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b rask a vBanK E xperim ent# with A lternative Cr D allas Will H ost https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • D r. Doug A u stin D is^ iissfes^ d rnirti^ jati^ e C J erry Trudo 319/398-4306 D ick Retí 319/398-48* Louvar 319/398-4204 D en n is Earhart 319/398-4789 Terry M artin 319/398-4320 A ndy A p p leto n 319/398-4314 Correspondent Division Toll-Free 1-800-332-5991 Merchants National Bank is i https://fraser.stlouisfed.org C edar Rapids, Iowa 52401 Federal Reserve Bank of St. Louis Member F.D.I.C. A BANKS OF IOWA BANK D o u g Bass 319/398-4837 Now Plus System' ATMs Will Be Among The M ost Popular Attractions In New Orleans. New Orleans’ renowned French Quarter offers a unique experience for millions of tourists each year. Amidst this old world charm and throughout New Orleans, visitors will soon be able to access PLUS SYSTEM Automated Teller Machines (ATMs). Mr. Joseph V. Wilson III, executive vice president of First National Bank of Com merce, was instrumental in bringing First NBC into the internationally shared PLUS SYSTEM ATM network. “Our decision was driven by the exceptional leadership we saw within the PLUS SYSTEM organization,” cited Mr. Wilson. “Other factors included the recent Visa affiliation and the PLUS SYSTEM network’s strong geographic coverage. We wanted to give our customers the high level of service and convenience they now have through our tie with the GulfNet regional network, but on an international basis. The PLUS SYSTEM network’s broad coverage and continued rapid growth coupled with its System excellent service record satisfied our objectives extremely well.” Isn’t it time your financial institution joined the leading ATM network as a THE LEADING PLUS SYSTEM member? For complete details on all the options available, call Ron Reed at Plus System, Inc., (303) 620-7318. ATM NETWORK Plus https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 Sayre Elected President of Robert Morris Associates NommERN SEPTEMBER 1987 • 94th year • No. 1488 MEMBER OF AUDIT BUREAU OF CIRCULATIONS MEMBER BANK MARKETING ASSOCIATION OLDEST FINANCIAL JOURNAL SERVING THE CENTRAL AND WESTERN STATES ON TH E COVER John Chrystal, chairman and CEO of Bankers Trust Company, Des Moines ($550 million assets), and chairman of Iowa Savings Bank, Coon Rapids, la. (assets $31 million), recently completed his 14th trip in the past 27 years to the Soviet Union, all at the invitation of what nation’s Ministry of Agriculture which has asked him to critique Soviet agriculture and offer suggestions for improvement. Mr. Chrystal is shown in the center of the cover photo (in plaid shirt) with Russian hosts show ing him a tea plantation in the Caucasus. His interesting story begins on page 22. O T H E R FE A T U R E S 6 21 26 Editorial Agricultural update Help your ag customers change Nebraska banker Kelly Holthus leads way with alternative crop experiment 28 ABA convention program Dallas will host nation’s bankers October 17-21 30 Association executives meet Central States Conference leaders share productive ideas 32 Administrative orders— Part II Dr. Doug Austin tells how they happen, what to do 36 Understanding interest cycles Ron George analyzes how to cope with their changes DEPARTM ENTS 38 40 43 Minnesota Twin Cities Illinois 45 45 52 South Dakota North Dakota Wyoming 54 57 60 Colorado Nebraska Omaha IO W A C O N V E N T IO N S E C T IO N 65 68 74 79 80 93 101st Convention Program You Will See Them at the Convention Interview with IBA President Russ Howard Bill Talen Flies His Plane to Munich Group Chairmen Report Ag, Business Conditions Des Moines News 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. 1488 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. Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis William H. Sayre, executive vice president, Fidelcor, Inc. and Fidelity Bank, Philadel phia, was elected p re s id e n t of Robert Morris A sso c ia tes in the association’s annual election on A ugust 7. RMA is the na tional associa tion of bank loan and credit offi cers. Thomas E. Boland, vice chairman and chief administrative officer, First Atlanta Corporation and its lead bank, The First National Bank £ of Atlanta, was elected RMA’s first vice president. David L. Eyles, chief credit officer, Chemical Bank, New York City, was elected second vice president. All terms are for one year. % United Missouri Promotions United Missouri Bank of Kansas £ City, N.A. has announced the follow ing promotion and elections: Robert S. Harr has been pro moted to senior vice president in the commercial banking department. He £ leads the commercial and residential real estate lending for the bank. Mr. Harr joined United Missouri in 1977 after being affiliated with other banks in Maryville, Mo. He holds a % bachelor’s degree in finance from Northwest Missouri State Universi ty in Maryville, Missouri. M. Diane Summers has been elected an assistant trust officer in % the employee benefits department of the trust division, responsible for administering retirement accounts for employee benefit customers. Ms. Summers joined United Mis- # souri Bank in 1984 as a pension trust administrator. Theresa J. Wright has been elected assistant corporate trust officer in the trust division where • she is responsible for the adminis tration of various corporate trust ac counts. She was previously associ ated with another financial institu tion before joining United Missouri • in 1984 as an administrative trainee. Mary A. Batson has been elected a personal banking officer where she is responsible for retail sales and customer service. ® WE PUT YOU INTO THE FULL-SERVICE INVESTMENT BROKERAGE BUSINESS... corosiH ikadimk summ m \ ?3*r am.8sh IS J27SOO 1.« 2 iO iff » t äh a i YX 0* 1 «w « i I*. M il «S.H BSHÏ not* 2Y H M m t S Î 590/0 I f .628 tMCH « -V »ÄH aw » Î3.S9 E ja 42* « a X 205 ■<î Ì-: ■■ t 4?»,H TX i tWSBWHnS* II CSKXX iö&m W £t YH Yl HENS 43 K 5 .9 « INCH $.198 IICH m.m +.20 »4.65 +.65 520.5 C PROFITABLY. First Bankers Securities C O R P O R A T IO N https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 200 Brick & Tile Building • Mason City, Iowa 50401 Toll Free - (800) 952-7899 * In Iowa - (800) 325-3030 6 Across The Desk from the Publisher Dear Readers: Two events stand out in my life as the epitome of what it means to be a real banker, one who can combine good business judgment with a human understanding of one’s genuine need at a crucial time. I have shared these rather personal and emotional stories publicly on only one occasion on the spur of the moment, but one of the bankers involved died recently and that prompts me to share with all of you these two special events in my life. The first occurred in 1935 in Omaha, where I was born and reared. My father was a native of Blair, Nebr., was graduated from Creighton University School of Dentistry in 1913 and had been a successful dentist in Omaha until he was sidelined with a crippl ing disability in 1927 at the age of 37. That was tough for one who was a four-letter football player, a basket ball player, a former city tennis champion, an 80 golfer, an avid hunter and fisherman, but he never com plained. He had more important things on his mind— he had a family of 14 children to feed, clothe, house and send to school! Three months before he was disabled, he had finally said “Yes” to an insurance agent patient of his and had taken out a disability-for-life income policy that paid him $4,800 per year—about one-third of his former income. (At that time, disability was limited to $10 per thousand of life insurance owned, and Dad had $40,000 in coverage, a fairly large amount in those days.) After three months in the hospital and in bed at home, he was able to get around for about two years or more with a body cast from his shoulders to his waist, and with the help of crutches. Later, he carried a cane most of the time in the event of fatigue. After having paid Dad his $400 per month from the time of his disability, the insurance company began delaying tactics on monthly payments after the Great D epression set in w ith a vengeance—about 1932-33—and finally in 1935 the company ceased payments, declaring my Dad was faking, etc., and filed a lawsuit against him stating he owed them the money they had paid him already! My two oldest sisters were completing their college education with two-year academic scholarships both had won. I was the oldest of eight sons, carried newspapers, had two minor parttime jobs and was barely 16. The big squeeze was on by the big insurance company trying to force my Dad into a settlement for a drastically reduced amount. Dad had one angina attack after another from the tension and worry. My mother, who could give lessons to Congress and the Director of the Budget on how to eke out one’s finances, held the family together finan cially and spiritually, while taking care of her ailing husband. Then, I remember the day Dad was called to the telephone! It was J. Frank McDermott, vice president at First National Bank of Omaha, and Dan J. Monen, trust officer and head of the trust department at Omaha National Bank. I recall vividly standing in the Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis big hallway watching Dad listening without interjec ting a word. At the end of the brief conversation h e ^ was able only to say, “Thank you, both of you, an d w God bless you.” He turned from the phone to Mother, who was standing by not knowing who was on the phone and through his tears on that kindly, loving face I heard him say merely, “Well, Mother, we’re saved!” q When the emotions died down he related that those two bankers, both long-time friends of his, had called with a brief message: “Ben, we have every confidence and trust in you. We know you’re going to win this lawsuit and we’re going to see you through it. We’re ^ depositing $1,000 in your account (at First National, in whose building he had his dental office since 1917).” That’s all there was to it. No discussion of payback, no discussion of collateral or formalities, just “We’ve deposited $ 1,000 in your account!” £ I have no knowledge of what discussion, if any, took place prior to that phone call. All I can tell you is that as a 16-year-old boy I was highly impressed with what those two men did for my mother and father, and I was impressed by the fact my parents had friends like that. 9 I can also recall they were among the very first to be paid back from the judgment awarded my father when he won that suit more than two very long years later. It was my good fortune to know Frank McDermott and Dan Monen personally after I joined this magazine £ in October, 1945. The second event was an even more personal one and took place about February 8, 1958, barely a week before I was to sign a contract purchasing a partner ship interest in our magazine. Unexpectedly, I came up # $5,000 short for the rest of the cash down payment I was to make. I decided to go down to the Central Na tional Bank here in Des Moines (now First Interstate) and confer with Ed Buckley, then president of the bank, who had earlier told me to let him know if I need- # ed help. I recall looking up at the big lobby clock over the east door and it said 8:45 a.m. as I walked in. Ed was in his office alone, just off the lobby, and when he saw me out there he waved me into his office. His first words were, “You look like you lost your • last friend! Is there something I can do?” I explained briefly, then told him we had paid cash for our lot and a large share of the new home we had moved into just nine months earlier, so I was cash poor right then. I remember telling him all I could give him was my paid- • for car as collateral and a second mortgage on our new home. E d’s response was brief: “ I don’t want your house or your car. All we need is you working. How do you think you can pay it off?” When I told him pro bably in three years he said, “Come on with me.” ® We walked out to the note cage across from his of fice. Ed reached through, pulled back a padded form and wrote in the date and $5,000. He asked me to sign ACROSS THE DESK. . . (Turn to page 88, please) • . Profit from craftsmen. The Correspondent Bank Division at United Missouri Bank has a staff of experienced bankers. Craftsmen. Craftsmen who know the business of handling correspondent accounts. Craftsmen who can help your bank with everything from investment, brokerage and data processing services to bankcards, asset/liability m anagem ent, loans, cash letters/transit and more. So start to profit from our highly skilled people today. Call a United Missouri Bank Account Officer today. U N ITED M ISSOURI BANK of Kansas City, n.a. Member FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis P.0. Box 226 Kansas City, Missouri 64141 (816) 556-7900 8 United Missouri Bank Signs Marketing Accord with Modern Banking Systems NITED Missouri Bank recently U signed a marketing agreement with Modern Banking Systems, Inc. of Omaha to offer an in-house data processing system to banks. United Missouri has exclusive liscensing rights in Missouri to lease a complete MBS software and hard ware package that will enable the customer to process all internal ap plications. United Missouri will mar ket and service the system through- out the Midwest region, including Kansas, Iowa and Illinois. “ This MBS package allows United Missouri to enhance its fami ly of data processing facilities,” states Gary Foltz, senior vice presi dent in the operations department of United Missouri Bank of Kansas City. “Many community and inde pendent banks need the capabilities to process their daily transactions for demand deposit, loans and other ABAS NATIONAL AGRICULTURAL BANKERS CONFERENCE is coming to exciting... and historic Washington, DC November 15-18,1987 1 accounts. This package has the flexi-1 bility to adapt to the specific needs of these smaller banks, yet it is rela tively simple to operate and man age.” United Missouri has been a recog-< nized leader in providing data pro cessing needs for community banks. The MBS package offers a cost ef fective alternative to the main frame processing that United Mis-i souri continues to offer. The new UMB system offers customers’ high performance minicomputer tech nology not available on micro- or personal computers. The software * includes a central information file, proof of deposit and MICR entry, demand deposit accounting, applica tions for savings, individual retire ment accounts and certificates of* deposits. In addition, the system has loan, general ledger and audit confirmation capabilities. United Missouri provides its inhouse processing system customers* with a complete package of mini computer hardware, the MBS soft ware, service and maintenance for the entire system, installation and training. Modern Banking Systems, Inc. provides in-house data processing systems specifically for financial in stitutions. The company, which is headquartered in Omaha, Nebraska, markets the software with computer systems manufactured by Texas In struments. Consumer Bankers Name Joe Belew as President Come to Washington and join your peers in thought-provoking, educational, and profitable exchange of ideas. You will benefit personally and professionally from the clearer, more practical perspective you will gain. For program, details and a registration packet, phone ABA Banker Education Network (202) 663-5430 -------------- AMERICAN BANKERS ASSOCIATION Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Consumer Bankers Associa tion board of directors named Ex- 0 ecutive Vice President Joe Belew to succeed Thomas E. Honey as presi dent, effective Aug. 31. Mr. Honey, president of CBA for the past two years, announced his II resignation effective Aug. 31 to become senior vice president and di rector of marketing at the Califor nia-based firm of DHL Worldwide Express, an overnight document II and small parcel delivery firm, with annual sales exceeding $1 billion. Before joining CBA, Mr. Belew, 38, served as chief aide to U.S. Rep. Doug Barnard, D-Ga., a prominent # member of the House Banking Com mittee. He previously served as a staff aide in the Senate, and has served in and directed several poli tical campaigns, including advance • work for national candidates. THE STANDARD TO WHICH ALL OTHER FINANCIAL SOFTWARE IS MEASURED. Quality. There is no substitute. Find out why more financial institutions turn to Information Technology, Inc P.O. Box 2705 Lincoln, Nebraska 6 8 5 0 2 (4 0 2 )4 2 3 - 2 6 8 2 INFORMATION TECHNOLOGY INC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 10 George Beck Heads LaSalle’s^ Financial Services Area Unbeatable Support. LaSalle National Bank supports you. With more than halt a century of e x p erien c e ... innovative products... responsive service... and deep commitment to the market. Our goal is to help you enhance your over all performance. LaSalle takes a consulting approach to correspondent banking, working closely with you to develop strategies that improve profits, growth and efficiency. We offer individualized service an d comprehensive capabilities, including: • multiple investment consulting • credit and financial services • global trade finance • merger and acquisition consulting • trust, treasury and m any other services In addition, LaSalle ensures dependable, cost-effective check processing, collections, loan overlines and the other standards of cor respondent banking. As your Midwestern neighbor, we share your perspective and regional loyalties. As a Chicago bank with international resources, LaSalle c a n share m oney-center b an k in g opportunities as well. Through our affiliation with ABN Bank, a leading global institution, w e offer m a n y a d v a n ta g e s w ell w o rth investigating. Get acquainted with LaSalle's Correspondent Bankers. Call Wayne Bismark or Del Rogers at 312-443-2769. Wayne, Del an d the LaSalle Correspondent Banking team will give you u n b e a ta b le 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 ABNO LASALLE3“ Your Correspondent Banking Bridge © 1 9 8 6 L a S a lle N a tio n a l B an k George J. Beck, Jr., the national director of financial services with Ernst & Whinney, was named executive vice president of ad ministration at LaSalle National Bank in Chicago, effective Sep tember 1 . After a long career with the G.J. BECK, JR. • public account ing firm, Mr. Beck will be in charge of LaSalle’s financial planning, comp trollers, auditing and tax divisions. He will direct these same activities ^ also as executive vice president o f ^ ABN/LASALLE North America, Inc., the management company for the North American banking net work of Algemene Bank Nederland, ^ N.V. Mr. Beck was made a partner at Ernst & Whinney in 1986 and became head of the firm’s midwest banking practice. During his tenure ^ in Chicago, Mr. Beck’s client list in cluded LaSalle, Continental Bank and Exchange Bank. Homer J. Livingston, Jr., chair man and chief executive officer of £ ABN/LASALLE North America, Inc., said, “George Beck is not only a seasoned banking pro, but he is also particularly well-versed on Chi cago banking. He will be a tremen- q dous asset to the organization.’’ Most recently, as partner in charge of the financial services group in New York, Mr. Beck di rected the firm’s nationwide auditing, consulting and tax services to financial institutions. In addition, he was chairman of the firm’s financial services industry committee and co-chairman of the # international banking committee. Earlier in his career with Ernst & Whinney, Mr. Beck helped write the Original Bank Audit Guide for the American Institute of CPAs. # Promoted at Heller, Inc. Mitchell F. Vernick has been named executive vice president of ty the Leveraged Funding Group of Heller Financial, Inc. He will be based at the company’s headquar ters in Chicago. The appointment was announced by Michael J. Lit- # win, Group President. Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 11 . BOND SERVICE : BANK SERVICE • <i§ 9 lit _ 9 vs. Chances are, your bank has been exposed more than once to “bond service.” It’s transaction-oriented service from people who know bonds, not banks. So the advice you get too often goes no further than offerings and occasional bids. Bond service is not what L. F. Rothschild, Unterberg, Towbin provides. Our specialty is BANK SERVICE* Over 25 years of service that combines intimate knowledge of bonds with in-depth understanding of banks. BANK SERVICE views your portfolio in the same light as you do: As a crucial com ponent of your bank’s overall position. Not as an independent entity. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis That’s why before we make a recommendation we conduct a thorough study of your bank. Then our BANK SERVICE committee meets to discuss the Bank Report we’ve prepared specifically for you. The recommendations from the committee are tailored to your bank's present position and future objectives in a chang ing marketplace. Our PMS system can help you monitor and manage your portfolio. We’ll introduce you to our Fixed Income Com puter Service, our investment banking group, our fixed income research, send you our news letter and invite you to appro priate seminars that we host in your area. All these services are de signed for one goal: To help you achieve your bank’s overall aims in a way no mere bond service can. So, while you may be get ting bond service, what you really need is BANK SERVICE. Call Mark Rosen, Principal, at (212) 412-2600. IB L. F. ROTHSCHILD, UNTERBERG, TOWBIN, INC. BANK SERVICE* Northwestern Banker, September, 1987 12 FRANK BAUDER. JOSEPH MIGELY. JOHN CROTTY. MAX ROY. Names synonymous with correspondent banking at Drovers. Almost 1 5 0 years combined experience. Frank Bauder Chief Financial Officer FBS Insurance Rises to 14th Place in the Nation FBS Insurance, a subsidiary of First Bank System, Minneapolis/St. Paul, Minn., has risen to 14th largest among U.S. insurance brokers, 9 according to a recent survey by Business Insurance, an industry publication. FBS Insurance is both the largest U.S. insurance broker ^ operated by a bank holding com- 9 pany and the largest broker head quartered in the Upper Midwest. The firm was ranked 15th largest in last year’s survey, which bases per- ^ formance on annual gross revenues. In 1986, gross revenues increased 8.6 percent to $29.2 million in 1986 from $26.9 million the previous year. Premium volume increased 28.5 per- ^ cent to about $166.5 million from about $129.6 million in 1985. FBS Insurance provdes both life/ benefits and property/casualty pro ducts through 296 employees in 19 £ agencies in Minnesota, North Da kota, Montana and Wyoming, as well as in all First Banks located in Minnesota, Wisconsin, North Da kota, South Dakota and Montana. ^ BAI Offers New Programs John Crotty, Jr. Sr. Vice Pres. Knowledgeable years...handling Overline Loans, Capital Requirements, Investments and Safekeeping. So consider Drovers for your correspondent needs. Y ou’ll find a continuity of policy. And a continuity of people. Like Frank. And [oe. And John. And Max. Call toll free 1-SOO-621-S991 In Illinois 1 -8 0 0 -5 7 2 -2 4 9 8 COLE TAYLOR BANK Cole Taylor Bank/Drovers 4 7th and Ashland Avenue Chicago, Illinois 6 0 6 0 9 3 1 2 -9 2 7 -7 0 0 0 “Be sure to tear o ff the facing information card which lists our correspondent banking services. ” Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ^ • Bank Administration Institute has announced a series of highly pro ductive, cost-effective in-bank train ing programs designed to bolster the * total sales performance of financial 9 institutions. The new programs focus on pro ductive selling, customer develop ment, sales management, teller re- — ferrai training and interpersonal 9 skills. Each of the programs, which last one to three days, can be custo mized to reflect an individual bank’s ^ special concerns. Professional train ers lead the sessions or can instruct in-bank trainers on how to conduct them. To produce challenging programs ^ for participants, a variety of teach ing aids are employed, including de tailed reference manuals than rein force ideas introduced in the ses sions; short video vignettes; com- q puter-based performance tools and videotape role plays. For more information about the programs call Stephen Rowe, man ager of in-bank training services, at ^ 800/323-8552. W hen it comes to financial service companies, ours stands out. In many ways. And one of the most important is the personalized service you get through a team of Field Representatives who are well aware that banking has changed, and who know the needs of today's banks. They offer you bank-designed programs that build profits for you and are a valuable service for your customers—a complete line including Credit Life tailored to fit your loans, Commercial and Real Estate protection for larger loans, Collateral Protection, Financial Planning, and Executive and Director Programs. What's more, IAC gives you important service, training and fee income advantages. To find out more, give us a call. And find out for yourself why so many thousands of lending institutions in the United States and abroad agree that the IAC Group is outstanding, in many ways. A Full Service Company for The Full Service Bank I 0^ ’up Individual Assurance Company 1600 Oak St. • Kansas City, MO 64108 Phone toll free in Missouri (800) 892-5890, other states (800) 821-5434. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 14 The program, designated “U ni-^ fied Facilities Development,” goes well beyond the services offered by any other architectural or design/ build firms, according to Rex H. NEW approach to financial fa broader range of research and plan cilities development — one that ning services — has been introduced Dunlap, Bank Building executive ^ vice president and chief operating addresses industry demands for a by Bank Building Corporation. officer. Mr. Dunlap said the Unified Fa cilities Development approach re sponds to the growing demand from 0 financial institutions for help in dealing with new operational and marketing requirements. “Financial The Superior Performance Information Network executives are coming to realize that in order to remain competitive # they’re going to have to capture every possible efficiency,” Mr. Dun lap said. “ Institutional performance must be viewed from a more compre Through Professional Consulting hensive viewpoint. Operations, mar- # keting and facilities management are inseparably interrelated.” -Ronald L. George, President The Unified Facilities Develop -David C. Melena, Executive V.P. ment approach responds directly to this new concern by supplying # -Robert E. Neville, V.P. authoritative analysis and recom mendations concerning operational efficiencies, marketing objectives and strategic planning before design begins, Mr. Dunlap said. • ^ Midwest M anag ement Consultants “We’re getting into the process 9140 West Dodge Road, Suite 270 Omaha, Nebraska 68114 (402) 391-1344 much earlier than design firms have traditionally done, providing a com prehensive framework for an institu tion’s facilities-related decisions. • We’re also ‘getting out’ of the pro cess later, offering warranty pro grams that maintain our relation ship for years after the facility is completed,” he stated. ® NO Do you currently write more than SI million YES As a result, Unified Facilities Development does more than simply annually of Credit Life and Accident and Health produce an attractive, functional Insurance through financial institutions? facility, Mr. Dunlap said. “ It leaves YES NO Can you m ove your m illion-dollar business the institution itself with an in- ® formed understanding of its own to another insurer? market, of its marketing objectives, and of its present and future opera If you said “y e sf we m ay have a better deal fo r you. tional structures. In an extremely agents to represent us in Hawaii, We’re Balboa Life and Casualty, competitive environment, those are “ things this industry needs.” Montana, or Wyoming. If you an A+ /rated carrier writing Bank Building Corp. Now Offers Unified Facilities Development A Spin Superior Performance Banking Attention Agents: qualify, we’re ready to offer you more than S100 million nation an exclusive company relation wide, with a complete line of ship in these states. We can grow highly-successful credit-related and prosper together. Let’s talk coverages. We’re looking for right away. Call or write: reputable and financially-stable Dave Bridges, Senior Vice President BALBOA LIFE AND CASUALTY 3349 Michelson Drive Irvine, CA 92715-1606 (714) 553-0700 (800) 854-6115 outside California Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BAI Names New Chairman Philip F. Searle, chairman of the board of Sun Bank/Naples, N.A., Naples, Fla., has been elected chair man of the board of Bank Adminis- # tration Institute for 1987-88 fiscal year. The new chairman-elect of the Institute is Michael P. Esposito, Jr., executive vice president and chief fi nancial officer of Chase Manhattan # Bank, N.A., New York. 15 • Phoenix Will Host BMA Conference HE president and chief operating T officer of First Interstate Ban corp., Edward M. Carson, has been added to the roster of those slated to speak at the Bank Marketing Asso ciation’s 72nd National Marketing Conference, to be held Sept. 27-30 at the Phoenix Civic Plaza. Mr. Carson, whose session is titled “Don’t Look Back—Some body May Be Gaining on You,” will discuss how First Interstate is posi tioning itself for success in the com ing years. During his career, Mr. Carson helped pioneer bank fran chising and the national Cirrus ATM network. BMA’s Annual Conference is the premier marketing event of the year for financial institution marketing executives across the nation. The four-day conference is expected to draw 2,000 participants. Also headlining the BMA Na tional Marketing Conference as speakers are: Lawrence Kudlow, chief economist at Bear, Stearns, & Co., who is also editor of The Global Spectator, the company’s economic forecast publication; Michael Mescon, dean of the College of Business Administration at Georgia State University and head of a consulting firm that has worked with busi nesses in areas ranging from organi zation redesign to arbitration; and Charles Garfield, author of the best seller Peak Performers and a mem ber of the clinical psychology facul ty at the University of CaliforniaSan Francisco. On the National Conference’s en tertainment calendar is a special presentation by Broadway-TV actor James Whitmore who will present his one-man show, “The Wit and Wisdom of Will Rogers.” Apart from the main general ses sion speakers, a special “hot topic” session on the future of debit cards is planned. Offering their perspec tives on the topic will be John F. Fisher, senior vice president, Banc One Corp., and Alex W. Hart, execu tive vice president, First Interstate Bancorp. The above speakers will appear in General Session presentations, —___*____ -__ __________ which are intended to offer talks of general interest from “name” pre senters. In addition to general ses sions, the BMA National Marketing Conference will consist of strategic sessions, which will focus on new ideas in bank marketing, and tacti cal sessions, which will concentrate on specific case studies and will be offered in classroom-style settings. Joe Orlando Dies at 77 Joseph (Joe) Orlando, 77, a long time St. Louis banker, died Wednes day, August 12, 1987 after suffering a stroke at Depaul Hospital in St. Louis. Mr. Orlando was widely known in the banking industry in St. Louis and throughout much of the Midwest. He was born in St. Louis in 1909, and began his career at the First Na tional Bank in St. Louis (now Centerre Bank in St. Louis) in the collec tion department. He eventually as sumed responsibility for the bank’s correspondent banking business in Illinois, Indiana, Kentucky and Iowa. Mr Orlando retired in 1974 as vice president. _________ ! DUST BOWL BANKING TOOK COURAGE — TODAY IT TAKES KNOWLEDGE The Foundation of the Southwestern G ra d u ate School of Banking is a nonprofit organization dedicated to edu cat ing bank executives at all levels of m anagem ent. Interm ediate Banking School gives a one-w eek concentrated overview of the banking industry. Southwestern G ra d u ate School of Banking offers three intensive tw o-w eek sessions for a professional diplom a. Assem blies for Bank Directors hosts seminars on all aspects of a bank director's responsibilities. For more information on the Foundation and its three educational programs, please write or call: The Foundation of SWGSB at Southern Methodist University https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SMU Box 214 Dallas, Texas 7 5275 2 1 4 /69 2 -2 99 1 Northwestern Banker, September, 1987 16 Corporate News ROMOTIONS and other an P nouncements have been made by the following firms: The Kirchman Corporation, Or lando, Fla.: Tim Clifford has been named president of the Dimension 1000 and 2000 product divisions. He will be responsible for the market ing, education and customer support aspects of the company’s principal integrated computer systems for banks ranging in size from start-up to $500 million in assets. More than 6,000 banks depend on Kirchman software for their daily processing. The Kirchman Corporation is the world leader in integrated bank in formation management systems and was recently selected by IBM to par ticipate in joint, complementary marketing efforts directed toward the banking industry. The company formerly marketed its software under the names of Omni Resources, Kencom, and Florida Software Systems. How ever, with the introduction of the Dimension product line, all activi ties were consolidated under the Kirchman name. John Paoloni has been named senior vice president of sales for The Kirchman Corporation. * * * Marketing Network, Inc., North brook, 111.: Alan B. Eirinberg and M ichael H. Greenberg have formed Market ing N etw ork, Inc., a full ser vice marketing communications agency offering a full range of J services includ- éêêÊ ing merchandis- fflii™ A. EIRINBERG ing, promotional planning, turnkey prom otions, direct response advertising, and public relations. The agency’s client roster includes: Marine Midland Bank, Buf- Don't go into the markets blindfolded. Get detailed analysis and advice' from The Brock Report— America's most complete " commodity marketing service, For your FREE three-week trial offer, w rite or cal The Brock Report 2050 W. Good Hope Rd„ Milwaukee, W l 53209 / Circulation: (800)558-3431 In Wisconsin: (414)351-5500 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis falo, NY; Chemical Card Services Corporation; National Sporting Goods Association; Capital Hard ware Corporation; Rand McNally Map Company; Network Services Company; Jewish Community Cen ters of Chicago; Fisher Pen Com pany; and Ultimate Foods, Inc. Mr. Eirinberg, who is chairman of the new firm, is a former feature col umnist for Advertising Age, a former director of the Bank Market ing Association and the Chicago As sociation of Direct Marketing, and past president of Chicago Financial Advertisers. He was senior vice president and marketing director for the Exchange National Bank of Chi cago and the Cole-Taylor Financial Group. Mr. Eirinberg also headed Flair Communications’ banking and finance division. He was vice presi dent-marketing at PGM, Inc. from 1983 to 1987. Mr. Greenberg, Marketing Net work president, has had extensive experience in account management work with Wells, Rich, Greene Ad vertising; Kobs and Brady Direct Response, and Marvin H. Grank Ad vertising. He was account super visor and media director at PGM, Inc, for the past four years. • D O E S Y O U R BANK N E E D AN IN V EST M E N T C E N T E R ? The results of a customer study commissioned by the Federal Reserve Board and Comptroller of the Currency* indicates that: ■ ■ 40 percent say they w ill change financial institutions in order to consolidate their financial affairs. 