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NORTHWESTERN « O o tM C e V "" Minnesota Drought Picture How to Deal with Farm Over-Production Kissing Your Deposit Premiums Goodbye r :yÿi ài® lyiljf ,4s . ri ■. . ' ' .il it.. . 'i**' e- » O ífV i A B A Annual Convention Is in Hawaii Iowa Bankers to Hold 102nd Convention Annual Agricultural Outlook —Survey https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Introducing BRANCHEANKER ® Merchants National Bank’s Newest Correspondent Service. This new PC-based platform banking system puts you in control of your business. BRANCHBANKER® is your complete banking tool. Promising greater productivity and cross-selling capabilities for you... and greater personalized assistance for your customers. See for yourself. Just stop by Booth 105 at the convention. And MNB’s technical systems staff will show you the future of banking. For more information about BRANCHBANKER®, please call 368-4042. Rudy Frey Vice P residen t, Technical Sale s & Su p p o rt I The Future Of B an k in g... Brent Schmidt Technical Sy stem s Sp ecialist Jerry Trudo Vice P residen t, C o rresp o n d en t Ban king Special Demonstration At The 102nd Annual IBA Convention, Des Moines. September 18 - 20. Booth 105. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Merchants National Bank is i THE STANDARD TO WHICH ATI. OTHER FINANCIAL SOFTWARE IS MEASURED. Quality. There is no substitute. Find out why more financial institutions turn to Information Technology, Inc., Lincoln, Nebraska and Birmingham, Alabama. ffio INFORMATION TECHNOLOGY INC. P.O. Box 2705 / Lincoln, NE 68502 / (402) 423-2682 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis WE PUT YOU INTO THE FULL-SERVICE INVESTMENT BROKERAGE BUSINESS... tarare TW»«« smm PE E T tSJ 1 .« iO:3? IttKTIOIfÌS EK t a 56W NfiU t r\->, v\ „ S 1 „ 0O;?f - 43 47W TX 1 WfiKElltttlTOfi 11 CÛKO HW ® 1112 SS ll€ »-»wa3 S . p UN» 3S.78i 37,0? a » f|S0 IMW 43i -*. 3990 8 3040 SPIC 434N 40 fi 43 N 30 31', UKX IK 5.94B UHC 6.IS t»C 36530.5 4js t.® C 349.87-».30 364.® 384.® PROFITABLY. 'First Bankers Securities CORPORATION 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 Lli 5 % NOgfflWESTERN % i j a m w SEPTEMBER 1988 • 95th year • No. 1500 % MEMBER OF AUDIT BUREAU OF CIRCULATIONS MEMBER BANK MARKETING ASSOCIATION % OLDEST FINANCIAL JOURNAL SERVING THE CENTRAL AND WESTERN STATES ON THE COVER % Any agricultural outlook or review story this year would have to take Into account the drought that hit the nation, and midwestern states especially, In the critical year of 1988 as the industry was trying to recover from the severe depression of the preceding several years. Some fields looked good to the casual glance, but closer Inspection reveals greatly impaired corn maturity, and inspection of soy bean plants showed many did not mature properly or had fewer beans in the pod than normal. % FEATURES 21 Annual agricultural outlook Exclusive % 24 N o rthw ester n B anker survey reports current conditions The Minnesota drought picture Minnesota Bankers Association study is released 25 'I* Farm over-production Noted editor Lauren Soth tells how to deal with it 26 Kiss deposit premiums goodbye Dr. Doug Austin offers his solution on the FSLIC % 28 IOWA CONVENTION SECTION % % % 102nd Annual Convention Program Interview with Clair Lensing You Will See Them at the Convention Group Chairmen Report Area Conditions Des Moines News DEPARTMENTS 34 35 35 41 Illinois Minnesota Twin Cities South Dakota 42 42 55 56 North Dakota Wyoming Montana Colorado 59 63 64 93 Nebraska Omaha Lincoln Index of Advertisers NORTHWESTERN BANKER 1535 Linden Street, Suite 201, Des Moines, Iowa 50309 % % Phone (515) 244-8163 Publisher & Editor Associate Publisher Associate Editor Ben Haller, Jr. Robert Cronin Diane Nelson No. 1500 Northwestern Banker (U S P S 397-620) is published m onthly by the Northwestern Banker Company, 1535 Linden Street, Suite 201, Des M oines, Iowa 50309. Subscription $2.00 per copy. $24 per year. Second Class postage paid at Des Moines, Iowa. P O ST M A S T E R : Send all address changes to Northwestern Banker, 1535 Linden Street, Suite 201, Des Moines, Iowa 50309. