3,984 6,101 4,873 4,482 12,312 13,648 11,305 11,518 12,899 14,381 25,500 16,100 26,900 23,600 12,700 32,200 32,100 37,487 Off-farm income of farm operator families1 NA NA NA NA NA NA NA 8,482 12,727 17,617 23,901 34,700 35,800 36,400 37,000 38,300 42,500 44,708 Total income of farm operator families Net farm income as percentage ofTotal Gross farm family income1 income NA NA NA NA NA NA NA 20,000 25,626 31,998 49,401 50,800 62,700 60,000 49,700 70,500 74,600 82,195 ------Percent-----NA 51.2 NA 44.8 NA 45.6 NA 39.5 NA 48.5 NA 41.2 NA 33.8 57.6 29.6 50.3 27.7 24.4 44.9 25.4 51.6 31.7 10.8 16.2 42.9 14.4 39.3 25.6 8.3 45.7 18.4 43.0 19.4 45.6 23.5 Source: USD A statistical reports. 1 Information not available prior to 1960 2 Based on the 1974 Census of Agriculture definition of a farm, which is sales of $1,000 or more and applies to 1975 and all following years. Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 19 Table 2. Total Population and Farm Population in United States Year Total' Population3^ (millions) 1950 1960 1965 1970 1975 1980 1981 1982 1983 1984 1985 1986 Farm Population (thousands) 151.3 180.0 193.7 204.4 216.0 227.1 230.1 231.9 234.2 236.5 238.7 241.6 23,048 15,635 12,363 9,712 8,864 6,051 5,790 5,620 5,787 5,754 5,355 5,226 Table 3. Farm Numbers and Average Acres Per Farm in U.S. Farm Population as Percent of Total (percent) 15.2 8.7 6.4 4.8 4.2 2.7 2.6 2.4 2.5 2.4 2.2 2.2 al Total population April 1 for U.S. Sources: “ Current Population Reports,” Bureau of the Census, USDA. ® ® ® ^ five dozen upper midwest banks being declared insol vent and sold off to another bank or, in a limited number of cases, just liquidated. Climbing back has been a slow process for many. A n examination of the accompanying charts shows how we have arrived at a reduced farming force work ing larger acreages, producing more, yet seemingly earning less. Lower interest rates and lower production costs the past few years have escalated net income. Yet, with all the terrible human tragedy and pain that accompanied the traumatic period of the ag reces sion of the 1980s, history will probably show that this period merely represented a condensation or “ hurrying up” of the inexorable process of fewer farmers and bigger acreages per farm that has been going on throughout this century, especially in the past halfcentury. The story cannot be told completely by charts, but the ones that accompany this article present some in- Year Number of Farms (thousands) Acres per Farm 1945 1950 1955 1960 1965 1970 1975 1980 1981 1982 1983 1984 1985 1986 1987 1988* 5,967 5,648 4,654 3,963 3,356 2,954 2,521 2,433 2,434 2,401 2,370 2,328 2,275 2,212 2,176 2,159 200.0* 215.8 258.0 297.0 340.0 373.0 420.0 427.0 424.9 428.1 432.1 438.0 446.0 456.0 461.0 463.0 ♦Estimated Source: USDA. teresting statistics that form part of the fabric of the historical trends in American agriculture. In Table 1, for example, the 1986 gross income from farming of $159.5 billion is 20.6 times greater than it was in 1910, 15 times greater than in the Depression period of the ’30s, and about six times greater than at the end of W W I I in 1945. However, this table shows, among other things, that net farm income as a percen tage of gross income (last column) in 1910, 1935 and 1945 was consistently around the 50% mark . . . 51.2% in 1910, 45.6% in 1935 and back up to 48.5% in 1945. But from that modern-day high water mark of 1945, net farm income as a percentage of gross farm income has plunged almost continuously and was 23.5% in 1986. It was as low as 8.3% in 1983! In other words, while gross farm income in 1986 was 20.6 times greater than 1910, the net for 1986 was less than half of what it was in 1910 (23.5%) as shown in the last column. Table 1 also shows that farm production expenses in 1986 Table 4. Historical Summary: Value of U.S. Foreign Trade and Trade Balance, Calendar Years 1930-84 U.S. EXPORTS Year Agricul- Nonagritural cultural 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1981 1982 1983 1984 1985 1986 1987 Million Dollars 1,201 747 517 2,254 2,873 3,199 4,832 6,229 7,259 21,859 41,233 43,339 36,627 36,099 37,804 29,041 26,222 28,637 Million Dollars 2,580 1,496 3,417 7,331 7,269 12,220 15,543 20,906 35,331 84,702 184,333 195,376 179,815 169,540 186,172 189,774 200,586 224,229 Percent AgriTotal culturi Million Dollars Percer 3,781 32 2,243 33 3,934 13 24 9,585 10,142 28 21 15,419 20,375 24 27,135 23 42,590 17 106,561 21 225,566 18 238,715 18 216,442 17 205,639 18 223,976 17 218,815 13 226,808 12 252,866 11 U.S. IMPORTS1 Year Agricul- Nonagritural cultural 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1981 1982 1983 1984 1985 1986 1987 Million Dollars 1,409 1,072 1,284 1,709 3,987 3,971 3,824 4,087 5,770 9,293 17,366 16,772 15,389 16,627 19,334 19,968 21,440 20,398 Million Dollars 1,592 967 1,257 2,389 4,756 7,366 11,190 17,196 33,986 87,638 226,611 242,240 226,951 240,053 303,656 323,585 347,217 381,668 Percent AgriTotal cultural Million Dollars Percent 3,061 48 2,039 53 2,541 51 4,098 42 8,743 46 11,337 35 15,014 25 21,283 19 39,756 15 96,931 10 243,977 7 259,012 6 242,340 6 256,680 7 322,990 6 343,553 6 368,657 6 5 402,066 TRADE BALANCE Year Agricul Nonagritural cultural 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1981 1982 1983 1984 1985 1986 1987 Million Dollars 268 325 767 + 545 - 1,114 772 + 1,008 + 2,142 + 1,489 + 12,566 +23,867 +26,567 + 21,238 + 19,472 + 18,470 + 9,073 + 4,782 + 8,239 Million Dollars + 988 + 529 + 2,160 + 4,942 + 2,513 + 4,854 + 4,353 + 3,710 + 1,345 2,936 - 42,278 - 46,864 - 47,136 - 70,513 -117,484 -133,811 -146,631 -157,439 Total Million Dollars + 720 + 204 + 1,393 + 5,487 + 1,399 + 4,082 + 5,361 + 5,852 + 2,834 + 9,630 — 18,411 — 20,297 — 25,898 — 51,041 — 99,014 124,738 — 141,849 — 149,200 1/General imports prior to 1934: subsequently, imports for consumption. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Northwestern Banker, October, 1988 20 were nearly ten times greater than what they were in 1945. Table 2 shows that the United States population of 241.6 million in 1986 was 60% greater than the 1950 population of 151.3 million people. But, not surprising ly to those who have been close to the ag industry for many years, the nation’s farm population decreased from 23.048 million people in 1950 to 5.226 million in 1986. Column three in Table 2 dramatizes this by showing that farm population in 1950 represented 15.2% of the nation’s total population, while in 1986 the farm population had plummeted to only 2. 2 % of the total population—only one-seventh of what it was 36 years earlier! Expressed another way, there was one farm person in 1950 for every 6.56 persons in the total population. By 1986 there was one farm person for every 46.2 per sons in the total population. This statistic alone testi fies to the great advances made in farming knowledge and technology, as well as the admirable productivity of the American farmer. Table 3 offers additional evidence of a 40-year change in American agriculture. The number of farms dropped from 5,967,000 in 1945 to just 2,159,000 farms in 1988, a reduction to only 36.2% as many farms as there were 40 years ago. Similarly, the acres per farm have more than doubled from 200 acres in 1945 to 463 acres per farm today, or 2.3 times greater than in 1945. The U S D A also records that the acres of land in farming in the nation drops about 5 million acres per year, mostly to urban sprawl, and in 1988 dropped to 998,692,000 acres, the first time ever below the billion acre mark. (A U S D A figure cited in the national news media in August, 1988, reported that the number of farms now has fallen below the 2 million mark.) Table 4 displays the frustrating figures involved in the nation’s exports, imports and troublesome negative trade balance. U.S. agricultural exports at the end of 1987 were $28,637 billion, more than 38 times greater than the $747 million in ag exports of 1935. A g imports increased to $20,398 billion at year-end 1987, leaving the U .S. with a positive ag trade balance of $8,239 billion. However, non-ag imports had ballooned to $381,668 billion by 1987, compared to non-ag ex ports that year of just $224,229 billion, leaving the U.S. with a trade balance deficit in non-ag trade of minus $157,439 billion. A fter subtracting the Table 5. U.S. Corn Production Source USDA-10/1-9/30 Year Bushels (billions) 1945 2.577 2.764 1950 1955 2.873 1960 3.907 1965 4.103 4.152 1970 5.841 1975 1980 6.639 1981 8.119 1982 8.235 4.166* 1983 1984 7.656 1985 8.877 8.250 1986 1987 7.064 4.462 (9/1) 1988 * PIK and drought Table 7. U.S. Com’l Hog Slaughter —Source USDA Year Million Head 1945 58.3 74.2 1955 1965 73.8 68.7 1975 1980 96.1 1981 91.6 82.2 1982 1983 87.6 1984 85.2 1985 84.5 1986 79.6 81.1 1987 T Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Table 8. U.S. Com’l Cattle Slaughter—Source USDA Million Head Year 20.8 1945 25.7 1955 1965 32.3 40.9 1975 33.8 1980 35.0 1981 35.8 1982 36.7 1983 1984 37.6 36.3 1985 37.3 1986 1987 35.6 favorable ag trade balance of $8,239 billion, that left the total trade balance for 1987 at $149.2 billion, the eighth straight year in the red. Tables 5 and 6 show the dramatic increases in corn and soybean production that produced the massive surpluses of recent years, as well as the dramatic effect on production of this year’s nationwide drought. The surpluses that resulted from “ fence row to fence row’ ’ planting in many areas have not only been moderated by the drought but also may be affected by the Conser vation Reserve Program that has idled approximately 40 million acres of land, much of it basically untillable that had been pressed into service. Tables 7 and 8 relate similar statistics for hog and beef cattle marketing over the past 40 years. □ IBAA Publishes Farmer Mac Booklet he Independent Bankers Associa tion of America has published a booklet outlining how Farmer Mac, the secondary market for agricultural real estate loans, will work and the importance of the upcoming stock sub scription to capitalize it. "Farmer Mac Facts” provides agri cultural community banks informa tion, in advance of the stock offering, about the upcoming stock issue and how they will be able to use Farmer Mac. The booklet answers such questions as: Why is community bank represen- Table 6. U.S. Soybean Production—Source USDA Year Bushels (billions) 1945 (records not kept) 1950 (records not kept) 1955 .374 1960 .555 1965 .846 1970 1.127 1975 1.548 1980 1.798 1981 1.989 1982 2.190 1983 1.635 1984 1.861 1985 2.099 1.940 1986 1987 1.905 1.472 1988 tation on the Mortgage Corporation board of directors important? How is the Mortgage Corporation common stock structured? What are the Comp troller of the Currency, Federal Re serve Board, and the various individu al states saying about bank purchase of stock? Since the initial common stock offer ing for Farmer Mac will be issued for subscriptions in October, the informa tion in "Farmer Mac Facts” is particu larly important for agricultural com munity banks. Farmer Mac’s operations also are reviewed. The bulletin describes a hy pothetical business relationship be tween the First State Bank of Commu nity, Iowa, (the loan originator) and the John Doe com pany (the loan pooler). An extensive question-andanswer section discusses how an agri cultural bank may profit from using Farmer Mac and the ways that lend ing limits, bank reserves, supplemen tal lending to the farm borrower and other banking practices are affected. Copies of "Farmer Mac Facts” are available by writing to the IBAA, PO. Box 267, Sauk Centre, Minn. 56378, or by calling 1-800-IBA-SAUK. □ T his bank cut processing costs 30% with aT I com puter system. W hen 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. “W hen 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 o f schedule.” Now, all they have to do is upgrade their software and add processing power and terminals where appropriate. A n 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.” T I 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. C all 1 -8 0 0 -5 2 7 -3 5 0 0 . 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. Investm ent protection you can take to the bank. , Te x a s In s t r u m e n t s Protecting the bank’s computer invest ment was a key factor in their decision to go with a TI system. ^M ODERN BANKING SYSTEMS, INC. w* https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6 9 6 9 G R O V E R STREET O M A H A , N EBRASKA 6 8 1 0 6 402- 392-0151 22 Ten features likely to characterize agriculture in the year 2000 Written especially for T he N o r th w e ste r n B a n k e r By DR. NEIL E. HARL Charles F. Curtiss Distinguished Professor Iowa State University Am es, la. Editor's Note: Dr. Harl is a nationally-known expert in the areas of agricultural economics and law. He is widely sought after as a speaker and writer on these subjects and has been called upon many times to ad vise or testify before Congressional committees. Recently, he presented a fact-filled, half-day seminaras the opening morning session for the 1988 A g Credit Conference hosted by the Nebraska Bankers Associa tion in Lincoln. A t that time, he gave a penetrating as sessment of United States and world agriculture in the year 2000 and beyond— "That's only 12 years away!" he stated. After the meeting, he agreed to prepare this special summary. 1 • The family farm structure will continue to be the predominant structural feature. A s the problem of too much debt concentrated in too few hands recedes in im portance in the 1990s, and the problem of global over production comes to dominate agricultural policy to an even greater degree than in the 1980s, pressure on farm earnings will discourage outside investment in agriculture, particularly in grain and oilseeds produc tion, with family farms that subsist on reduced rations surviving. 2 • Average farm size will continue to increase with application of technologies already known and with ad ditional technologies expected to emerge in the 1990s that boost average farm size. 3 « Farmland values are expected to be only modest ly higher in real terms (adjusted for inflation) because of pressure to adjust excess resources out of agricul ture attributable to the capacity to overproduce on a global basis. 4. Farm income is expected to be under continuing Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis pressure in the year 2000, again because of the capaci- _ ty to overproduce and because additional technology is 9 likely to be introduced that is output-increasing or cost-decreasing or both. Government intervention in U .S. agriculture i s ^ expected to recede from 1988 levels and to provide less buoyancy to farm income in the year 2000. 6 * W ith government intervention receding, t h e ^ acreage of intertilled crops is expected to rise modestly as some cropland shifts to grazing or other uses and the use of land substitutes for manufactured inputs. The amount of idled acreage is expected to decline with £ some cropland shifting to grazing. 7 « International-level competition in agricultural products is expected to be intense as other countries £ gradually reduce the level of insulation of their farms from competitive forces on a global basis. 3 • Input suppliers are expected to remain under con- f tinuing pressure as economic and environmental forces combine to reduce modestly the level of usage of manufactured imports. Q • tJ • Concern about the impact of agricultural produc tion on the environment is expected to intensify with curbs on the use of chemicals and commercial fer tilizers in the interests of reducing groundwater pollu tion. # 10 '• For rural communities relying upon agricul ture as the principal economic activity, the level of eco nomic vitality is expected to continue to decline ( through the end of the century. □ ui C O S T T he C O N T R O L ig Hfference: Y O U C A N B U I L D O N purchasing advan greatest tages rarely available fear in any the local architect b u i l d i n g p ro g ram is that assure you of that runaway costs highly competitive will shatter budgets pricing. and compromise your estimators using a fiduciary responsi- tec h n o lo g y -d riv e n bilities. Bank Building estimating process, Corporation virtually with access to cur eliminates that risk. ms Seasoned rent, accurate labor and materials cost W e will give best, most functional building information from every con permitted by your budget...We struction market in the country will do it at a mutually agreed you estim ates you upon, guaranteed price. You on, without fear of won’t have to worry about overruns. H o w can we j surprises later in the project. W e take cost con- Experience. Careful very seriously, providing a The Unified Facilities fort level you will appre- ment system, with its on it. Ask on responsibility, continuity and owner control. Special https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis at 24 (EDITORS NOTE: In addition to his duties at Farmers State Bank in Trimont, Les Peterson currently is working with a financial industry group chosen by the Farmer Mac Interim Board o f Directors to develop underwriting stan dards for the secondary market for agricultural real estate and rural housing.) HE SECONDARY MARKET for agricultural real estate and rural housing has the potential to change life for commercial banks. With that in mind, the Ameri can Bankers Association has been looking at this issue, working to see its achievement as a legislative objective, and now is intimately involved with developing the workings of this secondary market known as Farmer Mac. I would like to note a bit of the history of the ABA’s involvement in this process. In 1981, ABA cited the need for a source of fixed-rate credit for agricultural real estate. The alternative sources, primarily the Farm Credit Sys tem, were only providing variable rates for financing farmland. ABA formed a special Presidential Task Force which put together an inter-industry coalition that in cluded the ABA, the Independent Bankers Association of America, and the American Council of Life Insurance. That coalition worked diligently from 1986 until Janu ary 6, 1988 (when the President signed Farmer Mac into law), to bring about this secondary market. T W hat’s in Farm er M ac for Bankers Now that Farmer Mac is law, what does it mean to a banker like me? Without such a secondary market, I cannot offer my farm customers fixed-rate loans to buy farms. The Farm Credit System is the primary lender for long-term loans to purchase real estate in my area and that credit is either shorter-term (much less than 30 years) or adjustable rate. I come from Trimont, Minn., a community of about 1,000 people. My bank serves an agricultural area of about 30 miles in diameter. In the early 1980s I watched as land values fell from roughly $4,000 per acre to about $900 per acre. The only credit available back then was adjustablerate. There simply was no long-term, fixed-rate mortgage money to speak of. As a banker, I couldn’t do much about it. I couldn’t get into the business of making long-term loans, which meant I couldn’t provide what my customers desperately needed. The reason that other agricultural bankers and I could not offer long-term fixed rate loans, and still cannot today, is that our bank regulators, rightly, prohibited us from acquiring short-term funds (as we do through deposits) and lending them for long-term projects, such as buying farmland. It is clear from the problems that the S & Ls have today that a practice of borrowing short and lending long can lead to trouble if interest rates suddenly spike upward. With Farmer Mac as an alternative, I should be able to make long-term loans without facing the problem of holding them on my books and facing the risk of sharp swings in interest rates. H ow the M arket Will Work Here’s how a secondary market works: once I sell a loan to a pooler, he then packages it with other loans and sells it to an investor. The investor assumes the interest rate risk. Investors are the ones who gamble on the movement of Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Banking on Farmer Mac# Written especially for T he N orthwestern B anker Les Peterson President Farmers State Bank Trimont, Minn. # interest rates over a long period of time. They make their profit by anticipating successfully those movements and getting a return on their securities for taking that risk. As a banker I continue to service the loan, so I get to make my relationship with my farm customer stronger on a long-term basis. Also, I get to offer a product to the farmer or rancher that he or she needs. I am another source of credit for agricultural real estate or for rural housing and, at the same time, I can offer long-term, fixed rates in many cases. I have eliminated the risk that farmer would have faced with a variable rate and I have eliminated the interest rate risk I would have faced if I kept the loan on my books. Benefits for All Parties Farmers face enough risk with volatile weather and volatile food prices. They do not need the additional interest rate risk that they now have with their variable rate loans. Farmer Mac can provide an alternative to those variable rate loans, thus reducing some of the volatility in agricultural finance. There is also a benefit from competition. The very existence of Farmer Mac will increase competition and that should be good for the farmers, ranchers, and even bankers. I think Farmer Mac also will offer some market ing opportunities to agricultural banks which will, for the first time, be able to offer a full, broad package of real estate credit, short-term credit and an intermediate credit, and do all of that at competitive rates. H ow Banks Will Participate People ask how various-sized banks will participate in Farmer Mac. I believe that some small agricultural b a n k s# will originate loans. I do not expect that all ag banks will find it in their interest to participate; but those who have a solid base of farm customers and competent loan officers will find that they will be able to put together packages for their farm customers that will benefit those farmers a n d # be a profit center for the bank. 25 0 For regional banks that have an interest in agriculture, they could both originate and pool loans if