60 percent w a n t to consolidate their financial affairs at their local bank. Compared to regional banks or national brokerage firms - less than 20%. The majority o f the consumers, w hen looking for financial advice, turn to a banker. Most customers say they w ant to remain loyal to their local bank, but they also insist on having additional service and investment choices. Join the participating Investment Center bankers who are: Adding profit w ith little expense. ■ Attracting ne w customers. Retaining present customers w h o are taking their deposits to the competitors. ■ Diversifying services & products. W hy Us? ■ ■ ■ ■ ■ We offer you: Be sure to stop by Proven track record booth #614 during th e Experience Iow a Bankers Registered investment advisor Securities broker Co nventio n. Certified financial planners Full range o f products & services Proven marketing techniques designed for bankers, by bankers *As reported in "Financial Services Supermarkets: The Market For Consolidation, 1986 by Kenneth Kehrer. FOR MORE INFORMATION FAIX OR WRITE INVESTMENT CENTERS FIRST DAKOTA BUILDING 212 NORTH 4TH STREET BISMARCK, ND 58501 (701) 258-4399 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 18 Trans Union Credit Information Co., Oak Brook, 111.: The company last month announced awards for three persons and new staff posi tions for two others. A. O’NEILL L. WHITE Andrea O’Neill, account manager, Philadelphia division, was recently named the com pany’s 1986 Ac count Manager/ President’s Cup. The award is given annually for outstanding performance in the areas of ter ritorial and ac count q u o tas, sale s p ro fesS. DILLON sionalism, and special marketing challenges. She joined Trans Union in 1983 as a customer service representative. Lorie White, senior sales repre sentative, Kansas City division, was recently awarded the company’s 1986 New Bureau Sales Person President’s Cup. This honor is earned an nually by the sales person from a new Trans Union bureau who is most instrumental in helping the bureau develop its database and market penetration within the first three years of its new affiliation. Sally Dillon, vice president and head of human resources has re ceived the A ssociated C redit Bureaus’ (ACB) Education Contri bution Award. The award recognizes Ms. Dillon for her leadership contributions to ACB in the area of education. She has conducted classes at ACB’s Management Institutes, supported state association educational ef forts, and been involved in the development of specialized seminars, conferences, and training materials. ACB also recognized the instructional contributions she has bestowed upon ACB members. 0 0 # • # • The Domino Effect.. R. FINNEY Swords Associates will help you develop those alterna tives. Our associates are seasoned banking professionals who are eager to help you meet the challenges of the chang ing banking environment. Experts in correcting regulatory criticism, developing capital improvement plans, strategic planning and more, our associates are dedicated to assisting our clients to success. SW O R D S ASSOCIATES. INC. P R O FE S S IO N A l BANKING CONSULTANTS 2 BRUSH CREER BOULEVARD, SUITE 100, KANSAS CITY, MISSOURI 64112 (816) 753-7440 Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C. WIERMANSKI Robert L. Finney has been ap pointed vice president/general man ager of the Northwest division of Trans Union Credit Information Co. The announcement was made by Ed Echt, western regional vice presi dent. Previously, Mr. Finney was sales manager of the central region and was responsible for its expan sion into the Texas, Louisiana and Iowa markets. He will oversee the operation of Trans Union’s Bellevue, Wash., and Portland, Ore., divisions. Chester Wiermanski has joined the national services division of Trans Union as product research manager. He will be responsible for researching and evaluating new pro duct opportunities for Trans Union in their headquarters office, in Chi cago. He will also coordinate pro duct development and introduction, and market planning. q £ % • # https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis We KnowTheWay To Lands O f Opportunity In today’s economic climate, you have to search for opportunities around every bend. And now more than ever, it takes a strong financial leader to help make sure the best ones don’t get away At Norwest Banks, we understand the needs and opportunities facing bankers today. After all, w e’ve operated banks of our own in more than 100 different markets over the last 50 years. And when you come to us for correspondent banking, we make that experience work for you. We can provide the specialized services you need in your marketplace—no matter how large or how small it may be. And whether that means ATM access, credit cards, investment alternatives, or traditional correspondent bank services, we’ll work with you to get the job done. Talk to us today about our full line of services. When it comes to correspondent banking, we know the way. B We Know The Way. We Are Norwest. H kH affi NORWEST BANKS Members FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 21 New T ools for Ag Banks: • Loan loss amortization enacted • Secondary ag market proposed FTER 50 years, the effort continues unabated to shore up the cyclical fluctuations of the critically A important natural resource called agriculture. As these # # • ® ® q £ II 0 (|| (|| programs become effective through Congressional, Presidential or USD A action, they have a distinct ef fect on rural banks. When the fortunes of the economy regress, they generally have an adverse effect on banks as we have learned from the bitter lessons in the midwest these past few years. Two new efforts underway in this long chain of events aimed at shoring up agriculture and those in volved in it are highly important to community bank ers directly involved in agricultural lending. The first, listed as Title VIII in HR 27, which was signed into law by President Ronald Reagan last month, permits qualified ag banks to write down their ag loan losses over seven years instead of having to deduct the total amount of loss from capital at the time the loss is recognized. The second is an amendment to HR 3030, known as the Farm Credit System rescue bill, and this amend ment would create a secondary market for long-term farm real estate mortgages that could be accessed by banks and life insurance companies, as well as FCS. Of the two, the secondary market proposal probably will affect and aid more banks than the loss amortiza tion section. Loan Loss Amortization HR 27 was a banking bill that originated in the Se nate as SB 790 with about a dozen subtitles. It pro vided a rescue plan (Title III) for the Federal Savings and Loan Insurance Corporation, which was the sole thrust of HR 27 when it came out of the House. How ever, in the conference committee, the contents of SB 790 were incorporated under the HR 27 label. Title VIII of that measure, later signed by the President August 10, was an amendment for loan loss amortization initially offered by Sens. Alan Dixon (D., 111.) and Nancy Kassebaum (R., Kan.) as part of 790. It was re tained in the conference and is part of the new law. To qualify for ag loan loss amortization over seven years, a bank must be FDIC insured, have no more than $100 million assets, maintain a percentage of ag loans to the total portfolio at least equal to what it had January 1 , 1986, and must have a plan approved by FDIC or the OCC to restore its capital within the seven-year amortization period. Losses to be amortized cannot result from fraud or crime, must be for financ ing production of ag products or livestock in the United States, or be secured by farmland or farm machinery. Other qualifications, as deemed necessary, may be added by federal regulators. Losses that would have to be charged off for years between December 31, 1983, and January 1 , 1992, may https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis be amortized. Losses on property owned on January 1, 1983, or acquired before January 1, 1992, may be amortized. The federal banking agencies were instructed by the law to have written regulations 90 days after the Aug ust 10 signing by the President. Secondary Market for Farm Real Estate Mortgages HR 3030 was approved by the House Agriculture Committee before August adjournment and is sche duled to be taken up promptly in mid-September after the summer recess. The bill is basically the rescue bill for the Farm Credit Administration. Title III of that bill would authorize formation of a Federal Agricul tural Mortgage Corporation, thus providing a secon dary market for long-term farm real estate loans. It would be available to commercial banks and life insur ance companies, as well as the FCS. The concept is the result of extensive work done by an ABA Task Force convened two years ago by then ABA President Don Senterfitt and continued by current ABA President Mark Olson. To make the Task Force truly representa tive of all commercial bankers, Mr. Senterfitt invited the IBAA to have representation on the committee, and IBAA graciously responded immediately with then IBAA President B.F. “Chip" Backlund and cur rent IBAA President Tom Olson. Key roles were played by a number of midwestern bankers, all of whom supported the secondary market idea as a means of permitting community banks to continue financing their customers instead if seeing them forced to seek long-term lending assistance from the quasi-federal FCS agency. As approved to date in HR 3030, the Federal Agri cultural Mortgage Corporation would have a 13-mem ber board. FCS tried from the beginning to place the board under its control, a move obviously fought tooth-and-nail by the ABA, IBAA and life insurance companies (who had been invited to join in this endea vor and return them to viability in the farm real estate market). At this time the bill would have seven members of the board appointed by the President of the United States, two of them would have to be farmers. The FCS would have three members and the private lenders—banks and life companies—would have three members. Common stock to start up would be $20 million. Buying, pooling and securitization of mortgages would be done by large banks or insurance companies designated as poolers. The FAMC would certify these poolers, set the underwriting rules and appraisal stanNEW TOOLS. . . (Turn to page 94, please) Northwestern Banker, September, 1987 22 Report on Russian trip sh ow s: ^ Gorbachev well accepted; agriculture # lags, but improvements noted IOWA banker John Chrystal (second from right) poses with Rus sian hosts at site of egg pilot production plant in Byelorussia. Editor's Note: John Chrystal’s uncle, the interna tionally known Roswell (Bob) Garst, had traveled sev eral times to Russia after World War II and observed their farming methods. He met Nikita Khrushchev and invited the latter for what became a historic visit of the Russian leader to Coon Rapids, la., in 1959. The fol lowing year, when Mr. G arst’s poor health forced him to decline the invitation to return to Russia, that gov ernment extended the invitation to his nephew, John Chrystal, who had accompanied his uncle on an earlier visit. Mr. Chrystal went there in 1960 and has returned at the invitation of the Ministry of Agriculture about every other year since then, now making 14 trips in all. At the conclusion of each, he returns to Moscow where he gives an in-depth honest critique to their ag leaders of conditions as he saw them. Mr. Chrystal does not speak or read the Russian lan guage but relates that “ I ’ve gone there enough now that I can understand agricultural talk!’’ He still retains ownership in his family’s Iowa Sav ings Bank in Coon Rapids, where he retains his long time home, and has been CEO of the $500 million asset Bankers Trust Company of Des Moines since 1984. By JOHN CHRYSTAL Chairman and CEO Bankers Trust Company Des Moines, la. HIS WAS the most interesting and productive of all my trips to Russia in my 27 years of traveling there. I was taken initially on this visit to Byelorussia, located in western Russia near Poland—a republic of about 8.5 million people, with Minsk as its c ap italthen to Krasnodar near the Black Sea. After more than two weeks in those areas I returned to Moscow for the usual briefing and critique session with Soviet agricul tural leaders to discuss their agricultural situation as I saw it, a procedure they have asked me to follow on each of my visits. T Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Secretary Mikhail Gorbachev I have known quite a few of the Soviet leaders from Nikita Khrushchev to Mikhail Gorbachev. Mr. Gor bachev is well educated and has two college degrees. In fact, he is the first college graduate to lead the nation since Lenin. He was just 10 years old in World War II, so he is also the first non-war leader. He’s perfectly capable of criticizing his own country. He is able to lead it because he hasn’t faced the same problems that others have. His predecessors were all old, frequently in poor health, who operated on cronyism, with accom plished corruption. But General Secretary Gorbachev is an educated, non-military man who is strong, intellectual and wellliked—even more so than when I was last there two years ago. He sent me a letter while I was in Russia and telephoned before I left to express his interest and appreciation for my visit. We haven’t met personally on the last two visits. Historical Perspective My first trip to Russia was in 1960. Their agricul ture was awful; it was basic. There was no chemical fer tilizer, no storage, none of the advances we had incor porated long ago into American agriculture. Their country needed houses at that time. Since 65% of their people were involved in agriculture, they needed to feed only 35% of the others, so manufacturing got the priority. Few of their people had education beyond high school. Now, they have great improvements. Their chickens in 1960 laid 150 eggs, while most of ours laid 260. Now, theirs lay 250 and ours 285. They have lots of all kinds of products, but not enough. Their standard of living is narrow and stable, but substantially less than ours. But their economy has now lagged. Agricultural production has dropped from a 4 or 5% gain to a 1% gain. In the past, the Russian state has always said it had a contract to feed, house and employ all people in the nation. Mr. Gorbachev has reversed the deal and is re structuring the way it will now be done. He is making profound and meaningful change—not at all a drift toward capitalism, but more a remodeling of Marxism. He’s saying, “I ’ll get the government off your back and out of your pocket.” # # • • % • • • • 23 RUSSIAN hosts proudly display for John Chrystal (center) this tea plantation in the Caucasus. 0) 0 § ^ w H ^ 9 ® Farm Visits I went to a sturgeon farm where they hatched sturgeons and then released them in the Caspian Sea to keep up caviar production. I also saw a trout farm where they were crossing trout with salmon, giving them a coho type salmon. One farm, in spite of bad soil, was quite productive. The managers there had unbelievable authority to sign contracts on their own initiative with foreign govern ments. They must give the Russian government 40% of their production as return for inputs provided by the government. Under this new arrangement, they must pay for and account for tractors from the government—tractors they used to just requisition—so trac tor sales have plunged. Instead of buying new tractors, they’re now repairing them! My visit to Krasnodar this year was the first time I ’ve been able to return to an area we visited on a previous trip. In my critique on that area I had suggested a number of things, so it was interesting and hearten ing to find that many of those suggestions we dis cussed on that previous trip have now been implemented. I don’t want to infer they have all taken place just because I was there, but at least our thinking was in common on ways to improve their situation. In any event, they have greatly improved grain storage; they are now growing grain sorghum; fertilizers and irrigation are in much wider use, and they have reduced the size of slaughter hogs from 260 pounds and more down to about 200 to 210 pounds. Krasnodar is one of 29 ag complexes in the nation, a new idea. This one is made up of nine villages with 86,000 people, 36,000 of them employees, all getting paychecks from the farm complex. Pay has gone up in two years by 400 rubles, about a one-sixth increase. In a factory—one where washing machines are made, for example—they can put out 110 % of the orders brought back. If they can’t make sales, the fac tory workers are let out. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis However, the state places a floor under all workers wages and any worker laid off is paid by the govern ment. Secretary Gorbachev has a vision that includes the part played by workers in Russia and I think he’ll pro bably succeed. He has a substantial majority in the Politburo and has control in the Central Committee, 1 inch = 1,420 miles RUSSIA Area: 8,599,300 sq. miles (2.33 x Continental U.S.) 1,919,750 in Europe; 6,679,550 in Asia Coastline: 27,600 miles Pop.: 280,000,000 (est.) 191,000,000 in Europe; 89,000,000 in Asia Distribution: Rural = 52%; urban = 48% Pop. Density: 32.5 persons per sq. mile ★ = Republic of Byelorussia. Pop.: 8.5 m illion (1960) • = City/area of Krasnodar. Pop.: 370,000 (1960) UNITED STATES Area: 3,675,633 sq. miles (Continental U.S. only) Coastline: 4,993 miles (with Alaska & Hawaii: 12,383 mi.) Pop.: 230,000,000 (est.) Distribution: Rural = 30%; urban = 70% Pop. Density: 62.5 persons per sq. mile Northwestern Banker, September, 1987 24 John Chrystal finds Russian fishing can be as much fun as it is at home! although he has not appointed them all, but I think that will change this next spring. Wrap-Up Critique Session I suggested to my hosts during the critique session in Moscow that they send people who have graduated with a Botany degree to run the big farms of 86,000 people. I also suggested they use people with a busi ness degree to run those farms. They need a great increase in productivity, both in quantity and quality. As another part of our discussion I suggested further that they use irradiation of foods to increase shelf life. They keep referring to the war and what it did, but I tell them to look at Germany and Japan and see how those people have progressed. Secretary Gorbachev agrees. They need refrigeration and many, many im provements. Their food quality and production is just plain bad. You cannot have scientific revolution without shar ing information. Mr. Khrushchev failed in part because he didn’t have enough education to understand agricul ture. He planted corn from south to north when it wasn’t geographically suitable. He was tough and gross, and he lost his popularity. This man (Mr. Gorbachev) is not like that. It will take a long time. Their workers don’t work anywhere near as well or as hard as ours do. They need trillions of rubles to get up to speed. Two years ago the Russians were consumed with an interest in the United States and war, but that is different now. On our part, we spend so much for defense we’re hurting the economy we’re defending. I think Secretary Gorbachev has a 70% to 80% chance of success. He’s given the Soviets a chance for hope and optimism. We spend 7% of our money on defense; he spends 17% to 18%. He needs trillions for infrastructure development. He now needs an arms agreement with us and I think we’ll get it. I have invited two people to travel here to Iowa from Russia to take part in our Iowa Writers Workshop at the University of Iowa. Also, I have invited Viktor Nikonev, who is the ag czar of Russia, to visit us here and he has accepted. We are planning joint ventures. I met with Secretary of State George Schultz and told him we should have several joint ventures to begin with that will work. Because we are a leader in tech nology, we must maintain our world leadership posi tion. It will be a complicated affair, but the market is so enormous that I don’t think we should avoid it. I think the possibility of war with them is zip and if we’re not going to war, then we should cooperate with them on some projects. It will be an enormous gain for our nation and for the world’s benefit. □ p.m., with a reception that evening. Business sessions run throughout the day on Monday and conclude The effect of Point-Of-Sale shop just prior to Tuesday noon. ping on consumers, merchants and bankers will be spelled out at the RMA to Meet in Honolulu More than 1,600 members of Rob American Bankers Association’s 1987 Financial Network Workshop ert Morris Associates and their on POS, October 4-6, at the Palmer spouses are expected to attend House in Chicago. The focus of the RMA’s 73rd annual Fall Conference workshop will be ABA’s final on-line convention at the Hilton Hawaiian Point-Of-Sale Guidelines which were Village, Honolulu, November 1-4. scheduled to be published in Aug The theme of this year’s business ust. The guidelines are designed to program is “Charting Your Course pave the way for POS systems for Survival and Growth in Commer which directly debit a customer’s cial Banking.” Over 20 different ses sions will show bankers how to allo bank account at the point of sale. The workshop starts with regis cate the resources, design the sys tration Sunday, October 4 at 4:00 tems, and develop the products that ABA Schedules Debit Card Workshop in Chicago Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis can lead to increased profitability for their institutions, today and in the future. RMA is the national association of bank loan and credit officers. The keynote address for the Con ference will be delivered by Richard J. Flamson, III, chairman, Security Pacific National Bank, Los Angeles. Also slated to give major addresses are RMA’s President-Elect William H. Sayre, executive vice president, Fidelity Bank, Philadelphia; Lowell L. Bryan, director, McKinsey & Company, Inc., New York City; George Weinwurm, partner, DurkeeSharlit Associates, Los Angeles; and John Guaspari, author of I Know I t When I See It. ^ <|} <|) # # # • • ® ® £ j|) <|) <|| hiam ummcBsna,tust 25 IHM In todays complex, highly competitive marketplace, data processing is the lifeline of any financial institution. That’s why The Thust is work ing to provide the finest data processing products and ser vices in the financial indus try And we re getting better every day For hundreds of America’s financial institutions, The Thust is high technology — flexible data processing systems that can be tailored to serve the unique needs of each and every one. In our home office and com munities across the nation, The Thust is people — financial data processing professionals — who provide leadership in training, communication and support. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis What’s more, The Thust is secure — protecting our clients’ management and customer account information with multi ple level backup systems. Tb discover how The Thust can work for you, mail your business card to our Marketing Depart ment. Or call 515-247-0535. For superior data processing, you can trust The Thust. The more you know, the better. ■ thè Trust Financial Information Trust 907 Walnut Street Des Moines, IA 50309 515-247-0535 Northwestern Banker, September, 1987 26 “Bankers must help • their ag customers change with the times.’’* “AT 1st National, we believe the way to solve the problems of the banking community is to help farmers solve their problems.” An interview with C.G. “ KELLY” HOLTHUS, President First National Bank of York York, Nebr. by William A. Hamilton, Lincoln, Nebr. IS father started out as a tenant farmer, so C.G. H “Kelly” Holthus grew up farming someone else’s land. Today, his father owns two farms and Kelly Hol thus is president and CEO of a $120 million bank. Last May, Kelly completed a highly successful year as pres ident of the Nebraska Bankers Association. Of late, farming and banking have not been growth industries, but the 1st National Bank of York, over which Kelly Holthus presides, has managed its way through these difficult times to renewed profitability. “For as long as anyone can remember, we have been one of the top 100 banks in the nation in terms of agri cultural loans,” says Mr. Holthus. “Yet, in a way, our survival during these hard times for agriculture is a tri bute to our borrowers and a tribute to our directors and staff. “At 1st National, we believe the way to solve the problems of the banking community is to help farmers solve their problems. Cost Control Is a Key “Because I grew up on a farm, and a tenant farm at that, I know a little bit about what it takes to keep overhead and production costs down and still have a little money left over. “Today, my Dad owns a couple of farms, but he made the transition from tenant farmer to farm owner by virtue of his willingness to work, to work with mini mum debt, and to work minus some equipment that would have been awfully nice to have. “A bank is simply a reflection of what’s happening on the land around it. In 1986, our loans began to per form better, so our earnings are up slightly. “Our farmers are adjusting to the realities of a new Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis market place. They have learned to cut costs at almost every opportunity. They are running with less debt. Every farm does not need an $80,000 tractor and an $80,000 combine. Some of our better operators hire cer tain jobs done or they can rent the equipment. “Also, the farmers who will make it into the 21st Century must be willing to break away from some of the traditional ways of doing things and are willing to try some alternative crops,” says Holthus. Leader in Diversified Crops Not one to say: do what I say and not what I do, Mr. Holthus and eight of his loan officers have started their own diversified crop operation. The bank took 26 acres of land owned by 1st Trust Company of York and, with the help of the loan offi cers, planted onions, cauliflower, broccoli, sweet corn, lima beans and muskmelon. “On evenings and weekends (and sometimes during banking hours) our loan officers go out to move the irri gation pipes around and keep the weeds out,” states Mr. Holthus. “We planted a special kind of onion th a t’s ideal for onion rings. We discovered an onion ring plant up the road that imports its onions from Idaho. That’s ridicu lous! Nebraska farmers can grow the right kind of onions better and cheaper. We don’t like to see the onion ring plant exporting money to Idaho when that money could be earned by Nebraska farmers and kept here. ’’ “We’re not in the business of farming, so we’re just HELP AG CUSTOMERS. . . (Turn to page 63, please) 0 # III _ w ^ ^ q # 27 NO MATTER HOW YOU LOOK AT IT.. No 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, 445 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 Northwestern Banker, September, 1987 28 American Bankers Association Annual Convention Dallas Convention Center October 17-21 HE AMERICAN Bankers Association will hold T its annual convention Oct. 17-21 at the Dallas Con vention Center. Presiding over the gathering will be Mark W. Olson, president, Security State Bank, Fer gus Falls, Minn., who has served for the past year as ABA president. Slated to succeed him is Charles Pistor, chairman and chief executive officer, RepublicBank, Dallas. Thomas P. Rideout, senior vice presi dent, First Union Corporation, Charlotte, N.C., has served as treasurer and will become the Association’s new president-elect. Also serving on the Executive Committee for the past year has been Donald G. Ogilvie, ABA executive vice president. Speaking at the meeting will be the new Federal Reserve Board chairman, Alan Greenspan; U.S. Comp troller of the Currency Robert L. Clarke; FDIC Chair man L. William Seidman; ABC News anchorman Ted Koppel; news commentator Paul Harvey; entrepreneur H. Ross Perot; U.S. Sen. Phil Gramm, and a panel of top-ranked correspondents from Time magazine. Sunday’s fellowship gathering will feature Dr. Nor man Vincent Peale and the 100-member Texas Boys Choir. Also that morning is the Government Relations Forum featuring Federal Reserve Board member H. Robert Heller. New this year will be roundtable discussion sessions on Saturday afternoon and a series of workshops for MARK OLSON President Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CHARLES PISTOR Pres.-Elect bank directors. More than 200 companies will have ex hibits in the. exposition center, which will also include the ABA Technology Expo. Sunday night’s reception at the Loews Anatole # Hotel will star the Smothers Brothers, magician Harry Blackstone, Jr. and comedian Freddie Roman. Tues day night’s reception at the Fairmont Hotel will feature a salute to the 200th anniversary of the U.S. Constitution. # A special treat during the spouses’ program will be presentations by actresses Helen Hayes and Patricia Neal. NBC “Today Show’’ news anchor John Palmer will also appear. The preliminary schedule is as follows: # Saturday, Sept. 17 A.M. 8:30 9:00 10:30 P.M. 2:00 Grand opening ceremony. Exhibits open. Banking industry sessions. Banking industry sessions. Peer group sessions. Sunday, Sept. 18 A.M. 8:00 Exhibits. 8:30 Fellowship gathering. TOM RIDEOUT Treasurer DON OGILVIE Exec. Vice Pres. Q ® 29 9 10:30 Government relations forum, banking industry sessions. P.M. 6:00 ABA reception, Loews’ Anatole Hotel. 8:00 Exhibits. 8:45 General session. P.M. 1:45 Banking industry sessions. 3:15 Banking industry sessions. A.M. 8:45 General session, Fairmont Hotel. 11:00 Convention adjournment. Monday, Sept. 19 A.M. ® Tuesday, Sept. 20 A.M. 8:00 8:45 P.M. 1:45 3:15 6:00 Exhibits. General session. Banking industry sessions. Banking industry sessions. ABA reception, Fairmont Hotel. Wednesday, Sept. 21 FBS Capital Opens New Trading Room ® ® ® 0 0 £ % # HE NEWEST and largest trad T ing room in the upper midwest was recently put into operation by Construction of the space re quired 474 miles of wiring, and air conditioning capabilities triple the typical office space to accommodate the high concentration of screens and keyboards and high activity levels on the trading floor. FBS Capital Markets handles origination/securitization, structuring and distribution of a wide range of tax-exempt and taxable fixed in come instruments in both the U.S. and European markets. Invest ments available through the group’s offices in Minneapolis, St. Paul and London include government and agency securities, money market in struments, municipal obligations, interest rate products, certificates of deposit, foreign exchange and re lated products and mortgage-backed securities. First Bank System’s computer net work; and a foreign exchange sys tem provides “real time’’ down FBS Capital Markets Group, the loading of data from satellite com capital markets arm of First Bank munication links into a microcom System, Minneapolis. puter, which facilitates timely op Located at 100 South Fifth Street tions pricing. in downtown Minneapolis, the “Real time’’ market information Group’s new headquarters occupies passes to the appropriate worksta 37,000 square feet, employs 220 peo tion screens as soon as the source ple and features the latest worksta- generates it, providing the most ac tion technology from Micrognosis, curate market and pricing data Inc. Through a single keyboard, available. The trading force has ac traders and sales staff can access cess to Reuters News, Telerate, Dow personal computers and online infor Jones and other market data sources mation via as many as eight screens. to collect information needed for “We are now using sophisticated trading decisions. Traders also use technology th a t connects our the system to track house informa traders and sales staff with financial tion on securities and bonds avail markets worldwide,’’ said Gerald A. able in the group’s own inventory. Kraut, executive vice president and head of FBS Capital Markets. “This technology improves our ability to provide investment services to our clients. “Each trader can now manipulate and display up-to-the-minute data from broker services, news services, quotation vendors, personal compu ters and inhouse databases, which strengthens our investment capabilities. Geographic location is really no longer a factor in accessing infor mation about global markets.’’ According to Mr. Kraut, the FBS Capital Markets Group trading floor has two unusual features: Every workstation can be integrated into A work station in the FBS Capital Markets new https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis □ trading room. Northwestern Banker, September, 1987 30 THOSE attending the Central States Conference from state bankers associations within N orthwestern Banker readership area are shown in the accompanying photos, reading from left to right in each row: COLORADO—(Standing) Don Childears, CBA exec, v.p., Denver, and Tony Anderson, chmn. CBA and pres., Kiowa State. (Seated) Jean and Dave Scruby, pres-elect CBA and chmn., Evergreen Natl.; Jon Coates, pres. CBA and chmn., Century Bank of Denver; Sheila Coates, and Margaret Anderson. ILLINO IS— June and Bill Hocter (standing), IBA exec, v.p., Chicago, and Sandy and Jack Emmons, pres. IBA and pres., Security B&T, Mt. Carmel. Stan M atzke P resid es at Central S ta te s M eeting By BEN HALLER, JR. Publisher HE Central States Conference, composed of 15 T state bankers associations, met in late July at Madden’s Resort on Gull Lake at Brainerd, Minn., for the organization’s 76th annual meeting. Chairman of the Conference this past year and presiding at the July meeting was Stan Matzke, executive vice president of the Nebraska Bankers Association. He is succeeded as Conference chairman for the com ing year by Donald A. Booth, executive vice president of the Michigan Bankers Association. Mr. Booth and the MBA will host the Conference for the 1988 meeting at the Grand Hotel on Mackinac Island next July. During their two-day meeting, the managing execu tives of the associations and their elected state officers exchanged ideas on projects, problems and opportuni ties experienced by each. Emerging as a definite trend this year is the move away from reliance on dues to fund all association activities to more fee-based income from pay-as-you-go meetings for members, to subsidi ary activities developed by the associations. The most widely developed subsidiary activity among the 15 as sociations is insurance. All the associations are refining their activities to in clude those types of seminars and meetings that banker members tell them are most needed, and with registration fees charged for attendance at the meet ings, it is the users who pay for the service, rather than being subsidized by the general membership fund. Leg islative activity continues to be the most important IOWA— Lee and Russ Howard, pres. IBA and chmn., Mahaska Investment Co., Oskaloosa, and Mary and Clair Lensing, pres.