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis IBAA Bancard, Inc. has announced that 400 community banks are now participating in the organization’s credit card program. Walton Bank and Trust Company of Monroe, GA, a $3 million bank which opened its doors to the public August 18, represents the 400th participant in the program. "It’s been a hectic and very exciting day,” said Ben Melcom, vice president at Walton Bank and Trust. "We have been looking at the IBAA credit card program for some time, and wanted to offer our own credit card program from the moment we opened our doors.” At the close of the recent quarter ending June 30, 1988, IBAA Bancard participating banks had issued over 300,000 Visa and MasterCard credit cards to cardholders in 40 of the 50 U.S. states. IBAA Bancard, Inc. is a whollyowned subsidiary of the Independent Bankers Association of America. Through a group processing agree ment with Telecredit Service Center, Inc. in Tampa, Fla., IBAA Bancard, Inc. provides IBAA members with the opportunity to become independent is suers of Visa and MasterCard credit cards. The IBAA Bancard program is the only national credit card dedicated exclusively to the payment system needs of this nation’s community banks. Boatmen’s Bank Will Merge 7 in Kansas City Area ABA annual convention Honolulu is site for October 8-12 meeting 67 70 72 78 90 IBAA Bancard, Inc. Enrols Its 400th Community Bank C. Ted McCarter, chairman of the board and chief executive officer of Boatmen’s First National Bank of Kansas City, has announced an appli cation to merge Boatmen’s Bank of Belton, Boatmen’s Bank of Excelsior Springs, Boatmen’s Bank of Indepen dence, Boatmen’s Bank of Lee’s Sum mit, Boatmen’s North Hills Bank and Boatmen’s Raytown Bank into Boat men’s First National Bank of Kansas City. Mr. McCarter stated, "If the merger is approved, all banking offices will be maintained with the same senior management team serving customers as before.” He said that upon comple tion of the merger, Boatmen’s custom ers will have the convenience of trans acting business at 22 locations in the greater Kansas City area. Total assets of the combined banks as of June 30, 1988 were $2.4 billion. If approved, the merger is expected to be consummated by late fall of 1988. Northwestern Banker, September, 1988 yi $ ^ ^1 -ii 5i§§ $ 4 ^ -3 Ja 1 D i* siilP:^ ■i ► 1..^ ■/< III j # MI&MwM m ft You’re looking at a big way First Banks can help you make money. A state-ofthe-art trading room that gives you instant access to the largest bond inventory in the Upper Midwest. So you can shop more markets, check more rates and returns, © 1 9 8 8 First Bank System https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis quickly spot trends and opportunities, and precisely match investments to objec tives. W ith First Banks’ unmatched resources behind you, you can even share in the benefits of large block buying with out spending large sum s of money. ¡k «P rj * : j||gf f l ■«ÿ 3 r 3» * 9 ■lA -, <Â-ÆSÈ î- 1 5 'i L^ * «* (u y v i1 F 1 JvJm * *- ■ i? 8 M l ¿ i ¡ ■ p i :; 4 . mm ■ 1 j j jrA jg ■ ■ ^ ' wwf * 'R p F n 1 w You can also see a few of our other advantages: advisors who specialize in cor respondent bank investing. Experts per sonally committed to m eeting your needs, following your lead, and making your investments pay off. li£ ^ j ■ f® * S https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis mm ...,J ■ I ■ -v ■—*- 4»*,, • vW'ÙSi :.^ s .____ ,%Vj* ^ ”f 4 40* 4 - v ■ jaB H f h ■3 / f l « % •'-vi: ■ a ■ SH sai HH «* 'j P i ‘m ^ :v • i. as»1 J i ; I « \ ; : * V|l!