they are large enough to get the kind of geographic and crop diversity that will be required by the standards for pools of loans. Some money center banks will probably decide to become 0 poolers and use their contacts with investors as a major tool in selling the Farmer Mac securities. In Trimont, I plan to be an originator, perhaps to become a specialist in agricultural real estate and the secondary market. The other agricultural banks may decide they i|| simply want to participate enough to satisfy their custom ers’ demands. These banks may not want to develop the expertise for loan documentation in-house and I expect that some specialists will develop who can provide these things. But for any of us as originators, the goal is to be II able to provide a complete package of financial services for our farm borrowers, including real estate financing. “ Secondary markets can reduce the • cost of mortgages by as much as half to one percentage point from what they would have been for a similar product.” Two M ajor Questions Two questions that I am asked frequently are, "What will the cost be, and will Farmer Mac lower interest ^ rates?” Traditionally, secondary markets have lowered interest rates over time. However, a fixed-rate mortgage in Farmer Mac cannot be compared to anything that now exists. Variable or adjustable rate mortgages will always be lower. Therefore, it is not clear to me how we can 0 compare the cost of a secondary market that provides fixed rate mortgages to the cost of the variable rates that are now available. In general, however, experts on this sort of thing estimate that secondary markets can reduce the cost of 0 mortgages by as much as half to one percentage point from what they would have been for a similar product without the secondary market. But, I hasten to add, we really don’t have much historical evidence or a reliable way of determining what the cost of mortgages under 0 Farmer Mac will be at this point. Pricing mechanisms won’t be determined, in full, until after the underwriting standards are in place. Looking at the marketplace, the securities paper in this secondary market is going to have to be very, very good so that it can 0 meet triple-A standards and so that the interest rates are beneficial to farmers. Again, using the housing residen tial markets as a model, we would expect that over time both the base can be broadened, which would mean accepting more average mortgages into the system, and • that rates would come down. Many of the details of Farm’er Mac and what the secondary market offers agricultural banks of all sizes, will be discussed at ABA’s National Agricultural Bankers Conference, November 13-16, in Des Moines, In fact, I will ® appear on one of the panel sessions on this subject during the conference. A Num ber o f U nknowns In conclusion, I want to stress that I am both excited by • the prospects for this secondary market and somewhat frightened by the enormity of the responsibility to partici- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FARMER MAC Interim Board of Directors Chairman: John R. Dahl* — North Dakota — Rancher B. Dale Harrison — Ohio — Farm Credit System Leslie G. Horsager — New Jersey — Commercial Insurance Randall A. Killebrew — Illinois — Commercial Ag. Banker Thomas H. Olson — Nebraska — Commercial Ag. Banker James A. Pierson —- Massachusetts— Farm Credit System Donald R. Rogge — Texas — Farm Credit System Edward Charles Williamson, Jr.* — Georgia — Farmer George Benston* — Georgia — Professor ‘ Nominated by President Reagan to permanent board. Farmer Mac Chooses Financial Advisor, Underwriter The interim board of directors of Farmer Mac has selected veteran Wall Street securities specialist Henry D. Edelman to serve as its financial consul tant. Mr. Edelman serves as a first vice president with the New York securities firm Paine Webber. Mr. Edelman will be responsible for getting Farm er Mac up and running as the first step in developing the secondary market for agricultural real estate and rural housing mortgage loans. As his first project, Mr. Edelman assisted the interim board in its selection of the First Boston Corporation to be the lead underwriter for the first issuance of Farmer Mac voting stock. It is antici pated that the stock sale will take place during the autumn. Farmer Mac will raise at least $20 million in the initial capitalization. Mr. Edelman also will assist the interim board in organizing basic budget and accounting systems, legal oversight and administrative functions. In addition, he will act as liaison between the interim board and industry groups as they develop under writing standards for the secondary market accep tance of agricultural real estate and rural housing mortgages. Prior to joining Paine Webber two years ago, Mr. Edelman was an attorney and director of corporate finance for General Motors. He served a brief stint in the investment bank operation of Citibank. At Paine Webber he oversees federal government fi nance. His duties there include assisting the Small Business Administration and the Department of Housing and Urban Development in selling portions of their assets, which was part of President Reagan’s government loan sales program. pate in the development of it. We know so little about what is possible and we must make decisions today that are going to set up the framework that is being put in place to provide the benefits that I outlined earlier. There are just a great number of unknowns. Pricing, loan documentation, appraisal standards, and just what kind of relationships will develop between borrowers, loan originators and poolers of these loans remains to be seen. So, as I have said, I am excited by the potential, and we have the model of housing secondary markets to inspire us. However, there is a lot of work to do and a lot of decisions that have yet to be made that will determine just how this market is going to work for all of us — for farmers, for ranchers and certainly for Les Peterson, here in Trimont, Minn. □ Northwestern Banker, October, 1988 26 C EO of failed Iowa country bank reflects on the basics Written especially for T he N o r t h w e s t e r n B a n k e r By PAUL M. QUAM Banker Sigourney, la. N T H E COURSE of the next few paragraphs, I would like to share with you several of the promi nent considerations highlighting my association with the Hayesville Savings Bank over the course of the last several years. The expectations of this article are not that you will find any new secrets to prudent bank management, but rather an opportunity to revisit and appreciate basic banking concepts as they serve all banking institutions and, in particular, yours. I CAPITAL The final act of closing the Hayesville Savings Bank was based on its lack of capital and the ramifications thereof. Regulators are very interested in capital from several perspectives. Obviously, capital accounts represent the buffer between FDIC continuing to receive premiums from an institution and having a loss, or payout, upon the closing of the institution. One needs to remember constantly that FDIC is an in surance company, highly motivated toward limiting its potential loss exposure. The adequacy of you capital accounts most directly impacts that potential loss exposure. F D IC ’s actions appear to be highly motivated by the above discussed principle. The willingness of stockholders or a community to inject new capital into a capital deficient bank is viewed as a measure of commitment. Returning a stressed bank to full health does take cooperation among all involved parties (regulators, stockholders, management, and the community). All parties must give and take in the correction process. Willing com mitment to inject needed capital would appear to go a long way in the right direction toward winning the needed considerations (such as time) necessary for returning the bank to good health. The situation is very parallel to one of a borrower who is unable to per form on schedule. Collateral position influences the lender’s attitude greatly toward finding a workout solution. Offering additional collateral, or not being willing to grant additional collateral that the borrower has available, will greatly impact the lender’s attitude in resolving the problem between the two parties. A s management, one must guard against taking the funds provided by the equity accounts for granted. A s Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a gentle reminder, one should calculate the earnings generated at a conservative rate (Fed Fund rate) on average equity and subtract it out of last year’s net earnings. Doing this in many rural community banks in recent years would have resulted in a negative number, or in removing the majority of the year’s pro fit. This exercise once again highlights two critical points: • First, we are reminded of how critical is the effi cient management of net interest spread and operating expense. • Second, this exercise emphasizes how difficult re capitalization by internally generated profit can become for stressed institutions with greatly dimin ished capital accounts. The concept of risk-based capital standards does ap pear to have real merit. A t its largest, Hayesville Sav ings bank had total assets of $52 million and was capitalized at 10.5 percent. Hayesville has a popula tion of 80 people. The bank was located seven miles from the county seat, which has a population of 2,600 people. The county in general is very rural and agricul tural. For all practical purposes, the total potential market represented direct (farm operations) or indirect (suppliers) dependency on one economic base. Risk management through diversification in the loan port folio was greatly limited. Because of the risk inherent in the loan portfolio, the degree of risk taken in other areas (i.e. investments) had to be greatly restricted, thus limiting income potential in these areas. This situation also highlights the critical need for non interest (fee) income. In net, demographic (social and/or economic) considerations make risk exposure unique to each bank, because of the market it serves and, thus, it would seem reasonable to expect that pru dent capital levels will vary accordingly. In summarizing capital considerations, it would seem fair to say that capital is to a bank what a heart is to a body. Even if all else is fine, life cannot be sus tained in its absence, or its diminished capacity. W ith out sufficient capital, or prospect of same, banks can not anticipate a viable future. CASH FLOW VS. COLLATERAL LENDING Over the years, lenders have debated the merits and demerits of cash flow versus collateral-based lending. £ In reality, most loans are made out of consideration to both. A s part of this same discussion it must also be granted that positive cash flows and earned worth are not necessarily synonymous. W e much remind our selves constantly that principal repayment, for all # practical purposes, is totally dependent on the realiza tion of after-tax profits (earned worth). None of us can realistically expect to be able to successfully predict future collateral values or profitability. This fact would seem to highlight the need to document profit • REFLECTS ON BASICS. . . (Turn to page 30, please) ■ ABOUT THE AUTHOR— Paul M. Quam resides at Route 2, ® Sigourney, la., and had served for the past several years as the CEO of the Hayesville Savings Bank prior to its closing on March 10, 1988. Mr Quam was not an owner of the bank. He holds an MBA degree with a double emphasis in marketing and finance. Additionally, he has served as guest faculty to state and national- _ ly sponsored banking schools, as well as a speaker to state and ® national bank conventions. 27 Management Consulting Leveraged buyouts in the banking industry Special Reading for Directors, Management II R IC H A R D F. M A R O N E Y Asst. Vice President and C R A IG J. M A N C IN O T T I Vice President with ® DR. D O U G L A S V. A U ST IN President and CEO Austin Associates Toledo, Ohio || This article was prepared as a part o f a monograph submitted to the Herbert V. Prochnow Educational Foun<!||| dation o f the Graduate School o f Banking, The University o f Wisconsin under a grant received by Austin Associates in 1987. The authoris) acknowledge gratefully the finan cial and administrative assistance o f the Herbert V. Prochnow Educational Foundation for the development o f this mill manuscript. ERHAPS the biggest problem facing the board of directors o f a commercial bank is the ownership || structure. Developing a shareholder base with desired concentration, age and wealth characteristics is very difficult. One tool which should not be overlooked when analyzing shareholder structure is the leveraged buyout. As this article will illustrate, the leveraged buyout has || become a common technique utilized by banks across the United States and can provide many advantages to the community, management, directors and shareholders of commercial banks. P ^ Leveraged Buyout Defined Leveraged Buyout (LBO) has become a generic term which encompasses many types of transactions. The components which are consistently prevalent in LBO transactions are: 1 ) borrowing of money to purchase a ip business; 2 ) repayment of debt from the cash flow of the acquired business, and 3) creation of equity ownership by the reduction of the debt obligation over time. A lthough the com ponents o f an LBO are fairly straightforward, the means and methods by which the (II end result is satisfied are numerous. Transactions which are frequently termed as LB Os include: 1) the purchase of https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis an affiliate bank from a large bank holding company by an investor group; 2 ) purchase of an independent bank by an investor group, and 3) the reorganization of a bank into a bank holding company with some shareholders electing to liquidate their investment. While each of these three transactions is different in scope, they all have similar characteristics. Money is borrowed to purchase the bank and repaid through the cash flow of the bank’s operations. The ability of an LBO to be successful is contingent upon a few major factors. • First, there must be a core group of investors or shareholders which is loyal to the independence of the commercial bank. Whether it be through the purchase of a bank affiliate, or the reorganization of a bank to a holding company, there must be enough individuals with an interest in keeping their investment in the bank. • Second, the bank must have a management staff which is committed to the success of the bank. The most common ingredient in a troubled bank is poor or disinter ested management. Investors’ money will be at great risk if management is inept. • Third, the commercial bank must have the earnings capacity to repay the debt obligation. Certainly the man agement staff has a great deal of influence on the ability of the commercial bank to make a profitable return. Still, given a strong management staff and poor earnings, the leveraged buyout will not be successful. These three major components of a successful LBO are discussed in more detail in the remainder of this article. The Investor Group The first step in the LBO process is the creation of a core group of investors or shareholders willing to invest or continue to invest in the bank. The number of investors in the investor group can vary extensively. In general, the smaller the investor group the better, since coordinating a small group is more easily accomplished. Another advan tage of a small investor group is that securities disclosure is generally less. This will be discussed in more detail later in this article. A major disadvantage to a smaller investor group is that each member must contribute more money to meet the required amount of capital. The Federal Reserve has strict guidelines on the amount of capital which must be invested by the group and the amount of debt which can be used. Given the ability to repay the debt obligation Northwestern Banker, October, 1988 28 through financial projections, the investor group can borrow a maximum of 75% of the total purchase price. In other words, the investor group must come up with 25% of the purchase price in cash (or have a current investment in the bank). The investors generally must have a signifi cant financial net worth and/or current income for ap proval by the lender and Federal Reserve. The role of the investor group is slightly different when the bank reorganizes into a bank holding company and subsequently cashes out some shareholders. The investor group most likely will consist of current shareholders and possibly management. Additional investors, if desired, will limit the amount of debt which needs to be borrowed. This type o f internal LBO can be used to ward off an offer for the bank, provide liquidity to certain shareholders and/or help place stock into younger shareholders’ hands. The major hurdle in this type of LBO is the determination of the number of shareholders which will elect to receive cash at a predeter mined price. Given a fairly profitable bank, a maximum of usually two-thirds of the current shareholders could be cashed out at a "reasonable price.” Using the two-thirds scenario, the equity interest in the bank holding company would be the remaining shareholders representing onethird of the shares outstanding. As with all LBOs, money is borrowed by the holding company and used to cash out the other shareholders. “ A bank stock loan from correspon dent banks has become an attractive asset for many regional banks.” In any LBO transaction, the resulting ownership group must be fully committed to the use of its funds. This becomes even more evident given the Federal Reserve guidelines on dividend payments to shareholders in an LBO. The Federal Reserve maintains that no dividends shall be paid to shareholders if the debt to equity ratio of the organization is above 30%. For example, an LBO with a 25% equity interest and 75% borrowed money has a debt to equity ratio of 300% (75% divided by 25%). Exceptions to restricting dividends may be granted if the repayment of the debt using financial projections is promising. Nevertheless, tying up investor’s funds without any cur rent income is a big obligation and one that should not be taken lightly. Disinterested investors who demand liquid ity at a future point in time will only be a thorn in the side of the organization. The investor group or resulting shareholder base should be loyal to the independence of the bank with personally sound financial conditions. Bank Stock Loans Another key element in an LBO is the successful retention of a bank stock loan to finance the acquisition. A correspondent bank, institutional investor or another financial source should be contacted by the investor group to apply for a loan commitment. A bank stock loan from correspondent banks has become an attractive asset for many regional banks. It is recommended that more than one source be approached so that a competitive process is used to realize the best terms. However, a commitment fee often is charged to the investor group; therefore, a cost/ benefit analysis should be analyzed before applying to every correspondent bank in the country. https://fraser.stlouisfed.org Northwestern Banker, October, 1988 Federal Reserve Bank of St. Louis “ Not to be overlooked in the entire process is the application to the appropriate agencies to gain approval • of an LBO transaction.” The potential loan source should be provided with projections as to the repayment of the proposed debt over a period of 10 to 15 years. Factors used in projecting the feasibility of an LBO include the total purchase price for the bank, the amount of debt incurred, the terms of the debt and performance ratios of the bank. Areas to monitor over the 12 years include the capital of the bank and the debt-to-equity ratio of the holding company. It is recom mended that a professional independent advisor be re tained to support the investor group’s projections. It is a fairly complicated process in financially structuring an LBO, and it lends more support to the investor group’s projections to get professional help. In addition to the financial projections, the entire biographical and financial history of the investor group should be included with the package to the loan source. The commercial lender often requires personal guaran tees as well as corporate guarantees for the bank stock loans. This reinforces the belief that the investor group should possess the financial strength to pay off the loan by personal means in case the bank holding company is unable to do so in any given year. ^ q q 0 0 Application Process Not to be overlooked in the entire process is the application to the appropriate agencies to gain approval of an LBO transaction. The major regulator in the process will be the Federal Reserve Bank in the appropriate region. The Federal Reserve is the lead regulator of bank holding companies in the United States. Bank holding companies must be in place or formed in an LBO in order to borrow funds to purchase a commercial bank. The application to the Federal Reserve most likely will be in the form of an FR Y-l Application. Information disclosed in this application includes a description of the proposed transaction; information on the management of the organization; the effect on the competition and the convenience and needs of the communities and, most importantly, a detailed analysis of the financial capacity of the resulting holding company. This, generally, is the same information that is provided to the commercial lender and must meet the Federal Reserve guidelines discussed previously. Typically, personal financial state ments, terms of the loan commitment and projections of the bank to repay the debt are provided in the financial information to the Federal Reserve. The securities disclosures that are required in the formation and issuance of holding company stock will vary in complexity. Typically, LBOs of small community banks will fall under some type of exemption. Either the small dollar amount or the limited number of investors will lessen the amount of disclosure. It is preferred that the investor group be limited to 35 or