-elect IBA and pres., Farmers State, Marion. MINNESOTA— (Seated) Susan and Bill Sands, 1st v.p. MBA and chmn., Western Bank, St. Paul; Shirley and Jim Jorstad, pres. MBA and pres., Citizens State, Hayfield. (Standing) Chris Sands; Leila and Truman Jeffers, MBA exec, v.p., and Mark Olson, pres. ABA and pres., Security State, Fergus Falls, Minn. Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 31 NEBRASKA— (Standing) Karen Miller, NBA dir. of educ.; Harley Bergmeyer, pres.elect NBA and pres., Saline State, Wilber; Ron Arrigo, NBA conf. dir.; Don Blaha, pres. NBA and pres., 1st Natl., Ord; Mary White, NBA dir. of commun.; Stan Matzke, NBA exec, v.p., Lincoln, and Bill Brandt, genl. counsel NBA. (Seated) Marcia Bergmeyer; Kolleen Hoover; Dorothy Matzke and Rose Marie Brandt. NORTH DAKOTA— Roger Berglund, pres-elect NDBA and pres., Dakota Western, Bowman, with his wife Susan, and Don Childears, exec, v.p., Colorado BA. work within each association. Identifying the most needed types of programs has been the job, in many associations, of special Task Forces. The use of these Task Forces has been used ef fectively, the associations reported, for a variety of undertakings. Chief among them have been Task Forces devoted to studying statewide economic devel opment and long-range planning for the associations. Economic development was a key topic at the 1987 Central States Conference meeting as association ex ecutives and elected officers alike said they perceive a great opportunity for the banking industry to display leadership in economic development at this time. This assessment reflects banking’s desire, they said, to help pull the economy of each state back from the low point reached in the past four years due to drastic changes in both the ag economy and energy industries that cut across most of the 15 member states. Several of the state associations gave interesting presentations on how they are proceeding with this drive for economic development, with Indiana, Kansas and Wisconsin of ficials relating their specific endeavors. In addition to discussing a broad range of mutual as sociation functions, the Conference members heard an address from Mark K. Olson, president of the ABA and president of Security State Bank of Fergus Falls, Minn. Mr. Olson reviewed federal legislation, especial ly H.R. 27, which was subsequently adopted with modifications by the House and Senate and then signed by President Reagan last month, and a pending secondary market for ag real estate loans. Other guest speakers included Justin Moran, who heads his own research firm in Lansing, Mich., who presented the “Credit Union Study” for the Michigan Bankers Association. In addition, leaders of The Graduate School of Bank ing at the University of Wisconsin, Madison, which was founded and operated under auspices of the CSC, gave reports on the school. These included William H. Kennedy, Jr., president of the Graduate School, past president of the ABA and chairman of National Bancshares, Corp., Pine Bluff, Ark.; Richard I. Doolittle, ex ecutive vice president of The Graduate School, and Dr. Jim Pappas, academic dean of the school. □ SOUTH DAKOTA— Diane and Larry Ness, pres. SDBA and pres., First Dakota Natl., Yankton. W ISCONSIN— Lana and Bryan Koontz, exec, dir. WBA, Madison. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Northwestern Banker, September, 1987 Administrative Orders: Management Consulting ...h ow th ey happen and how you can g et out from underneath them Special Reading for Directors, Management Written especially for T h e N o r th w ester n B a n k er By DR. DOUGLAS V. AUSTIN President and CEO Douglas Austin & Associates, Inc. Toledo, Ohio and Professor Department of Finance College of Business Administration The University of Toledo Toledo, Ohio Part II G. The Best Solution Don’t Get Under An Order in the First Place OUR best defense, as a member of the Board of Y Directors of your institution, is not to get under an Administrative Order in the first place. As noted earlier, these orders normally do not arise spontane ously, although they can, if the administrative agency finds a significant embezzlement or misappropriation of funds. However, assuming that your Administra tive Order arises out of a slow, but continuous degen eration of the quality of your performance and condi tion, your function as a member of the Board of Direc tors is to stop the slide prior to the administrative agency’s order against your institution. Preventive Steps to Take How can this be done? First and foremost, you must make sure your checks and balances are in line so that the internal accounting procedures and controls, inter nal audit, external audit, and state and/or federal regu latory examination compliances are such that your bank is not in a weakened financial condition. You can save a lot of grief if you make sure that every time you have a minor problem, you fix it before it becomes a major hole in your financial condition. This is the first line of defense, and the best. How do you solve these problems early? The answer https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Editor's Note: This highly important article was pre pared by Dr. Austin as a chapter in a monograph on “How to Be a Bank Director, " which has been funded under the auspices of the Herbert E. Prochnow Foun dation, the Graduate School of Banking, The Universi ty of Wisconsin. Dr. Austin acknowledges gratefully the financial auspices of the Foundation in the prepara tion of the monograph, which may subsequently be published. Because of the critical importance of this subject matter for bank directors at this time, Dr. A us tin has submitted this chapter on ‘Administrative Orders" for his regular monthly pages in the N o r t h w e s t e r n B a n k e r . S o that our thousands of bank direc tor and bank management readers may have the ad vantage of the full text of this important chapter, it was decided to publish it in its entirety in three succes sive issues. Part I appeared in the August issue. The concluding Part I I I will be published in our October issue. is simple: Whenever there is a question of inappropri ate accounting in terms of accounting principles and procedures or internal/external audit questions, as to the quality of your financial condition, you should im mediately remedy these situations. The audit commit tee of the Board, or the Board as a whole, should take immediate action to remedy this situation. You, as a member of the Board of Directors, are in charge of your organization, and you should ask for compliance imme diately, if not sooner. You should not rely on manage ment to solve the problem. Get Involved Involve yourselves in the situation and make sure that management reports to you on a regular basis and is accountable for all of the conditions being complied with immediately. Since it is obvious that most prob lems arise from the operations of the institution, which is managed and administered by your management, then there is a reluctance on behalf of the management to realize that there is a problem and admit same. Humans being humans, they will have a tendency to “gloss-over” the problems. You, as members of the Board of Directors and, thereby, representing the shareholders, should ignore this type of pressure. You should react adversely to the situation by forcing man agement to recognize weakened conditions and remedy the situation in order to protect yourselves and the shareholders against adverse financial conditions and possible failure. Northwestern Banker, September, 1987 33 # ® ® ^ ^ ^ H ® <§ <|| (||| H|) Cl Whenever there is an adverse written report con cerning the financial condition and performance of the bank, regardless of what the cause is, the compliance should be swift, and the compliance should be in writ ing. By forwarding the report to either the internal/ external auditor or the state/federal regulatory agency, there will be a record of your compliance. The Board of Directors should control this process, even if the man agement drafts the initial reply. It is the role of the audit committee of the Board of Directors and the Directors themselves, en masse, to make sure that the compliance has been accomplished and that the techni cal and/or substantive violations have been cured. How can the Board of Directors insure that such compliance has taken place? Know What the Problems Are First, the Board of Directors must know exactly what the problems are. They can only know that by personally reading all of the internal/external audit reports, and the examination reports submitted to the Board by the state/federal regulatory agencies. It is not enough to listen to a recitation or read a summary of the violations. Each member of the Board of Direc tors should realize that he or she must know intimately all of the details of the problems facing the banking in stitution, and should be extremely familiar with all such problems, and know how to correct them. This means that all such reports must be written before the Directors sign off on same, and the Board of Directors should establish a time table for correction of all technical and substantive violations as quickly as possible. The Board should also make sure that all such conditions have been remedied, in writing, and placed in the Board of Directors minutes. The Board of Directors should never sign off on any examination or audit reports without personally knowing what the problems are, and all Directors should sign off on the compliance reports so that he or she knows that such compliance has taken place. You Must Read Exam Reports Examination reports are not to be disclosed to the public, but should be intimately understood by the Board of Directors. The authors have noted that in a significant percentage of the cases, the Board of Direc tors did not even personally read the examination reports. This can be a fatal flaw which may result in ac tual liability to the Directors in the long run. Further more, when the Board of Directors sign off on the examination report, and return such signatures to the state/federal regulatory agencies, the Board of Direc tors are clearly indicating that they have actual notice of the problems involved. If you haven’t read the reports, then how can you know how severe the problems are? You would be surprised at the number of Directors who, in their depositions after the failure of the bank, have indicated that they did not have the slightest idea of how bad the bank’s condition really was, and who, in all honesty, indicated that they had not read the internal auditor’s reports, the external auditor’s reports (if applicable), or the in creasingly severe examination reports by the regula tory agencies. In most cases, the Board of Directors were culpable in their failure to perform their duties of supervision and direction. In many cases, the Board of Directors https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis were responsible for the failure of the institution, or at least its severely degenerated condition, due to their failure to understand the true nature of the condition and problems of the institution. Believe me, if you read a severe state/federal exami nation report and you do not attempt to correct the conditions immediately, you probably deserve all that happens to you. On the other hand, if you react posi tively, quickly, and in good faith, you may not only save the institution, but you may relieve yourself of strong, personal liability and, at the same time, save the shareholders’ investments. You have a choice - and if you want to avoid the Administrative Orders, you had better react positively and quickly to remedy the situation promptly. H. Panic! F YOU receive any form of Administrative Order, Ireaction even the voluntary board resolution, then your best is to panic. This doesn’t mean run around like a chicken with your head cut off - it means react posi tively and quickly to solve the problem. Do not react adversely by calling the administrative agency names, assuming they are prejudiced against your Board of Directors and management, and attempt to stonewall the situation. As noted earlier, he who has the gold, rules. Remember, you don’t have the gold — they do. In the banking industry, working with the regulatory agency and solving the problems is the only way to save the ship. If you want to go down with the ship, then fight the agencies the entire way. “The regulatory agencies will look to you, as Directors, to solve the problems they have noted.” One other thing is extremely important - don’t believe your management. You, as Directors, are in charge of the supervision and direction of the banking institution, and the regulatory agencies are going to look to you to solve the problems they have noted. Your management is probably what has caused the problems, regardless of what they say, and regardless of what you feel about them. Your management is in charge of the everyday operations of the institution, in cluding the managerial aspects of running the staff. Also, they are responsible for the internal controls and procedures within the bank. Your management serves at your pleasure, and you as Directors should quickly make sure that the man agement understands you want the problems reme died, and you really don’t care what their opinions are. You desire to have the problem solved as quickly as possible and as fully as possible. If that means four management members have to go, staff has to be fired, or whatever else is appropriate, you should do it imme diately. A Serious Condition What is meant by “panic” is for you to understand that you are involved in a serious condition and not at tempt to “gloss over” the problem and assume that it will go away. It will not go away - it gets worse. If you really don’t believe that, talk to any banking examiner who wanders through your institution over the next several months and they will tell you how they conNorthwestern Banker, September, 1987 “There are very seldom surprise Administrative Orders, because you have ample warning they are going to arrive.” stantly go into banking institutions which are on a downhill slide to failure. Those institutions which turn around their significant problems through hard work, capital infusion, managerial changes, or whatever else is appropriate, are the ones that the examiners give a great deal of credit too, and the ones they look to with pride. The bank examiners are there to assist in the public safety of your institution and, believe me, there are no examiners who delight in closing commercial banks. In fact, the fewer number of problems they find in your in stitution, the better. When you turn a situation around so that the problems disappear and you operate more prudently and more profitability in the future, they can look to your situation as an example of how the bank examination function works within the banking industry. It does not hurt to have friends in the state and federal regulatory agencies, and by working with them and quickly solving the problems, you can make long-lasting friends. If you stonewall the situation, react negatively to the criticisms noted, and even contemplate or com mence legal action against the regulatory agencies, then in the long run they’ll get you. They are there to protect the depositors and creditors of your institu tion, not the shareholders. They will do everything necessary to fulfill their obligations, even if they have to steam-roll over you in the process. I. Financial Conditions Beyond Your Control N RECENT years, a new phenomenon in the com IFDIC mercial banking industry has arisen. Where the statistics from 1935 through 1975 indicated clearly that 7 out of every 10 commercial bank failures arose from embezzlement, fraud, self-dealing, and mis appropriation of funds, the preponderance of bank failures today occur because of economic and financial conditions beyond the control of the banking institu tion. This is reflected in the fact that L. William Seidman, chairman of the FDIC, has indicated that the FDIC is currently only suing bank directors in 67% of all bank failures, not 100% as was the original case. Until recent years, the only three things in this world that were absolutely certain were death, taxes, and being sued by the FDIC in case the bank failed. Today, you have at least a 33% chance of not being sued, although you might not consider that much of a com fort. What is happening is that because of economic and financial conditions within the marketplace in which your bank or bank holding company operates, there may be economic and financial forces which affect the safety and solvency of your bank. It is entirely pos sible that the condition occurred not from inappro priate lending but from the inability of your customers to repay their loans. This could have occurred because of significant agricultural price problems or energy considerations. This is especially true for those two fields (which are charitably called “oil patch” and “ag Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis patch” problems). Many of the commercial banks have failed, not because of illegal or inappropriate lending accommodations, but simply because the borrowers have been unable to repay on loans that were fore casted to be easily payable under previous economic and financial conditions. If this is your situation, you are really no different than a bank or bank holding company that has gotten into an Administrative Order condition on its own without the declining economy around them. A capital forbearance program may assist you, and you may be able to raise debt capital because the basic condition of the bank is better than others under Administrative Orders. However, regardless of how the situation arises, the Administrative Order that you face is an Administrative Order and must be addressed as quick ly as possible. J. What You Should Do When You Receive an Administrative Order DMINISTRATIVE Orders may arrive in the A mail, but they are very seldom going to arrive without some warning. Almost all bank examinations finish with an exit interview, and the senior examiner in charge of the examination will most often give you a clue that such an order will be coming. Furthermore, you may be invited in to talk to the regulatory agency either at your state capitol or at some district office as a body, and you will then learn about the Adminis trative Order. There are very seldom surprise Adminis trative Orders, because you have ample warning that they are going to arrive. Assuming that you receive an Administrative Order, what should you do? React As a Team First of all, you must react as a team, utilizing all your resources, before you sign anything. It doesn’t make any difference whether it is just a voluntary board resolution, which is a unilateral agreement signed by you, but does not have the signature of any regulatory agency involved, or whether it is an MOU, letter agreement, or a cease and desist order. First of all, don’t sign anything until you have had an opportunity to analyze the order carefully, negoti ate the terms, and make sure that all of your Directors are in accordance with the terms of the order. There is no reason to sign the agreement without a review. In fact, the regulatory agencies have no legal right to force you to sign [it] until you feel you have investi gated all legal remedies and conferred with counsel prior to signing. You should listen carefully to what the examiners and/or the regulatory supervisors tell you concerning the Administrative Order, but you should take the order back to your bank for a compre hensive review before negotiating to sign the agree ment. Enlist a Professional Team Second, you should have a team of professionals to assist you in the evaluation of the Administrative Order. The type of professionals that you will utilize will depend upon the nature of the order. You should utilize your local bank counsel or specialized legal counsel to assist you in negotiating the terms of the agreement. You should also utilize your professional external auditors for any accounting related clauses, 35 # # ® ® ® 4) 11 4) # 'll1 ft €> ® and financial consultants if the Administrative Order covers areas of expertise that your financial consul tants usually assist in. You, as a Board of Directors, and senior manage ment, should never attempt to negotiate the agreement yourself. The more you utilize your professional assistants to help you, the better will be the end result. Always keep in mind that your professional counselors have been involved in a large amount of Administra tive Orders and negotiations, while in most cases you have expertise in only one case - your own. The bank ing supervisory agencies are placing scores of Admin istrative Orders and, in the case of federal supervisory authorities, hundreds of Administrative Orders on commercial banks and bank holding companies throughout the United States. They know how to write them, and they know how to negotiate them. If you would attempt to negotiate on your own behalf, with out utilizing expert professional counselors, it would be like the amateurs going into battle with a group of professionals. If you use the analogy of having a high school football team trying to play the Super Bowl champions, you might have the type of analogy that tells you what your chances are. Utilize the Professionals Third, utilize your professional team to analyze the Administrative Order’s provisions and to determine honestly which ones can be complied with and the tim ing for such compliance. If there are any provisions of the Administrative Order which are not factually ac curate, they should be counteracted by factual infor mation and legal argument to indicate to the adminis trative agency that they are incorrect. However, the Board of Directors and their counselors should be realistic as to the nature of the violations and/or conditions which must be remedied. If the Board of Directors and management agrees that there is a problem, then it is up to the professional counselors to assist the management and the Board of Directors to determine what is necessary in order to comply with the Administrative Order and how much time is necessary to comply. In alternative language, don’t fight the provision; work out a timing schedule and an action plan to solve the problem and rewrite the provision and negotiate same with the administrative agency in order to comply as quickly as possible and as fully as possible. The purpose of utilizing your professional counse lors is not to fight the administrative agency. The pur pose is to utilize professional assistance who would be familiar with all types of Administrative Orders and know how they can be complied with and how much time it takes. Furthermore, if there are provisions that are not correct, they can be negotiated out of the agreement prior to signing. If the violations are substantive and you agree that they are, then the professional as sistants can help you devise a plan for complying with the remedy to the problem and also to determine the timing necessary for such compliance. You should always keep in mind that you have to comply, and if you set a deadline for compliance, you must meet that deadline. Therefore, if the administra tive agency requests a loan review to be submitted within 30 days, and it is impossible to do so, you had better negotiate that out of the agreement prior to the signature, rather than later on. You cannot simply say https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis “Your professional counselors should assist you in negotiation with the administrative agency.’’ to the administrative agency that you are not going to comply because the loan review timing is too short; you must comply and, therefore, you must counter with a timing that you know you can meet. Once you have agreed to meet that timing, you must comply on schedule. Negotiate with the Agency After you have thoroughly reviewed the Adminis trative Order, whether it’s a voluntary board resolu tion, MOU, or cease and desist order, your professional counselors should assist you in negotiation with the administrative agency. You should draw up clauses that you can comply with, and then these should be submitted to the administrative agency for their review. You may wish to meet with the administrative agency face to face to discuss any terminology and the timing of such provisions. Your professional counse lors should accompany you in order to negotiate with the lawyers for the state and/or federal regulatory agency. After you have reached an agreement on the provisions of the administrative order, then, and only then, should you sign the order. If you do not agree as to the terms, keep in mind that the state and/or federal regulatory agency has the ability to change the Ad ministrative Order from a voluntary board resolution or MOU into a cease and desist order in which your bargaining power will diminish significantly. You should bargain in good faith, but always keep in mind that you are not the one that holds the gold. The experience of this corporation in assisting our clients over the past five years has indicated clearly to us that when we negotiate Administrative Orders with agencies, we seldom win on the types of terms and pro visions that are in the agreement, but simply win on the timing necessary to comply with the various pro visions. First of all, we find out in most cases, our clients agree that most of the provisions in the Admin istrative Order are factually correct and do not rep resent just technical violations, but significant viola tions of law and/or financial and managerial conditions which must be remedied. Therefore, it is very unusual for us to argue on behalf of our clients that the admin istrative agency is factually inaccurate and that their provisions are inappropriate. However, it is common for the timing of the compli ance to be far too short, according to the clients. Ad ministrative agencies do not know how long it takes to accomplish a loan review within the commercial bank, or how long it takes to comply to a lot of the opera tional provisions. It is up to you to determine exactly how long it takes, and after such determination is reached [agreed to], compliance of the Administrative Order within that time is expected. The most latitude in negotiating Administrative Orders is in this area, and you must show good faith. Once the Administra tive Order has been signed, you must work diligently in order to meet its timing. □ Part I I I of Dr. Austin's article on Administrative Orders will appear in the October issue. Northwestern Banker, September, 1987 36 Understanding the interest rate cycle THE AUTHOR has 34 years of banking experience, divided between a career with the Comptroller of the Currency and the private sector. He was regional direc tor of special surveillance in the OCC Kansas City of fice. He has worked in bank consulting the past four years. His firm of three professional specialists works with banks in all areas of planning, loan administra tion, operations/performance review, software pro ducts, and regulatory compliance. What is Rate Sensitivity? The lack of consensus today on what is required in prudent asset and liability management practices leaves us all asking what is rate sensitivity? Is a twenty-year term fixed rate loan at 15 percent really a fixed rate when current rates are 10 percent? Is a threeyear certificate of deposit fixed at six percent if current rates move to nine percent? How much of “Now” or “Hi-Fi” or “Whatever the Name” accounts will roll into instruments which move up with the market? In a high rate cycle are they fixed or immediately rate sen sitive? What happens to CMO’s or other real estate pools at the bottom of interest rate cycles and what is their true maturity? A Short History of ALM A short history of the development of asset and lia bility management will help us understand what is happening now. We started in the mid-to-late 1970s with an attempt to analyze why interest margins moved up or down. Interest Rate Margin Analysis was a popular term and looked at volume, rate, and mix changes to determine the primary reasons for changes. Gap analysis was discovered by the industry and regu lators reacted to the S&L syndrome. So-called asset and liability management experts more recently started to talk about the absolute need to arbitrage and guess on interest rate movements. Some have tried to find good reasons to make fixed rate loans. Others have even talked about using futures markets to hedge, but have not come up with the exact vehicles to accomplish a good hedge on gaps composed of dif ferent instruments. On the other side, variable rates have been implemented by most financial institutions. Duration factors have become more important to city banks and more confusing to us all. The Expert Opinion Once again, the experts have done a one hundred eighty degree turn and are saying that “Gap” is not nearly as important a factor as originally thought. Yet, Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Written especially for the N o r t h w e s t e r n B a n k e r By RONALD L. GEORGE President, Midwest Management Consultants Omaha, Nebr. w # their own programs start with rate sensitivity analysis and the creation of Gap buckets. It has become very obvious that no one has a magic formula to completely guard against risks in rate O movements or to take advantage of those same move ments. A banker recently related to me about a na tional asset and liability management seminar where the instructor went through a lengthy discussion on the importance of matching maturities. In the ensuing • discussion of a case study the banker suggested selling long term bonds to correct a liability sensitive problem and was promptly told his suggestion was crazy. The instructor gave no explanation but had a gut feeling that was not a good strategy. ® ALM Software Because of all these factors, a number of very com plex and expensive computer programs have been writ ten. And, while some have several operating levels, ^ most are written for the large institutions which are most affected by money market activity. In order to reduce costs, time, and effort in ALM software, our consulting firm offers easy-to-use PC programs - The Gap Manager and Controller - to put ^ data in order and do “what-if” scenarios. Conclusions In order to perform adequate asset and liability management we are called upon to accumulate all data into a meaningful order and construct pro-forma finan- % cial statements based on our best estimates of what the markets will do. And, while it is true that we must avoid high risks from serious mismatches involving the investment of short term funds in long term assets or vice versa, we must also resist the suggestion that # our balance sheets be matched one-to-one based on theories of rate sensitivity that were never actually valid. We now know that most balance sheet accounts with an interest rate factor have some level of sensi- # tivity. It is still basically true in community banks that the market has more influence on liabilities than on loans. What seems to be required to accomplish mainte nance of, or improvement in, interest margins is to • build knowledge of what happens at each point in the interest cycle and to take advantage of movements with an estimate, based on our best analysis of all fac tors. Hopefully, we will all get better at projection and eventually want to build on our level of sophistication. • □ 37 Congratulations To Tlie Iowa Bankers Association O nlO O iearsO f Excellent Service Student Loan Marketing Association 1050 Thomas Jefferson Street, N.W., Washington, D.C. 20007 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Northwestern Banker, September, 1987 38 James R. Jorstad, pres., Hayfield T.L. Jeffers, exec, v.p., Minneapolis Norwest Plans to Consolidate Its Banks in Minnesota and North Dakota retain existing offices. In other parts of the state, the law increases from two to five the number of de rency to consolidate 39 of its Minne tached facilities permitted per bank. sota banks into nine new banks. The The law became effective August 1, consolidations will include creation and the consolidations will be com of one Norwest bank for the seven- pleted as soon as possible after regu county Twin Cities metropolitan latory approval is obtained. According to Mr. Kovacevich, the area, combining 17 metro banks into a single national bank to be called consolidations will allow customers of Norwest banks to make deposits Norwest Bank Minnesota, N.A. Norwest also is applying to con and conduct other transactions at solidate all nine Norwest banks in more locations. Norwest customers North Dakota into one statewide in the seven-county metro area par bank called Norwest Bank North ticularly will benefit from this capa city, he said, because they will be Dakota, N.A. In Minnesota, outside the Twin able to conduct banking transac Cities, 22 Norwest banks will be con tions at all Norwest locations in the solidated into eight new banks. Twin Cities. Each of these banks will be named In the Twin Cities, the consoli “Norwest Bank Minnesota,” fol lowed by a modifier indicating a geo dated bank will be Norwest Bank Minnesota, N.A. Offices will be graphical area. There will be 42 offices of the con Arden Hills, Bloomington, Brooklyn solidated metro area bank and 42 Park, Burnsville, Calhoun-Isles, Norwest offices outside of the metro Camden, Central, Douglas Drive area. Norwest Bank Northfield will (Golden Valley), Downtown Still not be part of the consolidations. It water, Eagan, East Bloomington, will continue to be a Minnesota East St. Paul, Eden Prairie, 8th Street & Portland Avenue, 48th state-chartered bank. Richard M. Kovacevich, Norwest Street & Chicago Avenue, Govern vice chairman and head of its Bank ment Center, Hastings, Jordan, ing Group, said Northfield is not in Maple Grove, Maplewood, Metrocluded in the consolidations because South, MetroWest, Midland, Northholding a state charter could have town (Coon Rapids), Norwest Center (downtown Minneapolis), Old St. strategic advantages in the future. Mr. Kovacevich said the consoli Anthony, Osseo, Plymouth, Ridgedations will bring greater conve dale, St. Louis Park, St. Paul, 7th. & nience to customers. He emphasized Olson Highway, South St. Paul, that the banks would “continue to Stillwater, Sycamore Lane (Maple identify closely with their own com Grove), 3030 Nicollet Avenue South, 1221 Nicollet Avenue, Universitymunities and neighborhoods.” Plans for the consolidations are Midway, Valley View, West H ast ings, West St. Paul, Woodbury. the result of new state laws. Outside the Twin Cities, the new In Minnesota, a 1987 law permits banks in the seven-county Twin banks and their offices will be (for Cities metro area to consolidate and regulatory purposes, the charters ORWEST Corporation filed ap N plications last month with the Office of the Comptroller of the Cur Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis will be located at the cities shown in 0 italics): Norwest Bank Minnesota Mesabi, N.A., Virginia, Ely, Eveleth, Hoyt Lakes; Norwest Bank Minnesota North, 0 N.A., Duluth, Denfeld (Duluth), Miller Hill (Duluth) Grand Rapids, Silver Bay, Two Harbors; Norwest Bank Minnesota Central, N.A., St. Cloud, Litchfield, Sartell, 0 Sauk Rapids, Westwood (St. Cloud); Norwest Bank Minnesota West, N.A., Moorhead, Fergus Falls, South Moorhead, South Thief River Falls, Thief River Falls, Westridge # Mall (Fergus Falls); Norwest Bank Minnesota South west, N.A., Marshall, Eastside (Mar shall), Northland Mall (Worthing ton), Worthington; # Norwest Bank Minnesota South Central, N.A., Mankato, Albert Lea, Austin, Mankato East; Norwest Bank Minnesota South, N.A., Faribault, Burnside (Red # Wing), Medford (Owatonna), Owatonna, Red Wing, South Oak (Owa tonna); Norwest Bank Minnesota South east, N.A., Roches ter, Dodge Center, • Goodview (Winona), Green Mead ows (Rochester), Northside (Roches ter), Winona; Norwest Bank Northfield (exist ing state bank, not part of consolida- • tion). □ 1988 MBA Officer Nominees Named The Minnesota Bankers Associa tion Nominating Committee met on Aug. 6 to decide recommended offi cers for the Association for 1988-89. The recommendations will be acted upon at each of the nine MBA Dis trict Meetings in September. Proposed candidates are: President—A. William Sands, chairman, Western Bank, St. Paul, and current first vice president of the Association. First Vice President—James H. Hearon, III, chairman, National City Bank, Minneapolis, and current second vice president for the MBA. Second Vice President—Micheál L. Lillehaugen, president, Communi ty State Bank, Alexandria. Treasurer—Martin V. Chorzempa, president, Richfield Bank & Trust Company. Elections will take place at the June 1988 MBA Annual Convention, t^> be held in Duluth. * 0 ||t 0 il> # the experience * ' ; ■* tat§a Experienced bankers and investment specialists. That’s who will be working for you at Marquette . . ./whether it’s a com plex bond swap a needed correspondent service, or just a routine transaction. Career bankers working as a team to see that all your correspondeni needs are m et Chances are you’ve already seen these folks in your bank. They have the mileage to prove it. A nd they have the experience that com es from over 200 com bined years in the banking business. (That’s 73,109 days!) You’ve made a career o f banking. Doesn’t it make good sense to do your correspondent banking and investment activity with career specialists? 