|g, f *. » Wê ^ ^§ S ÏP ^ - #4 jÉ 1F 1 ■ * j8 r* ~*$h*7K -îS ,*f i- ^ , : ^ v Jj - Ä -i Jj r> v F ^ iJÈÈÊeÊm||ç>yæ k S W ÊÊm. * 81 i§ § ^ 3| JS 3p ■ If you’re ready to make the m ost of your portfolio, call FBS Capital Markets at (612) 343-1936. We’re ju st the big bank Members First Bank System you need. First Banks Members FDIC 8 Minnesota: J Convention Calendar ABA—American Bankers Association AIB—American Institute of Banking BAI—Bank Administration Institute BMA—Bank Marketing Association CFP—College for Financial Planning IBAA—Independent Bankers Association of America NABW—National Association of Bank Women, Inc. RMA—Robert Morris Associates Sept. 19-20—IBAA ESOPs and Other Incen tive-Driven Systems Seminar, The Drake Oakbrook, Chicago, III. Sept. 24-27—National NABW Conference, Marriott Hotel, Boston, Mass. Sept. 25-28—ABA National Bank Card Con ference, San Francisco Hilton. Sept. 25-28—BAI Community Bank Presi dents Forum, Williamsburg, Va. Sept. 25-28—BMA Trust and Personal Fi nancial Services Marketing Conference, Sheraton Washington Hotel, Washing ton, D.C. Sept. 25-30—RMA Loan Management Semi nar, Columbus, Oh. Sept. 29-Oct. 1—CFP Financial Planning Practice Series, Chicago, III. Oct. 8-12—ABA Annual Convention, Hono lulu. Oct. 10-14—BAI Introductory Bank EDP Auditing, Chicago, III. C a n ’ t Pia il In s u r a r r^ e ? Insure Your at the B< brrowers Price Oct. 16-28—BAI Bank Executive Program, Durham, N.C. Oct. 30-Nov. 2—BMA 73rd National Market ing Conference, Hilton Square, San Fran cisco, Calif. Oct. 31-Nov 1—IBAA EDP Auditing Seminar, Sheraton Park Place, Minneapolis, Minn. Oct. 31-Nov. 4—KBA/NBA School of Trust and Financial Planning, Holiday Inn, Lenexa, Kan. Nov. 7-8—IBAA Long Range Planning Semi nar, Hyatt Regency, Kansas City, Mo. Nov. 9-10—IBAA Asset/LiabiIity Manage ment Workshop, Hyatt Regency, Kansas City, Mo. Nov. 13-16—ABA National Agriculture Bankers Conference, Des Moines, Marriott/Savery, Des Moines, la. Nov. 14-15—IBAA Community Bank Owner ship and the Bank Holding Company Workshop, Hilton Pavilion, Phoenix, Ariz. Nov. 14-18—BMA Southwestern Essentials of Bank Marketing School, U. of Hous ton, Tex. Nov. 15-18—BAI Asset/Liability Manage ment Conference, Chicago, III. State Conventions & Schools Colorado: Sept. 15-18—Independent Bankers of Colo rado Annual Convention, Beaver Creek at Vail, Avon. Illinois: Sept. 16-19 —Independent Community Banks in Illinois Annual Convention and Exposition, Adams Mark Hotel, St. Louis, Mo. Nebraska: Sept. 27 & 28—NBA “ The Customer” Executive Overview Program, Lincoln Cornhusker,Kearney Ramada Inn. Oct. 4—NBA Investment Conference, G.l. Interstate Holiday Inn. ^ Oct. 5—NBA Trust Conference, G.l. Inter#* state Holiday Inn. Oct. 11-12—NBA “ The Customer” Training Program, Lincoln Cornhusker. Oct. 13-14—NBA “ The Customer” Training Program, Kearney Ramada Inn. Oct. 12-16—NBA Post-Trip, Maui, Hawaii. W Oct. 20—NBA Regulation Z Review, Grand Island Riverside Inn. Oct. 25-27—NBA Operations Conference, Omaha Best Western Regency West, Ogallala Holiday Inn, Kearney RamadaA Inn. # Nov. 9—NBA Compliance with Federal Real Estate Lending Regulations, Kearney Ramada Inn. Nov. 10-12—Nebraska Independent Bank ers Association Annual Convention, V illa -^ ger Motor Inn, Lincoln. Nov. 16—NBA IRA Conference, North Platte Holiday Inn. Nov. 16—NBA IRA Conference, Columbus New World Inn. North Dakota: Sept. 20—NDBA Negotiation Strategies and Skills for Bankers, Bismarck. Sept. 21—NDBA Loan Negotiation and Workout Skills, Bismarck. ^ Oct. 20-21 —NDBA Human Resource C o n lP ference, Bismarck. Iowa: Wyoming: Sept. 18-20—IBA Annual Convention, Con vention Center, Des Moines. Nov. 5—WBA IRA Seminar, Hilton Inn, Casper. # Community Bank IAC BrokâCTræH vice: * H i g h -r isk Insurance *L arg V olum e P olicies *Anz* u ities, Variables, ^ p n iv e r s a l L ife BILL SHERMAN, CLU Call (800) 821-5434 in Missouri (800) 892-5890 IA C Group, bank insurance specialists since 1952. Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ^ Oct. 2-7— MBA Commercial Lending School, Radisson Arrowwood, Alexan dria. INVESTMENT BANKING SPECIALISTS M erging with another institution, acquiring another organization, or being acquired are difficult and com plex transactions. Austin Associates com bines banking, finance and corporate expertise to sm oothly effect a merger or acquisition. O u r expertise can be utilized to negotiate terms and conditions, to determine appropriate structure of a transaction, to prepare docum ents and applications, to assist with com m unicating to regulatory authorities, to issue fairness opinions, and to analyze m anagem ent and operations of a new organization. For specific information and con fidential assistance, please call Austin Associates at 419/841-8521. AUSTIN ASSOCIATES 3178 Republic Blvd., N. • Toledo, Ohio 43615 • 419/841-8521 Toledo • Chicago • Indianapolis • Springfield • Richmond • Des Moines .WHY IS BANCARD SO POPULAR WITH COMMUNITY BANKS ? DO INCREASING PROFITS MEAN ANYTHING TO Y O U ? Cardholders (In Thousands) Accounts Number of Participating Banks (In Thousands) $179 million in sales volum e, over 300 m em ber banks and m ore than a quarter million cardholders, (im pressive figures for IBAA Bancard, Inc. in less than two years of operation. W hy is Bancard so popular? The IBAA Bancard program gives com m unity banks a unique opportunity to issue, control, and profit from their ow n Visa and MasterW Card credit cards. Participating banks are H attracting new customers, increasing loan dem and and fee incom e in a very co m petitive credit card market. And, through a group processing agreement, com m unity banks have all the services available to professionally and profitably support a successful credit card program. Want to increase your profits? C o n ta c t IBAA Bancard, Inc. today. N O W YOU CAN OFFER YOUR CUSTOMERS THE CONVENIENCE O F WORLD-WIDE CREDIT BACKED B Y HOM ETOW N SERVICE . YES: We w ant inform ation on IB A A B ancard , THE c o m m u n ity b a n k card program ! Telecredit, «I Inc. B U SD m n sc A subsidiary of the https://fraser.stlouisfed.org INDEPENDENT BANKERS ASSOCIATION O F AMERICA Federal Reserve Bank of St. Louis Title Citv Phone ( ) Date □ Send free brochure about the complete Bancard profit system. □ I’m definitely interested...please contact me. Send to: IBAA Bancard, Inc. One Thomas Circle, Suite 950 Washington, D.C. 20005 or call us: 1*800*422*8439 10 Paper Focuses on Managing Allowance for Loan Losses Unbeatable Support LaSalle National Bank supports you. With more than half a century of e x p e r ie n c e ... inn ovative p r o d u c ts .. .responsive service... and deep commitment to the market. Our goal is to help you enhance your overall performance. LaSalle takes a consulting approach to correspondent banking, working closely with you to develop strategies that improve prof its, growth and efficiency We offer individualized service and comprehensive capabilities, including: • multiple investment consulting • credit and financial services • global trade finance • merger and acquisition financing • trust, treasury and many other services In addition, LaSalle ensures dependable, cost effective safe keeping, investments, loan overlines and the other standards of correspondent banking. As your Midwestern neighbor, we share your perspective and regional loyalties. As a Chicago bank with international resources, LaSalle can share money-center banking opportunities as well. Through our affiliation with ABN Bank, a leading global institu tion, we offer many advantages well worth investigating. Get acquainted with LaSalle’s Correspondent Bankers. Call Wayne Bismark or Del Rogers at (312) 443-2769. Wayne, Del and the LaSalle Correspondent Banking team will give you unbeatable support—with better service, better products and better ideas. LaSalle National Bank 135 South LaSalle Street Chicago, Illinois 60603 Member FDIC Member of the ABN/LASALLE group ABN O LASALLE Your Correspondent Banking Bridge c 1988 LaSalle National Bank https://fraser.stlouisfed.org Northwestern