under since inves tors over this amount generally will trigger SEC Regis tration under the 1933 Act. Limited disclosure will keep the registration fees, proxy materials and securitiesoriented documentation at a minimum. The investor 0 0 0 Q # • ® 29 ti group then can operate under the "Blue Sky” laws of the individual states, which will lessen considerably the cost involved with the registration and/or proxy solicitation. One word of warning in this area is that the investor group should not advertise publicly for investment in this transaction. If considered a public offering, the SEC will require a full-blown disclosure, which is extremely costly and time-consuming. The entire time involved with perfecting an LBO transaction will obviously vary depending upon the com plexity of the transaction. However, it can be stated generally that the formation of a holding company (if necessary), retention of a loan commitment and Federal Reserve approval can be gained within 5 to 9 months after intiating discussion with investors. Although this time period may not be suitable to certain shareholders needs, it is certainly well within the scope o f typical transactions involving sales of commercial banks. Pitfalls o f an LBO ® ^ ^ ^ a ^ 0 • Loyalty of management and a core shareholder or investor group, in addition to professional assistance in application and financial projection processes, are the key ingredients for a successful LBO. However, there are other common pitfalls which may be addressed in transacting an LBO. • Price To Be Paid For Bank — Whether it be an acquisition of a multi-bank holding company affiliate or reorganization, the price to be paid to current sharehold ers must be well thought out. It is recommended that a valuation of the stock of the commercial bank be per formed by an independent appraiser. The investor group, along with professional assistance, should factor in the intangibles such as the market, the management and the marketability of the stock, which may alter the financial value. A purchase from a multi-bank holding company is done typically on a competitive bid basis. The investor group is at a disadvantage under this scenario, given that it is competing with other bank holding companies with far more financial resources. The investor group must bal ance a competitive bid with being able to finance the acquisition. • Conflicts o f Interest — Often members of the investor group are currently directors or officers of the bank to be purchased. These individuals must be very careful to distance themselves from any "self interest dealings” in the transaction. It is essential to confront any Tom Smith Named President, Graduate School of Banking T hom as R. Smith has been named president of the Graduate School o f Bank ing at the Univer sity of WisconsinMadison and its Prochnow Educa tio n a l F o u n d a tion. Mr. Smith, T.R. SMITH who is vice chair man o f Brenton Bank and Trust Com pany, Marshalltown, la., and a director of Brenton Banks, Inc., has been a https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis conflicting interest which may arise and take appropriate steps to protect those persons. It is naturally suggested that extensive documentation be kept to assure minimal risk to these individuals. • Optimistic Financial Projections — One major problem with most investor groups is providing overly optimistic financial projections. It is important, when analyzing the feasibility of an LBO, to use reasonable and slightly conservative projections since the commercial lender and the Federal Reserve will do the same. A dvantages o f an LBO Although there are a number of obstacles to overcome in the formation of an LBO, there are some major advan tages which can be gained from a successful completion. • First, one of the major reasons why an LBO is pursued is to keep the local identity of the commercial bank. Given the support of management and the investor group, this goal can be accomplished through an LBO. The local economy and residents often benefit from hav ing a local independent bank present. • The second advantage of an LBO is the opportunity to provide management with a challenging opportunity to run its own commercial bank. Whether it be buying an affiliate of a bank holding company or preventing the sale, the management staff will have the capability of an swering to themselves and not to a regional office. • Third, an LBO can be a win-win situation for shareholders cashing out and shareholders remaining. Given a "fair price,” an LBO can meet the liquidity needs of certain shareholders while the holding company can provide a sound investment for shareholders electing to remain. Further, given a profitable bank in addition to the tax advantages of debt, the financial return to the investor group could be substantial. Sum mary Boards of directors of commercial banks today face issues of meeting shareholders liquidity needs, providing an adequate rate of return to shareholders, and other shareholder related problems. Often, when faced with such difficult decisions, the board is uninformed as to all of its options. The leveraged buyout can be attractive poten tially to all involved. This article has provided a general background on the process, but every LBO has different characteristics. It is recommmended that the board of directors discuss the specific situation with professionals to determine the feasibility of such a transaction. □ member of the school’s faculty for 25 years. A former treasurer of the American Bankers Association, and a national president of the American Institute of Banking, Mr. Smith is president-elect of the Iowa Bankers Association. He succeeds William H. Kennedy, chair man of the board, retired, National Bank of Commerce, Pine Bluff, Ark. Mr. Smith will serve a three-year term as president of the School, which is sponsored by the 16 state banking associations in the Central States Conference of State Bankers Asso ciations. The Graduate School of Banking was founded in 1945 to provide high quality, advance bank management education. Over 15,000 bank officers have com pleted the program and many of these graduates now occupy senior positions in banks across the country. Richard I. Doolittle is executive di rector and CEO of the School and Foundation, headquartered in Madi son, and James L. Pappas, dean of the College of Business Administration, University of South Florida, is aca demic dean. The School’s faculty includes 140 bankers, attorneys, business execu tives, economists, and members of university and college faculties. Northwestern Banker, October, 1988 30 A G B A N K E R S CO N FER EN C E. . . (Continued from page 16) Edelman, Associate Professor and Public Poli cy Economist Iowa State University, Ames, la. "Understanding the Changed Farm Credit System” — Frank W. Naylor, Jr., Chairman, Farm Credit Administration, McLean, Va. "Breaking New Ground With Alternative Enterprises for Agriculture” — Michael L. Tramontina. Deputy Treasurer, Des Moines, la. Peter A. Hermanson, President, National Turkey Federation, Reston, Va. John F. Rooney, Executive Director, Potato Growers of Idaho, Blackfoot, Idaho. Carl Babler, Manag ing Partner, Lafayette Acres, Inc., Cuba City, Wis. "Secondary Markets — the Stairway to Fulfil ling Future Borrower Needs” — Floyd E. Stoner, ABA Manager, Community and Agri cultural Banking, Government Relations. R E FLE C TS ON B A S IC S . . . (Continued from page 26) feasibility, and to be in a position to monitor same on a timely basis. A t the same time, prudent lenders must look at collateral considerations. One procedure that appears to have merit, and is very feasible with the use of a PC, is a spread, by category, of all collateral back ing loans. A s an example, ag lines might be categorized by the following: A . Real Estate B. Machinery C. Breeding Stock D. Feeder Stock E. Growing Crop F. Inventoried Grain G. Other Armed with the totals of each category, and the ratio between categories, the bank can have an objec tive awareness of its current risk exposure, with the ever-changing values of various collateral categories, and can make management decisions accordingly. A s regards collateral, Hayesville Savings Bank was real estate sensitive by a ratio of 271 over the next largest collateral category. T IM IN G Various functions of management are carried out in the various tenses (past, present, future). This is hard ly a profound observation. Of relevance is the fact that RMA Expands Outside Sales Force Two new account managers have been added to Robert Morris Associ ates’ outside sales force, it was an nounced by Clarence R. Reed, execu tive vice president. They are Anita M. Hill and Lillian A. Gruhn. Ms. Hill, who is based in RMA’s southeastern regional office at 690-21D Village Trace, Marietta, Ga., has the southeast and southwest as her territory. Ms. Gruhn, who recently Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 8:30 9:30 10:00 Noon James E. Murray, author of ABA’s comprehen sive training manual on the secondary mar ket: Partner, Brown & Wood, Washington, D.C. Leslie Peterson, President, Farmers State Bank, Trimont, Minn. Concurrent Sessions Repeated. Coffee Break with Exhibitors. Closing general session. "Madison Avenue Moves to the Country” — Robert A. Phinney, Director of Domestic & International Advertising and Promotion, California Raisin Advisory Board, Fresno, Ca. "What’s Ahead for the 1989 A g Conference in St. Louis?” — Nov. 12-15,1989. "Aspire to Reach Higher” — Terry Bradshaw, a four-time All-Pro NFL superstar who led the Pittsburgh Steelers to four Super Bowl wins, an actor, TV sportscaster, corporate represen tative and widely celebrated lecturer. Adjournment. □ ^ q £ £ a given function must be conducted in the proper tense. In particular, management of the loan portfolio must be accomplished in the present tense. This becomes increasingly so with the decline in capital ac- ® counts and, thus, a diminished ability to take risk. E x aminers evaluate loans in the present tense. In reality, this is all they can do, as the present affords the most definable picture of the credit (i.e. present performance and present collateral values, versus future). ® In short it takes great amounts of capital to justify waiting to take action on non-performing lines, on the basis that at some time in the future the profitability and collateral value will return. During stable times a bank conceivably can go out on the branch for a deser- ® ving customer. During stressful times you can find yourself out on the branch with many customers. W ith the added load, the probability of breaking the branch is greatly increased. Deteriorating credit lines must be dealt with immediately. Not doing so accelerates the ® transfer of risk from the borrowers (where it rightfully belongs) to the lender, who ideally is not to be at risk. Lastly, I would remind all of us that not all ex periences we are exposed to are pleasant, but all ex- ^ periences do afford us the opportunity to learn and ^ relearn useful concepts. A s initially stated, it is not an ticipated that this article will offer any new, profound banking principles, but rather once again give us all an opportunity to reflect on the merit of proven banking ^ concepts. □ opened a new RMA midwestern re gional office at 120 S. Riverside Plaza, Suite 1785, Chicago, has the midwest and west as her territory. Promoted by Barclays Philip F. Strauss, Jr. has been pro moted to group senior vice president and manager of the Central Group in the Business Finance Division of BarclaysAmerican / Business Credit. Mr. Strauss oversees business develop ment activities and administration of loans in the 13 states which make up the Division’s Central Group, Chicago. RMA Sponsors Loan Review Workshop in St. Louis • A one-day Loan Review Workshop focusing on the function and manage ment of loan review will be held Octo- 0 ber 28 in St. Louis. The event is de signed for bankers with a minimum of two years’ experience in loan review. Individuals responsible for managing the loan review function in small and % medium-size banks will also benefit. 31 MICA President Calls for Claims Arbitration Board M ortgage lenders and insurers should work together to establish a claim s arbitration board to settle claims disputes, William H. Lacy, pres ident o f the Mortgage Insurance Com panies of America (MICA), announced recently. Mr. Lacy called for the claims arbi tration board while speaking on a panel at the National Council of Sav ings Institution’s 1988 National Mort gage Conference. MICA is the indus try trade association. "Second, Mis are insurance compa nies, and we must enforce our policies for the benefit of all policyholders. An analogy would be your health insur ance. When you submit a claim, it typically includes costs not covered and in excess of the limits of your policy. You get a check for the full amount covered, but some of the costs you have to pay yourself. MGIC paid 99.3 percent of our claims in full under the terms o f our policy last year.” Lacy told the group that the claims dollars the private mortgage insur ance (MI) industry has paid to policy holders prove the need for mortgage insurance. "Evidence of the risks (in mortgage lending) can be seen in the claims paid by mortgage insurers. For the first 25 years of its existence, the modern private mortgage insurance industry paid $500 million in claims. In the last five years, claims paid jumped to $5 billion. Lacy said mortgage lenders will continue to need the coverage pro vided by the MI industry. 1989 Session GRADUATE SCHOOL OF BANKING at the University of Wisconsin-Madison A Tradition With A New Vision. The critical need for continuing professional education in banking today is a given. Competition, deregulation, rapidly changing technology and evolving customer services are making increasing demands on bank managers. The Grad uate School of Banking has undergone significant changes to meet these changing needs of bankers. The School’s cur riculum addresses directly, in innovative ways, the special educational needs being created within banking today. And it does so in the most cost effective way, about $100 per day, including room and meals. United Missouri Bancshares to Buy Monroe City Bank a a 0 0 United Missouri Bancshares, Inc., Kansas City, has announced an agree ment to acquire Monroe City Bank. The board of directors of Monroe City Bank and shareholders owning a ma jority of the bank’s stock have agreed to exchange their stock for stock of United Missouri. The offer is contin gent upon the tender of 100 percent of the stock and approvals by federal and state regulatory agencies. The stock offer is valued at $6.8 million. Monroe City, population 2,600, is located in the northeast region of the state near Cannon Dam and Mark Twain Reservoir. Founded in 1875, Monroe City Bank has assets totaling approximately $43 million. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ------------------------------------------------------CLIP AND MAIL FORM---------------------------------------------- Mail to: GRADUATE SCHOOL OF BANKING 122 West Washington Avenue Madison, Wl 53703 □ □ Please send brochure and application form Please have someone call re: more information Your nam e________________________________________________________________ T itle _____________________________________________________________________ Address__________________________________________________________________ City, State, Z ip ____________________________________________________________ Phone____________________________________________________________________ Northwestern Banker, October, 1988 Timewaswhenbanking simplymeant ‘depositsinj‘loansout! Nomore. 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 scft 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 all 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 80C-642-7582 National Wais 800-328-8013 33 years in the correspondent bank department, resigning as vice presi dent to accept the Fairmont Na tional appointment. The First National Bank of Jackson has $47 million in assets, while The Fairmont National has $37,312,000 in assets. The two banks will be operated as separate charters following regulatory ap proval. Jackson is 28 miles due west of Fairmont in south central Min nesota, just above the Iowa line. — Community First Names Region Manager The board of directors of Com munity First M innesota Bankshares, Inc., headquartered in Fargo, N. Dak., has appointed David A . Lee to serve as region manager for the Minnesota bank holding company. Mr. Lee currently serves as president and CEO and as a director of American National Bank of Little Falls, a Community First affiliate. He will continue to serve in those capacities. He has been president of American Na tional since 1982. Agreement Reached to Sell *1 First National of Jackson ^ ^ ^ ^ ^ 0 D Robert M. Burnham, chairman and president of The First National Bank of Jackson, has announced that an agreement has been reached to see the majority stock in the bank owned by the C.A. Burnham estate to John E. Goodenow and James M. Hongslo, subject to regulatory approval. Mr. Goodenow is chairman of Goodenow Bancorporation, head quartered in Spirit Lake, la. The holding company’s principal bank is W all Lake Savings Bank in Wall Lake, la., of which Mr. Goodenow is chairman, president and chief execu tive officer. Mr. Goodenow also is chairman of Fairmont Bancorporation, which owns control of The Fairmont National Bank in Fair mont. Mr. Hongslo is chairman and president of The Fairmont National Bank, the position he assumed in October, 1986. Prior to that time he had been with the Security National Bank in Sioux City, la., for 15 years following his gratuation from the University of South Dakota in Ver million. He served most of those https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Promoted in Pine City Edward W . Palmer has been pro moted to president of Pine City State Bank. He has been with the bank since 1983 and pre viously served as executive vice p resid en t and cashier. Prior to joining Pine City State, he was with First Bank E.W. PALMER System, serving at affiliate banks in North Dakota, South Dakota, Montana and Min nesota. Winona Bank Forms Leasing Subsidiary The Merchants National Bank of Winona has announced a major exsion of its opera tion s th rou gh the formation of a leasing subsi d ia r y . H ead q u a r te r e d in B lo o m in g to n and with an of fice in Winona, Merchants Cap ital Resources, Inc. will serve Minnesota, western Wisconsin and northern Iowa. J. Roger Meier has been named president of the leasing subsidiary. He had been sales manager for Hub bard Leasing Company of Mankato, and has also worked for ITT Indus trial Credit, St. Paul; Norwest Leas ing, Minneapolis, and the Omaha National Bank. Named in East Grand Forks First Bank System has named Daryl Evavold president of First Bank East Grand Forks. In addition to his new responsibilities, Mr. Evavold will continue to serve as an account executive in the client group. Mr. Evavold began his career with FBS in 1981 as a management associate. In 1982 he was appointed to commercial lending officer and in 1987 to account executive. V.P. Named in Virginia Gerald Johnson has been pro moted to vice president at First Bank Minnesota, Virginia office. He joined FBS in 1986 and serves as a product group manager. Promoted in St. Cloud John E. Leisen, president of Zapp Bank, St. Cloud, has announced the promotion of Marci Axtm an to staff accountant/investment coordinator. She has been with the bank for one year. Richfield Bank Sponsors Seminar Series Richfield Bank & Trust Co, Rich field, is sponsoring a series of four seminars which will be presented by Gumphrey Learning Centers, Inc. for Attorneys, CPAs and Financial Planners. The series began Septem ber 1 with “ Internal Trust Under standings.’ ’ Upcoming topics are “ Trust Officers Duties and Working with Life Underwriters’ ’ (December 1), “ Trusts and How They W ork’ ’ (February 23) and “ Case Study of Living Trusts and Testamentary Trusts’ ’ (April 13). The seminars cost $30 each and are held from 6:00 to 10:15 p.m. Sullivan Work Displayed in Owatonna An exhibition of the architectural ornamentation of Louis Sullivan, widely regarded as the most spec tacular and original art of its kind in America, was presented in Owaton na September 13 through October 9. The display was held at the Owatonna Arts Center, about ten blocks from one of the best pre served examples of a total Sullivan architectural enterprise: the down town banking office of Norwest Bank Owatonna. The collection of Sullivan pieces was salvaged from 28 different buildings built between 1881 and 1919, m ostly in the Midwest. Sullivan designed the Owatonna bank in 1906 and it was completed in 1908. Northwestern Banker, October, 1988 34 First Bank System announced on September 16 the appointment of 19 bank presidents and four business line managers in the Twin Cities. First Bank recently organized its community banks into four Twin Cities metro markets. Norb Conzemius, president of community banking for the St. Paul East Metro Market, announced the following appointments: Craig Bollum, who is president of First Bank, Payne Avenue. Jerry Thole, who is president of First Bank, Midway. Patricia Crowns, who is president of First Bank, Grand Avenue. Jim Widen, who is president of First Bank, Battle Creek. Tom Madden, who is president of First Bank, White Bear Lake. The First Bank, Lakewood office also reports to him. Gary Woeltge, who is vice presi dent and manager of private bank ing and community business bank ing, First Bank, St. Paul. Dianne Arnold, who is executive vice president and manager of con sumer banking, First Bank, St. Paul. Also reporting to her are the Shoreview, Highland and Little Canada offices. Colleen McCoy, president of com munity banking for the Minneapolis Central Market, announced these appointments: Mark Ouradnik, who is president of First Bank, St. Louis Park. Linda White, who is president of First Bank, W est Broadway. The St. Anthony and Apache offices also report to her. Dave Zelinsky, who is president of First Bank, Lake at 25th Avenue. Also reporting to him is the Lake at Bloomington Avenue office. Ann Melendez, who is vice presi dent and manager of consumer banking for First Bank, Minnea https://fraser.stlouisfed.org Northwestern Banker, October, 1988 Federal Reserve Bank of St. Louis polis. First Bank System has an Chuck Peterson, who is vice presi nounced recent promotions: dent and manager of community John Crenshaw and Kathlyn business banking, First Bank, Min Kastner Slater were recently pro neapolis. A vice president and manager of private banking for First Bank, Min neapolis has not yet been named. Neel Johnson, president of com munity banking for the South Metro Market, announced the following ap pointments in his market: Bruce Soma, who is president of First Bank, Bloomington. Also reporting to him are the W est Bloomington and Lyndale offices. Bob Stehlik, who is president of First Bank, Edina, with offices at 50th and France and 70th and France. Sandra Lipsey, who is president of First Bank, Apple Valley. Eric Iversen, who is president of First Bank, Eagan. Sandy Anderson, who is president of First Bank, Burnsville. Scott Hutton, who will become president of First Bank, Eden Prairie, which will include the Suburban National Bank following regulatory approval. He is currently serving as the transition manager. Dave Gilman, president of com munity banking for the North/West M etro M arket, announced the following appointments: Paul Elsome, who is president of F irst Bank, M innetonka. The Ridgedale office also reports to him. Gary Peterka, who is president of First Bank, Hopkins. Duane Ostlund, who is president of First Bank, Robbinsdale. Bill Stangler, who is president of First Bank, Plymouth. Also repor ting to him is the Brooklyn Park of fice. Kirby Scroggins, who is president of First Bank, Northtown. The Coon Rapids office also reports to him. moted to vice presidents, mortgage banking services in the special in dustries group. Mr. Crenshaw began with FBS in 1964 and M s. Slater came to FBS in 1984. The loan portfolio management group of FBS recently promoted James Melville to vice president, special loans real estate. He joined FBS in 1985 and was an assistant vice president. Mark Paynter was promoted from assistant vice president to vice president, finance. He came to FBS in 1980. David Morem has been named vice president of finance, metro com munity banking. He joined First Banks in 1979. The corporate banking group has announced the promotions of Sally Webber Centner and Terry Steen to vice president, upper Midwest divi sion; David Draxler to vice presi dent, national division; Jeffrey Torrison to vice president, national agribusiness; and Steven William son to vice president, corporate marketing. * * * Norwest Corporation announced on August 30 plans for a new bank ing office in Edina as part of a pro gram to expand its community banking operations in the Twin Cities suburbs. The new facility, to be known as the Edina office of Norwest Bank Minnesota, N .A ., will be located at 5116 Vernon Avenue in a building currently undergoing extensive renovation. The new office was scheduled to open for business on September 19. Dan Saklad, Norwest’s regional president for Minnesota/Wisconsin, ^ q Q ^ 9 # ^ 35 said Norwest intends to expand its community banking business in other suburban communities with either new banking offices or en larged quarters over the next six to 12 months. * * * Nelson D. Civello has been named executive vice president and head of FBS Capital Markets Group. He has nearly 20 years of experience in banking, investment banking and public finance, most recently with Marine Midland Capital Markets, a division of Marine Midland Bank in New York, where he was director and deputy division executive of the municipal securities division. * * * William M. Wingfield has been promoted to senior vice president and manager, trust securities pro cessing, for Securities Processing Services, Inc., a subsidiary of First Bank System. He joined FBS in April of this year from Wachovia Bank and Trust, Winston-Salem, N.C., where he was vice president of trust opera tions services. He has more than 15 years of bank and trust automation/operations experience. * * * Robert E. Leech has been pro moted to executive vice president of First Trust. He most recently served as senior vice president of the per sonal trust group of First Trust. In his new position he will continue to manage the personal trust group. Prior to joining First Trust in 1985, Mr. Leech was president of First Bank of South Dakota and senior vice president of the trust department. * * * Midway National Bank, St. Paul, has announced recent promotions. Susan A . Hagen has been pro moted from commercial loan officer to assistant vice president in the commercial lending department. She joined the bank in 1981, and has served as loan administrator and credit department manager. Prior to coming to St. Paul, she was assis tant cashier and compliance officer at the Bank of Buffalo Grove, 111. John B. Hermanson has been pro moted to commercial lending officer. He previously served as credit department manager, also in the commercial banking department. He https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis S.A. HAGEN J.B. HERMANSON joined the bank in 1984 as a credit analyst, was appointed as officer and credit department manager in 1986, and was subsequently as signed additional supervisory res ponsibilities for the bank’s loan auditing section. * * * Marquette Insurance Group has announced that four of its em ployees have purchased the property and casualty division from the In surance Group. The new agency is called M IG Insurance Brokers, Inc. Marquette Insurance Group will continue to offer life insurance, employee benefits plans and other financial serves products from its new headquarters in the Piper Jaffray Building in Minneapolis. M IC Insurance Brokers officially opened for business on August 1 and will re main at 7401 Metro Boulevard in Edina. * * * stop payment service that allows commercial customers to use their office personal computers to stop payment on a check and receive in stant binding printed confirmation of the stop payment order. Karl Ostby, vice president of cash management for Norwest, said it is the first on-line stop payment pro duct in the Upper Midwest. The Norwest “ BankTIES Stop Pay” system allows customers to request a photocopy of a check which has been paid. The system features tiered pricing based on volume breaks on the number of accounts a business has and the number of stop payment requests generated each month per account. Several Minnesota-based com panies participated in the design and pilot use of the product, in cluding ID S Financial Services, Inc., Blue Cross Blue Shield of Min nesota, and Target Stores. Norwest Bank Minnesota has also introduced a new software product that enables corporate customers to pay state taxes electronically in In diana through personal computers. That state recently became the first state to require electronic payment of corporate taxes. Norwest officials said they are the first bank to provide a software package that enables companies to TWIN CITIES NEWS. . . Norwest Banks have introduced a (Turn to page 41, please) In Northern Minnesota, Stanley r > >- 1 :overed. Meet Stanley Peterson, Norwest’s Correspondent Banker for North ern Minnesota. When you have correspond ent banking needs, he’s a good person to know. Stanley makes it his business to under stand the special needs of community banks. And he wants to do business with you. Talk © 1988 Norwest Banks to Stanley about our complete line of specialized correspondent banking services. When it comes to correspondent banking, he’s got you covered. Member F D IC !££!NORWEST BANKS u w CORRESPONDENTBANKING Norwest Bank Minnesota, N .A . Northwestern Banker, October, 1988 You’re looking at a big way First Banks can help you make money A state-ofthe-art trading room that gives you instant access to the largest bond inventory in the Upper Midwest. So you can shop more markets, check more rates and returns, ©1988 First Bank System https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis quickly spot trends and opportunities, and precisely match investments to objectives. With First Banks’ unmatched resources behind you, you can even share in the benefits of large block buying without spending large sums of money You can also see a few of our other If you’re ready to make the most of advantages: advisors who specialize in cor- your portfolio, call FBS Capital Markets at respondent bank investing. Experts per(612) 343-1936. _ sonally committed to meeting your needs, We’re just h * p__. following your lead, and making your Members First Bank System investments pay off. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Members FDIC 38 Illinois Bank, where she was second vice president and group marketing manager. Lori S. Stern is assistant vice president in the cash management sales department. She joins the bank from Connecticut National Bank in Hartford, where she was relationship manager and assistant vice president in the insurance in dustry department. * * * Joseph F. Tomasello has been named president of Avenue Bank of Elk Grove. He joins the bank fro m P la in s Bank of Illinois, fo r m e r ly D e s Plaines National !■ m f Bank, where he Ht Ä m o st recently Í served as senior vice president of tei the commercial TOMASELLO I lending division. Prior to joining PlainsBank, he worked at the First National Bank of Chicago as a commercial banking officer/manager. * * * H [H | I Arnold E. Davis has joined Am al gamated Trust & Savings Bank as vice president in the marketing department. Previously, he was vice president and chief lending officer for Illinois Service Federal Savings and Loan Association in Chicago. Prior to that, he was a vice president at Continental Bank. A relationship manager for municipalities and labor unions in Continental’s public funds division, Mr. Davis also worked in the public finance division of the bank. Mr. Staples succeeds Daniel C. Rohr, who has resigned to become executive vice president and chief credit officer at Columbia Savings and Loan Association in Beverly Hills, Calif. * * Allen G. W olkey has been named senior consultant for compliance ser vices at Financial Shares Corp. He comes to the organization from the Federal Reserve Bank of Chicago, where he served most recently as vice president of bank relations. He CHICAGO NEWS. . . (Turn to page 70, please) Gerrie M. Smith has been ap pointed vice president in charge of retail banking for the Affiliated Bank Group, Inc. She previously served as senior vice president and cashier for the Affiliated Bank/ North Shore National. Prior to that, she worked for Unity Savings/ Talman Home Federal Savings and Credithrift of America. * * «sis A.E. DAVIS T.J. BRESNAHAN Amalgamated Trust & Savings has also announced that Timothy J. Bresnahan and Elcosie Gresham have been appointed to the bank’s board of directors. Mr. Bresnahan is business manager of Local Union 134 of the International Brother hood of Electrical Workers. Mr. Gresham is president and business agent of Local Union 241 of the Amalgamated Transit Union. * * * * Three new officers have joined The Exchange National Bank of Chicago. Gordon L. Mason is vice president in the bond department and will manage the government trading desk. He previously was with Rodman and Renshaw, where he was vice president in charge of the municipal trading and underwriting departments. Lynn M. Orawiec is vice president and retail development manager. She previously was with Continental Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis William L. Staples has been named chief credit officer and chair man of the credit policy committee of Continental Bank. He was respon sible for Continental’s credit risk evaluation division from 1983 to 1985, before becoming head of the money market distribution, public finance and municipal securities division. Since October 1987, he has handled special assignments for the bank’s credit risk management area. He joined the bank in 1965 and has held a number of commercial lending positions in Chicago and New York ^ * I Ü» ^ 1st Natl. Collinsville and UMB Banks To Merge The boards of directors for First National Bank of Collinsville and U M B Bank of Illinois in Maryville have elected to merge the two banks into U M B First National Bank. The merger was effective August 31. Under the merger, the bank has combined assets of almost $157 million. Its main office will be in Col linsville, with offices also in Mary ville and Caseyville, a total of four. The board of the merged bank in cludes directors from the previous banks’ boards. Gary Haskell will serve as chairman and chief ex ecutive officer, with David Skiles as president, Richard Dawdy as ex ecutive vice president, and Scott Thomas as senior vice president. The bank is an affiliate of United Missouri Bancshares, Inc., a multi bank holdin g com pany head quartered in Kansas City, Mo. f 39 management of operations at the bank and its subsidiaries. Mr. Troia will also continue as vice p r e sid e n t/o p e ra tio n s and treasurer of Valley Bancorporation. He has been with the organization for 19 years. Goldman Elected NABW Pres, for Fox Valley <11 ® ® ^ ^ ^ w 0 ^ 0 First Wisconsin Announces Acquisitions in Minnesota On September 14, First W iscon sin Corporation completed the acquisition of Century Bancorp, Inc., a one-bank holding company in Circle Pines, Minn. Terms of the transaction were not disclosed. Century Bancorp owns the $26 million Centennial Bank. First Wisconsin has also announced that it has reached an agreement to acquire the $160 million Stillwater Holding Com pany, headquartered in Stillwater, Minn. Stillwater Holding Company has controlling interest in the $120 million First National Bank of Still water. Through its ownership of Hugo Bancorporation, Inc., a onebank holding company, it also owns the $40 million First State Bank of Hugo, based in Hugo. Terms of the transaction, which involved an exchange of stock, were not disclosed. In addition to its main office in Stillwater, the First National Bank of Stillwater has two branch offices, one in Stillwater and one in Lakeland. The First State Bank of Hugo has a branch office in Lino Lakes. No staff changes are anticipated. Upon completion of this acquisi tion, expected during the first quarter of 1989, First Wisconsin will have purchased a total of nine banks in Minnesota with 26 locations and over $850 million in assets. Named in Madison Sal A. Troia has been named senior vice president of Valley Bank, • Madison. He will assume respon sibility for the overall direction and https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Kristine Schulz Goldman, cor porate legal administrator and com pliance officer with Valley Bancor poration, Appleton, has been elected president of the Fox Valley Group of the National Association of Bank Women, Inc. M s. Goldman was awarded in 1986 for “ Outstanding Contribu tions to the Department of Legal Administration.” She was recently asked by the FDIC Washington of fice to be guest speaker for a com pliance seminar. Promoted in Sun Prairie Robert J. Maly has been named computer operations officer at Valley System, Inc.’s Sun Prairie location. He has been associated with Valley for six years, most recently as computer operations Meet Bill Meyer, Norwest’s Corre spondent Banker for Wisconsin. When you have correspon dent banking needs, he’s a good person to know. Bill makes it his business to under stand the special needs of community banks. And he wants to do business with © 1988 Norwest Banks manager. Two new appointments have been announced in the data control department. Jane Mathweg and John Montgomery have been named data control supervisors. M s. M athw eg was employed since March, 1987 as a balancing clerk. Mr. Montgomery has been with Valley for ten months, most recently at the Valley Bank on Monona Drive. Valley Offers Next Day Deposit Availability Valley Banks is offering next day deposit availability at its 88 loca tions. Nearly all checks deposited at the Valley banks will be available for withdrawal the next business day, with a few exceptions determined on a case-by-case basis. Federal regulations now require next day access for certain items such as cash deposits, electronic transfers, and deposits of U.S. Government checks. “ The regula tion was written to protect con sumers and businesses from having their funds held for an excessively long period,” said Sal A . Troia, vice president/operations and treasurer for Valley Banks. “ But really it is not as pro-consumer as Valley’s own practice of next day availability.” you. Talk to Bill about our complete line of specialized correspon dent banking services. When it comes to correspondent banking, he’s got you covered. ¡I-:: NOR WEST BANKS Ü CORRESPONDENT BANKING Member F D IC Norwest Bank Minnesota, N .A . Northwestern Banker, October, 1988 40 Luverne Hammerstrom, Cashier Carol Crawford, Assistant Cashier Drew Anderson, William R. Lennon and George Hanson. The bank has assets of $25.6 million and deposits of $ 21.2 million. No staff changes are anticipated. Promoted in Sioux Falls o Timothy Hamel has been pro moted to vice president, trust, at First Bank of South Dakota, Sioux Falls. He joined FBS in 1984 and most recently served as an assistant • vice president and corporate trust officer. Britton Bank Fails Named in Huron Added in Mitchell The Marshall County Bank in Britton was closed August 19. Its deposits were assumed by First Na tional Bank of Beresford. The bank had deposits of $9.6 million and assets of $10.5 million. The failed bank’s offices in Brit ton and Veblen are now branches of First National of Beresford. Farmers & Merchants Bank of Huron has named Ronald R. Jenkins executive vice p resid en t and commercial len ding officer. He is a 24 year veteran of bank ing. Mr. Jenkins m o st recently was president of Commercial Trust and Sav ings Bank in R. JENKINS Mitchell, also serving as a director of that bank until 1985. He retired from banking in 1985 to become in volved in Mitchell Community acti vities, primarily in the area of physi cian recruitment. Harlan Nielsen has joined the Mitchell staff of Norwest Bank South Dakota as mortgage loan originator/personal banker. Since 1981, Mr. Nielsen has been with 0 Century 21, Koupal and Anton, Inc. He has been an associate broker since 1984. Canton Bank Sold Local officers and directors have purchased controlling interest in Farmers State Bank of Canton. The bank had been owned by three local families. Purchasing the bank were Chair man Elmer Anderson, President Bruce Anderson, Vice President 1 # ^ Community First Announces Managem ent Changes The board of directors of Com munity First National Bank of Wahpeton has elected Ronald K. Strand president and chief executive officer and a director of the bank. William M . Sanger has resigned those offices but will continue to serve as chair man of the bank. Mr. Sanger has resigned to accept the position of vice president of cor- porate relations for Community First North Dakota Bankshares, Inc., Fargo. He will continue to be a shareholder of the bank and con tinue to serve as a director of the bank holding company. He joined the Wahpeton bank in 1964 and has served as president since 1971. Mr. Strand has resigned as presi dent and chief executive officer of Norwest Bank of North Dakota— Wahpeton to accept the position at Community First. He had served as president of the Norwest bank since 1985. From 1983 to 1985 he was senior vice president of Norwest Bank—Jamestown. He began his bank ing career at N orth w est Bank—Moorhead, Minn, in 1973. In addition to his positions in Wahpeton, Mr. Strand has been ap pointed region manager from the Community First North Dakota Holding company. Minot Bank to Remodel R.K. STRAND W.M. SANGER https://fraser.stlouisfed.org Northwestern Banker, October, 1988 Federal Reserve Bank of St. Louis First Bank Minot has announced plans to spend $500,000 remodeling its building at 17 First Avenue Southwest in downtown Minot. The project has already commenced. The 25 year old bank will remodel all three floors with new ceilings, lighting and furniture. The drive-in Dakotah Declares Dividend Rodney Fouberg, chairman of the board of Dacotah Bank Holding Co., announced recently that the board has declared a three percent stock dividend in lieu of its semi-annual cash dividend. The stock dividend will be paid on September 27 to shareholders of record on September 13. ^ • q a teller window will also be modified. Upon completion of the project, First Insurance, a bank affiliate, will move its offices to the second floor O of the bank building. Pfeifle Elected ICBND Pres. Myron Pfeifle, president of Bis marck State Bank, was elected president of the Independent Community Banks of North Dakota during their recent an nual convention. The conven tion was held at the K irk w ood M otor Inn in M. PFEIFLE Bism arck, and attended by 300 bankers, their spouses, and associate members. Mr. Pfeifle has been with the Bismarck State Bank since 1978, when he was hired as vice president. He was promoted to executive vice president and CEO in 1980 and president and CEO in 1982. Between 1975 and 1978, Mr. Pfei fle was vice president of the Elk N O R TH D A K O T A N E W S . . . (Turn to page 47, please) 41 Labagnara. J. Henry Schoenewise, Rhonda J. Bryant and Margaret A . Colbert were named asset management of ficer, operations officer and invest ment officer, respectively. United Banks Elects S.V.P. United Bank of Denver Announces Promotions ^ A number of promotions have been announced recently by United Bank of Denver: Robert A . Brown, portfolio manager in asset management ser0 vices, has been named vice presi dent. He recently joined the bank. Brad L. Meuli, who joined the bank last year, was also promoted to vice president. He works in regional II corporate banking. Named assistant vice presidents were Christopher B. Johns, asset management services; Brian J. Baker, special assets; Barry B. II Chesnut, manager of general ac counting and regulatory reporting; Kip H ughes, m anager of the women’s banking center, and Gary B. Lutz, cash management. II Named commercial banking of ficers