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 Ah Marquette Bank Minneapolis Merrber -D iC Investment Department 341-6558 MN Wats 800-642-7582 National Wats 800-328-8013 40 Norwest Corporation has an nounced that Leslie S. Biller, San Francisco, executive vice president and head of consumer markets at Bank of America, has been named to the new position of corporate execu tive vice president and head of stra tegic planning and acquisitions for the Norwest Banking Group. Mr. Biller will be primarily responsible for coordinating interstate banking strategy. Mr. Biller has been with Bank of America since 1985. He previously was senior vice president of interna tional consumer markets. Prior to joining Bank of America, he was with Citicorp for 12 years. Norwest has named Daniel A. Saklad, previously of Citicorp, as Minnesota-W is consin regional president for re tail and business banking and ex e c u tiv e vice president of Nor west Bank Min n e a p o lis. He joined Citicorp, in St. Louis, in 1974, and since DA- SAKLAD 1985 was president of Citicorp Per son-to-Per son, Inc., a mortgage and insurance subsidiary. Gerald M. Kanne, current regional president for retail and business banking in the two states, has been named to the new position of chief administrative officer for the retail and business banking group. He will also continue to head Norwest’s Minnesota merger task force. Mr. Kanne joined Norwest in 1957 at Norwest Bank Rochester. He served also at Norwest Bank St. Paul and Norwest Bank Minneapolis before being named regional president in 1982. Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis First Bank System, Inc., has an nounced the following promotions: Anna Bagdasarian to vice presi dent, entertainment division, special industries group. She joined the Los Angeles loan production office of First Bank Minneapolis in 1985, and has most recently served as assis tant vice president, entertainment. Susan Lackey Drake to vice presi dent, private capital. She has been with FBS since 1981, when she joined the executive banking divi sion at First Bank Minneapolis. She has most recently served as assis tant vice president, private capital. Bernard J. Weiss to vice presi dent, new ventures/products. He most recently served as assistant vice president of that department. Dennis Dills has been hired as head of FBS’s trust operations. He has joined First Trust Company as senior vice president and head of the Trust Operations Group. He pre viously was employed by First Wachovia, where he managed trust operations since 1980. * * * Norwest Technical Services, Inc., a subsidiary of Norwest Corpora tion, has a n nounced it has c o n s o lid a te d three of its tech nology units into a new sales, mar keting and deli very organiza tion called Nor west Technical Services Sales J.A. SIKKINK Marketing. The three business units transferred into the new division are Norwest Elec tronic Delivery Services (NEDS), Correspondent Data Processing and Cash Letter Sales. John A. Sikkink, senior vice president and a 25-year Norwest veteran, has been named manager of the new division. He has been head of NEDS since 1984. Prior to that he served at Norwest Bank Des Moines where he eventually became executive vice president of operations and adminis tration. David Gibb, Dallas, will join Nor west as vice president and director of technology sales for the new divi sion. He was director of a nation wide electronic business unit of MoneyMaker EFT Services. Other new vice presidents named directors of the new company are currently in the Norwest technology group. They are Phillip J. Benson, director of marketing; Albert Lewison, director of off-premise banking products, and Susan Schoeneberger, director of NEDS operations, custo mer service and systems staff. Also joining Norwest is Kathryn Reimann, marketing representative. She was network marketing coordi nator for the Cash Station Network of the First National Bank of Chicago. Norwest Corporation announced on July 29 that it will purchase from time to time up to 900,000 shares of its common stock. The acquired shares will be used to meet periodic stock insurance requirements under the company’s employee savings and investment plan, employee stock options, shareholder dividend reinvestment plan, conversions of convertible debentures and for other corporate purposes. ^ ^ £ £ f £ Marquette Bank Hosts Seminar closed, and the agreement is pend ing regulatory approval. No staff changes are anticipated. * * * At American National Bank, John P. Seidel has been promoted to assistant vice president—correspon dent banking. He joined the bank as a credit analyst in 1983, and was promoted to correspondent banking officer in 1985. Prior to joining American, Mr. Seidel was a branch representative and loan officer at Household Finance Company. Dean A. Junkans has joined the bank as a trust investment officer. He was previously employed at Farm Credit Services in a variety of positions, most recently as a funds management officer. * * * Marquette Bank Minneapolis held its Correspondent/lnvestment Conference this past month at the Minneapolis Athletic Club. Taking part in the one day meeting were, from left: Ralph Nelson, v.p., inv. serv.; Carl Pohlad, pres, and Mark Schabert, v.p. & div. head, corr. bkg. The conference included presentations on tax reform, director liability, bank regula tions and a look at the securities industry. Mr. Pohlad welcomed bankers from around the area. He told them, “Times have changed in correspondent banking and the environment is very competitive, however, Marquette Bank will continue to make an effort in correspondent banking.” In addition to the morning sessions, breakout sessions were available later in the day and included a look at mutual funds and the Marquette Fee Sharing Program, financial in surance and consulting services and the Master Retirement Program. An economic out look concluded the business portion of the conference. Entertainment during the seminar included a luncheon talk by Harmon Killebrew, mem ber, Baseball Hall of Fame, a “pre-game” party featuring dixieland band music and an evening at the Twins’ baseball game. Norwest Corp. has announced it has transferred its automobile dealer financing operations into re tail and business banking, from cor porate banking, and named John G. Stumpf senior vice president. Don ald L. Swanson, manager of dealer fi nancing at Norwest Bank Minnea polis, will continue to manage dealer finance as part of the new retail and business banking unit. Mr. Stumpf currently is vice president and manager of Norwest’s capital lending group. He joined Norwest in 1982 as chief credit offi cer at Norwest Bank East St. Paul. * * * First Bank System will offer a new investment banking service through its FBS Merchant Banking Group that capitalizes on the com pany’s experience with the bank divestiture program it began in https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1985. The new function is called Banking Financial Services and will offer expertise in the areas of capital generation, debt and equity place ments, mergers and acquisitions, consolidations, divestitures, and structuring for financial institu tions. Robert J. Anderson, FBS execu tive vice president who was head of special bank projects and imple mented the divestiture program, will serve as senior managing direc tor of Banking Financial Services. * * * First Bank System announced re cently that it has signed a purchase agreement to sell First Trust Com pany of Florida, N.A., a First Bank System subsidiary, to Bank of Bos ton-Florida, N.A. The subsidiary maintains one office in Sarasota, Fla. Terms of the sale were not dis- At Norwest Business Credit, Inc., Edina, John L. Matyi has been ap pointed senior vice president of the loan administration department. He replaces Lee Mork who recently re tired after 13 years with the com pany. Mr. Matyi has been employed by Norwest Bank Minneapolis for eight years, beginning in commercial lend ing and working in the capital lend ing group since 1984. * * * The Marquette-Holm Insurance Agencies have developed a new pro gram called the “Financial Insur ance and Consulting Services” (FICS) program. Through FICS, Marquette-Holm provides financial institutions with insurance and lia bility coverages for their customers and insurance management for themselves, as well as opportunities for the institutions to generate sig nificant fee income by way of creditrelated and investment-oriented in surance services. According to Wayne Boysen, chairman and CEO, FICS is “the first of its kind.” * * * American National Bank of St. Paul will host a two day seminar, “Financing and Managing Indepen dent Business: Practical Tools for Advisory Banking” in St. Paul on Sept. 21 and 22. The seminar is de signed for commercial bank officers. Northwestern Banker, September, 1987 42 Steven C. LeFever, president of Business Resource Services of Seat tle, Wash., will be presenter. Regis tration cost is $295, which includes text, materials and lunches. For more information, contact Pat Jans sen at the bank at 5th and Minne sota Streets, St. Paul, MN 55101, or call 612-298-6212. * * * First Bank System is offering a lower rate installment loan for Minneapolis-St. Paul area residents who suffered damage to their property from the recent record-setting rain fall. Flood damage resulted from up to ten inches of rain which fell in the area on July 24. The new loan offers an annual percentage rate one and a half percentage points lower than the normal First Bank rate. Advanced in Winona Three employees of Merchants National Bank in Winona have been promoted to assistant cashiers. Michael Speltz joined the bank in 1980 as an auditing assistant, and in 1982 was advanced to operations of ficer. Suan Hovell was hired by Mer chants in 1984 as an installment loan officer trainee. She was pro moted to administrative assistant of the real estate loan department in 1985 and later that year advanced to mortgage loan officer. She has been the compliance officer for the bank since 1985. Scott Strebe joined the bank in 1986 as a commercial loan officer. Before coming to Winona, he was employed by Marine National Bank of Neenah, Wis. as a commercial banking officer. Dennis Herricks and Thomas Czaplewski have been promoted from administrative assistants to in stallment loan officers at the bank. Mr. Herricks joined Merchants in 1986 from ITT Financial Services, LaCrosse, Wis. Mr. Czaplewski pre viously served at Heights Finance Corp. in Burlington, la., and also joined the bank last year. MBA District Meetings Offered HE MINNESOTA Bankers As T sociation will hold its 1987 Se nior Officer Workshops and District Meetings throughout September. Districts 3, 4 and 5 will meet jointly on Sept. 14 at the Sheraton Inn Northwest in Brooklyn Park, and their meeting will conclude with a re ception. All the other districts will feature dinners with a special speaker: at Districts 1, 2 and 7, David Landswerk, Wayzata Super intendent of Schools, will present “ I t’s Up to You,” and at District 8, 9 and 10, Joe Griffith of Dallas, Tex. will address the topic “Success is Attitude.” Dates and locations for these meetings are: District 1— Sept. 8, Kahler Hotel, Rochester; District 2—Sept. 9, Orchid Inn, Sleepy Eye; District 7—Sept. 10, Kandi Entertainment Center, Willmar; District 8—Sept. 22, Regency Inn and Conference Center, Hibbing; District 9—Sept. 23, Best Western, Thief River Falls; District 6—Sept. 24, Holiday Inn, Brainerd. Complete fee for the meeting is $28. You may register through the MBA office. The advance program is as follows: P.M. 1:00 Registration. 2:00 Call to O rder—D istric t President. State and Federal Legisla tion, John S. Jackson, MBA gen. counsel. Strategic Planning—Peter Brown, Peter Brown Associates, St. Paul. District business meeting and election of officers. MBA Services Update— Truman Jeffers, MBA exec. v.p. Economic Development and the M B A ’s M in n eso ta Bankers Enterprise Net work-W illiam Sands, MBA 1 st v.p. 5:30 Reception. 6:30 Dinner and speaker, James R. Jorstad, MBA pres., pre siding. 8:30 Adjourn. □ Mr. Hanson was graduated from Before joining MetroBank, Mr. Welle held several positions with the Luther College in Decorah, la., in First Banks, most recently as a com 1971. mercial loan officer at First Bank Security. He also served in that capacity with First Bank Edina. Mr. Hoover Joins MBA Staff Welle began his career with the First Philip A. Hoover has joined the Banks in 1977 as a bank examiner. Minnesota Bankers Association. He serv es as an agent for the MBA Insurance Agency, Inc., a Pres. Named in Prior Lake w h o lly -o w n ed Directors of First National Bank subsidiary of the of Prior Lake recently named Dennis MBA. H. Hanson as Prior to join president. ing the Associa Before joining tion, Mr. Hoover F irst National spent ten years P.A. HOOVER Bank, Mr. Han with St. Paul son was execu Fire and Marine Insurance Com tive vice presi pany as an underwriter and field dent of First Na supervisor specializing in the blanket tional Bank and bond and directors’ and officers lia Trust Company bility areas. He was a former branch of B arab o o , D. HANSON VP Named in Bloomington Wis., and prior Joseph M. Welle has been named to that he was vice president of vice president of MetroBank Bloom Brenton National Bank in Grinnell, MINNESOTA NEWS. . . (Turn to page 53, please) la. ington. Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis _ 9 q £ 0 # # * 43 P.M. 1:30 2:30 4:00 5:30 Illinois Independent Bankers to Meet HE INDEPENDENT Commu nity Banks in Illinois 13th An nual Convention and Exposition will be held Sept. 25-28 at the Hamilton Hotel in Itasca. “Projections and Reflections” is the convention theme. Keynote speaker is Senator Alan J. Dixon, and James Hagerbaumer, president of Hagerbaumer Econom ics, Waukegan, will be featured as well. A broad variety of topics will be addressed during concurrent edu cational sessions, from responsibi ties of bank directors to legislative updates. Among other activities at the con vention will be dinner and theater in Chicago, a “Speakeasy Party,” exhi bits and spouse tours. For more information on the con- T ^ 0 lity ll vention, contact Barbara Blough at the ICBI office, 300 West Edwards Street, Springfield, IL 62704, (217) 753-4331. The preliminary schedule is as fol lows: Friday, Sept. 25 A.M. 9:00 Golf Tournament P.M. 12:00 Tour of Long Grove Village 7:00 Evening Social Function Saturday, Sept. 26 A.M. 9:00 Opening Breakfast, Sen. Alan Dixon 10:30 Shopping at Woodfield Mall and Waccamaw Pottery 10:30 Education Sessions 11:45 Annual Business Meeting and Luncheon A.M. 10:30 P.M. 1:00 5:00 7:00 Exhibits Education Sessions Exhibits Optional bus trip to Chicago for dinner and theater Sunday, Sept. 27 Exhibits Educational Sessions Exhibits Chicago Speakeasy Party Monday, Sept. 28 A.M. 9:00 Drovers Breakfast and Rec ognition Program 11:00 Adjourn □ Chicago • Northwest Natl, to Open Elk Grove Office READY to break ground for the new Elk Grove unit of Nothwest National Bank of Chicago, a member of the Lane Bank Group, are these officers: Elk Grove Village President Charles J. Zettek, Village Manager Charles A. Willis, Lane Bank President Scott K. Heitmann and Chairman William N. Lane III, Northwest National Bank of Chicago President James W. Aldrich, and new suburban facility Manager Allison Stevens. The ceremony was held July 29. The new facility is located at 70 Biesterfield Road, and will include four drive-through lanes, an ATM and six lobby teller windows. Retail, commercial and trust departments will also be located at the facility, which is scheduled for completion in November, 1987. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Kevin W. Davis has joined Finan cial Shares Corporation as executive vice president and manager of the training and d e v e lo p m e n t services d iv i sion. His pre vious position was as vice pres ident and direc tor of market ing, training and sales at the MidKW- DAVIS State Bank, Altoona, Pa. He also served as a coordinator of sales, ser vice and interbank advertising for Keystone Financial, Inc., Harris burg, Pa. * * * Cole Taylor Financial Group, Inc. has formally announced a new CHICAGO NEWS. . . (Turn to page 62, please) Northwestern Banker, September, 1987 Hales Corners and for State Finan cial Services Corporation, a bank holding company. Promoted in Ellsworth M&l Reaffirms Offer to Marine On July 30, Marshall & Ilsley Cor poration announced it has reaf firmed its offer to The Marine Cor poration to merge with the Marine and will file an application with the Federal Reserve Board. Marine recently rejected the offer in favor of a lower one from Banc One of Ohio. J.A. Puelicher, chairman and chief executive officer of M&I, stated, “We believe our offer to ex change 2.235 shares of Marshall & Ilsley stock for each share of Marine’s, together with a form of price protection at $66.50, repre sents the most attractive proposal for our respective shareholders, and the State of Wisconsin. “Our financial advisor, Saloman Bros., agrees that M&I’s offer af fords Marine shareholders a poten tial difference in value from the Banc One offer. We believe the Marine shareholders should have the right to choose between our offer and Banc One’s. The filing of an ap plication with the Federal Reserve Board will preserve Marine share holder’s option to consider our offer on an equal basis with that proposed by Banc One. Nevertheless, we do not intend to increase our offer or engage in a bidding contest that would harm the interests of our shareholders.’’ Meanwhile, M&I announced that an agreement has been executed to purchase Software Development Corporation of Fort Lauderdale, a privately-held software company, subject to regulatory approvals. Community, Valley Banks to Merge It was announced on July 20 that approval has been received from the Federal Reserve Board for the affili ation of Community Banks, Inc. (Middleton) with Valley BancorporaNorthwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tion, Appleton. The merger was ex pected to close on Aug. 28. Commu nity Banks owns six banks and has 85% of its assets in banks in the greater Madison area. Valley would issue about two million shares of its common stock and pay about $600,000 in cash in the transaction. Valley currently has about 7,900,000 common shares outstanding. The corporation has also pro moted Laurel A. Marquardt to audit supervisor. She has been with the organization for three years, most recently as a senior auditor. At Valley Trust Company, Appleton, Sue Bernarde, Michael A. McMillan and Carol Irving have joined the staff. Ms. Bernarde has been named operations officer/security process ing manager. Prior to joining Valley, she was affiliated with Associated Kellogg Bank, Green Bay for 11 years, most recently as accounting section manager. Mr. McMillan will serve as data processing manager. Prior to joining Valley, he was a computer opera tions manager at Speed Queen. Ms. Irving has been named train ing coordinator. She previously served as trust officer at Brenton National Bank in Des Moines, la. Four individuals were promoted to officer status recently at Pierce County Bank & Trust Company, Ellsworth. Evelyn A. Cannon is assistant cashier and manager of the East Ellsworth Branch. She joined the bank in 1967. E. CANNON E. JENNINGS L. DONNELY C. CARDELL Elfrieda L. Jennings was pro moted from assistant auditor to auditor. She joined the bank in 1966. Lori K. Donnelly was promoted to installment loan officer. She has been with the bank since 1977, most recently as a personal banker. Corinne M. Cardell, a member of the bank staff since 1980, was pro moted to customer service officer. University National Elects President, Director WBA Supports Northwestern Wis. Two months after beginning work as executive vice president at Uni versity National Bank, Milwaukee, Mark Zalewski has been promoted to president. He succeeds Phillip Hudson, who has retired. Mr. Zalew ski has been active in banking ad ministration for nearly 15 years and has served as president of two banks in Madison. Meanwhile, J.J. Holz has been elected to the bank’s board of direc tors. He is owner and CEO of Holz Chevrolet in Hales Corners, and also serves as chairman for State Bank As part of Gov. Tommy Thomp son’s N orthw estern W isconsin Week, the Wisconsin Bankers Asso ciation Executive Council held its Aug. 14 meeting in Superior. The 13 member council normally meets in Madison but wanted to support the state’s effort to recog nize the Superior area. Among other activities, bankers have testified at hearings of the Senate Committee WISCONSIN NEWS. . . (Turn to page 62, please) 45 Norwest Announces Promotions Norwest Corporation has an nounced that Truman D. Phelan, se nior vice presi dent for busi ness banking at 1Norwest Bank South Dakota— Sioux Falls, has been promoted to senior credit a d m in is tr a to r for N o rw e st’s South D akota j.D . PHELAN region, effective Sept. 1 . He succeeds Vance O. Wil liams, who recently was named president of Norwest’s Montana region. Mr. Phelan has been with the Sioux Falls bank since joining Nor west in 1966. He was appointed commercial loan officer in 1970, named vice president and head of business banking and commercial lending in 1984 and promoted to se nior vice president last year. He worked with Dun & Bradstreet in Nebraska and South Dakota from 1952 until 1966, and was manager of its South Dakota operations when he joined Norwest. Meanwhile, Norwest Bank South Dakota has promoted Dale Hellevang, Jim M attern and Gary Schw eitzer to a s s is ta n t vice presidents in human resources and Charlotte Bartels to regional human resources officer. Mr. Hellevang joined Norwest in 1980 in Madison. In 1981 he was named a human resources represen tative in Sioux Falls and in 1983 was promoted to district human re sources officer. Mr. Mattern joined Norwest in Owatonna in 1981. In 1984 he trans ferred to Duluth, and in 1985 was named district human resources offi cer for the Black Hills and North Central Districts of Norwest Bank South Dakota, Rapid City. Mr. Schweitzer joined Norwest Audit Services in 1977 and in 1981 transferred to Norwest in Rapid City. In 1984 he was named assis tant vice president, district opera tions. He succeeds Mr. Mattern. Ms. Bartels joined Norwest Audit in 1974 as secretary and administra tive assistant. In 1984 she trans ferred to Norwest Bank South Da kota as a regional human resources administrator. Dacotah Declares Stock Dividend Rodney Fouberg, chairman, an nounced recently that the board of directors of Dacotah Bank Holding Co., Aberdeen, has declared a 3 % stock dividend in lieu of its semi- an nual cash dividend. It will be paid on Sept. 15 to shareholders of record on Sept. 1 . Bank Chartered in Viborg The South Dakota Division of Banking and Finance has issued a certificate of authority to operate a state chartered bank to Farmers State Bank of Viborg, as well as a certificate of authority for the bank to operate a branch in Irene. Woods to fill an unexpired term rep resenting the Southeast Group until June, 1989. Mr. Woods is regional president, F irst Bank System, Fargo. Promoted in Minot Advanced in Fargo ® At Norwest Bank Fargo, Harlee Olafson has been promoted to vice president/business banking at its main office in Fargo. He previously served as assistant vice president. ® Mr. Olafson joined Norwest in 1979 at Valley City, and transferred to the Fargo bank in 1984. Named in Valley City Cheryl Klinger has been named https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis assistant cashier and auditor at First National Bank of Valley City. She joined the bank in 1981 as in stallment loan secretary. In 1985, she was named operations assistant. NDBA Appoints Woods Southeast Group Rep At its meeting last month, the North Dakota Bankers Association Executive Council appointed Jerry Gloria Hultberg has been pro moted to vice president/financial services group manager at First Bank Minot. She joined the bank in 1966. Mrs. H u ltb e rg had held many posi tions, including personal banker, branch manager and a s s is ta n t head of retail banking. Her most recent position was as assistant vice president and manager of retail banking. 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For More Information Call Or Write To: ESI 1065 N. 115TH ST. • SUITE 210 • OMAHA, NE 68154 • (402) 493-7773 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Turn Key” Systems With Complete On-Line Documentation For Your Information Processing trol System Three months history on-line Calculates key management ratios • Information can be “rolled” to 5 levels • Deposit Accounting System • Five-tier interest accrual capabilities • Allows use of variable transaction codes • Three methods of overdraft protection • Tailored to in-house policies to generate fee income • Account analysis and service charging Savings Management System • Handles complete passbook processing ■ • Allows setting of maximum withdrawals • Provides automatic Christm as Club capabilities Retirement Management System . I • Includes self-directed plans, 401 (K )s, Keoghs and IRA s • Available separately for the IBM Personal Computer • Instantly answers variety of "what if” questions • Provides full user and government reporting • • Provides for automatic payment distribution • Complete IRA accounting system Time Certificate of Deposit Accounting System § Management System fjcation data jackage of customer balances imercial credit applications on-line help keys, on-line documentation https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • True book entry system • Fixed and variable rate capabilities • Ability to define your own product line • Full maturity prediction reporting capabilities • Add on deposit features 52 Lynn Duncan Promoted at First Interstate Casper Lynn B. Duncan has been elected to the position of senior vice presi dent, in charge of business and eco nomic development at First Inter state Bank of Casper. This appointment creates a new position for the bank, according to Charles E. “Chuck” Pedersen, presi dent and chief executive officer. L.B. DUNCAN M.M. WILKIE Duncan will coordinate the eco nomic development efforts of the bank by helping to put bank custo mers in touch with various economic development agencies throughout the state. He will also act as the liai son between the bank and private and public economic development programs. Duncan will also be in charge of First Interstate’s business develop ment, coordinating various sales programs and correspondent bank contacts. Most recently Mr. Duncan has served First Interstate of Casper as vice president and marketing man ager. He brings more than 30 years of business development and mar keting experience to his new posi tion. After attending the University of Minnesota at Duluth, he served from 1952-55 in military service then returned to his native Duluth to join Northern City National Bank. In 1970 he moved to Des Moines, la., where he joined Bank Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ers Trust Company as vice president for marketing. He returned to Min nesota in 1973 to join the Dick Stebbins Agency in Minneapolis, work ing there four years. Mr. Duncan moved to Casper in 1977 to join Wyoming National Bank (now a Norwest franchise), then joined First Interstate of Cas per in July, 1984, as vice president and marketing manager. M. Michelle Wilkie will replace Mr. Duncan as vice president and marketing manager. Most recently she has served as assistant vice president in the commercial loan de partment. Previous to that, she was assistant vice president and market ing officer for First Interstate Bank of Great Falls, Mont. $8.4 million. At June 30, 1987, equi-0 ty capital was $19.7 million and primary capital was $28.5 million or 6.4% of total assets. “While the losses incurred in re structuring our investment portfolio# were higher than expected and loan loss provisions have put us behind our profit plan in the second quarter, we are encouraged that non-interest expenses are down almost 16% fo r # the first six months. These improve ments combined with an anticipated reduced level of loan loss provisions in the second half should result in profitable operations in the th ird # and fourth quarters of 1987.” Promoted in Laramie First Interstate Bank of Laramie has named E.J. (Woody) Haines^ chairman. He will remain CEO, and his former position as president will be filled by David L. Keithley, who will also serve as chief operating of ficer. Mr. Keithley previously served as senior vice president and credit administrator at First Interstate Bank of Idaho, Boise. Also at the bank, Gordon W. Jen kins has been promoted from senior vice president to executive vice president and chief financial officer. Affiliated Reports Second Quarter Loss Affiliated Bank Corporation of Wyoming has reported its financial results through June 30, 1987. R.W. Miracle, president and chief execu tive officer of Affiliated, stated “for the second quarter, 1987, Affiliated is reporting a loss of $1,808,000 ($1.52 per share). When combined with earnings of $534,000 for the first quarter, the year-to-date loss through June 30 was $1,274,000 ($1.07 per share) compared to a loss of $8,930,000 ($7.53 per share) for the first half of 1986. “The loss in the current quarter is attributable primarily to a restruc turing of the bank’s investment portfolio, as a result of increases in the level and volatility of interest rates earlier in the quarter. New se curities losses in the quarter related to this restructuring were $1,635, 000. “The provision for loan losses in the second quarter was $1.3 million while net charge-offs in the same period were $2.9 million and the end ing allowance for loan losses was WBA Announces Committee Members ® The Wyoming Bankers Associa tion has announced its 1987-88 com mittee members. Chairmen of the committees are as follows: # Agriculture—Ed Garding, First Interstate Bank, Sheridan. A u d itDon Doyle, Norwest Bank Casper. Consumer Credit—Janet Julian, Hilltop National Bank, C asper.# Coordinating with the State Trea surer—Donald Swanton, First Inter state Bank, Casper. Credit Confer ence—Richard Niedling, First Inter state Bank, Casper. Insurance—# Ralph Owen, First Wyoming BankEast Cheyenne, Cheyenne. Legisla tive-Charles E. Pedersen, First In terstate Bank, Casper. T rust— Thomas A. “Rusty” Ward, Jr., N or-# west Bank Casper. 