Banker, September, 1988 Federal Reserve Bank of St. Louis • Robert Morris Associates has pub lished a new monograph entitled Managing the Allowance for Loan and £ Lease Losses: State of the Art. The book includes information on the experi ence of banks that have successfully managed their ALLL. It also contains extensive research on the subject, a § study of congressional hearings, and interviews with senior management from RMA member institutions. Managing the Allowance for Loan and Lease Losses: State of the Art is £ based on surveys and interviews in volving relatively large banks. RMA selected these financial institutions because they seemed to best express the current state of the art in the<|^ determination of ALLL. However, the basic methodology is still valid for smaller banks, even though some of it may have to be modified to accommo date these banks’ specific needs. # The cost of Managing the Allowance for Loan and Lease Losses: State o f the Art is $43 each, with a discount price of $27 each for personnel from RMA member institutions. For more infor- # mation and to order, contact the RMA Order Department, 1616 Philadelphia National Bank Bldg., Philadelphia, PA 19107; (215) 665-2850. Neal Farrell Resigns as Mercantile Bank President • Neal J. Farrell, 55, took early retire ment August 31 as president and chief executive officer of Mercantile Bank # N.A. and president and chief operat ing officer of Mercantile Bancorporation Inc., St. Louis. Mr. Farrell addi tionally submitted his resignations from the boards of directors of the 0 bank and its parent company. Donald E. Lasater, chairman and chief executive officer of Mercantile Bancorporation, has assumed the posi tions vacated by Mr. Farrell pending a • search for a successor. That process is expected to take four to five months, and Mr. Lasater will work in conjunc tion with a five-member search com mittee of Mercantile’s board to select a # replacement. Mr. Lasater said senior managers of Mercantile will be re viewed by the committee together with other qualified candidates before a final decision is made. ® Farrell said at the present time he is exploring several worthwhile opportu nities and alternatives. He joined Mer cantile in 1978 as president of Mercantile Bank, previously having been at ® Chase Manhattan Bank, New York. •...fee income from •our Investment Center . continues to exceed all When Bill Beohm, president of Tama State Bank, decided to provide a full service invest ment center for the bank’s customers, he looked into a number of companies offering this type of service. “We chose Investment Centers of Amer ica,” Bill says, “because they have years of experience in working with independent banks such as ours and a proven track record of success.” with o n e o f h is clien ts. Beohm was certain the program would succeed but was surprised how quick ly it happened. Surprised how the Investment Center’s hand• picked representative, Bob Gunderson, established “almost instant credibility” in the bank and in the community. Surprised at the many new faces he saw in the bank because of the Investment Center. Surprised at the amount of cross® over business the center has generated. Surprised how bank deposit levels remained stable as customers drew money from other institutions, brokerage houses, insur^ ance companies, etc. to fund their investments. in vestm en t c o u n se lo r B o b Gun- P i e r s o n d isc u sses an in vestm en t ^ D “Most o f all, we’re surprised at how fe e income from our Investment Center continues to exceed all our expectations!”, Beohm says, “and it’s all new money... income we would not have had otherwise. ” It’s no surprise that 60% of your customers would prefer to consolidate their financial affairs at one bank — that’s research-proven! For more information on establishing an Investment Center in your bank, call or write today! I B INVESTMENT • III C E N T E R S Investment Centers of America, Inc. First Dakota