were M . Elizabeth Hummel, Lisa L. Montgomery, Bruce W . Panter, Henry S. Romaine Jr., Carolyn L. Salmans, Randall J. II Schmidt, John M . Varnell, Melinda A. Yarborough and Marlain E. TWIN CITIES NEWS. . . II (Continued from page 35) initiate an automatic clearing house tax credit electronically through a PC. The new program is an add-on to || the BankTIES program. * * * Susan K. Koonsman has been elected senior vice p r e s id e n thuman resources ......... at United Banks of Colorado. She has been with U nited B an ks since April 30, 1987, when the merger of Uni ted and IntraW est Financial Corporation was S.K. KOONSMAN fin a lize d . She became vice president— human resources in early 1988. M s. Koonsman spent ten years with the Manville Corporation before moving to The First National Bank of Denver in 1981. Pres. Named in Durango John A . Marvel has been named president and chief executive officer of The First National Bank of Durango. He is a former chief ex ecutive officer of the First National Bank of Alamosa, and more recently was president of the Montana Bank of Bozeman, Mont. He has been with The First National Bank of Durango since September, 1987. provides project planning, design, art production and communications services, audio-visual support ser vices and video production services. It also operates an art production studio and manages the company’s graphics identification standards. * * * Norwest Corporation has named Patrick M. Redmond to a new posi0 tion as creative art director for its in-house art an d d e s ig n group. He had 0 been operating his own consul t in g fir m , P a tr ic k R ed m ond D esig n . <pThe a rt and d e s ig n g ro u p P.M. REDMOND https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Marquette Bank Minneapolis has announced the addition of two of ficers to its staff. William Endres joins the bank’s loan administration division as as sistant vice president. Previously, he was a member of the liquidation division for the FDIC. Prior to that, he held various management posi tions at several Minnesota banks in cluding Pope County State Bank of Glenwood, State Bank and Trust MBA Meets to Discuss Bank Structure Proposal A t a recent meeting of the M on tana Bankers Association board of directors, a draft of proposed changes in bank structure was reviewed. Said M B A President Lynn Grobel, “ W e are working on a bank structure proposal that will improve services to the consumer and help Montana’s economy.” According to Mr. Grobel, a number of changes in the proposal, such as allowing banks to merge and consolidate plus pro vide banking facilities in com munities not now served by banks, are being considered. In response to an economic con sultants report to the Governor’s Council on Economic Development, Mr. Grobel said, “ Montana bankers are also concerned about archaic banking laws holding us back from providing competitive financial ser vices to all Montanans. Our asso ciation will try to modernize bank laws and regulations in the 1989 Legislature for everyone’s benefit.” Co. of New Ulm, Roseville State Bank, and First Bank in St. Paul. Mike Sexton joins the bank business services group as assistant vice president. M ost recently, he was the vice president of finance and adminstration at Hoffman Electric Company. Prior to that, he was an assistant vice president at First Bank Minneapolis. * * * Marquette Bank Minneapolis’s main bank at 6th and Marquette has been chosen as the location for bank scenes filmed for the CBS Entertain ment movie, “ The Comeback.” Filming in the lobby, skyway, and on the marble staircase of the bank took place on August 23. The movie stars Robert Urich. Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 43 200 Attend Ag Credit Conference By B E N H A L L E R , JR. Publisher ® Q 0 || || || II II N E X C E L L E N T turnout of 200 registrants for the 1988 A g Credit Conference sponsored by the Nebraska Bankers Association Sep tember 1 and 2 at the Lincoln Hilton Hotel was a substantial increase over the 1987 attendance. The annual A g Credit Conference is hosted by the N B A Lending Committee, of which Ken Ward, senior vice presi dent and cashier of Cornhusker Bank in Lincoln, is chairman. He was assisted in moderating the business sessions by two of the other 15 committeemen—Mike Ja cobson, senior vice president, Na tional Bank of Commerce, Lincoln, and Richard Nelson, vice president, Farmers State Bank & Trust Co. of Superior. Two men were honored with plaques at the first day luncheon for their numerous contributions to agribusiness at the state and na tional level. They were U.S. Trade Representative Clayton Yeutter and Kirk Jamison, Nebraska director for the Farmers Home Administration. N B A President Harley Bergmeyer, president of Saline State Bank, Wilber, presented the awards. He cited Mr. Jamison for “ his willingness to go to bat for Nebraska farmers and ranchers to make F m H A programs work as they were intended,” mentioning speci fically Mr. Jamison’s excellent work A in establishing the F m H A ’s A p proved Lender Program in Neb raska. The Cornhusker state leads the nation in lender participation in the Approved Lender Program. Ambassador Yeutter, who could not be present, was chosen as co recipient because of his remarkable success in negotiating export agree ments that have significantly im proved the federal export picture, especially for ag commodities. A m bassador Yeutter is a native of Eustis, Neb., and is a graduate of the University of Nebraska in Lin coln, where he received a Ph.D. in ag economics and a law degree. Dr. Neil Harl, the Charles F. Cur tiss Distinguished Professor of Economics at Iowa State Universi ty, Ames, presented a five-part seminar that ran throughout the first morning session. His talks looked at U .S. Agriculture in a World Setting, Government Farm Programs, Lender Liability: Pro blems and Pointers, and Develop ments in Agricultural Real Estate Lending. To strengthen U .S. agriculture, Dr. Harl said, the short-term need is for the government “ to provide ad justment assistance. In the long term we must increase demand sharply or reduce production. One of our most promising solutions to our over-production is encouraging in creased food consumption in non-ag countries.” This can be accom plished, he added, “ by helping them to do what they do best by utilizing their low-cost labor to produce goods for export so they will have money to import from u s.” Dr. Harl used extensive slides and charts to illustrate all of his discus sions. Throughout the latter part of his remarks he referred to the future of agriculture and the positive and negative factors that could affect it by the year 2000— “ and that’s only 12 years aw ay!” To outline his pro jections for our readers, Dr. Harl prepared the special summary that appears in the feature section of this issue outlining ten factors to con sider for agriculture in the year 2000 A .D . Thomas H. Olson, president of Lisco State Bank in Lisco., Neb., spoke in his capacity as one of the nine appointed members to the in terim board of the Federal Agricul tural Mortgage Corporation. That corporation, known now as Farmer Mac, was contained in H.R. 3030, the Agricultural Credit A ct of 1987, which was signed into law January 6, 1988 by President Reagan. That was known primarily as the Farm Credit System rescue bill, but con tained Title V II creating the secon dary market for long-term ag real estate loans and allows banks and other financial institutions equal ac cess to the market. LEFT— Kirk Jamison, FmHA state director for Nebraska, and his wife, Trula, admire the plaque given to Kirk by the NBA in recognition of his numerous contributions to the State of Nebraska. With them are, from left: NBA Pres. Harley Bergmeyer, pres., Saline State, Wilber; NBA Lending Comm. Chmn. Ken Ward, sr. v.p. and cash., Cornhusker Bank, Lincoln, and NBA Exec. V.P. Stan Matzke. RIGHT— Two of the prominent guest speakers at the Ag Credit Conference were Thomas H. Olson (left), pres., Lisco State Bank and past pres, of IBAA, and Dr. w Neil Harl (third from left), the Charles F. Curtiss Distinguished Professor at Iowa State University, Ames. They are pictured with Mr. Bergmeyer and Mr. Matzke. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Northwestern Banker, October, 1988 44 Nebraska News LEFT—Three Nebraska bankers who had a big hand in the creation of the idea for Farmer Mac when they served together on the ABA/IBAA Joint Task Force to look at lending alternatives for bank ag lenders were, from left: Tom Olson, pres., Lisco State and past p r e s # of IBAA; Mel Adams, chmn. & pres, of Adams Bank & Trust, Ogallala, and C.G. Kelly Holthus, pres., First Natl., York, pres.-elect of the ABA. Mr. Adams and Mr. Holthus also are past presidents of the NBA. RIGHT—Commodity speaker Richard A. Brock (left), pres, of Brock Associates, Milwaukee, visits with NBA Lending Committee member Mike Jacobson, sr. v.p. Natl. Bank of Commerce, Lincoln, who pre sided at final session. Mr. Olson reported action of his subcommittee that met in Denver August 26 to hear presentations made by 11 investment firms bid ding to handle the $20 million stock sale scheduled to be offered in Oc tober. He said “ A B A and the IB A A have worked hard together to assure that as broad a range of banks as possible may participate in purchase of this stock.” He said it appears likely it will be offered in increments at least as low as $5,000 to en courage widespread bank participa tion. “ This is a real positive step for community banks to expand their ag real estate loans by accessing na tional markets through Farmer M ac,” he stated. Rusty Jesser, federal legislative representative for the American Bankers Association in Washing ton, D.C., presented the “ Washing ton Legislative Issues/Up and Down the H ill.” This centered on another look at Chapter 12, the Farm Credit rescue bill and the Secondary M arket that resulted, drought legislation, mediation laws, and other current banking legislation under study. Frank W . Naylor, Jr., chairman of the Farm Credit Administration in McLean, Va., who is responsible for regulating and overseeing the Farm Credit System, recalled the 1971 legislation revamping the FCS. “ One side said loans to be made should be at 75 percent of the agricultural business value of that property. The other side merely had a higher number. It wound up being 80 percent of appraised value. If it had been 75 percent of the business value, look at how many problems we would have avoided!” Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Registrants and spouses were taken by bus to the U N L Center at the University of Nebraska In stitute of Agricultural and Natural Resources. Professors from the A g College made five concurrent presen tations from which guests could select the one they wished to attend. Following a banquet at the facility, Dr. Irv Omtvedt, vice chancellor for Agriculture & Natural Resources, was the speaker. The entire program the second morning was devoted to “ Commodi ty Prices—Making Decisions in Dif ficult Times,” and presented by Richard A . Brock, president of Brock Associates in Milwaukee, W is. Mr. Brock is widely-known and respected by farmers and bankers alike for his thorough, accurate reports that serve as guides for thousands of his readers. He used extensive charts to discuss com modity prices, the tools needed by producers to market their crops, the tim ing that is necessary, the banker’s role in advising on a farmer’s marketing programs, and developing the consistent marketing plan itself. A few of the comments offered by Mr. Brock follow: “ Even with the worst drought ever we’ve only hit $3.40 per bushel on the corn, showing that the 30-year cycle is still valid.” “ Keep the stock market in perspective. Between 1965 and 1985 it moved only between 700 and 1,000. Now, people think 2,700 is the norm and cry when it ranges bet ween 1,900 and 2,100. It was 1,250 in 1 98 5!” “ The bond market is about ready to make a move to the upside. I think we’ll see bonds in six months trading at par. W hy? The Fed thinks# it will control inflation. The dif ference between inflation rate of 4 and the prime at 10 means the real cost of money is 6 . It can come down now. The bond market today is t e l l # ing us it’s going higher. It was up IV2 last Friday.” The 1988 A g Credit Conference concluded with a noon luncheon and an address given by Tom Osborne,# head football coach for the Universi ty of Nebraska. After giving a short assessment of his team ’s opening victory over Texas A & M and a brief review of key players on the 1988# team, Mr. Osborne said “ The one true thing that lasts, and is most im portant in each person’s life, is character. It is the main thing and all else fades away. Building# character is made up of several com ponents: “ 1. Discipline—Learning, study ing and doing over and over again University of Nebraska head football coach Tom Osborne (seated left) is pictured with NBA Pres. Harley Bergmeyer (right) and pro gram speaker Rusty Jesser, ABA federsd^ legislative repr., Washington, D.C. # A p ow erfu l, m o d e m , top-of-the-line electronic data processing system is not beyond your reach, regardless o f the size o f your institution. W e have one for you. T w o, in fact. First National Bank o f O m aha’s Information Processing System is as versatile, efficient and pow erful as y ou ’ ll find anywhere. A n d it’s available to you. D ozen s o f banks are already linked with us electronically to receive the full com petitive benefits o f this state-of-the-art service. O u r In-H ouse P rocessing System , established in your institution, is fu lly controlled by your management and functions on your timetable. Staff time is conserved, overhead reduced, processing costs stabilized and services im proved. It’s designed for optim um efficiency in financial institutions o f varying sizes and requirements. O u r E D P services are your m ost affordable and valuable option. Give us a call; we need to talk. M ichael J. D o o le y • National M arketing D irector • First National Bank o f Om aha O n e First National Center • O m aha, Nebraska 68102 • (402) 341-0500 © firs! n a tio n a l b a n k of omaha one first national center omaha, nebraska 68102 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 46 what needs to be done, and to the best of one’s ability. “ 2. Perseverance—This attribute is highly important. More than 125 years ago a young man’s fiancee died shortly before they were to be married. He grieved a long time; he suffered by going bankrupt in two businesses; he was defeated a halfdozen times when he first ran for of fice. But he had perseverance and Abraham Lincoln became our 16th president. He showed that it’s not that you fail, it’s how one reacts to adversity. “ 3. Teamwork—There are two kinds of players. The first asks, ‘W h a t’s in it for me? How much per sonal attention and glory is in it for m e?’ The second kind is a team player who asks only, ‘W hat can I contribute to be better to help the team?’ Happiness as a member of the team depends on your stance toward life. “ 4. Loyalty —W e tell our players, ‘If this place is not what you want, see us and talk about it. If you have a beef with a teammate, talk it out. If we can’t get things straightened out, then you’d be better off some place else and we’ll help you to the extent we can.’ “ 5. Be multi-dimensional—Learn about the rest of the world besides athletics. Learn about life. W e ’re physical, mental and spiritual be ings and we need a balanced life. One-dimensional people can’t cope with adversity such as an injury, or personal problems such as divorce. That’s why we have chapel each Saturday morning, so our players have a feeling for this important dimension of their lives. You need balance in your lives, as well, besides banking, farming or other business pursuits.” The meeting concluded following the luncheon. □ The following promotions were recently announced by Norwest Bank Nebraska: J a c k A y r e s was named senior vice president of development. He began his banking career in Manhattan, Kan., in 1971. In 1982 he moved to the Tri-County Bank and Trust in Bellevue and was chairman of the board and president there until 1985. He then became chairman of the board and president of the Bank of Bellevue, and held that position until joining Norwest in May. J o h n C. P e a r s o n has been named vice president in the commercial real estate department. He began his banking career in Wichita, Kan., and moved to Omaha in 1985 to work as vice president in a savings bank. In 1986 he became a vice president and manager of a mortgage corporation. Elected in Plainview Roger D. Synovec has been elected president of Plainview Na tional Bank of Plainview. He joined the bank in 1972 and has held the positions of vice president and ag loan officer, senior vice president, and most recently, executive vice president and chief loan officer. He succeeds Eldon R. Fox, who was with the bank over 25 years. Merle D. Johansen was elected senior vice president of the bank. He joined Plainview National in 1980 as vice president. Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis J. AYRES J. PEARSON T h o m a s J . B e h m e r is an assistant vice president in the ag department at the Norwest Bank Nebraska in Hastings. His financial career began in 1986 when he began working for Farm Credit Services as an assistant vice president in the special assets division. He joined the Federal Land Bank Association in 1979 as a loan officer and branch manager. L a u r e n c e R a y n o r began working in the trust department of Norwest Bank Nebraska’s downtown Omaha bank in April. He formerly served as a high school teacher and counselor and as an account executive for an investment firm. * * * L. RAYNOR ® ® ® C h r is t in e M . C a r p in o has been named vice president and director of # marketing and sales for American National Bank of Omaha. She most recently served as field marketing manager for Godfather’s Pizza. She was director— strategic planning for # Data Documents from 1983 to 1986 and worked in corporate finance and strategic planning for Enron Corp. from 1979 to 1983. * * * 9 A ‘ ‘ Gala Family Fun N ite” was sponsored by Douglas County Bank & Trust Co. on Saturday, September 17 at Rosenblatt Stadium. Entitled £ “ Together, L et’s Dream,” the event featured vocal and band music and a fireworks display. Bank customers were invited to attend the fun night for free. 0 * T.J. BEHMER ® * * Norwest Bank Nebraska, N .A . recently displayed the work of sculp tor M a t t P la c z e k in the lobby at the £ bank at 20th and Farnam. 47 Union Bank and Trust Company, (§ Lincoln, has received FDIC ap proval to merge with the Pawnee County Bank, Pawnee City. The Pawnee County Bank will be operated as a branch of Union Bank <9 and Trust. No staff changes are anti cipated. * * * Elected in Kearney M ary C. Thaut was elected cashier of First National Bank and Igi Trust Company of Kearney at a recent meeting of the board of directors. M s. 0 » Thaut was for merly assistant vice president of operations at Ci ty N a t io n a l 4 ) Bank in H a s M.C THAUT tings. Previous to that, she was employed by the U n ited Bank of Greeley, Greeley, Colo. Name Changes Announced Bailey Lewis & Associates, a Nebraska-based advertising, mar keting and public relations firm with offices in Lincoln and Omaha, has been chosen as the agency of record for the Nebraska Higher Education Loan Program, Inc. (NEBHELP) and the Nebraska Student Loan Pro gram, Inc. (NSLP). NORTH DAKOTA NEWS. . . (Continued from page 40) Valley State Bank in Larimore. He began his banking career with the Farmers and Merchants Bank in Aberdeen, S. Dak., in 1970. Mr. Pfeifle has served for several years on the ICBN D Executive Council, and as chairman of the association’s General Services Com mittee. He serves on the Banking Services Committee of the Indepen dent Bankers A s s o c ia tio n of America, is a member of the Na tional Community Banker Advisory Board for the American Bankers Association, and has been active in the Bismarck Chamber of Com merce. He is also active in civic and church organizations. Other officers of the IC BN D are: P re sid e n t-E le c t— Terry M cN e a , president, Farmers & Merchants Bank, Hatton, and Vice President— James Goetz, president, State Bank of Oliver County, Center. Abbott Bank Group has an nounced that ten banks in the group have changed their names to “ The Abbott Bank.” The banks will re main under separate charters. Banks changing their names in clude the Guardian State Bank and NDBA Group Officer 41 Trust Co., Alliance; the Bridgeport State Bank; the Bank of Chadron; Candidates Announced Gordon State Bank; the Bank of The Nominating Committees of Hyannis; the Bank of Hemingford; the four N D B A Groups indicated the Bank of Mullen; the Merriman plans to present the following slates O Bank, the Bank of Valentine, and of candidates for group officer posi Citizens State Bank of Thedford. tions at the meetings which were https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis held the week of September 26: Northeast Group: President— Peter K. McKenzie, vice president, Lam b’s Bank of Michigan City. Vice President—Terry Rime, president, Farmers & Merchants Bank, Langdon. Secretary/T reasu rer— M ike Granlund, vice president, Northwood State Bank. Northwest Group: P re sid e n tWilliam C. Parker, vice president, First American Bank, Rugby. Vice P resident— Zinie Peterson, ex ecutive vice president, Lakeside State Bank, New Town. Secretary/ Treasurer— Frank Keogh, senior vice president, American State Bank, Williston. Southwest Group: President— Ronald Braseth, president, First Na tional B an k, H e ttin g e r. V ice President— Gerald Wilier, president, Kirkwood Bank & Trust Co., Bis marck. Secretary/Treasurer— Delores Maier, vice president, Security State Bank, New Salem. Southeast Group: R.J. Klinkhammer, president, First American Bank, Casselton. Vice President— Steve Dahlstrom, vice president, Farmers & Merchants Bank of Valley City. Secretary/Treasurer— Jerry Woods, president, First Bank of North Dakota—Fargo. Additional nominations will be ac cepted from the floor during the group meetings. The four newlyelected group Vice Presidents and the S o u th e a s t G r o u p ’ s new Secretary/T reasurer will begin three-year terms on the N D B A E x ecutive Council following the 1989 Convention. American Natl. Honors ICBND with Tree Plantings To commemorate the contribu tion made by independent communi ty banks to the growth and vitality of North Dakota, American Na tional Bank of St. Paul, Minn., has donated 106 tree seedlings to the North Dakota State Park Board for planting in the new Cross Ranch State Park project. The presentation was made on September 8 at the annual conven tion of the Independent Community Banks of North Dakota by Craig Mueller, assistant vice president of American. The gift was related to the convention theme, “ Our Roots Run Deep.’ ’ The 106 seedlings were meant to represent the 106 members of the ICBN D. Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis v . *-.V- -*« • '%.T-i . - S ■": V Ä > » . :>CSS ^ < vs> T w . :.< /'- <:. •- • . '' ^ :*- *< * , *.<-. Here To Serve You Well *»rN ¿v 1 t ML. S 'H . - Firslier Bank Omaha and Firslier Bank Lincoln are a dominant financial force throughout the heartland. We know this area and its people. That’s why we're the institutions to turn to for help with your own needs, or when serving the needs of your customers. As a member of the $2 billion Firslier Financial group, we offer the experience, expertise and financial strength that few can match. And we mean business for those we serve. Count on your FirsTier Team to serve you well. F irs T ie r B an ks https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Omaha Lincoln In Nebraska: 800-642-9305 Outside Nebraska: 800-228-9175 In Nebraska: 800-742-7462 FirsTier Bank, N.A., Omaha and FirsTier Bank, N.A., Lincoln, Members FDIC When you're doing things right, there's no reason to change. That's why, for 71 years, Bankers Trust has not changed things that are important to our customers: • We have not changed our first priority — providing our customers the very best service possible. • We are still locally owned. And that means we care about local Iowa customers. • We are still doing business on the same downtown block where we first opened our doors. • And, in 71 years, we have never changed our name. For almost three-quarters of a century, peo ple have been able to rely on Bankers Trust. We've earned our reputation for service and stability, and we're proud of our good name. We've helped local businesses grow — many have become major corporations. And we've helped generations of people — individuals like yourself — to achieve their personal financial goals. That's a record in Des Moines that nobody — nobody — can match. Bankers! Member FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 51 the IB A structure, Dale C. Froehlich, president and CEO of Ankeny State Bank in Ankeny, also was elec ted in the August mail ballot as treasurer-elect, a position created to give more continuity to the increas ingly important job as treasurer. Neil Milner continues as execu tive vice president and CEO of the IB A professional staff in Des Moines headquarters. Sunday Business Meetings OFFICERS of the Iowa Bankers Association for 1988-89 are, left to right: Immed. Past Pres.— Clair J. Lensing, pres., Farmers State, Marion; Exec. V.P.— Neil Milner, Des Moines; Pres.— Donald E. Snyder, pres., Manufacturers Bank & Trust, Forest City; Treas.— Thomas t|| B. Gronstal, pres., Carroll County State, and Pres.-Elect— Thomas R. Smith, vice chmn., Brenton B&T, Marshalltown. Don Snyder Named IBA President By BEN HALLER, JR. Publisher DIANE NELSON Associate Editor ROBERT CRONIN Associate Publisher ^ A W E L C O M E R A IN fell during r \ , the Iowa Bankers Association convention last month, giving registrants further reason for their upbeat mood. Speakers gave en4IHcouraging talks about the continu ing economic recovery in Iowa and the Midwest, although looking over their shoulders at the earlier part of the 1980s and adding a touch of cau tion to their comments. Donald E. Snyder, president and chief executive officer of the Manufacturers Bank and Trust in Forest City moved up to the IB A presidency, succeeding Clair J. Lensing, president and CEO of Farmers State Bank in Marion. The new president-elect, named by mail ballot by IB A members in August, is Thomas R. Smith, vice chairman of Brenton Bank and Trust in M ar shalltown. Continuing as treasurer for the second year of his two-year term is Thomas B. Gronstal, presi dent and CEO of Carroll County State Bank, Carroll. Although he does not have officer status within The annual business meetings for the Iowa Bankers Association, Iowa Bankers Insurance and Services and members of the American Bankers Association were held Sunday after noon. In his report to the IB A member ship, Executive Vice President Neil Milner said I B A ’s long-range plan was set in motion five years ago and is being reviewed constantly by the board of directors. “ The board has now put in place a strategic plan for the future,” he said, “ not just a technical document, but a living document. It has built-in, meas urable criteria to monitor the plan’s progress, to make sure it is keeping pace and performing for the mem bers.” On the legislative front, Mr. Milner said feedback from Iowa House and Senate legislative leaders indicates that when they are asked by various groups how to do a better job, the elected representatives say, “ Go talk to the Iowa Bankers A sso ciation!” Mr. Milner said there is an expan ding interest in BankPac, which now has exceeded 1987 participation but is still short of the level of several years ago. “ However,” he added, “ we have turned the trend line up ward again.” He said IB A members soon will receive a new personnel LEFT— United Missouri Bank of Kansas City hosted their annual dinner during the IBA Convention. Enjoying themselves were, from left: Mark Bailey, a.v.p., host bank; Jack Rigler, pres., Central State, Muscatine, and his wife, June; Carlene and Patrick Moehn, pres., Commer# cial Savings, Carroll, and Jeff Gobel, v.p., host bank. RIGHT— Also present were, from left: Max Larson, pres., First Natl., Sioux City; Dick Muir, v.p., host bank, with Sheryl and Duane Prill, chmn., Pleasantville State. https://fraser.stlouisfed.org Northwestern Banker, October, 1988 Federal Reserve Bank of St. Louis 52 Iowa News LEFT— Present at the Merchants National Bank hospitality suite were, from left: David Neuhaus, pres., Fairfax State Sav.; Jerry Trudo, v.p.; Bob Louvar, v.p., both with host bank, and Bill Talen, chmn. & pres., Farmers Sav. B&T, Traer & Vinton. RIGHT— Taking part in the Banks of Iowa reception were, from left: Larry Gilb, pres., host bank; Terry Martin, v.p., Merchants Natl., Cedar Rapids, and his wife, Dixie; Jim McConnell, chmn. & pres., Somers Sav., and his wife, Susan, and Jim MacLean, v.p., Valley Natl., Des Moines. LEFT— First Bank Minneapolis hosted a luncheon during the convention. Taking part were, from left: Al Highum, v.p., host bank; Al Maser, chmn. First Natl., Lemars; Ken Bezdicek, v.p., and Dewey Senneseth, v.p., both with First Bank Mpls. RIGHT— Cole Taylor Bank/Drovers held its luncheon during the IBA Convention. Guests included Bill Boehm, pres., Tama State; Vaughn Hartzell, rtrd., Mechanicsville Tr. & • Sav., and Max Roy, sr. v.p., host bank. manual, as well as a catalogue of all services and products available through the IB A . Gerald F. Lapke, retiring chair man of IB IS and president of the Shelby County State Bank in Harlan, introduced the other ten members of the IB IS board. The new chairman will be Norman D. Skadburg, president at First State Bank in Webster City. The new member of the IB IS board is Paul H. Johnson, the IB A representative on the board. He is president and CEO of Iowa State Bank, Algona. IB IS President Frank Gleeson said, “ 1988 was a good year. W e in creased business by 18 percent to $2.3 million in premiums.” Mr. Gleeson gave a review of each divi sion of IB IS and noted progress in each of them. Russell S. Howard, A B A state vice president for Iowa and chair man of Mahaska Investment Co., Oskaloosa, conducted the brief A B A meeting. Named to succeed J. Bruce Meriwether, president of First Na tional Bank, Dubuque, to a two-year term as an A B A Leadership Con ference delegate was Clair J. Lensing, now immediate past president of IB A . Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Monday General Session The morning session of the con vention began in traditional fashion with a tribute to outgoing IB A President Clair Lensing. Mr. Lensing’s positive attitudes about bank ing and how they are reflected in his selection of the “ C-O-O-P” theme were related during the presenta tion. First speaker for the morning was Dr. John G. Stoessinger, professor of international affairs, Trinity University, who explored present economic conditions and the future of the American economy in the light of international relations. Dr. Stoessinger expressed his amazement at improved relations with the Soviet Union, and advised bankers to take advantage of a new market: “ A lot of bankers will be go ing to Russia to look for business.” Possibly even greater oppor tunities are opening up in China. Dr. Stoessinger said, “ W e are talking about one-fifth of the human race turning from communism to capi talism. ’ ’ He warned bankers that the Chinese are very slow and deliberate in their dealings, a fact often discouraging to Americans and ad vantageous to the patient Japanese. “ Do not become provincial,” he ad vised. “ You want to get in on the ground floor before the rest of th e # pack catches on.” A s for the Japanese, Dr. Stoess inger expressed deep concern about their influence over the American economy. “ W e [the U.S.] h a v e # become a fire sale for the Japanese for the last three to four years,” he said. He foresaw the October, 1987 stock market crash and considers the main factor to be the sudden# boycott on American bonds by the Japanese, who previously had been heavy investors. “ Twenty-five per cent of our American standard of liv ing is borrowed Japanese funds,” h e # stated. Dr. Stoessinger then compared the attributes of Japanese and American students, crediting them with discipline and c rea tiv ity ,# respectively. “ The secret to success is to combine creativity and dis cipline,” he said. “ Those who do will control the market.” Dr. Stoessinger closed by relating# the saga of his youth, when he escaped the Holocaust in Europe on ly to be captured in Russia and sent to the Gulag. He subsequently fled to Japan, where he was witness to # Iowa News 53 LEFT— Davenport Bank & Trust hosted a convention-wide breakfast and participants included Jim Figge, off. of pres., host bank; Bob Sierk, pres., First Natl., la. City; Stan Barber, chmn., Wellman Sav., and Michael Bauer, 1st v.p., host bank. RIGHT— Pete VanSistine, Valley Systems, Inc. and Gary Stevenson, right, v.p., First Natl., Sioux City, visit in the exhibit hall. LEFT—Visiting at the IBIS, Inc. exhibit were, from left: Max Kiernan, pres., Alton Sav.; Ron Meyer, v.p., IBIS, Inc.; Larry Gilie, v.p., IBIS, Inc.; (||Oan Jessen, exec, v.p., Farmers Sav., Weaver; Bill Carr, v.p., IBIS, Inc.; John Fagerland, pres., Maquoketa State, and Jim Jensen, v.p., IBIS, Inc. RIGHT— Guests at the Midwest Management Consultants exhibit were, from left: Kevin Harding, farm repr., and Ralph Wollenhaupt, pres., both with First Natl., Fontanelle; Janel and Bob Neville, v.p., Midwest Mgmt., Omaha, and Gene Young, v.p. & cash., Treynor State. LEFT—Showing their wares at the Office Concepts, Ltd. exhibit were, left: Dick Bremicker and Ross Schoonover, with guest banker, center, Steve Land, v.p., Security Sav., Farnhamville. RIGHT— Visiting at the Modern Banking Systems, Inc. exhibit were, from left: Gil Baehler, MBS, Inc.; Gary Schoeni, pres., Farmers & Traders Svgs., Douds, and Mike Reynolds, reg. sales mgr., MBS, Inc., Omaha. LEFT—At the Laser Pro exhibit were, from left: Royal Nold, sr. v.p., Iowa St., Algona; Doug Wall, Century Systems, Des Moines; Dave Windle, CFI Bankers Services, Portland, Ore.; Curt Gressman, cash., Polk City Sav., and Gary Livesay, v.p., IBIS, Inc./Laser Pro. RIGHT— Tak i n g part in one of the many concurrent sessions were, from left: Chuck Bonsteel, Steve Porter and Jim Wolf, all with James Baker & Co, Oklahoma City. They spoke on “Theories of Investment Portfolio Management.” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Northwestern Banker, October, 1988 54 Iowa News LEFT—Displaying their wares at the National Bank of Waterloo exhibit were, from left: Tom McDermott, sr.v.p.; Judy DeGroote, v.p., both with National Bank of Waterloo, and Eileen Thompson, a.v.p., Peoples T&S, Indianola. RIGHT— Visiting at the Investment Centers of America exhibit were, left: Larry Tweed, sales rep., Bismarck, N.D., and Dean Conrad, v.p. & cash., First T&S, Remsen. f LEFT—At the Evergreen Systems, Inc. of Omaha display were, from left: Dave Stochl, v.p., Omaha; Gary Todd, exec, v.p., and Steve Bloomquist, asst, cash., both with Peoples Natl., Columbus Junction, and Lee Meyer, Omaha. RIGHT— Visiting at the Banking Careers, Ltd. ex hibit were, from left: (front) Jean Eden, owner, Des Moines, and Sandi Garner, Webster City, with their guests, from left: (back) Norm Skadburg, pres., and Jeff Plagge, exec, v.p., both with First State, Webster City. the conflagrations at Hiroshima and Nagasaki, and made his way at last to Shanghai, China. There an A m e r ic a n o ffic e r from Iow a befriended him and assisted him in gaining entrance to Grinnell College in his home state. Dr. Stoessinger’s ode to the value of freedom as it abounds in America earned him a standing ovation from the moved crowd. Next on the agenda was A B A President Charles Pistor, who urged bankers to “ stay involved with pas sion” in the fight to get expanded powers for banks. Mr. Pistor also brought up the soon-to-be-released A B A task force report on the FSLIC problem. He said that solving the problem will surely require taxpayer assistance, and also expressed that whatever the eventual solution, it will involve banks. “ I cannot stress enough that this is a bank problem,” he told his listeners. Rounding out the morning ses sion was Thomas W . Faranda of Faranda & Associates, who ad dressed the topic “ Ten Com Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis mitments to Excellence in Growing Your Banking Business Profitably.” His ten recommended commitments are to the customer; to creative thinking; to an entrepreneur/intrepreneur environment; to effective leadership; to consultation; to dialogue; to culture, mission and values; to peak performance; to management and self development, and to achieving excellence. Concurrent Sessions During Monday afternoon, con vention attendees were able to at tend two of the concurrent sessions. “ Economic Development— Tap ping the State’s Resources” was presented by a panel of experts moderated by M yrt Levin, executive director, Iowa Business Council, Des Moines. Assistance for new businesses was discussed by Jack Bailey, direc tor, Iowa Area Development Group, W est Des Moines. He gave informa tion on the use of tax increment financing, the Sm all Business Development Centers, and the Iowa Business Growth Company. Leonard C. Goldman, director, ISU Research Park in Ames, gave a presentation on research parks and incubators. He urged banks to in vest in these programs in spite H their risk because of their necessity if Iowa is to benefit economically from advances in research. Bruce Gerleman, president of the International Trade Center of Iov^l in Des Moines, described how the Trade Center assists the efforts of Iowa communities and businesses to reach markets overseas. Jude Conway, adm inistrator Division of Finance Authority, Department of Economic Develop ment, Des Moines, shared with the audience the work of the Bureau of Business Assistance. The BureM creates jobs and provides loans, loan guarantees and grants to assist businesses. One of the more popular concuxrent sessions was presented 1^ David Miles, managing director for Investors Management Group, Ltd., Des Moines. Mr. M iles’ presenta tion, “ O pportunities in BankSponsored Brokerage,” encourag™ "Kirk Gross Company gave usthe unique image we were looking for.".. and w e are very pleased w ith the re sults. The creative de J. Bruce Meriwether/President sign of our First National Bank of Dubuque teller line and the whole facility has given us a bank w e're proud of." Kirk Gross Company offers a complete turn-key package all the w ay from feasibility studies and site selection through installation of all your furnishings and bank equip ment. We have the full time staff of architects and interior design spe cialists to create the functional envi ronment you are looking for. Kirk Gross Company has built or remodeled over 1 million square feet of financial facilities in Iowa. For creative solutions from start to finish, Kirk Gross Company can handle the project — w ith quality all the w ay For more information, call or w rite The Kirk Gross Company 4015 Alexandra Drive, PO. Box 2097, Waterloo, IA 50704. Phone: (319) 234-6641. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 56 Iowa News LEFT—At the First Interstate exhibit were, from left: Jeff Sims, a.v.p., Des Moines; Kris Ausborn, v.p., Iowa T&S, Emmetsburg; Sid Jones, exec, v.p., Home State, Jefferson, and Randy Steig, v.p., First Interstate, Des Moines. RIGHT— Displaying their information during the con vention were, left: Michael Hopson, v.p., Des Moines, and Douglas Austin, pres. & c.e.o., Austin Associates, Toledo, Oh. . LEFT—“ Puttin’ around” at the BIOS Banking System exhibit were, from left: Milt Hennick,, Cedar Rapids; Charles E. Walsh, v.p., F a rm e ry & Merchants, Burlington; Randy Johnson, Cedar Rapids, and Lisa Walsh, a.v.p., also with F&M in Burlington. RIGHT— Roy Wingers, left® talks with a banker about Bank Building Corp., St. Louis. bankers to learn the ins and outs of bank-sponsored brokerage and how to generate profits. Mr. Miles said, “ A bank-spon sored brokerage is a creative ap proach to controlling customer assets by providing alternatives to traditional bank products and ser vices within the bank itself.” He also said that bank-sponsored brokerage helps enhance the image of the bank, retain customer assets and generate fee income. Mr. Miles said that, first of all, the brokerage operation “ must fit with your bank’s overall strategy and have one hundred percent sup port from the top.” Secondly, a survey should be taken to determine the services your customers want. Third, the bank should establish clear objectives and define its ap proach as either defensive or as a profit center. Other concurrent sessions offered were “ Coping W ith Change” with consultant Dr. Charlene Bell; “ Theories of Investment Portfolio Management” with representatives of James Baker and Co., Oklahoma City; a Laser Pro demonstration by Gary Livesay of IB IS; “ Retirement Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Benefits for Your Employees” ; and “ A Passion for Customers” video tape by author Tom Peters. On Monday night a reception was held in the exhibit hall, after which receptions were held in the bank lob bies of First Interstate Bank, Norwest Bank and Valley Bank in downtown Des Moines. A number of private dinner parties followed, then registrants were invited to the Presi dent’s Dance at the elegant, new Iowa State Historical Museum where guests could inspect the facilities and dance to the Big Band sound of an excellent orchestra that played till midnight. Tuesday A g Breakfast The Tuesday morning A g Break fast session was marred by the in ability of the scheduled speaker to arrive because of weather complica tions along his route to Des Moines. Ambassador Clayton Yeutter, the U.S. Trade Representative, was rerouted by the airlines and couldn’t be located the morning of the break fast. Teleconference lines were quickly installed as a backstop, but when it became apparent Am bassa dor Yeutter couldn’t be found, IB A staff executives Neil Milner and W es Ehrecke showed their ingenui ty by quickly arranging during the# breakfast hour with several promi nent guests to share the platform for an impromptu panel discussion. They responded graciously and were given a warm reception by the la r g # audience. Taking part were: Lt. Gov. Jo Anne Zimmerman; Iowa Secre tary of Agriculture Dale Cochran; Iowa F m H A Director Bob Pirn, and Robert Furleigh, A SC S state ex® ecutive director. Moderating the panel was Don Muhm, the wellknown and highly-respected farm editor for many years of The Des Moines Register. ® Mr. Cochran quickly reviewed the effects of the ag recession of recent years. He said Iowa lost 11,000 far mers, 275 implement dealers (thre per county!); 137,000 people left thi state, and 40 banks were closed. He added, “ Now, I have had to spend 80 percent of my time on the drought. W e formed a Task Force of 32 to people who have been looking a how to help farmers get through the worst of it. M ost of our efforts and suggestions wound up being im plemented by U SD A Secretary Lyng or being enacted into law by » Iowa News 57 More Pictures from Iowa Bankers Convention • Final convention speaker Carl Pohlad (center), pres., Marquette Bank Minneapolis, is picutred with, from left: Jock Stevenson, ©pres., First T&S, Cedar Rapids; IBA Pres. Clair Lensing; IBA Sr. V.P. Wes Ehrecke, and Doyle Ruble, pres., Iowa State Savings, Clinton. Mr. Pohlad is owner of the Cedar Rapids and Clinton banks. I» LEFT— Data Business Equipment was on hand to visit with bankers at the convention. Taking part were, from left: Jim Landuyt, Des ©Moines; Parker Schmitz, Des Moines; Bob Chittenden, pres., Farmers Sav., Mitchellville, and Tom Kolb, Des Moines. RIGHT— Enjoying a shoe shine, compliments of MidAmerica Corporation were, from left: Bill Clark, acct. mgr., Financial Information Trust, Des Moines, and Jerry Trudo, v.p., Merchants Natl., Cedar Rapids. LEFT—Present at the First Natl., Omaha Dinner at the Wakonda Club were, from left: Gerry Tomka, v.., and his wife Rosie; Jim Grotenhuis, Sec. State, Stanton, and his wife Kathryn, with Marty McCartney, pres., United Natl, of Iowa, Sidney, and Pat. RIGHT— Also enjoying the evening were, from left: Pat Moehn, pres., Commercial Sav., Carroll, and his wife, Carlene; Timmy and Bill Miller, pres., Polk City Sav.; Ginger O’Neal, host bank, and Bruce Lauritzen, pres., host bank. LEFT—Welcoming guests to the Bankers Trust convention reception were, from left: Tom Smith, exec, v.p.; Dennis Wood, pres. & c.o.o.; John Chrystal, chmn. & c.e.o.; John Ruan, chmn of exec, comm., and Ben Eilders, sr.v.p., all with host bank. RIGHT— Visiting with a banker ^ vas , left, Jeff Rodman, v.p., MABSCO Capital, Inc., Des Moines. Mr. Rodman presented “Farm Lending and Farmer M ac—The Secondary Market Arrives.” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Northwestern Banker, October, 1988 58 Iowa News LEFT—Showing their wares at the Brandt Money Handling Machines, Omaha, exhibit were, from left: Rudy Carey, Herb Duysen, Dennis Steel and Mark Grimes. RIGHT— Promoting the Graduate School of Banking in Colorado were, left: Norm Skadburg, IBA trustee and pres.,( First State, Webster City, with Kathy Jones, Boulder, Colo. ENJOYING First Interstate Bank of Des Moines reception were, from left to right: Bob Millen, pres, of host bank and Happy; Jim Eilers, s r .# v.p. of First Interstate; Marilyn and Bill Beohm, pres., Tama State; Doug McDermott, pres., Home State, Jefferson, and Jan; Robert Gulling, pres., Monroe Sav., and Chris and Randy Steig, v.p., First Interstate. Congress. W e feel that without these regulations and the Disaster Relief Bill we would have lost an ad ditional number of farmers.” Mr. Cochran added, “ All you have to do is look at what happens with ag processing companies and related ag industries to see how important farming is to the entire nation. I don’t think the $3.9 billion price tag on drought relief will help much. W hat we need is more rain to replace the large deficit in sub-soil moisture throughout the state.” Mr. Furleigh reviewed effects of the 1985 Farm Bill, then discussed in some details the conservation measures being pursued, including the cropland reserve program aimed at putting away up to 69 million acres of highly erodible land. “ The initial goal,” he said, “ is 45 million acres and we are now at 23.5 million acres in the CR P.” Mr. Furleigh said one of the current problems facing his department is how to administer the Drought Assistance Act. He said specialists from his staff were attending a meeting in Dallas, Tex., to get details about handling ap plications. Lt. Gov. Zimmerman said “ we can’t really know our losses from the https://fraser.stlouisfed.org Northwestern Banker, October, 1988 Federal Reserve Bank of St. Louis drought until harvest. Some farms have had their crops wiped out, while others in the same community have fine crops. This creates stress that must be dealt with in the con text of community reactions, in which bankers play a great part. W e were just thinking about phasing out our ‘hot line’ but we have in formed the Extension Service we will fund it one more year. The state government is on hold looking at the drought until we know the actual ef fects of the drought and how it af fects all services of state govern ment.” F m H A Director Bob Pirn said, “ W e ’re making progress with the Fm H A Disaster Program despite the drought.” He noted that “ 40 percent of farmers in the state have drought insurance and another 40 percent probably wish they did have! F m H A will have a Drought Assistance Program and we’ll come in with and behind the A SC S pro gram.” Mr. Pirn also added, “ W e will continue to prom ote the Guaranteed Loan Program. A number of our borrowers will be af fected by the restructuring regula tions. This means extending longer terms, but mainly writing down some loans.” Moderator Don Muhm stated, “ 1 ^ think Iowa is the best kept secretw around. I am optimistic, for agricul ture here is looking better and I have confidence in its return.” A n extended question and answer ^ period concluded the A g Breakfast. Tuesday Concurrent Sessions Tuesday morning bankers were once again able to select to attend two of the concurrent sessions o f - ^ fered. Martha Steincamp, acting region al counsel for the Environmental Protection Agency, Kansas City, Mo., addressed the topic, “ Under q ground W aste Disposal Liability.” She advised bankers as to how they can best protect themselves from costly liability of this type. Acts of banks which may result in # liability include: 1. foreclosure on polluted property; 2. taking over management of a debtor with polluted property; 3. obtaining the right to have a third party m a n a g e# the debtor; 4. installing an agent to take over management; 5. providing payment to other creditors of the debtor. M s. Steincamp urged bankers t o # be careful if a debtor uses hazardous Two Stronger Correspondent Banks The National Bank of Waterloo ® 411 ^ ® G> Peoples Trust and Savings Bank The National Bank puts its financial strength and outstanding correspondent banking services to work for a larger num ber of banks in Northeast Iowa. Our state of the art com puter processing equipm ent is designed to m eet all your needs and is one of the largest processing centers in the state. Even m ore important, the experienced m anagem ent team ca n provide advice and banking expertise for all financial questions. We are responsive to your needs. You can now put our unm atched com bination of an experienced team and expanded services to work for all your correspondent banking needs. Give us a call for m ore det ai l s. . . 1-800-772-2411 or 319-291-5200. Thomas R McDermott Josef M. Vich Vice President Sr. Vice President John Cunningham Now the sam e financial strength and services in correspondent banking are available to bankers through Peoples Trust and Savings Bank of Indianola, an affiliate of Iowa National Bankshares and The National Bank of W aterloo. We offer full services including purchase of excess funds, bond advisory; data processing services, autom ated accou nts receivable billing system s and other com plete correspondent bank services. In Indianola, call 515-961-6241 for more details on our expanding correspondent bank department. Put our financial strength, our financial perform ance and our continued financial growth to work for you. Call any m em ber of our team for more information. Everett R Brown President Vice President Mike Coppess, CPA Vice President Eileen Thompson Assistant Vice President — T’ | J ¡T il I rP 1 >r Erling Schmiesing Wm. J. Rickert James Freet Dennis Thoren Leroy C. Bell Robert Cook Charles E. Yagla Executive Vice President Sr. Vice P resident Sr. Vice President Assistant Director Assistant Vice President Assistant Vice President Data P rocessing O fficer T h e National Bank Peoples Savings Bank 100 East Park ■Waterloo, IA 50703 ■(319) 291-5200 515-961-6241 EAST SIDE SQUARE - WEST ROADS CENTER INDIANOLA, IOWA OF WATERLOO https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FDIC Insured up to $100,000 Subsidiary of Iowa National Bankshares Corp Iowa News 60 PICTURED at Security Natl, of Sioux City breakfast were, from left to right: Florence and Ray Erlandson, pres., Cherokee State; Gene VISITING at Norwest Bank of Des Moines reception were, left to right: Skip and Kim Bright, v.p., Keokuk Savings B&T; John Nelson, chmn. of Norwest Des Moines, and Kay; Ed and Martha Johnstone, pres., Keokuk Savings; Lynn Horak, pres., Norwest, and Charlene; Ray Erlan£ son, pres. Cherokee State, and Florence, and John Rigler, v.p., Norwest, and Cheryle. chemicals, or produces them as a by product. Banks should check if land has been previously used for such purposes or for a landfill or waste site, or if underground storage tanks are present. She recommended con sidering an “ environmental audit’ ’ by a qualified expert. Bankers may also seek information on real estate or companies by contacting the Freedom of Information Office at the E P A in Kansas City. A presentation on Farmer Mac was given by Jeff Rodman, vice president of marketing, M A B SC O Capital, Inc., Des Moines. He began by relating figures which indicate higher farm operating loans are predicted for 1989. “ Farmer M ac,” he said, “ is a tool to help us deal with these [increases].” Regarding the upcoming offering of Farmer Mac stock, Mr. Rodman said banks must own stock to be able to use Farmer Mac, and the stockholders will elect the perma nent board, “ a very key group of people.” Mr. Rodman recommended that bankers begin to to keep an eye out for organizations such as M AB SC O and Prudential which will become Farmer Mac loan pool assemblers. “ You will have a tremendous https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis amount of communication with the pool assemblers, not like with Fan nie M ae,” he said. A main difference will be that pool assem blers themselves will sell loans. Mr. Rodman went on to relate facts about loan pools and other details of the new secondary market. He closed by urging bankers to look carefully at the stock offering. “ If commercial banks don’t get in volved right now with the develop ment of Farmer M ac,” he said, “ this tool will be gone.” Dr. Douglas Austin, president of Austin Associates, Toledo, Oh., and his associate Mike Hopson, vice president in charge of the recentlyopened Des Moines office, gave a detailed discussion during the con current session on “ Your Board of Directors and the Credit Review Process.” Following an eight-page outline distributed to the overflow crowds in attendance at both ses sions, they stressed the respon sibilities of directors for knowing their duties specifically in the area of credit—before the loan is dis persed, while the loan is outstan ding, and when the loan has to be collected or charged off. Dr. Austin and Mr. Hopson went into detail about the documents directors should have from bank management for proper review of loans, and also added a sample board meeting agem da. • In her concurrent session on “ Managing Relations with Bank Regulators,” Attorney Mary E. Cur tin of Minneapolis used a detailed outline that was distributed to an bankers at this well-attended ses sion. This covered such items as for mal and informal enforcement ac tions, the C A M E L rating sy ste i^ provisions generally found in Cease and Desist Orders and/or Written Agreements, factors to remember in dealing with enforcement actions, and common misimpressions of suc^| actions. Also popular among attendees was the “ Negotiating Skills for Bankers” session presented by con sultant Art Pulis of Durango, C o l^ 50-Year Bankers Lunch Oliver Hansen, chairman of the Liberty Trust & Savings Bank, Durant, presided at the I B ^ 50-Year and Past Officers Club. He told the large crowd of veteran bankers, “ If this group had written the book on A g Credit from its ex periences, and it had been ma<% mandatory reading for bankers, the Northwestern Banker, October, 1988 Rob. Ron. Louis. Shirley. Joe. Jim. ILeft to right: Rob [ooksey, Marketing Representative; Monahan, (Marketing Officer; Louis Holmes, Marketing Represen tative; Shirley IHeishman, POS/ |ec# Coordinator; je Ehlers, Market|ing Representative and Jim Mrazek, Marketing Representative. First-rate credit card services - on a first-name basis. W h en you choose D avenport B an k ’s complete line o f credit card services, you’ll get to know us on a first-name basis. W e take pride in giving the kind o f service you e x p e c t- prom pt, personal attention to all your goals and needs. W e’ll keep you on a first-name basis with your customers by putting your b a n k ’s name on every card and application. T h e y ’ll keep their im portant ties to you - the bank they’ve come to trust. Y o u ’ll be impressed by our great program. W e offer some o f the lowest fees, finance charges and m erchant pricing around. But it’s our friendly, professional staff - and the service they provide after the sale - that will make you a believer. Call (319) 3 83-3407 for more inform ation or to arrange to have a representative call on you. D/Vt/EiNPORT BAIMC ------------------------A N D T R U S T C O M P A N Y ----------------------- https://fraser.stlouisfed.org 203 Federal Reserve Bank of St. Louis MEMBER FDIC WESTTHIRD STREET, DAVENPORT, IOWA 52801-1977 Iowa News LEFT— Bill Brenton (second from left), chmn. Brenton Bank, Des Moines, and Dick Jacobson (second from right, pres, of Jacobson Wholesale and dir. of Banks of Iowa), were among guests at LaSalle Natl, of Chicago luncheon hosted by Del Rogers (left), v.p.; Nick DeLeonardis (center), sr. v.p., and Wayne Bismarck (right), v.p. RIGHT— Northern Trust of Chicago dinner hosts included (at extreme 0 ft) Mark Short, 2nd v.p. and Mike Kubacki (rear), v.p. & div. head, and Gigi Short, with guests Jack Rigler, pres., Central State, Muscatine, and [ June; Scott Fetner, pres., Natl. Bank of Waterloo, and Joanne; Mitzi and Nick Schrup, chmn., American T&S, Dubuque, and Dick Summerwill, pres., Iowa State B&T, Iowa City. Farm Credit System, regulators and Congress, we wouldn’t have had the troubles we’ve gone through.” After lengthy meetings by the nominating com m ittee (of at least three minutes), Joe Gronstal, director and former president and chairman of the Carroll County State Bank in Carroll, was designated to succeed Mr. Hansen as president of this prestigious group for the coming year. His duties will consist of presiding at the 1989 convention luncheon. Closing General Session Tuesday afternoon’s general ses sion opened with a presentation by Shelburn Wilkes, Wilkes Manage ment Associates, Orlando, Fla., en titled ‘ ‘Parade of Presidents.” Mr. Wilkes is an expert on American presidents and amused his listeners with an anecdotal trip from George Washington to Ronald Reagan. IB A Executive Vice President Don Muhm, Des M o in e s R e g is te r editor, moderated the ag panel. Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis farm and CEO Neil Milner next addressed the convention. He lamented bank ing legislation currently before Con gress, saying banks have ‘ ‘no good options in W ashington.” He also called for unity in the banking in dustry, stressing that unity exists on all the important issues. He urged bankers to be persistent in contacting their legislators, saying, ‘‘W e do have a lot of friends in the legislature, on both the state and na tional levels, and we need to not be timid in telling them what we want.” Alan Tubbs, president and CEO of First Central State Bank, DeW itt, relayed highlights of the A B A ’s FSLIC Oversight Commit tee Report. He told bankers that the solution to the FSLIC problem is not simple recapitalization, but will require insurance reform. He agreed with Charles Pistor’s earlier com ments that the banking industry will be involved in the resolution of this problem. O. Jay Tomson, chairman and CEO of Citizens National Bank, Charles City, shared his reflections on the matter of the FSLIC. He said, “ The desire to clean up this mess does not exist to an equal degree among all the players. Those of us with a strong interest in the out come must stand watch . . . W e should not stand ready to inherit something that is less than accep table.” Mr. Tomson set forth five ac complishments toward which he feels the banking industry must work: 1. equal capital requirements for all players; 2. equal accounting practices for all players; 3. equal regulation for all players; 4. equal taxation for all players; 5. a com plete re-examination of deposit in surance. • The afternoon session closed with I keynote speaker Carl R. Pohlad, president of Marquette Bank Min-1 neapolis. Mr. Pohlad opened withl reminiscences of his youth in \Mist[ Des Moines, and went on to share! the principles which have brought [ him success in banking. “ D on’t get fancy with your bank ing services,” he said. “ You hav^tol get to the people. Banking is a I people—people—people business. ” He related his commitment to visit! personally with customers dailw atj the bank and exhorted his audie®e,[ “ Know your customers . . . you say,I ‘I know, I know!’ but you don’t do| it !” Mr. Pohlad described his bank sl position, ranked third in the Twin! Cities, as one which requires not be-1 ing all things to all people. “ W ej defined our market niche and try to| reach it—and work at it,” he said. Bob Pirn (left), FmHA Iowa st. dir., was awarded a plaque at the Ag Breakfast for distinguished service by Chuck Souder (center), retiring Ag Comm. chmn. and v.p., 1st Sec. B&T, Charles City, and Jeff Plagge, new Ag Comm., chmn. and exec. v.p .,#st State, Webster City. Flexibility is what makes our credit insurance program stand above the rest! Credit Life and Disability insurance through Iowa Bankers insurance & Services, Inc. offers you the flexibility you need to tailor your coverage to your customers' specific needs. For instance, we give you the choice of a comprehensive blanket program for open-end home equity loans or single premium program for closed-end loans. In addition, programs are also available for ag/business and mortgage loans as well as collateral protection (L.S.l.) coverage. When it comes to insurance, IBIS can give you the professional training you and your staff need to increase your bottom line. Call Cary Livesay or Ron Meyer at IBIS today 1-800-532-1423, or return the coupon below fo r more information. ! --------------------------------------------- ■ S I w a n t ta iio r-m a d e cov erage! P lease c o n ta c t m e re g a rd in g : C re d ito r P ro te c tio n ____ L e n d e r s S i n g l e i n t e r e s t ____ A n n u a l R e n e w a b l e T e r m — _____M o r t g a g e L i f e / D i s a b i l i t y 1 l a m a l s o i n t e r e s t e d in: ■ — P ro p e rty /C a s u a lty — G ro u p L ife /D is a b ility in c o m e /A n n u itie s 1 1 ■ w 1 ____ C r o u p H e a l t h / D e n ta l/V is io n ____O t h e r Name T itle Bank 1 Address 1 C itv ■ ZiD Phone R e t u r n t o : I o w a B a n k e r s i n s u r a n c e & S e r v i c e s , I n c ., 300 L ib e rty B u ild in g , Des M o in e s , Io w a 50308 . Iowa Bankers Insurance & Services, Inc. _ l Owned by all banks in Iowa fo r the benefit of Iowa banks. An affiliate o f the Iowa Bankers Association https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 64 Iowa News LEFT— Hosts at FirsTier Bank of Omaha luncheon included, from left: Gene Noell, v.p.; Dick Yeshnowski, v.p.; John Wear, a.v.p.; Joan lr gram, Inv. off., and John Clements, v.p. RIGHT— Scott Fetner (center), pres., Natl. Bank of Waterloo, visits with Bob Jamerson (le f£ ai chitect, and Bob Buckley (right), pres., of Kirk Gross Co., Waterloo. AWAITING the crowd arrival for the Sunday evening “Court Avenue Experience” were, from left: Mike Hopson, v.p., Austin Associates, De Moines, with Sharon Sievers; John Sorensen, v.p.; Wes Ehrecke, sr. v.p., and Barb Lowe, convention coord., all with IBA. RIGHT— Othe IBA staff members take a well-deserved break between sessions at the convention center. But most important, he empha sized, are the fundamental skills of banking. Mr. Pohlad told his au dience the key to success is to train your people in the basic skills they need, and retrain them often. His maxim: “ Teach your employees the fundamentals over and over.” Inaugural Dinner and Show The Inaugural Dinner and Show Tuesday evening at the Marriott Hotel was an elegant affair. John K. Hanson, chairman of Manufacturers Bank & Trust in Forest City, and his wife, Louise, provided beautiful flowers for each of the several hun dred ladies in attendance. Retiring President Clair J. Lensing presided at the dinner to install the new officers. Incoming Presi dent Don Snyder presented a gift to Clair and his wife, Mary, from the IB A —a beautifully framed litho of a Maynard Reese wildfowl painting. Mr. Snyder stressed three areas of strategic concern to the members of the IB A . First, he said, “ we all need to be involved in planning, especial ly in our legislative efforts. A s bankers, we have no choice but to be https://fraser.stlouisfed.org Northwestern Banker, October, 1988 Federal Reserve Bank of St. Louis involved to make our voices and our opinions heard. Second, we must pursue strongly our programs of education and training. Third, membership products and services is an area that will be reviewed often to make sure we are meeting the timely needs of member banks. Last, we will continue studying the association structure to make sure it maximizes your investment with IB A .” Mr. Snyder began his brief pre pared remarks with this Irish toast: “ M ay you have the hindsight to know where you’ve been, the fore sight to know where you’re going, and the insight to know when you’re going too far.” After reviewing briefly the ac complishments of the IB A in its first 100 years, he stated, “ Our hind sight is good. Our foresight is our strategic plan which is reviewed an nually and will be updated. This calls for several special efforts.” Referring to insight, Mr. Snyder said, “ I t ’s possible to go too far. This is a world of tradeoffs, com promises, and, sometimes, injus tices. If you think the IB A leader ship is going too far, tell u s .