53 MBI Session Completed The Midwest Banking Institute (MBI) concluded its 21st annual ses sion on July 24. About 66 students completed the two one-week ses sions in two consecutive years. The Institute is sponsored by the state bankers associations of Minnesota, Montana, North and South Dakota, and Wisconsin. James Bennett, pres., Billings John T. Cadby, exec, v.p., Helena Norwest Names President for Region VIII Norwest Corporation has an nounced that Vance O. Williams has been named re gional president for N o rw e st’s R egion V I I I , comprising Nor west’s banking o p e ra tio n s in Montana. Mr. Williams succeeds C.P. B uck M oore, who has been named to the new post of regional chairman for Montana, and who re mains Norwest regional president for South Dakota. Mr. Williams previously was ex ecutive vice president of Norwest Bank South Dakota—Sioux Falls, and senior credit administrator for the South Dakota region, Region VI. He joined Norwest in 1957 as a credit analyst in the corporate office in Minneapolis, and subsequently served with Norwest banks in Fari bault, Minn., for 11 years; Fargo, N. Dak., four years, and Rapid City, S. Dak., for eight years. He moved to Sioux Falls in 1984. through the first quarter of this year. We’ll know more when later statistics are available.” MBA 25 Year Club Awards Scholarships The Montana Bankers Associa tion reminds bankers whose careers span 25 or more years that they may join the MBA’s 25 Year Club scholarship award program. To join, bankers need only send a $25 con tribution and the year they entered banking to the MBA office. The contributions are used to fund $500 scholarships to students majoring in finance, business and ag business at Montana state universi ties and colleges. Six scholarships were awarded this year. MINNESOTA NEWS. . . (Continued from page 42) manager for the Huron Valley Na tional Bank in Ann Arbor, Mich. Mr. Hoover’s primary duties will re late to the marketing of Banclnsure products to MBA-member banks. Economic Recovery Seen According to a recent article in The Billings Gazette, statistics con firm economic recovery is taking place in Montana. The newspaper has tracked vari ous economic indicators since 1984, including housing starts, number of oil rigs, visitation at Yellowstone and Glacier national parks, savings and loan deposits, prices for farm commodities and unemployment rates. Phil Brooks, Montana state eco nomist, was quoted as saying: “My overall judgment is that recovery started last fall and has continued https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Changes Told in St. Cloud The addition of John Reep as trust officer has been announced by John E. Leisen, president of Zapp National Bank in St. Cloud. He was previously associated with Iowa State Bank. In addition, Keith Finstad has been named assistant trust officer. He has been with the bank for four years and previously worked in the audit department. Assistant Vice President Mark Christianson recently received his Certified Financial Planner status. He has been with Zapp for six years. Zapp Presents Free Movies for Senior Citizens Zapp National Bank, St. Cloud, is once again sponsoring its “Senior Cinema” program, in cooperation with the Cinema Entertainment Cor poration. The bank makes free movie tickets available for use at the local Crossroads Cinema theater. Re freshments at 9:30 a.m. precede the show, at 10:00. The bank recently of fered “Crocodile Dundee” and will present “ Hoosiers” on Oct. 14. Brainerd Bank Sponsors Business Seminars For the second year, First Ameri can Bank in Brainerd is co-operating with the Brainerd Area Chamber of Commerce to present a series of seminars for small businesses called “Business Sense Seminars.” A re cent program, offered on Aug. 25 at the Brainerd Holiday Inn, featured a CPA discussing how to “Manage Your Business for Profits.” The seminars are held monthly. Future topics include tax laws, em ployee appraisals, computers and ac counting. Bank Secrecy Seminars Held Nearly 200 bankers attended the first three meetings of the Bank Sec recy Act Seminar for Customer Con tact Personnel. The seminar is spon sored by the Minnesota Bankers Association and 17 Minnesota Study Groups and the Southwest Chapter of the AIB, in cooperation with the Internal Revenue Service. The seminar is scheduled to be held in 24 locations from July through September. According to MBA Administrative Vice Presi dent Wayne Berthiaume, “Response has been tremendous.” 2000 total attendees are expected. Northwestern Banker, September, 1987 54 mid-market lending. Prior to that he ^ was employed by Affiliated Bankshares of Colorado, Inc. and First National Bank of Denver. 1st Interstate Acquires Bank of Casper Colorado Natl. Announces Staff Changes Colorado National Bankshares, Inc., Denver, has announced recent staff changes. Robert G. Baker, Jr. has joined Colorado N ational B ank—E x change, Colorado Springs, as execu tive vice president and chief operat ing officer. He began his banking career in 1964 at the former Colo rado Springs National Bank, and held various positions there until his election as president in 1985. Pamela M. Kelsall has been elected a vice president at Colorado National Bank of Denver. She has been with CNB since 1978 and man ages the banking division’s planning and product development activities. Stephen J. “Ched” Miller has been elected a vice president of Colo rado National Bank—Lakewood. He joined the bank in 1974 and is re sponsible for commercial lending. Also at the Lakewood bank, Nancy A. Harvey has been elected a loan operations officer. She has been with the bank since 1983. Linda Brinson has been elected a vice president of Colorado National Bank—Arvada. She began with the bank in 1978, and is responsible for accounting, customer assistance, bookkeeping, switchboard and proof departments. Also at the Arvada bank, Pat Deegan has been elected a banking officer. She joined CNB in 1980 and is responsible for new accounts. Ronald K. Siegle has been elected assistant vice president at Colorado National Bank—Northeast, Denver. He has been with CNB since 1983 and is responsible for commercial and consumer loans and consumer compliance. Chris A. Duran has been elected an assistant vice president of Colo rado National Mortgage Company. She joined the company in 1981, and is responsible for all loan servicing Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis functions. E. Kinzie Gordon has been elected an assistant vice president of Colo rado National Mortgage Company. She joined the company in 1985, and is responsible for commercial real estate loan origination and investor relations. Central Bancorp. Announces Promotions First Interstate Bank of Denver announced today that it has ac quired 100% of the stock of the Bank of Casper. The stock was ac quired as a result of a bank stock loan to Energy Banks, Inc., a Casper bank holding company. Chuck Pedersen, president and CEO of First Interstate Bank of Casper will become chairman of the Bank of Casper. No other staff changes are anticipated. Arapahoe Banks to Merge United Banks of Colorado, Inc., Denver, has filed an application with the Comptroller of the Currency for the merger of United Bank of Arapa hoe—East into United Bank of Ara pahoe. Both banks are located in Englewood. Following approval, the merged bank will be headquartered in the United Bank of Arapahoe facility. William K. Soldan has been elected president, chairman and CEO of the bank. He previously served as executive vice president of United Bank of Littleton. He has nearly 25 years of banking experience, including 15 years with United Banks of Denver, Arapahoe, SouthPark and Littleton. Kent D. Boyd has been elected president of Central Bank of Aurora. His 17 years of banking experience include senior vice president for Cen tral Bank of Colorado Springs and executive vice president for Central Bank of Broomfield. He has also served as interim president for two Central banks, and most recently was executive vice president of Cen tral Bank of Chatfield. Meanwhile, Raymond L. Guerrie has been elected president of Central Bank of Westminster. He has served other Central Banks in Battlement Mesa and Glenwood Springs as president and executive vice presi dent, respectively. He is currently president of Central Bank of Broom field and will continue in that func tion. Glen L. Ryland has been elected to the board of Central Bank of Denver. He is president of Ryco, CMBA Elects Officers Inc., and aviation and general man At its recent convention in Vail, agement consulting service. the Colorado Mortgage Bankers As sociation elected its 1987-88 officers and board members. D.L. “Dutch” Franz, senior vice president of United Mortgage ComNamed in Denver pany, was elected president; David Rick Regan has been named se C. Harder, president and CEO of In nior vice president of commercial terstate Lending Corporation, vice lending at First Interstate Bank of president, and C.W. “Chuck” Lent, Denver. He joined the bank in 1986 Jr., vice president of National Mort as vice president and manager of gage Company, secretary/treasurer. 0 0 0 0 0 0 If we're not your correspondent bank, you're writing off the best service in the region. Frankly, you’re short-changing your self and your custom ers by not using First Interstate Bank of Denver as a correspon dent bank. That's because no other bank in the Rocky M ountain region approaches our experience, resources, and breadth of products. You're missing the business know how of the region’s oldest bank, one that understands your m arket and has helped large and small financial institutions suc ceed for over 127 years. You’re missing the strength and flex ibility of the m ultistate First Interstate Bank system, w ith m ore than $55 billion in assets. And you're missing a range of com prehensive and technically advanced products that can be tailored to your needs today and tomorrow. Specifically, you're overlooking: Cash letter processing that gives you excellent availability and competitive pricing. A proven com m itm ent to extending cre d it Participations that offer flexibility and fast turnarounds. Investment products and expertise from the region's leading investment dep artm en t International services that offer access to First Interstate's worldwide network. The m ost advanced cash m anage m ent systems, along w ith complete consulting and support. Third-party cash m anagem ent ser vices that will m eet the needs of your customers. And you can buy federal funds at national rates in am ounts as low as $50,000 on approved credit. To learn more, call Bob Swartz now at (303) 293-5600. W hether your operation is large o r small, you have a lot to gain from the best correspondent banking services in the Rocky M ountain region. O First Interstate First Interstate Bank of Denver 633 Seventeenth Street, Denver, Colorado 80270 Member FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Here’s One Line That Says More About Us Than Anything. When it comes to gauging success, one of the key indicators is total assets. First National Bank of Omaha1* has one of the best records of any financial institution in Omaha. We’re proud of our solid growth. And proud to serve you — and assure you — with our strength, financial expertise and experience. Few institutions offer you what we can in performance and stability. Wouldn’t you rather trust your money to the people who consistently prove they know how to manage it? In 1986 we achieved $1,118,046,000.00 in total assets. That’s why we’re proud of our name. * First National of Ncbr., inc. No Wonder They Call Us First. <D firs! naNonal bank of omaha Member FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 57 Legislation Dominates Area Meetings berg, who manages the NBA em ployee benefit program. Mr. Blaha stressed the need for development of a good image of REA MEETINGS conducted banking, as well as the need for a strong Contact Banker w at six locations around thedeveloping state last month by the Nebraska Bank committee. He reviewed an almost ers Association drew excellent weekly series of meetings he and the crowds of bank officers. other staff had been involved in The meetings were held Tuesday, since his election to head the NBA 0 Wednesday and Thursday in succes at the convention last May. sive weeks—August 11, 12 and 13 in A major portion of the program Omaha at Ross’ Steak House; Bea was devoted to the “Government trice Elks Club, and in Columbus at Relations Report,’’ reviewed in the New World Inn; August 18, 19 depth by Mr. Brandt. He stressed HI and 20 at Scottsbluff Country Club; again the need for a strong Contact McCook Elks Club and the Kearney Banker committee because it will be Ramada Inn. needed in coming months as key NBA President Don Blaha, presi issues important to banking are pre dent and CEO at First National sented to the legislature. # Bank, Ord, presided at the meet Mr. Brandt stated up front that in ings. Speakers at each meeting in his opinion, “Usury could be the cluded Bill Brandt, NBA general most dangerous issue facing us in counsel; Stan Matzke, NBA execu the legislature, notwithstanding the tive vice president; Roger Fleury of emphasis on structure and other # Nebraska Senator Karnes’ office in issues. It will take the united effort Washington, D.C., and Bill Oster- of all financial institutions in Neb w By BEN HALLER, JR. Publisher A • ADDRESSING th e s ix area m e e tin g s c o n d u c te d la s t m o n th by th e N e b ra s k a B a n ke rs A s s o c ia tio n w e re th e above, le ft to rig h t: Bill Brandt, N B A g enl. c o u n s e l; Stan Matzke, NBA exec. v .p .; Roger Fleury, a id e to N e b ra s k a ’s U.S. Sen. K a rn e s, and N B A Pres. Don Blaha, pres. & ceo, 1st N a tl., Ord. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis raska, and that means all Nebraska banks as well. If you can assist as a Contact Banker, please come for ward now to help make this a united front.’’ On the issue of Public Funds, Mr. Brandt said law changes over the years mean that “Our argument for a level playing field gets weaker.’’ LB488 that was proposed last ses sion in Lincoln demands divestiture of 50% of state funds from banks. Mr. Brandt said Nebraska is the last state having such restrictions against s&ls. He reported that “We have just received a compromise offer’’ on the Public Funds issue from leaders of the top five s&ls in the state. This compromise would remove the re strictions; would allow deposit of funds in stock s&ls only; would defer the startup date to January 1, 1990. “This may not be enough,” Mr. Brandt stated, “but down the road is coming a bill to pool all insurance through one place for several coun ties going together. Now they want to pool public funds to go into one place and we see possibly a state bank like the one in North Dakota... A positive result of compromising on the Public Funds issue is from gaining an ally that will help fight the pooled funds issue to operate a state bank, and they would help fight this.” In response to a ques tion, Mr. Brandt said the 50% dives titure is not a part of the compro mise offer made by the s&ls. Mr. Brandt said “The Public Funds issue was discussed with the NBA committees at their retreat re cently and they agreed unanimously to seek compromise.” On the issue of interstate bank ing, Mr. Brandt reported that NBA has sent out to five firms requesting a proposal to conduct a survey. Two questions apparently will be asked: The first will ask the banker’s per sonal preference on interstate bank ing—for, against or neutral. The sec ond will ask what the NBA’s posi tion should be—for, against or neu tral. The results, according to Mr. Matzke, will be used by the execu tive council in determining a posi tion. Mr. Brandt said Nebraska is bet ter off with voluntary rather than mandatory mediation such as pre vails in Minnesota and Iowa. He said as of September 1, former Judge Sam Van Pelt and his firm will provide voluntary mediation Northwestern Banker, September, 1987 58 Nebraska News service. He also said that on the issue of branch banking, the NBA has voted not to take a position so long as the bill is confined to Douglas, Sarpy and Lancaster counties. He also stated NBA’s opposition to tamper ing with the usury limits, or allow ing any annuity loophole as a means for evading debts in bankruptcy. Mr. Fleury recapped Congres sional work leading to the passage of H.R. 27, which was signed into law August 10 by President Reagan. He also reviewed current negotiations that brought the Farm Credit Sys- Talk To The Municipal Bond Professionals William March Robert E. Rob President Exec. Vice President Patrick H. Rensch C.W. (Chuck) Poore, Jr. Sr. Vice President Sr. Vice President Bill Abts, Jr. Wayne A. Rasmuss Vice President Secretary-Treasurer Micky Krupinsky John Trecek Representative Counsel For municipal bond OFFERINGS, BIDS and APPRAISALS, call on the professionals who specialize in tax-free bonds. Municipal Bond Underwriters, Inc. Investment Bankers • Underwriters 208 South 19th Street, Omaha, Nebraska 68102 (402) 341-1144 In Nebraska Call Toll Free (800) 642-4413 Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tern rescue bill and the ag secondary market out of committee and before the House in mid-August. Mr. Matzke reported that Presi dent Blaha had reactivated the Eco nomic Development Task Force ini tiated a year and a half ago by for mer NBA President Kelly Holthus. In the material handed out to all reg istrants at the area meetings was a page asking individual banks for a commitment to the NBA’s Lender Commitment Program in connection with local economic development. It is a non-binding commitment but serves to focus each bank’s atten tion on the need for such local development, while also focusing community attention on the com mitment of the local bank(s). In a related area of activity, Mr. Matzke reported that the NBA mar keting committee will underwrite the approximately $ 12,000 cost for producing a half dozen newspaper ads for local placement that have been developed by Bailey & Lewis advertising agency of Lincoln. The ads are taglined “Your Home Town Bank,” and are aimed at economic development in cooperation with the Nebraska Department of Economic Development. Mr. Matzke also reported on a customer study to be handled by the Rozmarin firm in Omaha. It will con sist of two parts. Two personal inter view focus group studies will take place in Lincoln and Kearney, con sisting of 10 to 12 people in each case. The state also has been divided into five areas by the marketing committee for 1,000 telephone sur veys. The results will be presented to CEOs in October at the Senior Management Conference. The business meetings concluded with an explanation of new details of the NBA insurance programs by Bill Osterberg, who services the Vol untary Employees Beneficiary As sociation that provides coverage to nearly 400 Nebraska banks. A reception and dinner, featuring Oklahoma humorist Dan Baker, con cluded the evening at each meeting. first meeting will be held in early Oc tober. The purpose of the meeting will be to recommend a target year/ date for the first Ag Lending School, plus begin curriculum planning. Committee members are: Jack Meyers, exec, v.p., First National Bank, Cunningham, Kan.; Galen Nelson, v.p., American State Bank, Great Bend, Kan., James L. Darrah, pres./CEO, Chapman State Bank, Chapman, Kan.; Becky Tongish, Dir. of Ed. and Human Resources, KBA; Jone Beer, Schools of Bank ing administrator; C.G. Holthus, pres./CEO, First National Bank, York, Neb.; Homer Pierce, pres./ CEO, Seven Valleys State Bank, Callaway, Neb.; Dale Goff, v.p., Richardson County Bank, Falls City, Neb.; Don Blaha, pres./CEO, First National Bank, Ord, Neb., and Karen Miller, Dir. of Ed., NBA. Elected in Tecumseh Terrence L. Geiger has been elected president of the Johnson County Bank of T ecu m seh , a w h o lly -o w n e d s u b sid ia ry of A m erican N a tional Corpora tion. Active in banking since 1972, Mr. Geiger had served as the president of other banks prior to joining American National in 1986. Promoted in LaVista The Bank of Nebraska in LaVista has named Robert J. Hearron its president. He previously served as senior vice president of Mid City Bank of Omaha. Other promotions at the bank were: Dick Janowski, senior vice president, to senior loan officer; Cur tis D. Brown, to loan officer/consumer loans; Anthony J. Horacek to □ cashier; Ethel J. Stamm to assistant cashier in charge of mortgage loans, Ag Lending Committee and Cindy Luukkonen to assistant Established by KBA/NBA cashier in operations. Under the direction of the KBA/ NBA Schools of Banking board of directors, a special Agricultural Banks to Merge Application has been filed to Lending Advisory Committee has been established. Chaired by C.G. merge Dalton State Bank into First “Kelly” Holthus, the committee’s National Bank of Sidney. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 60 maha At Norwest Bank Nebraska, Michael Drahota has been promoted to vice presi dent-special loan administra tion and Marcy Long and Diane Robinson have been advanced to assistant vice presidents. Mr. Drahota joined Norwest in 1985 as a special loan administration officer. Prior to that he worked as an admin istrative legal council for another bank. Ms. Long is manager of the 96th and L Street facility. She joined the bank in 1967 and has managed the discount department, was assistant facility manager and a personal banking officer. M. LONG D. ROBINSON Several officer appointments have been announced by FirsTier Bank Omaha. Ronald H. Bielenberg was named vice president. He joined the bank in February and is serving as the city executive for the Kearney facility. Nancy K. Johnson was promoted to vice president. She joined the bank in 1973 and is a personal trust administrator III in the estate and trust division. R.H. BIELENBERG M.J. MATTHES N.K. JOHNSON J.S. MORRIS to vice president. He transferred to the bank in 1986 from FirsTier Man agement Consultants where he was a senior field consultant. Named assistant vice presidents were: Gerald J. Cook, manager of the credit card—credit department; Howard James Cunningham, trust systems analyst in the operations area of the estate and trust division; Karry A. Johnson, manager of account services for the operations division; Thomas H. Rogers, lending officer II in the corporate team of the commercial lending division; Robin A. Sgroi, manager of credit card operations in the retail division, and Bruce Stacy, a lending officer II in the leasing department of the lending division. Other officer appointments were: Christine L. Brown, lending officer; John C. Brown, credit officer; Susan K. Fleetwood, credit officer; Dan K. Gomez, lending officer; Virginia Hughes, trust investment officer; Wood A. Hull, personal trust officer; Linda Mason, operations officer; Susan Moreland, operations officer; Mary Theresa Ringwalt, trust in vestment officer, and Philip D. Wolf, lending officer. * Ms. Robinson is the manager of the Cash Center at 20th and Farnam Street. She joined Norwest in 1974 and has been manager of the savings section, DDA section and tellers. She has managed the Cash Center since 1971. Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis * £ q 0 0 0 0 * FirsTier Financial, Inc. net in come for the first six months of 1987 totalled $9,418,000, a 35.3% in crease over the $6,959,000 earned during the same period of 1986. On a per share basis, earnings were $ 1 .88, compared to $1.40 a year ago. Second quarter earnings totalled $4,409,000, or $.88 per share, up 62.5% from the comparable 1986 figure. According to William C. Smith, president and CEO, the corpora tion’s improved performance pri marily resulted from its ability to re duce the monthly provision for loan losses to a level that is consistent with current requirements. The primary capital ratio of Firs Tier Financial, Inc., was 7.69% at mid-year. FirsTier Bank Omaha’s ratio was 8.62% and FirsTier Bank Lincoln’s was 9.12%. * Also named v.p. was Mark J. Matthes. He is division manager of the new created operations division. He transferred in June from FirsTier Bank Lincoln, where he served as vice president and operations man ager. John S. Morris was also promoted * ^ 0 0 0 0 • * Kirkpatrick, Pettis, Smith, Polian Inc. has announced the appointment of Robert D. Northrop as senior vice president, business development, in its Lincoln office. KPSP, a full-service investment banking and securities brokerage, is 0 0 Nebraska News an affiliate of Mutual of Omaha with offices in Omaha and Lincoln. Mr. Northrop has many years of banking an investment experience. From 1979-83, he served as presi dent and chief executive officer of First Mid America, Inc., a Lincolnbased brokerage firm. Prior to this, he served as executive vice presi dent for First National Bank of Lin coln (now FirsTier). Most recently, he has served as administrator of economic develop ment for the City of Lincoln. * * * At American National Bank, Chris J. Murphy and Albert Pinho have been elected assistant vice presidents. Mr. Murphy joined the C.J. MURPHY A. PINHO bank in 1980, and will continue his responsibilities with the marketing and loan departments. Mr. Pinho joined the bank’s loan department in 1985. * * * First National Bank of Omaha has filed an application with the Of fice of the Comptroller of the Curren cy to open a branch office at 114th & Dodge Streets in Omaha. * * * Mrs. Elizabeth Robbins, 58, who retired from the First National Bank of Omaha last spring after 20 years of service there, died last month of cancer in an Omaha hospital. Liz Robbins was known to bank ers throughout Nebraska, Iowa and other states for her two decades of work in the correspondent banking department where she worked as secretary and administrative assis tant. Mrs. Robbins is survived by her husband, W.J. Robbins, Nebraska area manager of the U.S. Treasury Savings Bonds division; a son, Steve, of San Francisco; and two daughters, Jeanne Harrington and Kay Peterson, both of Omaha. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis John Cochran, president of Norwest Bank Nebraska, has an nounced that Norwest scholarships have been given to the following Nebraska students: Marcia Hild, Lori Ann Krajicek, David Arkfeld, Teresa Ann Luedke and Tracey Newby of Omaha, Andre Leigh Hitz and Donald Fendrick of Norfolk and Michael J. Farrell of Hastings. A total of 94 college scholarships were given by Norwest this year. 61 Lexington Banks to Merge Farmers State Bank & Trust Co., Lexington, has filed application with the Nebraska Department of Banking to acquire First Savings Company of Lexington. The latter is an industrial bank owned by basical ly the same stockholders as Farmers State Bank, and it will be merged into the bank. Krejci Moves to Hickman Ronald J. Krejci has resigned as president and CEO of Schuyler Don Bell has resigned as presi State Bank & Trust Company. He dent and chief operating officer of and a group of investors have ac the Crawford State Bank to pursue quired the First State Bank of Hick other business interests. Ben Nor man. Mr. Krejci will serve as that man has been appointed executive bank’s chairman and chief executive vice president and chief operating officer. officer. He previously served as vice president at Security National Bank NBA Members Encouraged in Harrison. Max Hasselbring has resigned as to Attend ABA Convention the bank’s installment loan officer, First choice for hotel accommoda in order to accept a position with the tions at the ABA Convention has Casey Insurance Agency in John been announced by the NBA to be son. His successor is Scott Haskell, the H yatt Regency Dallas at Re who was formerly assistant cashier union, 300 Reunion Boulevard. at the First National Bank of Fair- NBA members are encouraged to bury. mark this hotel on their convention registration form. The NBA Post-Convention Trip, Ownership Change Oct. 21-24, will take you to the San Filed in Minatare Antonio Marriott Riverwalk. Call A group of investors headed by the hotel at (512) 224-4555 and ask Gary L. Kelley has applied under the for the NBA Post-Trip room block. Change in Bank Control Act to ac Current rates for single or double quire 100% of the voting shares of are $95-$105. Contact the NBA of Minatare State Company, the hold fice for more information on the ing company for Minatare State Post-Trip. Bank. Mr. Kelley is the bank’s presi dent. Application is on file with the Federal Reserve Bank of Kansas Trust School Announced City, awaiting approval in late Sep The KBA/NBA Schools of Bank tember. ing will offer their 1987 School of Present owner of the holding com Trust & Financial Planning on Nov. pany is bank Chairman H.L. McKib- 2-6 at the Holiday Inn—Central in bin. Omaha. According to Mr. Kelley, no staff Registration will begin at 11:30 changes are anticipated in connec a.m. on Nov. 2; classes officially tion with the ownership change. begin with an orientation at 1:00 p.m. The school adjourns on the 6th at approximately 12:15 p.m., follow Merger Application ing the post-test. Filed in Schuyler Enrollment fee includes registra Schuyler State Bank & Trust Co. tion, instruction, four nights lodg has filed an application with the ing, breakfasts, lunches, coffee Nebraska Department of Banking breaks, one reception and all class to acquire State Savings Company room materials. Fees are $700 for of Schuyler. The two organizations single housing, $600 for double, and share some common stockholders. $550 without housing. State Savings Company would be For an application, call Jone Beer merged into the bank and operated or Pam Bartak at (402) 474-3313. as an office of Schuyler State Bank. Deadline for applications is Oct. 5; Changes Told in Crawford Northwestern Banker, September, 1987 62 The new benefit is in addition to 0 other benefits already provided for Cole Taylor employees—a 401(k) plan, profit sharing, medical and dental insurance, and life and dis ability insurance. £ * Donald R. Campbell was elected president of Commerce Savings Lin coln, Inc. by the board of directors at their July meeting. Mr. Campbell, who was formerly senior vice presi dent, remains a member of the board of directors. Mr. Campbell began his banking career at the National Bank of Com merce in 1972. He transferred to Commerce Savings in 1974 shortly after the bank was acquired by First Commerce Bancshares, Inc. At First Commerce Bancshares, Ann Emanuel Hovis has been pro moted to audit manager. She joined the audit staff in 1983. Her previous experience includes employment with First National of Kearney. * * * FirsTier Bank Lincoln has an nounced several promotions: Alan R. Eveland was promoted to assistant vice president, underwrit ing, municipal and government bond division. He joined the bank in 1979. BAI Officers Announced The 1987-88 officers of the East Central Nebraska Bank Administra tion Institute are as follows: Presi dent-T erry Novak, First National Bank Omaha, David City branch; Vice President—Daryl Wilton, First National Bank, Schuyler; Secretary/ Treasurer—Robert Frehrichs, First National Bank, Columbus. Past President—Jayne Shack, Albion Na tional Bank. Receives Scholarship The KBA/NBA Schools of Bank ing has named Max L. Dibble reci pient of The Prochnow Educational Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis * * The Construction and General Laborer’s District Council of Chi cago and Vicinity, in cooperation 0 with Amalgamated Trust & Savings Bank, Chicago, will offer a no-fee 12.5% annual rate MasterCard to its 16,000 members. Said Council Presi dent Ernest Kummerow, “Ours is # among the best credit card affinity programs, not only in the construc Michael G. Harlander was ad vanced to assistant vice president tion trades, but possibly the coun and investment officer, municipal try.’’ * * * # and government bond division. He joined FirsTier in 1984. In connection with the recent Daniel S. Black was named ag and changes in the Cole Taylor Financial financial institutions officer, and Group’s corporate identity, a special Carolyn A. Sharp, operations man children’s art contest was held by all • ager at the 13th and “L” branch. member banks. Artwork submitted * * * was to answer the question, “ If you Robert R. Rossel has been elected changed your identity, what would correspondent banking officer at the you look like?” Winners were selected in the 8-11 ® National Bank of Commerce. He joined NBC in 1979 as check pro year age group and the 12-14 year cessing manager after spending nine group at each member bank. Judges years with an Omaha bank as cost were a panel of three members of the accountant officer. After serving as School of Art Institute’s non-degree ® check processing officer and assis program. Winners received scholarships to tant vice president, Mr. Rossel left the bank to spend the past two years the Studios Program of the Art In stitute. in private business. * * * WISCONSIN NEWS. . . FirsTier Bank Lincoln has closed (Continued from page 44) its Bellwood branch, located at Broadway and State Streets. on Aging, Banking, Credit and Tax ation and the Senate Committee on # Agriculture, Health and Human Services on the availability of credit for rural economic development. Foundation PDP Scholarship. Mr. Bankers also testified before the Dibble, an operations officer at the joint committee on Northwestern # First National Bank of Phillipsburg, Wisconsin’s special listening session Kan., will receive a full scholarship on the economy of Northwestern for the first-year session at the Wisconsin with special emphasis on Graduate School of Banking in tourism. Madison, Wis. # CHICAGO NEWS. . . (Continued from page 43) Employee Stock Ownership Plan (ESOP). All of the initial 7,923 shares in the ESOP were purchased without incurring debt, meaning Cole Taylor’s initial contribution to the ESOP amounts to about $1.47 million. Named in LaCrosse Arthur S. Holmes, president and founder of ALTEC International, Inc., has been named to the board of # directors of First Bank LaCrosse. Prior to forming ALTEC, he was vice president and manager of the gas processing division of Koch Pro cess Systems, Inc., Westborough, !» Mass. HELP AG CUSTOMERS. . . (Continued from page 26) trying to make the point that Nebraskans can grow other things besides feed grains,” Mr. Holthus empha sized. In-House Data Processing Innovation comes naturally to Kelly Holthus. In 1966, 1 st National Bank of York was the first Neb raska bank (outside of Omaha and Lincoln) to hire a service center to do its data processing. The First Na tional Bank of York was also the first small-town bank in Nebraska to install automated teller machines (ATMs). ‘‘Our latest innovation is to do our data processing in-house,” says Mr. Holthus. ‘‘We were happy with the service center but, after a thorough study, we decided we could save a significant amount of money by doing our own data processing. Not only that, we are now the service center for our branch banks in Bradshaw, McCool Junction and Waco. ‘‘Best of all, our entire bank is running on a software system developed and produced by Information Tech nology Inc. of Lincoln. Midwest Firms Are Leaders “And that brings up a pet peeve of mine,” he inter jected. “Too many people out here on the Great Plains have this notion that sophisticated computer systems have to come from the big cities on the coasts. “ I remember having breakfast with some bankers at a meeting back East. This one bank president was from New England and he was raving about how much he liked the banking software he was running on his inhouse data processing system. Then, a bank president from Virginia chimed in and said he was using the same software and started telling everyone how his staff loved this particular system. “Since we were thinking about doing our own data processing, I broke in to ask the name of this software company. I found out it didn’t come from Boston or Silicon Valley. It came from 50 miles down the road in Lincoln! Kelly Holthus points to 26 acres of land where 1st National Bank of York officers have planted onions, cauliflower, broccoli, sweet corn, lima beans and muskmelon as part of the bank’s “Alterna tive Crops Demonstration Plot.” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis IN 1st National’s computer room, Kelly Holthus discusses a data processing procedure with Ronald Winquest, manager of EDP at the bank. “Later, we learned Nebraska has at least three com panies producing computer software for the financial services industry. With a little more digging, we found three of these companies virtually dominate the pro duction of financial services software in America. “And th a t’s my point. If we can write some of the most sophisticated and innovative computer software in the world out here on the Great Plains, we also have what it takes to gear our farming operations to the realities of a changing economy. Farmers Rely on Computers “More and more, our farmers come in with their led gers and cash-flow projections on computer printouts. Recently, I read that today’s farmers are adapting to the micro-computer more quickly than their grand fathers took to the tractor after World War I. The use of computers means our customers have a better fix on their costs, day-to-day. “A sure way to go broke is to sell low and buy high. Shipping out raw materials at low prices and buying back high-priced manufactured or processed goods is a cycle we must break by learning to convert whatever we produce to cash either on or near the farm. “ I think the successful bankers of the future will be those who are willing to invest in on-farm or near-thefarm food or fiber processing plants. If a bank is a re flection of the community it serves, bankers have to be willing to help their customers change with the times,” says Mr. Holthus. Farm/Bank Teamwork Needed “Long ago,” he continued, “ I learned you really have only two choices: you are either part of the prob lem or part of the solution.” So, as president of this bank I ’ve tried to get everyone in our industry to be part of the solution. Farming has to change and bank ing has to change right along with it. “Working as a team, we’ll make it into the 21st Cen tury and be stronger than ever,” Mr. Holthus con cluded. □ ■ ABOUT THE AUTHOR—William A. Hamilton, Ph.D is a Lincoln-based free-lance writer and syndi cated columnist. Dr. Hamilton’s column, “Central View,” appears in almost 450 newspapers. Northwestern Banker, September, 1987 64 Welcome from the Bankers' bankers Whether you come to talk business, to renew long-term friendships, or to make new ones, the Iowa Bankers Associ ation convention is a valuable get-together. While you're here, we hope you'll take time to come in and visit with our Bankers' bankers — Steve Brewer, Patti Campbell, Ben Eilders and Don Jordahl. Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bankerspust Des Moines, Iowa 50304 Member FDIC, Federal Reserve System 65 * “Forging Ahead with Confidence” Iow a Bankers A ssociation 101st A nnual Convention Des Moines Convention Center September 20-22 RUSSELL HOWARD CLAIR LENSING FRED HAGEMANN NEIL MILNER President Pres.-Elect Treasurer Exec. Vice Pres. OMPLETING a century of activity and service, C the Iowa Bankers Association will hold its 101st annual convention September 20-22 in Des Moines. ^ £ 0 # # • • Once again the city’s beautiful convention center will host bankers from all over the state. With the theme “Forging Ahead with Confidence,” the convention will focus on the new optimism rising throughout the banking industry. Russell S. Howard, chairman of the Mahaska Investment Company, Oskaloosa, will preside over the gathering. Scheduled to assume the presidency is Clair J. Lensing, president of Farmers State Bank, Marion. IBA Treasurer for the past two years has been Fred Hagemann, president of the State Bank of Waverly. Neil Milner has continued to serve as the Association’s executive vice president. “Bank Day at Living History Farms” will begin the festivities on Sunday the 20th. Highlighted by ribbon cutting ceremonies at the Walnut Hill Bank, the day will also feature a church service at Church of the Land and an old-fashioned picnic. Bankers and their families may visit Living History Farms free of charge for the day. Two special performances of “South Pacific” with Robert Goulet will be presented for bankers at 3:00 and 7:30 on Sunday at the Civic Center. Outstanding speakers are scheduled for the general sessions on Monday and Tuesday. Internationally known economist Paul McCracken, “Wall Street Week” ’s Louis Rukeyser, ABA President Mark Olson and University of Iowa basketball coach Tom Davis will be featured. Forums for both Republican and Democratic presidential candidates will be offered, and the following are scheduled to appear: George Bush, Pierre DuPont, Ben Fernandez, Alexander Haig, Kath leen Heslop, Jack Kemp, Paul Lexalt, Pat Robertson, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Joseph Biden, Michael Dukakis, Richard Gephardt, Albert Gore, Jr., Jesse Jackson and Paul Simon. The popular concurrent sessions will be offered again this year, with topics including mergers and ac quisitions, banking regulators, marketing, products and services, and bankruptcy. The President’s Dance, “Some Enchanted Even ing,” will be held Monday night at the Marriott Hotel and feature The Big Band Sound, formerly the William Tell Band. Midwest Marketing Consultants will be taking portraits in order to provide bankers with com plimentary picture packages. The Ag Breakfast Tuesday morning will include speakers Dean Kleckner, American Farm Bureau Federation president, and cowboy humorist Baxter Black. Entertainment for the traditional Inaugural Dinner will be the West Des Moines Dixieland Band. The convention program and spouse program fol low: Sunday, September 20 A.M. 11:00 11:00 P.M. 12:00 1:00 2:00 2:00 3:00 4:00 5:00 7:30 Bank Day at Living History Farms. Church services. Lunch. Dedication of Walnut Hill Bank. IBA and IBIS annual meetings, Church of the Land. Registration Desk open at Convention Center. “South Pacific,” Civic Center. Exhibit hall open at Convention Center. Reception in exhibit hall—cash bar. “South Pacific,” Civic Center. Northwestern Banker, September, 1987 66 Iowa News M. OLSON L. RUKEYSER Monday, September 21 A.M. 8:00 Registration desk and exhibit hall open. 8:30 Opening ceremonies. 9:00 Paul McCracken, member, President Reagan’s Economic Policy Advisory Board. 10:00 Republican presidential candidates forum. 11:15 Tom Davis, U. of Iowa basketball coach. 11:45 Lunch. P.M. 1:30 Concurrent sessions. “Unraveling the Mysteries of M&As’’ “Realizing Profits From Expanded Bank Ser vices” “Straight Talk From the Regulators” “Creative Portfolio Strategies” “Bits and Bytes of Computer Wizardry” 3:00 Break. 3:15 Concurrent sessions repeated. 8:30 “ Some Enchanted Evening,” President’s Dance, Marriott Hotel. Tuesday, September 22 A.M. 7:00 Registration desk open. 7:00 Ag Breakfast. Dean Kleckner, pres., American Farm Bureau Federation. Baxter Black, cowboy poet. 8:00 Exhibit hall open. 9:00 Concurrent sessions. “Don’t $ell Your Bank Short” “State-of-the-Art Approach to Loan Documen tation Preparation” T. DAVIS Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis R. GOULET D. KLECKNER “With Opportunity Comes ResponsibilityGuidelines to Home Equity Lending” “Secrets of a Bankruptcy Fighter” 10:30 Break. 10:45 Concurrent sessions repeated. 11:30 50-Year Banker and Past Officer Luncheon, Sa very Hotel. P.M. 12:15 Lunch. 1:30 Democratic presidential candidates forum. 2:30 “W hat’s Ahead for the Economy?” Louis Rukeyser, economist and host of “Wall Street Week.” 4:30 Convention adjourns. 6:30 Inaugural Dinner and Show, Marriott Hotel. S p ou ses’ Program Monday, September 21 A.M. 8:30 Opening Ceremony—General Session. 9:00 Paul McCracken—General Session. 10:00 Republican presidential candidate forum—General Session. Skywalk tour. 11:30 Younkers luncheon & style show. P.M. 1:30 General Convention—Concurrent sessions. 2:00 Educational and craft workshops: Pre-death/Financial Planning. Jazzing Up Your Jewelry Box. Kitchen Cover-ups. Tone’s Presents: Variety Is The Spice of Life. 3:00 Concurrent sessions repeated. 8:30 “Some Enchanted Evening’’—President’s Dance. Tuesday, September 22 A.M. 7:00 Ag Breakfast. 9:00 General Convention—Concurrent sessions. 9:30 Brunch—Iowa Ballroom/Marriott Hotel—Tipper Gore. 10:45 Concurrent sessions repeated. P.M. 1:00 Democratic presidential candidate forum. 2:30 Educational and craft workshops: Rape Prevention. Gourmet Goodies, Gadgets & Grounds. Hats Off To The Hat Lady. Busy Hands/Happy Heart. 2:30 Louis Rukeyser. 4:30 Spouse program grand prize drawing. 6:30 Inaugural Dinner and Show. 67 WE ARE YOUR BANK'S & SERVICES, INC A FULL SE R V IC E IN SU R A N C E AG ENCY • I I K j A n I 4 C I FULL SE R V IC E B A N K S" __ ver 4V2 Million Dollars in Dividends returned to Iowa Banks in the past ten years. i^ S S Iowa B ank ers In su ran ce & Services, In c. 1 0 4 E. L o cu st S tre e t (Effective O c to b e r 1, 1987) 3 0 0 L iberty B u ild in g D es M oines, Iow a 5 0 3 0 8 (515) 2 8 6 -4 3 0 0 Call o u r toll TREE WATS n u m b e r 1 -8 0 0 -5 3 2 -1 4 2 3 Owned by Banks in Iowa for the Benefit o f Iowa Banks https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Northwestern Banker, September, 1987 68 Iowa News idents; Joel Warland, loan officer. Davenport Davenport Bank and Trust Co.: James K. Figge and Thomas K. vice president and cashier; Peter B. Figge, office of the president; Rich Welch, senior vice president and se ard R. Horst and Robert G. Lenertz, nior trust officer; Margaret E. Bill senior vice presidents; Michael A. Bauer and John W. Schricker, first ings, vice president. vice presidents; Barry A. Richards, vice president; David C. Howell, cor Chicago American National Bank: Peter S. respondent banking officer. Hilton, correspondent banking offi Des Moines cer; Craig C. Grannon and Meg GagBankers Trust Company: John liardo, second vice presidents. Ruan, chairman of executive com Continental Bank: Robert C. mittee; John Chrystal, chairman Vasko, senior vice president; Zed S. and CEO; Dennis R. Wood, presi Francis and Philip C. Adams, vice dent and COO; Thomas D. Smith, presidents; Mary K. Nihlean and executive vice president; Larry FroJames E. Honan, Jr., second vice wick, Ben G. Eilders and Joseph J. presidents; David U. Drake, bank Bustin, senior vice presidents; ing officer; Barry L. Bobrow, bank Donald H. Jordahl, vice president; ing associate; Marybeth Jones, vice Steven D. Brewer, assistant vice president, treasury and securities. president. First National Bank of Chicago: First Interstate Bank of Des Jack Clark and Clarence Cross, vice Moines: Robert G. Millen, president; president; Dennis Duffy, corporate James W. Eiler, executive vice presi banking officer. dent; Randy P. Steig and William V. LaSalle National Bank: Delmar Mullins, vice presidents, Iowa divi Rogers, Wayne Bismark, Rudy sion; Dean A. Roth, assistant vice Frank and Peter McGuire, vice pres president, investments; Joan A. You Will See Them at the 101st Annual Iowa Bankers Convention HE 101 ST annual convention of T the Iowa Bankers Association will be held September 20-22 at the Des Moines Convention Center. Of ficers and representatives of larger banks from major banking centers in the Midwest will be attending the convention. Following the list of bankers plan ning to attend is a list of personnel from investment, service and equip ment firms registered for the con vention. Cedar Rapids Merchants National Bank: Henry Royer, chairman and president; Robert S. DeWaay, executive vice president; Jerry N. Trudo, Terry M. Martin, Richard E. Retz, Dennis O. Earhart and Robert J. Louvar, vice presidents; Douglas R. Bass, corres pondent banking officer; Andy B. Appleton, ag loan trainee. Peoples Bank & Trust Co.: Ken neth A. Strother, senior vice presi dent; Lawrence E. McGrath, senior BEST WISHES to the Iowa Bonkers Association os it begins a second century of outstanding service American iïïu s t C tSavings Danl^ The Danl^qf Opportunity DUBUQUE and DYERSVILLE DUBUQUE, IOWA 52001 LEO F. KANE Executive Vice President Commercial and Correspondent Bonking Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member FDIC Amtrust 69 50% O F ALL BANKS ARE NOW BONDED BY THE KANSAS BANKERS SURETY COM PANY That’s Right... In less th a n e ig h te e n m onths w e have solved th e b o n d in g needs for over o n e -h a lf o f th e banks in Iowa. THE REASONS... SUPERIOR SERVICE MOST COMPETITVE PREMIUMS REALISTIC UNDERWRITING PROMPT CLAIMS SERVICE IF YOU'RE NOT GETTING THE SAME FROM YOUR BONDING COMPANY... GIVE US A CALL - YOU'LL BE GLAD YOU DID. W e are p ro u d to b e rep rese nted in Iowa exclusively by IOWA BANKERS INSURANCE AND SERVICES, INC. 104 EAST LOCUST STREET DES MOINES, IOWA 50308 1-800-532-1423 or (515) 286-4344 FINANCIAL INSTITUTION BONDS, SAFE DEPOSITORY LIABILITY, CHECKS KITING FRAUD INDEMNIFICATION, DIRECTORS A N D OFFICERS LEGAL DEFENSE A N D LIMITED INDEMNITY POLICIES THE KANSAS BANKERS SURETY COMPANY 611 Kansas Avenue P.O. Box 1654 Topeka, Kansas 66601 Phone 1-913-234-2631 Serving the Heartland of America since 1909 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Northwestern Banker, September, 1987 70 Iowa News Thompson, investm ent officer; Brian J. Hughes and Nancy Tierney, investment representatives; Jeff Sims, commercial banking officer, Iowa division; Stuart Becker, com mercial banking representative, Iowa division. Norwest Bank Des Moines, N.A.: George F. Milligan, chairman and CEO; H. Lynn Horak, president and COO; John Sampson, senior vice president; John P. Rigler, Richard Pedersen, Larry Reding, Gary McClimen, Kathleen M. DeLucca, Colleen Monahan, William VanLent and John D. Hunt, vice presidents; Mark E. Conway, Thomas L. Quinlin, John J. Cretzmeyer and Jay Nichols, second vice presidents; Dorothea A. Wolfe, administrative officer; Michael Trafton and Lyle Hiatt, investment officers. Valley National Bank: J. Locke Macomber, chairman; Marvin E. Mazie, president; Will J. Hoekman, Verne C. Bates and William A. Wishman, senior vice presidents; Mark L. Hamilton, James F. MacLean and H. Peter DeRosier, vice presidents; E. Howard Hill, director. Kansas City Commerce Bank of Kansas City: Tom R. Jennings, assistant vice president; Joe Nixon and Jim Steer, bond officers. United Missouri Bank of Kansas City: J. Lyle Wells and Lawrence E. Russell, vice chairmen; Phillip D. Straight and Kirk W. Vaughan, ex ecutive vice presidents; Richard H. Muir and Jeffrey P. Goble, vice presidents; Mark S. Bailey, assis tant vice president. Minneapolis First Bank Minneapolis/St. Paul: Dewey Seneseth, Chris Wilson and Ken Bezdicek. First National Bank of Minneapo lis: Kenneth A. Wales, senior vice president; Allen G. Highum, vice president. Marquette Bank Minneapolis, N.A.: Dick Holmes, assistant vice president; Rob Pope, investment consultant. Omaha First National Bank of Omaha: Mike Foutch. Norwest Bank Nebraska, N.A.: Charles Undlin, president; Howard Nielsen, vice president, financial in stitutions group; Robert Zaback, se- Committed to making your bank stand apart from the Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis nior vice president/manager, finan- £ cial institutions group; Tim Tewes, financial institutions officer. Sioux City First National Bank: Max J. Lar son, president; Gary W. Stevenson, ® vice president. Security National Bank: Richard A. Waller, senior vice president; Ron E. Kiel, correspondent banking offi- £ cer. Waterloo National Bank of Waterloo: R. Scott Fetner, president; William J. Rickert, Erl Schmiesing, Byron Lov- • ing, James Freet, Willis Créés and Curt Kyhl, senior vice presidents; John Cunningham, Kendall B. Mes ser and Dale Zimmerly, vice presi dents; LeRoy Bell, assistant vice • president; Dennis Thoren, assistant director—data processing; Chuck Yagla, data processing officer. Investment, Equipment and Service Firms AGRIcareers, Inc., New Hamp ton, la.: Sandi Garner. American Express, West Des ® Moines, la.: Mark Bliss. Bank Building Corporation, St. Louis, Mo.: Roy J. Wingers, senior consultant. £ Banking Careers Ltd., Des Moines, la.: Jean Eden. Banks of Iowa Computer Ser vices, Cedar Rapids, la.: Brian C. Scott, president; Larry Clore, vice president—sales; Randy Johnson, Darrell Elkins and Anna Lee Scott, executive account managers; Tom Anderson, marketing executive; John Meehan, business develop ment. Bell & Howell, Waukesha, Wis.: Gary K. Nickerson, regional sales manager; Robert Lidgett and John up Bailey, sales representatives. Brandt Systems, Omaha, Neb.: Jim Grimes, David Grimes, Herb Duysen, Dennis Steele and Scott Grimes. • Central States Health, Omaha, Neb.: John Benson, assistant vice president; Brenda Frey, regional manager. ^ Copy Systems, Inc., Des Moines, la.: Bill Paterson, president; Rich Apenzeller, sales manager; Jim Binnie, Pat Logan, Tom Gardiner, Gor don White, Jay Daly and Kraig f Bougher, sales representatives. Left to right: John Oliger, Correspondent Banking Officer; Mike Bauer, First Vice President; Dave Howell, Corres pondent Banking Officer; Jim Perkins, Assistant Vice President; Barry Richards, Vice President. Portrait of Achievement Our correspondent team will help you meet your most important objectives. Our state-of-the-art technology and experi enced team of banking professionals give you the expertise you need to excel in every aspect of your operations and investments. And we do it by giving you the personal attention you de serve. Watch your money grow. Our Federal Funds investments and competitive rates on certificates enhance your profit picture. And our service is backed by strength and safety sec ond to none. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis We’ll show you results. Call us today to set up an appointment or talk to one of our corres pondent officers at the Iowa Bankers Convention September 20-22 in Des Moines. We’ll show you how we can help you achieve all your goals. Phone (319) 383-3429 D A k / E IN P O R T B A IN K ------------ A N D T R U S T C O M P A N Y -----------MEMBER FDIC 2 0 3 W E S T T H IR D S T R E E T , D A V E N P O R T , IO W A 5 2 8 0 1 - 1 9 7 7 72 Iowa News Creditor Resources, Inc., Atlanta, Ga.: Bob Okerstrom and David Carl son, account representatives; Jim Woolard, marketing manager. Crest Microfilm Inc./Eastman Kodak Co., Cedar Rapids, la.: David Airy, business imaging specialist; Brad Goulding, micro image sales rep. Cummins-Allison Corp., Des Moines, la.: Ralph M. Haskins, branch manager; Timothy S. Determan, sales representative; Michael Emig, Allison national accounts manager. Data Business Equipment, Des Moines, la.: Waldo F. Geiger, presi dent; Tom Kolb, marketing man ager; Lynn Groen, manager, compu ter systems division; Jim Landuyt, Marcus Wilson and Parker Schmitz, marketing representatives. Evergreen Systems, Inc., Omaha, Neb.: Ralph G. Noren, president; Ronald K. Hill, vice president. Federal Deposit Insurance Corpo ration, West Des Moines, la.: Don Drewel, Dennis Whitlatch and Rob Yancey, liquidation assistants, asset marketing; Thomas Matkin, credit manager; Stephen Post, de puty bank liquidation specialist; Russ Lair, section chief, asset mar keting. Financial Information Trust, Des Moines, la.: Greg Lawler, service coordinator; Mark Havemann, busi ness development manager; Susan Fairchild, account manager; Bruce Christensen, director, northern re gion. First Interstate Information Sys tems of Iowa, Des Moines, la.: Rich ard Davis, president; Larry Glass and Rich Bro, senior vice presidents; Dave Akehurst, director, customer support; Steve Turner and Walt Astor, financial marketing officers; Evan Branson, commercial product manager. Hamilton A ssociates, Des Moines, la.: Thomas M. Hamilton, president; David L. Hansen, divi sion manager. HBE Bank Facilities, St. Louis, Mo.: Arnold Goodman, regional manager. IAC Group, Des Moines, la.: Craig Ross, state director; Kathryn Foster, financial insurance specia list. Iowa Bankers Association, Des Moines, la.: Marsha Raisch. Iowa Bankers Mortgage Corp., Des Moines, la.: Sam E. Callahan, president; Daniel Vessely, vice president/treasurer, and entire staff. Iowa Bankers Insurance & Ser vices, Inc., Des Moines, la.: Frank Gleeson, president. Iowa College Aid Commission, Des Moines, la.: Laurie A. Wolf, director, field services; Bob Red man, field representative. Iowa Transfer System, Inc., Des Moines, la.: Dale A. Dooley, presi dent and CEO; James W. Jorgensen, manager, customer service and mar keting; Lyanna Kline, customer ser vice assistant. The Kansas Bankers Surety Co., Topeka, Kan.: Don Towle, president; Dave Abendroth, senior vice presi dent. Kirk Gross Company, Waterloo, la.: Gerald L. Gross, chairman; Robert T. Buckley, president; Rob ert H. Jamerson, director of archi tecture. McGladrey, Hendrickson & Pul len, Des Moines, la.: John McCune, Œ1 i t imperial Ibouöe Restaurant anb Hounge The c h a ir m a n w ants convenient. T h e p r e s i d e n t w a n t s p r e s t ig io u s . T h e office m a n a g e r w a n t s a f f o r d a b l e . T h e s a le s m a n a g e r w a n t s a g o o d b a r . S o u n d s lik e th e y a ll w a n t ff it ^Imperial House 1901 1n g e r s o ll R e s e r v a t io n s S u g g e s t e d Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 243-9649 Kevin Prust, Mike Wheeler and Paul # Hayes, partners; Linda Cottington, principal; Cindy Ramsell, Jack Ingle and Tim Hansen, managers. Midwest Marketing Consultants, # Inc., Lenexa, Kan.: Jeff Squire, president/account director; Dick Schutze and Dale Demoss, vice presidents/ account directors; Rich Zankel, vice president; Jim Tingle and Kevin # Evanowski, master photographers; Chris Hammond, operations man ager. Modern Banking Systems, Inc., Omaha, Neb.: M.J. Reynolds. NCR Corporation, West Des Moines, la.: Robert C. Lapinski, re gion director; Steve Kregsa, district manager. 0 Office Concepts, Ltd., Waterloo, la.: Harold W. Schoonover, presi dent; Ross D. Schoonover and Jerry B. Spurgat, vice presidents; Michael D. Mahaffey, designer, project coor- # dinator; Tim Jones and Geoffrey Grimes, architects. Omaha Financial Life Insurance Co., Panora, la.: George Foster, as sistant vice president; Bill McCarty, ® general agent; Roger McCarty, mar keting representative; Al Thomp son, CPA, marketing representa tive. Pioneer Hi-Bred International, Inc., Farm Information Manage ment Services Division, Johnston, la.: Tom Gray, sales manager; Bill Alexander, area sales manager. 0 Safeguard Business Systems, Des Moines, la.: Dick Bain, Ed Leistad, Jordan Jaeger and Skip Skalinski, distributors; Greg Bade, branch manager; Steve Bauer, automated <§ payroll; Mike Corcoran, computer forms. Swords Associates, Kansas City, Mo.: Tom C. Cannon, associate. Unisys Corp., West Des Moines, # la.: Jeff Williams, branch manager; Larry D. Eilers, Ron Pieracci, John Washburn and Mark Stuck, senior account representatives; Glenn Ans- 0 pach, Chris Gunnare and Denise Cowan, account representatives; Ron Campbell and Chris Kakert, marketing support representatives. U.S. Check Book Co., Omaha, # Neb.: Edward S. Batchelder, presi dent; John D. Finlay son, vice presi dent-sales manager; Glen Altfillisch, John Kohring, Thomas Potthoff, Randy Roan and Chuck Strat- # tan, sales representatives. 73 Two Strong Iowa Banks To Serve Correspondent Banks • ^ • • The National Bank of Waterloo Peoples Trust and Savings Bank The National Bank put’s its financial strength and outstanding correspondent banking services to work for most of the banks in Northeast Iowa. Our state of the art computer processing equipment is designed to meet all your needs and is one of the largest processing centers in the state. Even more important, the experienced management team can provide advice and banking expertise for all financial questions. We are responsive to your needs. Put our unmatched com bination of experience and services to work for all your correspondent banking needs. Now the sam e financial strength and services in correspondent banking are available to banks in Southeast Iowa through Peoples Trust and Savings Bank of Indianola, an affiliate of Iowa National Bankshares and the National Bank of Waterloo. We offer full services including purchase of excess funds, bond advisory, data processing services, automated accounts receivable billing system s and other com plete correspondent bank services. Working together, Iowa National Bankshares can put over one half billion dollars of financial strength behind your bank. Put our financial strength, our financial performance and our financial growth to work for you — call any member of our experienced team today. Build On Our Strength Bill Rickert Sr Vice President Waterloo . John Cunningham Vice President Waterloo Erling Schmiesing Sr. Vice President/Cashier Waterloo James Freet Sr. Vice President!Mgr. Waterloo T h e N ational Bank O F W A T ER LO O Leroy Bell Charles E. Yagla Everett Brown Milt Hennick Assistant Vice President Waterloo Data Processing Officer Waterloo President, Indianola Sr. Vice President, Indianola P eoples IkusT and Savings Bank 100 East Park ■ Waterloo, IA 50703 ■(319) 291-5200 114 N. Howard ■Box 279 ■Indianola, IA 50125-0279 (515) 961-6241 Subsidiaries of Iowa National Bankshares Members FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Northwestern Banker, September, 1987 74 Iowa News “Our state needs to diversify itself” A interview with RUSSELL S. HOWARD Chairman Mahaska Investment Co. Oskaloosa, la. N o rthw estern B a n k e r “ IT is critical for the future of Iowa to develop alternative employ ment as the agricultural revolution continues. This will have the greatest impact on banking.” S A THIRD generation banker, Russell S. Howard A has brought a solid background of bank manage ment and demonstrated community leadership to his demanding job as president of the Iowa Bankers Asso ciation this past year. Mr. Howard took over the key post as IB A leader during the annual convention in Des Moines last September. He will conclude his duties by presiding at the annual convention in Des Moines this month. Before assuming the IBA presidency, Russ Howard had been very active in the IBA. He served as trea surer in 1973-74, and two terms as chairman of the as sociation legislative committee. He was in on the ground floor of electronic banking development in Iowa as a member of the Iowa-Nebraska Joint EFT Study Team in 1974. That study resulted in Iowa’s unique electronic funds transfer system that formally became the Iowa Transfer System. He served as its first president from 1975-77, continuing on the ITS board until 1982. With that background of association work, Russell S. Howard decided to devote another period of time to the important work of the Iowa Bankers Association, first as its president-elect in 1985-86, then as president in 1986-87. His combined years of IBA work gave him the necessary background to set some goals for IBA, as required of any association leader. A Look Back Reflecting on the rapidly passing scene of the past 12 months, Russ said: “I guess my overall assessment of this past year is positive with the exception that in my inaugural speech last September, I called for the IBA to take a leadership role in developing a strategic plan for the state that would lead us out of the eco nomic crisis we are in. Although considerable work has been done and there are numerous groups working on the state’s redevelopment, unfortunately the IBA is not at the forefront of these efforts. From a public Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis image standpoint alone, commercial bankers need to impress upon everyone our desire to see our state re cover and that the people displaced from farming do not leave, but find employment. Our state needs to di versify itself so that we do not suffer so tremendously during future economic cycles.” The topic of statewide economic development is a critical one in Russ’ mind and he stressed the point again by stating, “ I will just re-emphasize that I think it is critical for the future of Iowa banking to be in volved heavily in the redevelopment of Iowa, especial ly to diversify our state from a single industry and to develop alternative employment as the agricultural revolution continues. To me, this will have the greatest future impact on banking.” These strong feelings are in keeping with his eco nomic development goal he urged consistently throughout the past year in every speech he made. P e rs o n a l B a c k g ro u n d Russ Howard was born into a banking family March 5, 1931. His grandfather, Harry S. Howard, founded Mahaska County State Bank in 1883 and served as its managing offi cer from opening day until his retirement in 1934. He died in 1940 at the age of 86. His son, Russell S. Howard, Sr., who joined the bank in 1920, became managing officer in 1934. He was named chairman and president in 1945. He retired as president in 1969, when he was succeeded by his son, Russell S. Howard, Jr., but continued as chairman until his death in 1978 at the age of 86. The younger Russell Howard was graduated from Dart mouth College at Hanover, N.H., in 1953, then completed graduate work at the University of Iowa. He joined the fami ly bank at that time, then succeeded his father as president in 1969 and was also named chairman at the time of his father’s death in 1978. He continues as chairman of the bank today, as well as chairman of the holding company, Mahaska Investment Company. “ At First National Bank in Sioux City, we’re proud of the productive relationships we’ve devel oped with many banks in our area. Through these partnerships, our staff of professional bankers 9ockw ise Patty Stansbury, Gary Stevenson, Phyllis Foster, Ed Den Beste, provides our friends with Evey Thompson, Mark Paradise, Jan Foresee, Lon Kelling. a competitive edge in their local marketplace with services like loan overlines, investments, credit card services, and data processing. While many people refer to these banks as “respondents” , we prefer to call them friends. If you’re looking for a friend, give us a call at (712) 277-1500. We’d like to get to know you — % - Max J. Larson President “See you at the Iowa Bankers Convention! ” First National Bank in Sioux City Member FDIC • Sioux City • A 'BANKS OF IOWA’ BANK • (712) 277-1500 Stængth\5uCan BankOn. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 76 Iowa News “Bankers need to impress on everyone our desire to see our state recover and that farmers do not leave, but find employment.” Banker Volunteers Are Essential Making the work of any association president easier is the dedicated work of so many IB A banker volun teers. Recalling the countless hours spent for IBA by fellow bankers, Russ said, “Membership involvement seems to be improving, and attendance at various meetings and seminars has increased by and large. All of our committees did an excellent job of developing their programs and seeing that they were imple mented. They proved again their professionalism by their high quality committee accomplishments.