% o should also recognize that makin no decision at all is improper. I firn ly believe you and I have a stron obligation to use the best of our^bi ities in making your associatiornoei ter to serve you and our bankers.” [ Promoted in Sibley Harris J. Kruse has been ^rc moted to executive vice president o the Sibley State Bank. He has bee with the bank for eleven years, firs as a trainee, then as assistant^ic president, and most recently as vie president and cashier. Mr. Kruse succeeds Michael Mu lendorf, who is now serving as pres dent of Washington County % n lfl Blair, Neb. Promoted in Osceola A t Clarke County State % m l Diane Ogbourne has been promote to personal banking officer an marketing director. She has bee with the bank for ten years and ha been a customer service repose tative for the past eight years. Io w a N e w s 65 IBIS Celebrates 10th Anniversary CELEBRATING the Ten Year Anniversary of Iowa Bankers Benefit Plan last month in Des Moines were, from left: Juanita Fulster, a.v.p.; Frank Gleeson, pres.; Chris Wehde, a.v.p.; Martha Faring, group claims, all with IBIS, Inc., Des Moines; Neil Milner, exec, v.p., IBA, and Sylvia Richards, billing processing, IBIS, Inc. Also enjoying the reception were from left: Larry Gille, v.p.; Jim Jensen, v.p.; Merritt Krause, v.p., all with IBIS, Inc., and Wes Ehrecke, sr. v.p., IBA, Des Moines. |IT<$ Bill Payer Introduced Dale Dooley, president of ITS, ic., and other staff members were Iow a C ity recently to demmWtrate S H A 'A M Bill Payer, new service. )ver one thousaml University Fiowa students ive signed up the program, /hich will enaD. DOOLEY jle^them to pay lr education bills with their A T M :ards. This is the first time such a irvice has been offered in the inited States. É t first, Bill Payer will be ricted to A T M s and similar terlinals at supermarkets, retail ’enters and financial institutions. le program will be expanded over Din^, as utilities companies and Dtners who bill regularly are signed ip with the service. Eventually Ispecial Bill Payer terminals will be ¡installed as well. Conrad, Melbourne Banks |Announce Merger James J. Molloy, president and of the First State Bank, Conoy, has announced that the merger f the Melbourne Savings Bank into the First State Bank was completed n September 1. Melbourne will be jpatated as a full-service office and ill be managed by Ron Kemmerer, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis vice president. Ken Michels was recently added to the Melbourne staff as assistant vice president and ag loan officer. Daryl Stalzer will continue as manager of the S & M Insurance Agency in the Melbourne office. The merger brings the total assets of First State Bank to $37.5 million. W aterloo Banker Graduates From Boulder School John W . Rathjen, vice president at Peoples Bank and Trust Com pany of Water loo, has com pleted the final y ea r of the Graduate School of Banking, held at the Univer sity of Colorado, Boulder. He was am ong m ore than 460 stu dents attending J- RATHJEN the 38th session of the school. To compete, be complete! A total financial services delivery system is coming soon from IOWA BANKERS ASSOCIATION Northwestern Banker, October, 1988 66 Io w a N ew s Libertyville Bank Remodels associate administrator for manage ment assistance in S B A ’s Centra’ Office in Washington, D.C. Mr. Thomson joined S B A in 1982. Elected in Muscatine CONSTRUCTION has begun on a major remodeling project for Libertyville Savings Bank, according to President Robert Stump. An addition to the west side of the bank will double the size of the building. The expansion will give the bank four private offices, a conference room, a serpentine teller line with six teller openings, and a sit-down station, with addi tional vault storage space in the basement, an expanded waiting area, and expanded park ing facilities. Office Concepts, Ltd., specialist in the design and development of financial institutions, is in charge of the turnkey project. It should be completed by the end of the year, according to Office Concepts Vice President Ross Schoonover. Named SBA Director for Cedar Rapids District James N. Thomson has been named district director of the U.S. Small Business Administration’s Cedar Rapids office, effective Oc tober 10. He is responsible for S B A ’s finance and investment, business development, procurement assistance, minority small business and advocacy outreach. In this position, he will supervise 18 employees and SB A activities in Eastern Iowa. He had been regional administrator for Region V in Chicago and responsible for Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin for two years. Immediately prior to becoming reginal administrator, he was the district director of the Minneapolis office. He also has served as branch manager in Springfield, 111., and as Committed to making your bank stand apart from the Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Richard J. Pilcher has been elec ted senior vice president/senior trust officer of the First N ational Bank of Musca tine. For the past five years, he has been the senior trust of fic e r at th e F a rm e rs and Merchants Bank and T ru st in R.J. PILCHER Burlington. Pri or to that time, he was in private Ww practice in Grundy Center. D.M. Lamb Dies D .M . Lamb, director of the City State Bank of Madrid, died o # a heart ailment on August 22. He was 64. He re tired from the bank as vice p resid en t and c a s h ie r on D ecem ber 31, 1987, after spen ding his entire banking career D.M. LAMB of 41 years with the City State Bank. Mr. Lamb was raised in Boone and graduated from Boone H * h School in 1942. He then attended Coe College, Cedar Rapids. During World War II, he served as a lieute nant in the U.S. Army. Mr. Lamb joined City State BÊmk in 1946 as a bookkeeper. He was pro moted to assistant cashier in 1948 and to cashier in 1957. He was a director since 1960 and vice presi dent since 1965. w In 1957-58 Mr. Lamb served as president of the Des Moines Chapter of the National Association of Bank Auditors and Controllers (now ^ie Bank Administration Institute). Tie was active in numerous civic and church organizations. Surviving are his wife, Gloria; his daughter, Sandy, and his son, S t ^ e . Sandy is customer support officer of F ir s t I n te r s t a t e In fo rm a tio n Systems of Iowa, Inc., Des Moines. Steve is senior examiner in the A t lantic Field Office of the Iowa D^yision of Banking. Iow a N e w s • 67 Davenport Bank & Trust Hosts Reception and Dinner 400 BANKERS and guests from Iowa and Illinois were in attendance last month for the Davenport Bank & Trust Co. correspondent recep tion and dinner. This annual event was held at the Black Hawk Hotel in Davenport, with a reception followed by dinner and dancing. Enjoy ing the evening were, from left: John Benner, chmn. & pres., and Marilyn Evans, v.p., Bradford Banking Co., with Judy and Michael Bauer, 1st v.p., host bank. Also present were, from left: Martha and Edward Johnstone, II, pres., Keokuk Svgs. B&T Co.; Colleen and Gerry Huiskamp, chmn. & pres., Blackhawk State, Milan, III., and James Figge, off. of pres., host bank, with his wife, Sandra. IBA Consum er Services Conference To Be Held O ctober 18-19 H E Iowa Bankers Association will present “ Consumer Bankers Know the Score,“ the 1988 Conler Services Conference, on Oc>er 18 and 19. It will be held at the Marriott Hotel in Des Moines. Featured speakers at the con ference will be Dennis and Niki M e Coisti ntion of McCuistion & Associates, Irving, Tex. Also appearing will be Dr. Willie Staats, professor of banking and finance, Louisiana State University, Baton Rouge; Flynn, Des Moines attorney, and Randy Mascorella, assistant women’s basketball coach at Iowa State University. A special “ tailgate party” for parti^pants will be sponsored by Iowa Bankers Insurance & Services. The complete agenda follows: T Tuesday, October 18 A.M. % :00 Registration. 9:00 Welcome and introductions: Nancy Dunkel, IB A consu mer service committee chair and vice president and ® senior loan officer, Farley State Bank. 9:15 “ Game Plan for the ’9 0 s” — Dennis McCuistion. H):45 “ Tackling the Com peti® tion” — Dennis McCuistion. of Market Driven” — Niki McCuistion. “ They’re Number O ne!” pre sentation on customer ser vice—Niki McCuistion. 2:45 Concurrent sessions: “ Variable Rate Lending” — Dennis McCuistion. “ Preparing for the Compli ance E xam ” — speaker to be announced. “ Making Sales Calls/Incentives” — Niki McCuistion. 4:00 Concurrent sessions repeat. 5:00 Tailgate party sponsored by IBIS. Wednesday, October 19 A.M. 8:00 Continental breakfast. 9:00 “ Negotiating Skills” — Dr. Willie Staats. 11:00 “ Lender Liability—Calling the Right Signals” —Tom Flynn. P.M. 12:00 Luncheon— “ You Can Be A W in n er” — Randy M a sco rella. 1:30 “ W ays to W in ’Em Over” — Dr. Willie Staats. 3:00 Adjournment. □ ILAWLER I Austin P. Lawler & Associates, Inc. COST REDUCTION PROGRAMS Thinking about cost reduction? Our firm makes the difference. We d on ’t just make recommendations, we work with your people to im plement positive solutions. Your own staff can tell you what the problems are. But do they have the expertise to provide you with solutions? W e’ve proven that we can, in a wide variety of banks. Our preliminary analysis is designed to let us show you specifically how our services can be put to use to provide benefits to your bank. For a list of references or more information call 312-584-5757. A.M. 12:00 Luncheon; presentation on I B A ’s annual Consumer ^ Credit School. 1:30 “ Customer Service/Concept https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Austin P. Lawler & A ssociates, Inc. 40W 274 Winchester Way St. Charles, IL 60175 Northwestern Banker, October, 1988 68 Io w a N e w s IBIS Annual Golf Outing Held IOWA Bankers Insurance & Services, Inc. held its Eighth Annual Golf Stag last month in various locations across the state. IBIS, in con junction with The Credit Life Insurance Company of Springfield, III., sponsored the event in three Iowa cities: Cedar Falls, Ottumwa and Carroll. Execellent participation and good weather marked this year’s event. Pictured above at the Beaver Hills Country Club in Cedar Falls are, from left: John Stull, v.p., Lincoln Svgs., Reinbeck; Lynn Bonjour, v.p., Home Tr. & Svgs., Osage, and John Hudson, a.v.p., The First Natl., Waverly. Also pictured, from left, are: Charles Yagla, data proc. off., Natl. Bank of Waterloo; Gary Livesay, v.p., IBIS, Inc.; Bob Beilis, v.p., Fairbank St., and Jack Hawks,, v.p., The Credit Life Co. # Changes Told in Farley The following promotions and staff changes have been announced by the Farley State Bank: Nolan L. Ford has been promoted to assistant ag loan officer. He has been with the bank since February, and prior to that worked for a year and a half with the Farm Credit Ser vices in Webster City and Nevada. t ]et a Second Kenneth J. McDermott has joined the bank in the teller and operations department. He is a recent graduate of Cornell College in Mount Vernon. N.L. FORD Sioux City Bankers Complete Graduate School of Banking Debbie D. Smith, assistant v i # president, and Ronald A. Jorgensen, controller, of First National Bank in Sioux City, have completed their final year of the three-year Graduate School of Banking, Boulder, Colo.# K.J. MCDERMOTT Opinion M a k e s u r e the a d v ic e fo r D. SMITH y o u is the b est a p p r o a c h Both bankers won honors for high exam scores. In addition, IV#. Jorgensen was a member of the win ning bank simulation team. (to b u ild o r r e m o d e l) . C o n s u lt w ith a p e r so n w ho has 25 years o f b a n k b u ild in g e x p e rie n c e p e r s o n a lly (free fo r the a s k i n g ) . C o n ta c t: P.J. TRUMM N.J. SCHMITT Patricia J. Trumm has been pro moted into the installment loan de partment. She will also be in charge of student loans. Nancy J. Schmitt, who works at the bank’s Holy Cross facility, has been promoted to manager there. Elected in Eldora 1 :7 . Xooker Associates BANK DESIGN CONSULTANTS Box 7266 PH.1-712-262-1499 SPENCER, IOWA 51301 Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis R. JORGENSEN Jim Brown has been named presi dent and acting chairman of the board of Hardin County Savings Bank. He succeeds his late father, Robert R. Brown, in both positions. Jim Brown joined the bank in 1974 and has spent the last six years serving as executive vice president. Promoted in Dubuque Robert D. Anderson, Jr. has been promoted to assistant vice presi dent, marketing of D ubuque Bank and Trust C om pany. He joined the bank in 1987. Prior to that, he was em ployed at Lange Insurance Co., In c. as sales m an a g er. H is background in- R- ANDERSON, JR. eludes eight years in insurance sajps and management. 69 ^Prom oted in Burlington C.H. Walsh, president of Farmers & Merchants Bank & Trust, has an nounced promotions and re-assign ments in officer personnel. • Leonard W . Lane, formerly vice president and comptroller, has been elected vice president and trust of ficer. William A . Kuehn, vice president •and farm representative, has been promoted to vice president and senior loan officer, and will continue his responsibilities as head of the farm department. • Russell E. Larson, assistant vice president, has been transferred to the commercial loan and real estate loan departments, having previous ly served as commercial loan officer. ASPA Plans Iowa Conference The second annual State Con ference of the American Society for P ersonn el Administration will be held at the Marriott Hotel in Des Moines on November 9 and 10. General session presenters in c lu d e Thomas G. Kelley, vice "r e s id e n t—human resources at the Benjamin Franklin Savings and Loan Association of Portland, Ore.; Gwen L. Stern, Midwest regional ^irector for the W yatt Company; ueff Hallett, president of TRAC , Inc.; and Dr. L. Robert Keck, presi dent of Boulder Graduate School. For more information, contact ^ h a r o n Ward, ASP A /Iow a ’88, c/o Holmes Murphy, 420 Keo W ay, Des Moines, IA 50309. A p p o in te d in Ankeny John “ Swede” Lundstrom has been appointed to the board of direc tors of Hawkeye-Ankeny Bank & Trust. He is manager of Iowa Real t y ’s Ankeny office. He served for eight years as an Ankeny City Coun cilman, and currently serves as first vice president and president-elect of the Ankeny Chamber of Commerce. • There js^ a Difference in Banks Trust, confidence, loyalty . . . w ords our custom ers use to describe how they feel toward Valley National Bank. Valley Bank is experiencing substantial grow th . .. in deposits, ...loa n s, and . .. in earnings. That’s because w e maintain a highly skilled staff, offer top service, and perform well financially. We w elcom e your inquiry . . . Rem em ber, there is a difference in banks. Retired in Wyoming Lucile J. Von Sprecken has retired from Citizens State Bank, |Wyoming, after 30 years of service, she held the offices of vice president and cashier at the time of her retire ment. Geraldine F. Levsen has been pro m o te d to vice president and cashier of the bank. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Valley National Bank m Main Office-Sixth and Walnut M em ber FDIC A “ BANKS OF IOWA” BANK For Professional Correspondent Service call 1-800-622-7262 Northwestern Banker, October, 1988 70 you have my heartfelt gratitude. M y only request is that you give Paul* and his associates the same oppor tunity to know you and serve you with a high quality magazine. M y last grateful acknowledgment goes to my wife, Peggy, my partner for 45 years next February 26. She has given purpose to my work, sound counsel at critical times, and guidance to our three sons and two daughters when my work was de manding. I know that it was because of her that we have the gift of so many personal friendships among you. She has truly been a partner ( and she joins me in this wish that our paths may cross often in the fu ture. Vaya con Dios! Ben Haller, Jr. Publisher Hunter R. Rawlings III, president of the University of Iowa, has been elected to the board of directors of Norwest Bank Des Moines, N .A . He became the 17th president of the University on August 1, succeeding James O. Freedman. * * * John F. Ambroson was recently elected first vice president at W est ACROSS THE DESK. . . (Continued from page 9) This October issue you are reading will be the last one under the name of the N o r th w e ste r n B a n k e r . Our sale contract was effective as of October 1, 1988, but I will con tinue publishing the N o r th w e ste r n B a n k e r Weekly Newsletter through the month of October for Paul. That last issue will be mailed October 28. That will be exactly 43 years from the time I started work here on Oc tober 29, 1945. I have been asked by Paul to continue writing a monthly feature article or editorial for at least the coming year, which I plan to do. * * It is natural, I suppose, at a time like this, to reflect on the many events of one’s career; however, such thoughts on 43 years in this dyna mic, changing business would fill a book. The over-riding memory I can carry with me always is one of the so many good and capable people we’ve known in the banking industry. Northwestern Banker, October, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D es M o in e s S t a te B ank, W est D es Moines, by its board of direc tors. Mr. A m b ro so n p r e v i ously served as a se c o n d v ic e p r e s id e n t in commercial len J.F. AMBROSON ding at Norwest Bank Des Moines, N .A . These include ones who manage small banks exceedingly well, and others who manage large banks ex ceedingly well—the size made no dif ference; it was the high quality of in dividuals that stands out. From these, my wife and I have been greatly blessed with many cherished friendships which will stay with us always. The riches of this world may elude me, but I am wealthy in the know ledge that so many friends like you share the same lofty goals of con duct espoused in the “ Credo” of my Alma Mater, Creighton University in Omaha. That Credo begins with “ W e believe in G od,” continues through several short statements re lating to the dignity and responsibiities of each person, then concludes with this statement: “ W e believe, briefly, in the teachings of Christ, who held that morality must regu late the personal, family, economic, political and international life of men if civilization is to endure.” For your friendship and your loyal readership these past 43 years, # CHICAGO N E W S .. . (Continued from page 38) was with the Chicago Fed for 41 ^ years. * * * Marie A. Fotino has been named assistant vice president of financial® services at Avenue Bank of Oak Park. She joined the bank in 1971 as a teller. She has held a variety of positions, including financial service officer, which she has held since® 1986. INDEX OF ADVERTISERS October, 1988 American Express Travelers Checks................................. 71 Bank Building Corporation................................................. 23 Bankers Trust Co., Des Moines ......................................... 50 BICS Banking System ................................................................ 11£ Computers Transportation Services, Ltd............................12 Davenport Bank &Trust Co.................................................. 61 First Bank System, Minneapolis................................... 36-37 FirsTier Bank Omaha/Lincoln....................................... 48-49 First National Bank, O m aha............................................... 45 Graduate School of Banking, M adison................................... 31£ Gross, Kirk Co., W aterloo................................................... 55 IAC G roup..............................................................................10 IBA Securities........................................................................65 Investment Centers of America, Inc................................... 4 Iowa Bankers Insurance & Services, Inc.............................63 Kooker, Earl F. Associates................................................. 68 LaSalle National Bank, Chicago ....................................... 7 ® Lawler, Austin P. & Associates, Inc.....................................67 Marquette Bank Minneapolis ....................................... 3,32 Merchants National Bank, Cedar R ap id s ........................ 2 Midwest Management Consultants, Omaha .................. 8 Modern Banking Systems, Inc............................................. 21 National Bank of Commerce, Lincoln..................................... 42a National Bank of W aterloo................................................ 5 9 ™ North Central Life Co., St. Paul............................................13 Norwest Corporation, Minneapolis................................... 72 Norwest Bank M innesota................................................... 35 Norwest Bank W isconsin................................................... 39 Office Concepts, Ltd., Waterloo......................................... 66 United Missouri Bank, Kansas C ity .......................... * . . . 1 4 £ Valley National Bank, Des Moines..................................... 69 ---------------- F 2 nd In A Series From American Express 1---------------- TRAVELERSCHKHK FACTS AMERICAN EXPRESS* TRAVELERSCHEQUES ARE ACCEPTEDBY 24%MORE MERCHANTS THANVISA" TRAVELERSCHEQUES. 100 % 90% 80% 70% 60% 50% 40% 30% 20 % 10 % AMERICAN EXPRESS TRAVELERS CHEQUES VISA* TRAVELERS CHEQUES 78% I n a recent nationwide study of merchants who accept travelers cheques, 97 % of those surveyed said they accept American Express Travelers Cheques versus only 78% for Visa-logo cheques (Source: L.R.S. Research, June 1988). This significant advantage is one reason American Express Travelers Cheque sales have skyrocketed by more than $4.6 billion from 1983 to 1987, while Visa-logo cheque sales have declined by $188 million (Source: Visa annual reports). So if you’re selling Visa-logo cheques and yoursales haven’t lived uptoyour expectations, why not switch to the Cheques that have unparalleled sales year after year. American Express Travelers Cheques. If you’d like more information on howto increase your sales, call Lou Eilerat 1-800-221-7282. Travelers Cheques * Visa-logo travelers cheques are actually issued by Citicorp, Barclays Bank and BankAmerica. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ■ lnc That’s BankTIES (Terminal Information and Entry Services), the cash management tool that Norwest has created. PC-based. In-house. With early and smart in mind. Early, as in 6 a.m. (Central time). That’s when current, complete and precise balance and transaction information is at your finger tips each business day. Smart, as in better cash management through timely BankTIES™ access to Quotes Rate Reporting Service, and the ability to make “early-smart” moves like wire transfers and ACH transactions. And immediate con firmation through BankTIES™ Stop Payment, © 1988 Norwest Banks Members FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a totally integrated, on-line, real-time stop payment service. Norwest’s complete in-house operation is the key. To short-cut third party vendors. To deliver simpler, quicker, better, cheaper and more secure reports. Customized reports, if you like. Ask about BankTIES™ And about Norwest’s other cash management systems that can help make your people smarter. Sooner. SNORW EST BANtCS CORRESPONDENTBANKING
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