“ The area where bankers devote hundreds of volun teer hours in every association is legislation, and IBA is no exception. These past several years have been difficult ones for bankers everywhere, especially in leg islative halls and, again, Iowa has not been an excep tion. Russ has devoted much time to this process dur ing the past year as required of the president. In doing so, he has experienced again the agonizing truth about the legislative process and makes this observation: A Legislative Review “As with most legislative issues, we seem to be forced to take our programs in very small increments. We were unable to get the Double Jeopardy Law com pletely amended to allow central filing, but we did get some commitments from the leadership that it could probably be accomplished this coming year. The Tort Reform bill was a major step in potentially reducing the cost of liability insurance for banks. The tax bill was a major unrecognized accomplishment in that the state would have tremendous windfall taxes from banks if our tax laws had not been amended to tie into the new federal law. Iowa bankers should feel very good about the fact that our state is one of the few that allows expanded powers that are so much sought after on a national level.” The federal scene, as he relates, is more of the same: “On a national legislative basis, HR27 probably will have very little impact on Iowa banks. However, it is significant in that it does give us an indication of Con gress’ attitude toward commercial banking as a whole. Again, I guess we have to count our accomplishments in various small increments. Of much greater impact on rural banking will be the secondary market for ag real estate. With the tremendous decline in loan de mand for most banks in Iowa, this new outlet could give us access to credit lines that presently are not available to us because of our inability to make long “Of much greater impact on banking (than HR27) will be the secondary market for ag real estate,” Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis term, fixed-rate farm loans. We are all aware that the Farm Credit System’s long-term plans are to become the premier ag lender in the United States. We can ill afford to become competitively disadvantaged at this time.” Staff Function and IBA Future The cement that holds together all of the banker volunteer involvement is the IBA staff. Each officer, committee chairman and committee member develops a greater understanding of and appreciation for the role of the full-time, professional staff when they become involved in association activities. Here is how Russ assesses the staff role and the long-term goals of the IBA. “I think that the IBA has an excellent staff, one that is very dedicated and hard working. My experi ence as an officer is that our board needs to take a long look at what the IBA’s function will be in the future. I would like to see a comprehensive long-term plan developed that would address what banking will look like in the future; where IBA can best serve its members by helping us cope with the tremendous changes that we will be going through. Whether we want to accept it or not, banking is changing rapidly and we small bankers need all the help we can get in learning to cope with this environment. “I would like to see a comprehensive, long-term plan developed to address what banking will look like in the future.” “Perhaps a further way IBA can help its very small bank members is to develop the educational programs and tools needed to help the smallest banks cope with these constant changes and thus retain the vibrancy of our commercial banking system in rural communi ties.” IBA’s Outside Relationships The IBA maintains close working relationships with many groups. In addition to inviting the Iowa Inde pendent Bankers to have a representative on the IBA board of directors, and having a decades-old close rela tionship with the American Bankers Association and its membership programs, the IBA maintains close contact with regulatory bodies—in Iowa, with regional federal officials and with their national offices in Washington, D.C. Russ points out that it was common several years ago for most banks to sense an adversial position with the federal regulators especially, and their examiners. He has strong, positive feelings about the subject now, as he states: “I attribute the soundness of our Iowa banking sys tem to the quality of our regulatory bodies. We Iowa bankers all recall how diligently and persistently Tom Huston (Iowa superintendent of banking from Septem ber 1, 1975 to January 10, 1986) called for state-char tered banks to build and maintain high capital levels in order to withstand unforeseen shocks. Because of his persistence, Iowa banks built a capital/deposit ratio second to none in the nation—around 10%. As a result Community Bank Division J a c k C la rk Bud Cross Keith St. P ierre Skip D u ffy g f | FIR S T CHICAGO The First National Bank of Chicago Suite 0162 C h ic a g o , IL 60670-0162 312-732-1306 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis or 312-732-4101 78 Iowa News of this direct leadership by Tom, and notwithstanding the fact that two dozen Iowa banks failed in the past several years, many Iowa banks survived a bad loan loss period because they had that extra capital. It is now recognized by federal regulators and others that Iowa banking withstood the devastatingly bad farm economy of the past few years because of that high capital ratio he espoused. “By comparison, banks in Texas were allowed to ‘wheel and deal’ and they are now suffering the conse quences to a greater degree than Iowa did. “Not only have both the FDIC and the OCC been rigorous in their enforcement in pursuit of the safety and soundness of our industry, but they now have a constructive approach aimed at helping banks improve their overall quality. I t ’s refreshing that all of our regulators are doing more now to maintain integrity and professionalism not only in their own staffs but within our industry.” Conclusion The agricultural economy has not been kind to farm ers, their community business and bankers the past several years. The role of the IB A and other state # banker associations in the midwest became complex in that time—new legislative efforts and new types of programs were called for, all with tighter budget con straints that reflected the belt-tightening at all levels of the midwest economy. Leading the IBA through # what, hopefully, may be the last of those “down economy” years has been difficult for Russ Howard and his fellow presidents of neighboring state associa tions. But, with the help of many dedicated, volunteer bankers and a responsive IBA staff, he has given his • leadership to help launch IBA into its second century of service to its industry and the people of Iowa. □ Fetners Donate Land for Youth Camp HANKS to the family of R. Scott T Fetner, president and CEO of the National Bank of Waterloo, the Waterloo Boys-Girls Club will have a new camp. Mr. Fetner and his wife Joann have donated 88 acres in Fayette County as the site for an educational camp. The largely underprivileged urban youth of the club will use the camp not only for outdoor enjoy ment but also to develop their com munications skills. Camp activities will emphasize development of read ing, writing, speaking and listening skills. The camp will consist of a lodge, three tent sites and recreational areas. Cost for the project will be about $ 100,000 , and a major gift by the Ray Sulentic family of Waterloo is among funds already raised. The # lodge should be ready for use this winter. Meanwhile, Mr. Fetner was re cently selected to receive the “Gov ernor’s Award” for outstanding volunteer service to the state of Iowa. He was presented with the award by Gov. Branstad at a cere mony in Cedar Rapids on May 29. Mr. Fetner had recently made a humanitarian trip to Honduras with the Iowa National Guard Medical Unit, and regularly supports the ef forts of the Guard. Kanawha Bank Closed Farmers State Bank of Kanawha was closed July 30, and reopened as a branch of First National Bank of Clarion. “Mismanagement of the loan portfolio and poor loan selec tion” was cited by Banking Superintendent William Bernau as cause of ® the bank’s failure. It was the fifth Iowa bank to fail this year, and brought nationwide closings to 106, compared with 138 at this time last year. 9 First National paid a premium of $226,200 to buy Farmers State. The Clarion bank will assume over $4.4 million in assets, while the FDIC ^ will .take over the bank’s loans, totalling roughly $11 million. The FDIC will give the bank $ 10.2 mil lion. The bank failure occurred while ^ Farmers State president James Mallen was serving a 60-day sentance in Leavenworth, Kan. for mak ing false statements to the FDIC. The charges related to more than q $400,000 in loans the bank made in 1981 and 1982 to four men who, like Mr. Mallen, had stakes in a limited partnership. He successfully fought an attempt by the FDIC to suspend q him from the bank following the in dictment last December, but he was ordered removed shortly after the verdict. Retired in Grinned DISPLAYING plaques recognizing their contributions to the Waterloo Boys-Girls Club are, from left, Scott and Joann Fetner and Anne and Ray Sulentic. Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Helen Hargrave, vice president and assistant trust officer at Grinnell State Bank, has retired after 60 years with the bank. During her • career, Mrs. Hargrave worked in all capacities and has been actively in volved with the training of many employees. Her most recent respon sibilities have included trust, real • estate loan processing operations and personnel. Mrs. Hargrave has been named honorary secretary of the bank’s board of directors in recognition of • her many years of service. 79 After attending the Rotary Inter national convention in Munich, the Talens visited other western Europe nations. In the course of that tour, they visited Dieter Krings, Mayor of Wallmerod, West Germany, and his wife, Ingabord, who have traveled extensively in this country, includ ing several visits to Northfield. They also flew to Switzerland and Denmark, with one of their more harrowing, exciting instrum ent landings taking place in Denmark. They also visited Czechoslovakia, Poland and Hungary, but took a commercial airliner to those nations. During their stay in Denmark, the Talens visited another old friend, Arne Nielsen, who is president of the $65 million asset Hadsten Bank in Hadsten, Denmark. Bill says of his friend, Arne, “That guy is really en thusiastic! He runs an independent bank that makes over $1 million a year in net profit. He really outdis tances the branch of one of the giant banks in Denmark and has a real message for independent bankers.” On the return trip, after flying 12,000 miles and 58 air hours from the airport at Fairbault, Minn., near their home in Northfield, Minn., the Talens decided to conclude their per sonal flying jaunt at Reykjavik, Ice land, and they flew the rest of the way home to the Minneapolis air port on a commercial jet. A retired Air Force Colonel at the U.S. Air Base in Reykjavik flew their plane back to Minnesota for them. Bill Talen is involved with bank ing in the states of Minnesota, Iowa and Wisconsin. He is owner, chair man and president of the $45 million assets Farmers Savings Bank in Traer, la.; owner, chairman and president of the $20 million assets First State Bank in Edgerton, Wis., and has family banking interests in both Rochester, Minn., and Menomi nee, Wis. □ Iowa News Caroline Talen wore the special survival suit necessary in case of ditching into the frigid waters of the North Atlantic. * Bill Talen F lies Own Plane A cro ss A tlantic to Munich Rotary M eeting w | UST 60 years after Charles LindW bergh made his historic, non stop 3,600 mile solo flight in 33 V2 hours from New York City to Le ^ Bourget Field in Paris, France on May 20-21 , 1927, banker William Talen pointed his twin-engine Cess na Skymaster from Minnesota to Munich, Germany, this past June to 0 attend the Rotary Club Interna tional convention. Bill Talen, who was accompanied by his wife, Caroline, flew the same Atlantic Ocean as the famous Lind0 bergh, but by a safer, more extended route than the noted aviation pio neer. Bill flew in a group with six other planes, took six days and made 19 landings on the four-week, ^ round-trip jaunt, 11 of them instru ment landings in difficult weather. But, it was a feat few private pilots have achieved. The Great Circle Route that took 0 the small group of private planes across northern Canada, Greenland, Iceland, the Faroe Islands, Scot land, then on across England and to the continent, is a relatively lonely 0 one. The route generally sees only four or five airplanes a day during the good flying months that last from May 1 to November 1, and most of those planes are being fer£ ried abroad by professional pilots for delivery to European buyers. “But the scenery was fantastic,” Bill enthused, “especially because of the continuous summer daylight in % that northern region, and it certain ly added to our sense of security to https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis be able to see what we were flying over.” For further security on that part of the trip, Bill and Caroline donned survival suits in the unlikely event of having to ditch in the North At lantic or the North Sea. A highlight of the trip for WWII veteran Bill Talen came when they concluded a two-day stay on the island of Jersey in the English Chan nel. On June 6 , the day of takeoff from Jersey, Bill’s climbing pattern took him directly over Omaha Beach where Allied forces landed just 43 years earlier on June 6 , 1944, to begin the invasion of Europe in WWII. Changes Told in Dubuque bank in Traer displays this model of his Cessna Skymaster. At First National Bank of Dubu que, William H. Callahan has been appointed personal banking officer. He previously worked at Mera Bank and Associates Financial Services Corporation in Phoenix, Ariz. Peggy Hudson has joined the bank as marketing assistant. She previously worked as production/ promotion manager at KDUB and in advertising at H artig’s Drug in Dubuque. Northwestern Banker, September, 1987 80 Iowa News Group Chairmen Report Area Conditions ROUP chairmen of the Iowa Bankers Association have sub G mitted the following reports on farm and business conditions in their areas: Group 1 James Miller, Pioneer Valley Sav ings Bank, Sergeant Bluff: When asked to com ment about the current and fu ture outlook of agriculture and business condi tions of Group 1, I devised a sur vey th a t was m ailed to a banker in each of the counties in Group 1. This report is a consolida tion of those surveys and the thoughts of other bankers tele phoned for additional input. The most dramatic statements concerned the increase in land values. All respondents were of the opinion that land prices had stabi lized and that prices were up. Cur rent prices quoted ranged from ROUP $530.00 per acre for rather steep hil ly unimproved farms to $ 1, 100.00 per acre for good production land. Most buyers are farmers who are paying the highest prices. Investors with local ties are also buying. The speculator seems to be absent from the market. Some respondents indi cated that inventories of land for sale are diminishing rapidly; how ever, few believe that land prices will accelerate in the near future because of the relationship between net return and the farm program. Cattle and hogs are making good money which in turn has fostered some expansion. It appears that pro ducers are utilizing existing facili ties by retaining gilts. With the high cost of feeder cattle, replacement has slowed considerably even with the lower cost of grain. The profits from livestock has helped many pro ducers pay off old debt which in turn improves the attitude of their bank ers. Group 1 respondents expect one of the best crops ever from corn and soybeans. Adjectives such as very good, excellent and outstanding Bank Insurance Specialists 8555 Harbach Blvd., Des Moines, IA 50311 • (515) 223-6205 We’re H elping B anks Change the Word Insurance' Into ‘ Investment A sk us how at th e Iow a B a n k ers C onvention S ep tem b er 20 thru 22 Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis were used to describe prospective q crop yields. So far the crop year has been almost problem free, except for some spotty hail damage. Two bank ers expect some storage problems. Others feel that because of PIK ade- q quate storage is available. When asked about the effect of payments from government pro grams, all bankers responded that loan demand was down. Borrowers £ have been able to pay current ex penses from payments made by the farm program. What will happen as government payments taper off? Some respondents felt that loan de- £ mand would pick up. One was philo sophical and said, “We will face that when the time comes and roll with the punches.” The general economy of the 0 Group 1 area has improved particu larly in the agriculture area. Many small businesses are struggling, but are improved over a year ago. The outlook then is good but with some # pessimism. This is reflected in one banker’s response: “Government withdrawal of farm price supports will trigger another major adjust ment in the farm economy.” # Group 2 Joe E. Hutchinson, Union State q Bank, Rockwell City: (This report was prepared by U nion S ta te Bank’s ag repre sentative, Rich ard R. Bahls.) Economic con ditions in the Group 2 area have been mixed. While the agri cultural sector has experienced a healthy rebound compared to their depressed condition 2 years ago, the £ business community continues to suffer. Farmers generally had a profit able year due to excellent crop yields, good livestock prices and low £ feed costs, and the income stability provided by the Farm Program. However, most farmers have used these profits to make an overdue re duction in their intermediate and • long-term debts rather than to spend it in the small-town communi ty. Some farmers have made some replacements or additions to their line of machinery that may have # been overdue, but very little new It s very sound advice. A specialist can help you design a financial institution th a t not only looks good to your customers, but w o rk s well, too. \j f , j Kirk Gross Company has built and remodeled m ore financial institutions than anyone in Iowa and our w o rk has received national aw ard recognition. W e k n o w h o w to design th e m better. W e k n o w h o w to build th e m faster. And w e can use local contractors to help build th e m fo r less. W e have the experience. W hen you’re ready to build or re m o d e l. . . call a specialist Call Kirk Gross Company. GROSS CQ Kirk Gross Company 4015 Alexandra Drive Waterloo. IA 50704 319/234-6641 S e e a S p e c ia lis t. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 82 Iowa News machinery was purchased. The reduction in debt and a more costconscious attitude has laid the foun dation for further recovery in the farming sector. The larger shopping centers have experienced a moderate increase in business, but the businesses in the small-town majority of our area have not seen this increase. Con sumers from rural areas seem to make an outing out of a shopping trip to the larger shopping centers. A few shops with the higher debt loads have closed, and a few store owners have closed their stores in favor of an earlier retirement or a better paying job elsewhere. If the small-town stores could coax some of the local consumers back from the larger shopping cen ters, they may be able to begin mak ing some progress. Disposable in come in the area should improve slightly as the area farmers are look ing forward to another excellent corn and soybean harvest. Profits in the livestock industry have also been the best in a few years and should continue for at least a few more months. However, without a reversal in the shopping center trend, small-town stores and more highly leveraged shops will continue to close. As far as the farming community is concerned, most of the highly leveraged farmers should again be able to make their scheduled pay ments while the farmers with less debt could again make advance pay ments or use the extra cash to operate on next year. Farmers with very little debt and those with money in CD’s, as well as investors convinced that land prices have hit bottom, have been responsible for slightly firmer land prices. Top farmland has been selling from $1200 to $1350 per acre. Real estate brokers say that they hardly have time to advertise a farm listing before an offer is made on a newly listed property. More stable land prices and the farm income stability provided by the Farm Program has also led to cash rental rates level ing off in the $75 to $85 per acre range for the better land. However, if the farm income supports pro vided by the Farm Program were substantially reduced, I would look for some renewed weakness in land prices and cash rental rates. With about four weeks to go before harvest begins, yield pros pects for corn appear to be 10 to 15% better than 1986 yields as many farms with the better land will average in the 155 to 165 bu. per acre range. Soybean yields may be held back by spotty stands this year, but excellent growing condi tions has allowed the plants to set a good number of pods and we have plenty of moisture available to fill those pods. Yields should be about as good as last year’s excellent yields with the better farms averag ing in the 50 bu. per acre range. The swine breeding herd in the area may have seen a small increase user L ooks F o rw a rd to S e e in g You a t The Iowa B ankers A ssociation Convention ★ Visit our hospitality room at the Savery ★ United States Check Book Company PRINTING - LITHOGRAPHING - BANK SUPPLIES - COMMERCIAL SUPPLIES 1201 SOUTH 16TH STREET • OMAHA, NEBRASKA 68108 Call 1-800-228-9246 (In Nebraska 402-345-3162) Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (perhaps around 5%) in the past 12 months, with most of the increase coming in the custom hog feeding activity. With talk of lower hog prices in the next 12 months, expan sion in the breeding herd will pro bably be minimal. The number of cattle feeders has increased as a result of the desire to feed the hay harvested from the set-aside acres. However, the total number of cattle on feed in our area has probably not increased that much because several of the more established cattle feed ers have resisted the higher replace ment prices being paid for feeder cattle in the past few months. A few loans mainly for used equipment were made this past year, but most cash flows would not allow term loan payments of any major significance. Overall annual operat ing debt was down about 20 % as a result of the reduced acres and the advance government payments that farmers used to cover part of their operating expenses or debts. Some banks offset this reduced loan de mand by accepting new FmHA Subordination Loan customers that came in as a result of the cut in FmHA direct loan funds. Group 4 James P. Lage, Citizens State Bank, Postville: We must assess the agricultural and business condi tions of our area with renewed op timism for sev eral reasons. In v is itin g w ith b a n k ers from Group 4, I found the morale im proved and their attitudes better. Does this mean that economic condi tions have improved drastically? No, this means that we have wit nessed some positive changes dur ing the past year to compensate for the reversals we had been observing. Livestock prices have contributed significantly to the positive changes we are experiencing. Hogs, during the past year, have once again become “mortgage burners.” The hog/corn ratio is presently at one of the best levels that I can ever recall. The fed cattle market has been pro fitable during most of the past year. As a banker, I feel the urgency of contracting or hedging any replace ment feeder cattle this fall. Because "I chose the bics Banking system because it beat all the popular in-house solutions o n . . . service, flexibility, operational efficiency a n d . . . price.” if you want the best you want the BICS Banking System. . . Exquisite customer service Total product flexibility Assured response time of 4 seconds or less 98% of the time F. T. E. Efficient Total cost flexibility https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 84 Iowa News of the fat cattle market and the sup ply and demand for feeder cattle, the replacements appear too expensive to finance without a hedge or con tract. The well-managed, efficient dairymen of our area continue to generate profitable operations, even with the government intervention. Most of the crops in Northeast Iowa appear to have the potential for record yields. However, we have some localized areas in this eight county area that are suffering from inadequate moisture and, conse quently, reducing crop yields. Crop prices appear below cost of produc tion. Government payments have subsidized these enterprises and continue to show support to our grain farmers. Without the pro gram, crop production loans would certainly be in jeopardy. Most of the crops in this area are maturing ahead of schedule and with the con tinuation of good weather condi tions, should create an early har vest. Storage facilities appear very limited for the crop production of our area. Land values in the area have sta bilized during the past year. Good, productive land is attractive to buy ers and commanding prices above the levels of the past couple of years. In some areas, prices are showing a 10 % increase from the low side of values. The agricultural economy does in deed create an impact on the main street businesses of Northeast Iowa. Main street businesses are adjust ing inventories, collecting receiv ables and operating more efficient ly—the depressed ag economy cer tainly forced these businessmen to be more competitive and better enterpreneurs. The increases in live stock prices have created a reduc tion in loan volume in most of the area banks. It appears that our customers are paying off their in debtedness and are reluctant to create new debts for capital im provements. Agriculture is and will remain the lifeblood of our communities. The positive livestock prices, the pros pects for an excellent crop, and the more positive attitude of main street businessmen, including bankers, have all helped to impart a much more optimistic economic attitude in our area. We hope it continues. ings about the continuance of this f program are strongly in favor, and when asked about the effects of the declining support provided by the program, most felt the scheduled de creases were manageable but a dras- £ tic cut in support prices would be disastrous. One observer stated there is “a long ways between the $1.43 old crop price and $2.50 pro duction costs.” A few area bankers % thought the continual reduction in crop acres would affect crop prices, but a couple dissenters said world trade and set asides still would not make corn growing profitable with- # out government subsidies. Group 5 The most enjoyable question in Michael Guttau, Treynor State my interviews of area bankers ad Bank, Treynor: Moisture and grow dressed attitudes and local economic ing conditions conditions. All bankers reported a # have been re very positive improvement in com ported good to munity (and banker) attitude. Sev excellent eral locations could report new in throughout the dustry, plant expansions, hospital growing season expansions, research facilities, etc. • across S o u th Specifically related to agriculture, west Iowa. Crop one machinery dealer reported he m aturities are was having his best year ever. g en erally one Again and again the prevailing at and a half to two titude that came through was “we • weeks ahead of can make this work.” The positive schedule with an early harvest and spirit and concern for the communi exceptional yields expected. ty is still present in our area’s com Land sales throughout the area munity banks. have been slow. Most areas report at least stable land sales prices with a Group 6 few areas quoting land that was in Jim Schipper, American State the $600-$650 range last year, now Bank, Osceola: Many banks in selling for $150-$250/acre more. Southern Iowa Marginal land continues at lower are now begin values with no recovery. ning to realize When area bankers were asked some re s u lts about the cash flow generated by from the severe farm program payments, comments adjustments and included: “keeping us going,” “our c h an g e s th a t salvation,” and “like a transfusion have occurred when you’re dying.” Obviously feel over the past few years. Al though some of Welcome To The I BA Convention these results are In banking, getting the right position and advancing not the most positive, we are begin one’s professional career is a very im portant endeavor. ning to notice some very encourag At MIDWEST PERSONNEL, we have the professional ing signs of better opportunities in know-how and the experience to give you the edge. the future. £ Progressive bankers pay our fee to hire the RIGHT person they need. Many banks have found ways to reduce overhead and generate addi •Professional, Confidential Service tional non-interest income, and, at • ‘ Friendly and Reliable Assistance the same time, have taken steps to •••C om petitive Fees-Employer Paid reduce the risk of continuing loan # LINDA R. HEIT losses. Consequently, many banks CALL OR WRITE NOW TO SEE WHAT’S AVAILABLE Banking Specialist are beginning to enjoy significant improvement in net earnings, in spite of increased competition for New Hampton, IA 50659 515-394-2325 deposits and soft demand for quality # loans. MIDWEST PERSONNEL Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ! Over 50 years of . banking experience . at your fingertips. Just pick up the phone and call First Interstate Bank. You’ll connect with the experienced, professional correspondent banking services that Iowa banks have come to depend on. And you’ll get results — results that translate into a strong bottom line. For correspondent banking, choose the bank with over 50 years of experience — First Interstate Bank. We’re setting the pace. Randy Steig Vice President and Manager (515) 245-7251 Randy has 11 years experience as a bank examiner including responsibility as assistant superintendent. In addition, he served as vice president and executive director of the Iowa Banker’s Association. Stuart Becker Commercial Banking Representative (515) 245-7191 Stuart has 3 years experience in the correspondent and commercial/corporate areas. Ken Danilson Vice President (515) 245-7148 Bill Mullins Vice President (515) 245-7157 Bill has seven years experience as a bank examiner. For the past four years, he has effectively served Iowa banks’ correspondent needs offered through First Interstate Bank. For 15 years, Ken has been intensely Involved with agriculture-related banking, including 11 years managing a county seat bank ag department and four years managing our agriculture production and farm real estate lending service. Jeff Sims Commercial Banking Officer (515) 245-7262 Jeff has spent 3/2 years as a bank examiner and most recently, 2 years in loan review with First InterstatgfGf lowa< Inc. Lisa Ver Mulm Administrative Assistant (515) 245-7173 Lisa has intern experience in banking. Her background in this area will prove valuable in answering your questions. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 86 Iowa News Agricultural credit seems to have established some stability, largely as a result of government payments from the feed grain program and the conservation reserve program. Vir tually all grain producers are partici pating in the set aside program, even those farmers who have histori cally not participated. The CRP has been used extensively in Southern Iowa, many counties have reached the 25% of eligible acres enrolled in the program with most bids near $70/acre. Adding to the improvement in the Southern Iowa economy are the prospects of another good crop this year. We are experiencing the third consecutive year of excellent grow ing conditions, hampered only by three weeks of extreme hot, dry weather in late July. Continuing favorable livestock prices are also giving support to rea sonable levels of net farm income. Feeder cattle raised locally have been selling $10 to $15/cwt higher than a year ago. Hog prices have also remained favorable. The banks in and around Des Moines also are experiencing im provement from a year ago, with some banks reporting record earn ings for the first six month period. The Des Moines business activity is continuing at a healthy pace, caus ing extensive construction activity, both for residential and commercial purposes. There has also been a sig nificant amount of real estate loan are being received sooner than in-^ come would be realized from sale of crops, has made a sizeable impact on the borrowing needs of farmers. Loan to deposit ratios are down from normal levels for most country^ banks and the lack of loan demand has also put downward pressure on interest margins. Many farm opera tors have improved their financial position because of farm program ^ payments and improved earnings. Net profit for the grain farmer is almost entirely dependent on the Group 7 Arnold Schultz, Grundy National government farm program. Manage Bank, Grundy Center: The attitude ment practices that affect the b o t-^ tom line have also changed because of most farmers of the farm economic crises. For ex and agri busi ample, we are seeing better controls nesses in our over crop input expenses and more area can best be pencil pushing to determine affor- 0 described with dable cash rent payments. th e w ords Livestock operators are also bene “guarded opti fiting from the government pro m is m .” L a s t gram, in that they get the double year was a good benefit of realizing a high price for 0 year for many their grain by using the government farm families, loan program and in addition have especially those without debt levels. 1987 has the po the advantage of cheap feed for their tential to be another good year. livestock feeding program. In our However, many of the fundamental area, there is more interest in feed- # problems facing the rural economy ing cattle in 1987 when compared to are still unresolved and there seems recent years. Feeder costs have risen to be some skepticism concerning dramatically but with cheap feed in the future, in that the profitability puts, projected breakeven levels now being enjoyed is primarily due have been mostly in the $58 to $62 # to the government farm program. range, which has allowed feeders to The amount of government farm buy put options to eliminate the program payments coupled with the downside market risk in feeding. Farm land values have rebounded fact that some of these payments 10 to 15% from the lows of 1986. # Volume of land sales increased dur ing the late winter and early spring and there appears to be continued interest in the purchase of good refinancing this year as a result of declining interest rates. The high level of real estate loan activity has generated excellent fee income for those banks that have been active in real estate lending. Commercial lending has been unusually competative in recent months, limiting profitability. 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DES MOINES, IOWA 50306 • PHONE (515)288-7245 Iowa News ^ farm land by those farm operators who are in excellent financial condi tion. This may present an opportuni ty for some that are still struggling with excessive debt to now sell land ^ to reduce debt and ultimately be a survivor of the ag recession. Main street businesses are also seeing improvement but it is a far cry from the “go go” days of the late D seventies and early eighties. Con trolling inventories, overhead ex penses, and debt levels seem to be the main ingredients for success for the main street businessman. 0 In summary, the optimism of the current ag recovery is clouded by the uncertainty of trying to plan 3-5 years in the future without knowing the details of the future farm pro41 gram. The fundamentals of many problems related to agriculture are still unresolved. As bankers, we still see those with excessive debt strug gling to survive while his neighbor is 0 experiencing an excellent return on his investment. But the most plea sant change of the past year has been the marked improvement in at titudes. On most days, it is again a % pleasant experience to be recognized as a country banker. Group 8 J. Robert Bunn, Community State ^ Bank, Clarence: The extremely hot, dry weather has taken us from what we thought ^ of in April as a turn upwards to now a very nega tive outlook for ag ricu ltu re in 0 our Group 8 . As we took financial statements early in the year, we were very encouraged by the im0 provement in most of our borrowers’ financial picture. We realized this was true because of the government program, but needless to say, it put money in the bank. Then as we ^ planted the crop so early with plenty of sub moisture, it looked like another great year, with hog and cattle prices being very good and prospects for livestock prices to con41 tinue high most of 1987. The grains came up great in May and by June we thought we had really turned the corner. Then came July with 90 and 100 degree weather for far too many 0 days, and the crop deteriorated by the hour. So with the short crop, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 87 There Is a Difference in Banks Trust, confidence, loyalty ... words our customers use to describe how they feel toward Valley National Bank. Valley Bank is experiencing substantial growth ... in deposits, ...loans, and ... in earnings. That’s because we maintain a highly skilled staff, offer top service, and perform well financially. We welcome your inquiry ... Remember, there is a difference in banks. Valley National Bank 6 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, September, 1987 88 Iowa News most Group 8 banks are going to be hurt, some very bad. This will affect the business people as much as the farmers, so all in all things do not look too bright right now. Even before the short crop there were still farmers with too much debt to ser vice, and there will continue to be many more problem lines facing us all. It will take several more years before we can even begin to get back to the “good old days” and we will never see those days if the govern ment takes away the farm program that we have today. Sorry to be so pessimistic, but it is hard to be otherwise. Group 11 Daniel Doyle, Wellman Savings Bank, Wellman: It appears that the b u s in e s s and agricultural out look for th e Group 11 area is improving. How ever, we have a long way to go before we see the improvement we all would like. A g ric u ltu ra l areas show a bet ter level of profitability than do many non-ag commercial rural busi nesses. Although cash flow has in creased dramatically, primarily due to better livestock prices as well as government dollars, this has not helped small town rural businesses enough to make them very profit able. If the ag economy continues on its present course, better cash flow will eventually revitalize our rural areas. However, with the number of farmers continuing to fall, the re covery will be limited until agricul ture begins to attract new people. Farmland prices in our area are approaching their low and some prices have actually rebounded. Pro perty can, in some instances, be pur chased and paid for from positive cash flow. More land is moving, but the cloud on the horizon here is the potential reduction in farm support payments which I think is inevitable given the present federal budget deficit. In the more industrial areas of Group 11, reports are that the eco nomy is greatly improved, particu larly in manufacturing, with steady employment and even some new in dustry. In summary, it appears condiNorthwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tions in Group 11 are improving, both in the agricultural and commer cial areas. Bank profits are expected to increase as we swallow our charge-offs and go back to profit ability. However, we still need to deal with a monumental federal bud get problem that threatens all of us in Group 11 and around the country. Group 12 James L. Cuttell, George State Bank, George: Outlook from Group 1 2 , w hich is Northwest Iowa, is all around p r e tty good. R a in fa ll, a l th o u g h som e what spotty, has been adequate and in certain a re a s peo pie have had those two to three inch soakers. Hog and cattle customers have smiled all spring and summer as they bring in checks representing a decent return for their labor and in vestm ent. Feeder prices have jumped as farmers have harvested their set-aside acres and now are chomping at the bit to put some thing in the yard. Seventy-five cent 650 pound heifers are somewhat difficult to put the pencil to and make work. I question the rationale for the harvest of set-aside when the whole idea is to take corn acres out of production. I doubt if there will be much corn chopped this fall. Corn and bean yields appear good, although not as good as last year. Two weeks of extreme temperatures have hurt the yields and the con tinued heat will cause further drop in yield and test weight. Customers are again talking bin construction and PIK premiums are at 110%. Land prices appear to have bot tomed out about a year ago in the $1,000 per acre range and have re turned to the $1,200/$ 1,300 area. A large portion of the land sales have been to cash buyers. These buyers like the land investment compared to the 6 % Bank Certificate. Any fur ther price increase would now de pend on the government farm pro gram. Loan demand has remained weak and there is no indication of any increase in demand. Main street merchants continue to struggle for survival. ACROSS THE DESK. . . (Continued from page 6 ) it, then tore off the form, handed it to the teller and said, “Put that ini Ben’s account.” With that, he mere ly turned to me, put his arm around my shoulder and said, “ I t ’s all taken care of. I really meant it when I told you to come see me if you need help, i Good luck with your purchase.” We shook hands and he returned to his office. As I walked out the door I glanced up at that lobby clock again i and it said 8:54 a.m. Those nine minutes changed my life because a banker like Ed Buckley believed in me and trusted me. Because he helped me at a critical juncture in^ my business life, I was able to com plete the original partnership con tract and then, some years later, to acquire total ownership of our firm. The last time I saw Ed was at din- * ner one evening about two years ago. On the spur of the moment I went over to his table and recalled the above story, which pleased him. Ed was in poor health and it was to be the last time I ever saw him. Ed Buckley died a couple of months ago while I was away cover ing banker conventions and I didn’t know about it until a friend told me later of his death. I cried a little, because I had lost a good friend who cared about me. But, I was happy as well, for I knew that God who gives each of us spe cial talents and asks only that we use them properly, must have been very pleased when he welcomed home Ed Buckley, who had used his ( talents so wisely and compas sionately to assist others. All I can wish for you, our read ers, is that you may share the same joy and sense of fulfillment that be- ( longed to Frank McDermott, Dan Monen and Ed Buckley. I thank them now for what they did for my parents, my family and me. I hope that each of you will have fond , memories of the times you have tru ly helped people in your communi ties in time of critical need. Ben Haller, Jr., Publisher Lloyd Johnson (left), chmn., pres. & CEO of Norwest Corporation, Minneapolis, was wel comed to Des Moines Norwest meeting by George F. Milligan, chmn. & CEO of Norwest Bank Des Moines. « Norwest Board Meets in Des Moines KEEPING with their tradition Iin Nofcities holding meetings periodically outside of Minneapolis, the D Norwest Corporation board of direc tors traveled to Des Moines for a Ju ly 28 meeting. Lloyd P. Johnson, chairman, president and CEO of the corporation presided at the meeting. || Chief executives of Norwest affili ates in Des Moines co-hosted a re ception and dinner party at Wakonda Country Club for the visiting Norwest Corporation directors, | | presidents of Norwest affiliates in Iowa, directors of Norwest Bank Des Moines, and a number of area civic and business leaders. George F. Milligan, chairman and CEO of f | Norwest Bank of Des Moines, N.A., and regional president for Iowa, ex tended a welcome to the visiting board and other guests on behalf of the Des Moines executives, who in# eluded H. Lynn Horak, president and COO of Norwest Bank Des Moines; Richard J. Brinkman, presi dent of Norwest Financial, Inc., and Robert V. Gorsche, president of Nor# west Mortgage, Inc. Mr. Johnson addressed the group briefly before the dinner meeting was adjourned so the Minneapolis contingent could board planes for ® home. Mr. Johnson, a native of Min nesota and a graduate of Carleton College there, returned from a west coast bank executive post to head Norwest in March, 1985. He recalled ^ that Norwest Corporation had its roots in Iowa when Northwestern Bancorporation was formed in 1929 and the First National Bank of Mason City was one of the first ^ three banks forming the holding company. Des Moines and Sioux https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis City banks were incorporated a few years later. Norwest now has 50 banking and financial service offices in Iowa, he noted, including the state’s largest bank and largest holding company. Regarding future expansion, Mr. Johnson said, “We’re awaiting ap proval for our purchase of Toy Na tional Bank of Sioux City. While we have good coverage in Iowa now, it is no secret there are some places in which we’d like to acquire a position. There have been some bad times in Iowa, and typically, Iowans have not taken them sitting down, but are moving ahead. I refer to the biotech nology leadership at Iowa State Uni versity, the development of Des Moines, including a $100 million in vestment in downtown. Des Moines is becoming a regional pool of data card specialists. Amoco is moving its entire credit card operation here, creating 200 more jobs.” Mr. Johnson continued, “But, there is one area that is not up-todate and that is in bank structure for branch banking. This enables custo mers to deposit their funds any where, then move anywhere to use them; also, to do all their lending under one roof and at one time. We wouldn’t have to file 11 SEC reports either, a savings we could pass along. I t ’s not fair. There are so many advantages to having all our banks consolidated into one. We’ll be back next year and try it.” Mr. Johnson recalled that 1986 was Norwest’s second highest earn ings year in history. “We took a $126 million loss in the first six months of 1987,” he reported, “after setting aside reserves against Iowa News 89 foreign loan losses of $240 million, a decision that met with very strong approval. Excluding that action, earnings were up, and strong earn ings will reduce that loss to $30 million by year-end.” He added that “non-performing loans in the domestic economy are dropping rapidly.” In closing, Mr. Johnson stated, “Like many other corporations, we’ve had to revise and change to re main successful. We have consoli dated our back room operations for efficiency, and reduced layers of management between the customer and our top people. I ’m proud of our 9,000 employees in the banking group—proud of them for the way they’ve adapted as we’ve become more market driven and market oriented.” In total, throughout the Norwest system, Mr. Johnson said the corpo ration has 900 locations in 44 states. □ Banks of Iowa Will Purchase Ames Bank Banks of Iowa, Inc. and Great Midwest Financial, the parent com pany of United Bank and Trust, Ames, announced August 4 that they have agreed in principle that the bank will become affiliated with Banks of Iowa. Completion of the transaction is subject to approval of a definitive agreement by the board of directors of both companies and to approvals by various regulatory agencies. At June 30, 1987, United Bank and Trust had assets of $139 mil lion, loans of $72 million, deposits of $121 million and capital of $13 mil lion. The bank is profitable, well capitalized and serves the prosper ous central Iowa community of Ames which includes Iowa State University. Banks of Iowa, Inc. had previously announced its intent to take advantage of growth opportu nities and expand its existing mar kets. Banks of Iowa, Inc. is Iowa’s larg est statewide banking corporation with fourteen affiliate banks and a data processing company. At June 30, 1987 Banks of Iowa, Inc. had assets of $2.2 billion, loans of $ 1.1 billion, deposits of $ 1.8 billion and capital of $162 million. Other area banks owned by Great Midwest Financial are not included in the Ames agreement. Northwestern Banker, September, 1987 90 Iowa News I BA Convention Event Sponsors ACS—Credit Bureaus of Iowa and Associated Credit Services, Inc.: Grand prize for inaugural dinner and show. Dataplex: West Des Moines Dixieland Band for inaugural dinner and show. Deluxe Check Printers: Flowers for registration area and exhibition hall stage. Federated Investors, Inc: Co-sponsors for President’s Dance. Midwest Marketing Consultants, Inc: Co-sponsors for President’s Dance, pictures for complimentary package at President’s Dance. Safeguard Business Systems: Flowers for registration area and exhibi tion hall stage. Student Loan Marketing Association (Sallie Mae): Exhibit hall cock tail reception on Sunday evening. Central Iowa BAI Elects Officers The Central Iowa Chapter of the Bank Administration Institute has elected officers for 1987-88. Elected president and CEO was Tom Quinlin, second vice president at Norwest Bank Des Moines. He succeeds Marie Vranich, vice presi dent and cashier at East Des Moines National Bank. Remaining as vice presidents are Don Fatka, vice president, City State Bank of Madrid, and John Walther, president, South Story Bank and Trust, Slater. Elected as new vice president is Joyce Buck, vice president, Central State Bank, State Center. Directors elected are: Mike Wiskirchen, senior manager, Peat Mar wick Mitchell, Des Moines; Dorothy L. Coffey, assistant cashier and ac counting officer, Jasper County Sav ings Bank, Newton, and Larry Glass, senior vice president, market ing, First Interstate Information System of Iowa, Des Moines. Elected to serve on the Planning Committee are: Craig Meyers, assis tant vice president, Iowa State Bank, Des Moines; Jerry A. Young, assistant vice president, Security Savings Bank, Marshalltown; John Seddon, vice president, First Inter state Bank of Urbandale, Des Moines, and Donna Fickes, cashier, G uthrie C ounty S ta te Bank, Guthrie Center. Added in Waterloo Dennis E. Egel has joined the staff of Peoples Bank and Trust Company of Waterloo as vice presi dent and trust division head. He pre viously served as a trust officer at Waterloo Savings Bank, where he served for 11 years. He has also practiced law in Oelwein and was the assistant city attorney there. D.E. EGEL B A N K IN G quality service by experienced professionals Confidential. Fees Paid by Employer. Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis J. TACK Jerry K. Tack has joined Peoples Bank and Trust as vice president in charge of commercial loans. Pre- viously, Mr. Tack was a vice presi- 0 dent at Hawkeye Bank and Trust in Mason City. He was also the capital lending officer at Norwest Bank and a lending officer at Farm Credit Sys tem in Mason City. # Added in Eldridge Jim H. Olson has joined Central Trust and Savings Bank of Eldridge' as executive vice president. His most recent posi tion was as as sistant vice pres ident in charge of loan review for the corporate office of Banks of Iowa, Inc., in Des M oines. J.H. OLSON C entral T ru st became an affiliate of Banks of Iowa in June. Prior to joining B of I, in^ 1983, Mr. Olson served for five years with the Iowa Department of Bank ing as a bank examination analyst. 50th Anniversary Observed in Worthington The State Bank of Worthington celebrated its 50th anniversary on August 6 with a reception and din-0 ner held in the W orthington Memorial Hall. Bank directors and staff hosted the event for bank cus tomers. Assets of the bank were $ 8 4 0 323.70 when it opened on Aug. 7, 1937. As of Aug. 7, 1987, they stood at $14,118,444.51. Honored on the anniversary were the following bank employees: Olan0 F. Tegeler, president and CEO, 50 years in banking; Verla Sue Tegeler, vice president, 25 years; Alan J. Tegeler, vice president and cashier, 21 years; Sue R. Burger, operations# officer, 20 years, and Joyce M. Dud ley, teller, five years. "Stop By Booth #716 During The IBA Convention" Jean Eden 515-276-1151 525 M erle H ay Tower • Sandi Garner 515-832-1258 T/W/F 276-1253 M /TH Des M oines, Iowa 50310 • 515-276-1151 Iowa News 91 United Missouri Hosts Investment Seminar for lowans United Missouri Bank, Kansas City, held its 5th Annual Iowa Investment Seminar in Des Moines recently at the Wakonda Country Club. Taking part in the one day seminar were, from left: Larry Russell, exec, v.p.; Sean Doherty, inv. off.; Alan Sack, inv. off.; Janet Kelley, v.p.; Jeff Goble, v.p.; Mark Bailey, a.v.p.; Dick Muir, v.p.; Andy Trovillion, inv. repr.; Lyle Wells, Jr., vice chmn.; Becky Herman, inv. acct. off. and Hal Hollister, exec. v.p. The seminar included golf, an investment program and a social hour followed by dinner and awards. The investment program included key insights on mortgaged backed securities, alternative bank investments, bank investment strategies and an economic outlook. Chuck Orr, partner, McGladrey, Hendrickson & Pullen, CPA’s, gave a bank tax update. Mr. Russell, who gave the introductions, called the invest ment seminar “ an informal day to reflect on ideas and to give investment strategies through a hard hitting program.” Brandt Appoints Manager Brandt, Inc. has recently an nounced the appointment of James O. Grimes as its authorized district manager for the entire state of Iowa. Mr. Grimes, president of Money Handling Machines, Inc., has been the authorized Brandt representa tive and doing business in western Iowa since 1953. His organization brings a wealth of experience to the banks of eastern Iowa. Specific sales and service personnel have been as signed to cover eastern Iowa banks. Service points will be at Daven port, Des Moines and Waverly. The two salesmen covering the counties in Des Moines. east of Des Moines will be Herbert Seminar leader John Moye, a se nior partner in the Denver law firm Duysen and Dennis Steele. Moye, Giles, O’Keefe, Vermeire and Gorrell, is a national recognized ex pert on the UCC. IBA to Offer Registration is at 7:45 a.m. and Documentation Seminar the seminar runs from 8:30 to 4:15. In an effort to keep bankers up-to- Fee is $120 for IBA members, $150 date on the most recent documenta for subscribers and $180 for non tion issues, the Iowa Bankers Asso members, with $15 additional after ciation is sponsoring “Loan Docu Sept. 25. The fee includes manual, mentation and Analysis of Article continental breakfast, lunch, breaks Nine of the Uniform Commercial and materials. For more information Code.’’ The one-day seminar will be contact Barb Lowe at the IBA of held October 7 at the Savery Hotel fice. ler counter with a sit down station will provide additional work area for the tellers. Private coupon booths ARRY Riveland, president and feet when the project is completed to for safety deposit inventories will be located close to the vault. The ex CEO of the Luana Savings better serve its customers. Bank, has announced that construc The full service facility will main panded facility provides additional tion has started on a major remodel tain the drive-up on the west and space for storage, bookkeeping and ing program. Expanding to the east, will have four private offices and a larger lobby area in addition to the the bank will have over 3,550 square two conference rooms. A revised tel private offices. A basement under the addition will contain much needed storage space and double the size of the bank’s present Communi ty Room. The exterior appearance of the building will be enhanced by a new roof line that encompasses both the original and new structure. The Kirk Gross Company, Iowa’s largest specialist in the design and development of financial institu tions, is in charge of the project and will utilize local trades where pos sible. Barring unforeseen delays, the project should take six to seven months, Mr. Riveland said. Luana Savings Bank Is Expanding L https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Northwestern Banker, September, 1987 92 Iowa News Gerald Gross Named Chairman, Robert Buckley President at Kirk Gross Co. ERALD L. Gross, president of G Kirk Gross Company of Water loo since 1971, announced recently that he has assumed the duties of chairman of the board and Robert T. Buckley has been elected president and managing officer of the com pany. Mr. Buckley has been with the firm since 1979 and has held posi tions of sales representative and sales manager. G.L. GROSS R.T. BUCKLEY Mr. Gross said this move, which was effective July 1, provides Kirk Gross Company with continuing ex perienced management, while giving him more personal time to develop further his Kirk Gross Company bank building and remodeling busi ness in Florida, which has expanded greatly in the past year. Mr. Buckley said, “We’re com mitted to expanding the business and providing the same quality ser vice and careful attention to detail that has made Kirk Gross Company a leader for the past 51 years. We’re a company old in experience and young in enthusiasm, and th a t’s a winning combination. ’’ Mr. Gross echoed his sentiments and added, “The philosophy at Kirk Gross Company has always been to emphasize service and do what we say we’re going to do. This service starts with the initial contact and continues until every last detail is completed. Under Bob Buckley’s leadership, this same philosophy and commitment to service will con tinue.’’ Kirk Gross Company is the largest full service turn-key firm in Iowa, having built or remodeled more than 290 financial institutions in the state. Its greatly expanded list of projects for 1987 over 1986 emphasizes the strong economic re covery experienced in Iowa banking in the past year. Mr. Buckley said Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Kirk Gross has completed or has under construction 14 projects already this year, with another halfdozen on the drawing board at the end of July. These include a just completed new branch building at New Hart ford for the Iowa Savings Bank of Dike. Open house was held in the New Hartford building on August 18. One of the major remodeling jobs completed this year was the ex tensive work done by Kirk Gross Company for First National Bank of Dubuque. In addition, all the archi tecture and design for the beautifully done Depot Office of Midway Bank and Trust in Cedar Falls (featured in the August issue) was performed by Kirk Gross professionals. A major remodeling for the Gilbertville office of the National Bank of Waterloo also was completed in recent months. Six jobs in progress for architect, design or remodeling work are: ma jor remodeling for Security Bank & Trust in Decorah; renovation in Grundy Center for Grundy Na tional’s main building and also the bank building it obtained through the recent acquisition of Hawkeye Bank there; remodeling and expan sion for Luana Savings Bank; re modeling and new addition for Com munity Savings Bank in Edge wood, with groundbreaking September 1; interior design and remodeling for United State Bank in Cedar Rapids, and interior design and remodeling for Farmers Savings Bank in Traer. IBA Sponsors Consumer Bankers Conference “A Harvest of Consumer Pro ducts,” a conference sponsored by the IBA, will be offered on Oct. 13 and 14 at the University Park Holi day Inn in West Des Moines. The meeting will address new develop ments in the lending field and offer successful techniques for selling new products and services. A highlight of the gathering will be an Octoberfest celebration at Liv ing History Farms. Beer and brats, a polka band, hayrides and a chance to see the Walnut Hill bank make up the festivities. Registration is $150 for members, $190 for subscribers and $225 for £ non-members before Oct. 2. After that date, fee is $20 additional. The agenda is as follows: Tuesday, Oct. 13 A.M. • 8:00 R e g istra tio n /c o n tin e n ta l breakfast. 9:00 “Home Equity Lending: The Second Phase,” Michael Moebs, pres., Moebs Ser- ® vices, Lincolnwood, 111. 11:50 “Competing with the Auto Lending Market,” Michael Moebs. P.M. • 12:00 Luncheon with Chuck “Iowa Boy” Offenburger. 1:30 “Major Issues in Consumer Compliance.” ^ 2:30 Roundtable discussions. 9 3:45 “The Role of Bankers in Im proving the Bankruptcy System,” Richard Stageman, of counsel, Davis, ^ Hockenberg law firm, Des Moines. 6:00 Octoberfest. Wednesday, Oct. 14 A.M. • 8:30 Continental breakfast. 9:00 Concurrent sessions: 1. “Building a More Effec tive Sales Team,” John Pratt, Pratt and Assoc., # Lakewood, Colo. 2. “The Dos and Don’ts of Property M anagem ent,” Jo h n Leavengood, Des Moines. 3. “ Non-Interest Income: Panacea and Peril,” William F. Staats, prof, of banking, Louisiana State U., Baton Rouge, La. • 10:45 C oncurrent sessions re peated. P.M. 12:00 Luncheon with Jim Gib bons, wrestling coach, Iowa State U. 1:30 “Getting the Ear of Top M a n a g e m e n t,” W illiam Staats. 3:00 Adjourn. □ Appointed in Clinton Clinton National Bank has an- • nounced the appointment of Chris E. Fenimore as vice president and trust officer. He joins the bank after serving as vice president and senior trust officer of the American Na- # tional Bank in Omaha. 93 served in the retail lending division. Mr. Strutzel was previously an examiner with the Department of Bank. Mr. Fisher formerly served as an examiner with the FDIC. * * * • ^ ^ w ^ First Interstate Bank has an nounced the following personnel changes: Richard L. Reis has joined the bank as senior vice president, retail banking. He previously served Norwest Corporation, Minneapolis, as vice president, consumer asset manager. Dale Klauss was promoted to manager of the Ingersoll office. He joined the bank in 1970 and most re cently served as manager of metro retail banking. Maggie Hoogerheide was ad vanced to vice president and man ager, personal trust division. She joined First Interstate in 1985 as a trust officer. She also serves as vice president of the Estate Planners Forum. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Larry Cobb was promoted to vice president and manager of trust in vestments and operations. He joined the bank in 1983. Jeffrey A. Simms was elected commercial banking officer in the Iowa division. He was previously a loan review officer for First Inter state of Iowa, Inc. Jo Lynn Gilchrist has joined the bank as a corporate trust officer. She will manage the employee bene fit and corporate trust areas of the trust division. She previously was employed by Ernst & Whinney, where she was a tax consultant. Steven J. Augspurger, Craig E. Strutzel and Richard B. Fisher are new loan review officers for the bank. Mr. Augspurger joined First Interstate in 1984 and most recently Donald R. Runger, president of Hawkeye Bank & Trust of Des Moines, has an nounced the elec tion of Steven G. Patterson as ex e c u tiv e vice p re sid en t and chief operating officer. He will also serve on the board of direc tors. Mr. Patter son most recent ly was president and CEO of Citi zens National Bank of Boone. Mr. Patterson began his banking career with First Federal State Bank of Des Moines, then became executive vice president of Hawkeye Bank & Trust of Sioux City. After serving in this capacity for four and a half years, he became president of the First National Bank of Sibley. He then moved to Boone. Carol T. Stone has been elected vice president and trust operations officer of the bank. Darrell Hughes was promoted to vice president and senior loan offi cer, and Steve Anderson to assistant vice president and consumer loan officer. Other new officers elected in clude Brenda Hansel, assistant man ager, Hickman office, and Jessica L. Rubes, assistant accounting officer. * * * Edwin F. Buckley, 91, died recent ly in Des Moines after a lengthy ill ness. Mr. Buckley had been a Des Moines banker for 53 years. He was born in Des Moines in 1895. He started his banking career in March, 1914, as a messenger for the old German Savings Bank. He was w ith the R econstruction Finance Corporation in the Chicago office for a short time in the early 1930s, and also held positions with the Des Moines National Bank and its successor, Iowa-Des Moines Na tional Bank, before joining the Cen tral National Bank (now First In terstate Bank) in 1935. Mr. Buckley was elected presi dent of Central National in 1941, and then was moved to chairman in 1962. He retired as chairman and a member of the board in January, 1967, at the age of 71. Northwestern Banker, September, 1987 94 Iowa News NEW TOOLS. .. (Continued from page 21 ) dards for loans sold, and guarantee to investors the safety of their investment. Local banks originating loans to a pooler would have to contribute to a 10% reserve to stand behind each pool of loans. That local bank’s contribution would be accessed to cover losses before any other pool mem ber’s reserve is accessed. The contribution of the 10% reserve is a matter of contractual arrangement be tween local lender and the pooler and may be decided by any agreed upon method. The pooler would submit a pool of loans to FAMC for its guarantee and FAMC would collect a fee for an additional reserve pool to be used in the event the indi vidual pooler’s 10% reserve should be exhausted. Only if the FAMC reserve is exhausted would the $1.5 billion line of credit from the U.S. Treasury be used by FAMC. This Treasury guarantee should allow the FAMC guaranteed securities to sell competitively in the market. As ABA and IBAA stressed, allowing banks to par ticipate in a solid secondary market means that, for the IN D E X O F A D V E R T IS E R S September, 1987 American Bankers A s s o c ia tio n ........................................ 8 American Express Travelers Cheques................................19 American Trust & Savings, D ubuque................................. 68 Balboa Life & C a s u a lty ........................................................ 14 Banking Careers, Ltd.............................................................90 Banks of Iowa Computer S e rvice s..................................... 83 first time in many years, the local bank may offer its professional farm customers complete lines of credit,0 both long-term real estate and shorter-term production and equipment loans, restoring community banks’ vitality as one-stop lenders. There will no doubt be a fight when Congress takes up HR 3030 in the days ahead, for FCS undoubtedly^ wants to expand its role to take as much business away from the private sector in long-term and short term lending as possible. The involvement of every community bank in the nation will be vital to winning this one in the Congress. □0 * * * In addition to the special agricultural articles read ers will find in this issue, two additional, important ones will be featured in the October issue. One is a ^ survey among a group of leading ag bankers on wherew agriculture and ag lending is headed in the future. The other relates how the Iowa FmHA/Banker Advisory Board, the first ever in the nation, is helping bring understanding and harmony between the two groups, ^ and how USD A plans to expand the concept to other states. Bankers Trust Co................................................................... 64 Brandt, O m aha...................................................................... 86 Brock R eport.......................................................................... 16 Daktronics, Inc....................................................................... 94 Davenport Bank & Trust Co.................................................. 71 Des Moines S ta m p ................................................................86 Drovers Bank of C hicago...................................................... 12 Evergreen Systems, Inc....................................................46-51 First Bankers Securities Corp............................................. 5 First Interstate Denver..........................................................55 First Interstate Des Moines ................................................85 First National C h ic a g o ....................................................... 77 First National Omaha .........................................................56 First National Sioux C ity .................................................... 7 5 0 Financial Information Trust ...............................................25 Gross, Kirk Co. IAC G ro u p .......................... IBIS,Inc............................... Imperial House Restaurant Information Technology .. Investment Centers of ND . 81 13, 80 .. .67 . . .72 Kansas Bankers Surety Co.................................................. 69 LaSalle National B a n k.........................................................10 M B U ................................................... Marquette Bank Mpls....................... Merchants National B a n k .............. Midwest Management Consultants Midwest Personnel ........................ Modern Banking Systems, Inc........ 58 39 2 140 84w 95 National Bank of Com m erce................................................59 National Bank of W a te rlo o ................................................. 73 North Central Life ...............................................................27 Norwest Bank Des M o in e s ................................................. 96 Norwest C orp o ra tion ............................................................20^ Office Concepts, Ltd............................................................. 70 Plus System, Inc.................................................................... 3 LF Rothschild Seize a marketing advantage and gain positive awareness in your community with a tested and proven method of image building. Increasingly popular electronic information displays by DAKTRONICS will Yellowstone State Bank inform the public of your presence and Lander, Wyoming willingness to serve their needs. Indoor and outdoor displays from DAKTRONICS allow you to effectively communicate your messages both inside and outside your facility. In addition to your messages, you can also offer your display for civic announcements and community programs. Whatever the use, DAKTRONICS displays will enhance your image and increase awareness of your business, putting you a cut above the competition. Rnd out more by calling 1-800-843-9879 or writing us today. X» D A K T R O N IC S , IN C. D A K T R O N IC S IN C 331 THIRTY-SECOND AVENUE FAX 605/697-5171 POST OFFICE BOX 128 TOLL FREE 800/843-9879 (exc. AK, HI, and SD) BROOKINGS, SOUTH DAKOTA 57006-0128 TELEPHONE 605/692-6145 Northwestern Banker, September, 1987 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 11 Sallie M a e .............................................................................. 37 Southwestern Graduate School of B a n k in g ..................... 15 Swords Associates, Inc., Kansas C ity ................................18^ United Missouri Bank ......................................................... 7 US Check Book Co.................................................................82 Valley National B a n k ............................................................87 Joins West Bank Ronald H. Bishop has joined W est| Des Moines State Bank as a first vice president in the lending area, w orking wi t h commercial and consumer loans. His extensive banking experi ence includes, most recently, employment at Bankers T rust R.H. BISHOP Company as vice president—commercial loans. Prior to that he was with a Chicago bank. ( T his bank cut processing costs 30% w ith aT I com puter system. When J. Sid Dinsdale decided that there had to be a way his bank could operate more effectively, he did the smart thing. He turned to a TI computer Value-Added Reseller (VAR) that specializes in bank ing financial system configuration and software. “When we committed to computeriz ing, we knew we’d save money by bring ing our processing in-house. We figured the payback would take 30 months, but with our TI system, we’re already well ahead of schedule.” Now, all they have to do is upgrade their software and add processing power and terminals where appropriate. TI service and support won’t leave you short. Texas Instruments has been making and marketing reliable computer systems for almost 20 years and offers a coast-to-coast network to back them. An easy transition. Project Manager Steve Zey explains. “Now our TI computer handles all the transaction accounting in the bank. Our transition to in-house processing was smooth. “Most of our people were using the sys tem within a few hours of installation.” Call 1-800-527-3500. Find out how your bank’s operations can benefit from a TI computer system and a TI reseller’s specialized bank accounting software. Call the number above for the TI reseller nearest you. Investment protection you can take to the bank. Texas Protecting the bank’s computer invest ment was a key factor in their decision to go with a TI system. In s t r u m e n t s m https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ~ ^M O D ERN BANKING SYSTEM S, INC. 6969 GROVER STREET OMAHA, NEBRASKA 68106 402-392-0151 SoMuch MdkAbout Top row: George Milligan, H. Lynn Horak, John Rigler, Dick Pedersen. Bottom row: Mark Conway, Tom Quinlin, John Cretzmeyer, Jay Nichols, Dorothea Wolfe. Iowa Bankers Convention September 20-22,1987 Des Moines Convention Center will be there. We look forward to seeing you and hope you’ll pay a visit to our bank while you’re in Des Moines. The winds of change are blow ingin the economy, in agriculture, and most certainly in banking. We’ve never had more pressing reasons to get together, discuss these changes, and listen to some expert opinions on topics vitally important to our business future. All of us from Norwest Bank Des Moines Norwest Bank Des Moines, N.A. 7th & Walnut, Des Moines, Iowa 50304 (515)245-3131 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis We KnowTheW ky We Are Norwest. S f NORWEST BANKS
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