Building • 212 North 4th St. • Bismarck, ND 58501 • TOLL-FREE: 1-800-544-7113 North Dakota: 1-800-732-2363) Digitized (In for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis J A William J. Beohm, President TAMA STATE BANK TAMA, IOWA 12 FRANK BAUDER. JOSEPH MIGELY. JOHN CROTTY. MAX ROY. Names synonymous with correspondent banking at Drovers. Almost 150 years combined experience. Frank Bauder Joseph M igely Chairman President & CEO John C ro tty, Jr. M ax A. Roy Sr. Vice Pres. Sr. Vice Pres. Knowledgeable years...handling Overline Loans, Capital Requirements, Investments and Safekeeping. So consider Drovers for your correspondent needs. Y o u ’ll find a continuity of policy. And a continuity of people. Like Frank. And Joe. And John. And Max. Call toll free 1 - S0 0 - 621 - S9 91 In Illinois 1-SOO-572 - 249 S ^ m Cole Taylor Bank/Drovers COLE 4 7th and Ashland Avenue TAYLOR Chicago, Illinois 6 0 60 9 BANK 3 1 2 -9 2 7 -7 0 0 0 “W e look forward to seeing you in D es M oines during the Iowa Bankers Association Convention. ” Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Conferences and Workshops • Scheduled • ORKSHOPS and conferences scheduled within coming weeks include the following: • ABA POS Workshop, Oct. 17-19,® Westin Hotel, Chicago. This year’s conference will provide answers to such questions as: • How much will POS cost? • How can banks make debit cards® profitable? • How do banks get customers to use debit cards? • What are the security risks? • How much security will b a n k ® need and what will it cost? • How should banks integrate POS direct debit with credit services? Member registration fee $395; non members $495. Contact ABA B anke® Education Network at 202/663-5430. W • BMA 1988 Trust and Personal Fi nancial Services Marketing Confer ence, Sept. 25-28, Sheraton Washing® ton Hotel, Washington, D.C. Trust ex ecutives will provide guidelines on how to conduct market research, de velop new products, and manage trust sales and service quality, and s h a r® their views on the future of trust and private banking. The conference also will feature numerous concurrent break-out sessions, an assessment of the coming Presidential election, a # Sunday "Peer Group Exchange, and a wide-ranging exhibit hall. Registra tion is $595 for members;; $795 for non-members. Contact Karen Joens at 312/782-1442. • • Consumer Bankers Association 68th Annual Conference, Sep. 25-28, Hotel Del Coronado, San Diego. Key noter is Sen. Christopher Dodd (D .® Conn.), chairman of the Senate Bank ing Subcommittee on Consumer Af fairs. Panels and sessions will focus on consumer attitudes, federal legisla tion and regulation, asset securitiza® tion, home equity lending, auto fi nance and student lending. There will be a special issue forum on first mort gages, and a panel discussion of the experiences of leading participants in® consumer credit securitization. A special offering will be a hands-on workshop in news interview training. Registration fee is $575 members; $695 non-members. Contact Antigoni® Ladd at CBA at 703/276-1750. r I |f l h e r e 1S no Establishing build more critical ing budgets. Growth component projections and then- in a success- impact on personnel ful building program and space require than thorough plan- ments. T h e careful n in g b a sed on in analysis of these and formed research. other factors is the Without it, you build rock solid founda- . on sand. Bank Build- Facilities ment understand your uni- I system , 41111 que facilities requirements bet ter than any other organization we have . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D evelop- . H ssSISIhi a 14 United Missouri Gets New Chairman and Vice Chairman R. Crosby Kemper announced last month that the board of directors of United Missouri Bank of Kansas City, n.a. has elected J. Lyle Wells chairman of the board. Mr. Kemper will now serve as senior chairman of the board, and Malcolm M. Aslin continues as president and chief executive officer of the bank. In addition, William H. Shackelford, III has been elected a vice chairman of the board and an advisory director of the board. Mr. Wells has managed the commer- J.L. WELLS, JR. M.M. ASLIN cial banking division since 1987, which includes metropolitan and na tional business development depart ments, commercial lending, interna- D A R R E L L ELKINS W OULD LIKE TO H OLD YO U R H AN D. As part of the BIC S10-Point Service and Support System, you get your very own executive account manager. One of these is Darrell Elkins. His job is to make sure BICS gives your bank stateof-the-art data processing.. .and more. One way Darrell does this is through his on-going service vis its (point #3). At least once a month, he visits your bank to lend a hand and ensure that you’re getting the maximum return on your BICS investment. To find out how the BICS 10-Point Service and Support System can give you 100% support, 100% of the time, call 1-800-421-0059 or 1-800-332-5242 (in Iowa). 1 0 0 % SUPPORT. 1 0 0 % OF THE TIME. THE b a n k in g SYSTEM 4333 Edgewood Rd. N.E. P.O. BOX 1847 Cedar Rapids, Iowa 52406 319/395-6600 A Banks o f Iowa subsidiary Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W.H. SHACKELFORD H.A. PEEL tional banking and correspondent banking activities for the bank. He joined City National Bank, now United Missouri Bank of Kansas City, ( in 1956. In 1964, he moved to Grand Avenue Bank, which is now United Missouri City Bank, where he served as president and later as chairman. After 18 years, Mr. Wells moved to I United Missouri’s downtown bank in 1982 and was elected a vice chairman of United Missouri Bank of Kansas City, n.a. Mr. Wells currently serves on the< board of directors for United Missouri Bank of Kansas City, n.a., United Mis souri Bancshares, Inc., United Mis souri City Bank and Pioneer Service Corporation. ^ Mr. Shackelford has been an execu tive vice president in the commercial banking division since 1986 when he joined United Missouri. Mr. Shackel ford was affiliated for 19 years with ^ First National Bank of Kansas City, prior to joining United Missouri. The United M issouri board of directors further announced these promotions: ’ Harry A. Peel has been promoted to senior vice president in the commer cial banking divison. He markets com mercial bank services primarily to customers and prospects in the upper * Midwest region of the country. After receiving his bachelor’s degree in 1971 from the University of Kansas, Mr. Peel joined United Missouri as a man agement trainee and has held various ' positions in business development during his banking career. He also has served in the U.S. Army. Alexander C. Kemper has been pro-. moted to assistant vice president in 1 the commercial banking division. He is involved primarily with lending ac tivities for commercial customers and with developing new business for the ^ bank. Mr. Kemper joined the bank last year as a credit analyst. He was elect ed an assistant cashier in January 1988 and moved to the commercial banking area. He holds a liberal arts ^ degree from Northwestern University in Evanston, 111. . T h is bank cut processing costs 30% with aT I computer system. «HI W hen J. Sid Dinsdale decided that there had to be a way his bank could operate more effectively, he did the smart thing. He turned to a TI computer Value-Added Reseller (VAR) that specializes in bank# ing financial system configuration and software. “W hen we committed to computeriz ing, we knew we’d save money by bring ing our processing in-house. We figured # the payback would take 30 months, but with our TI system, we’re already well ahead o f schedule.” 0 Investment protection you can take to the bank. Protecting the bank’s computer invest ment was a key factor in their decision to go with a TI system. Now, all they have to do is upgrade their software and add processing power and terminals where appropriate. A n easy transition. Project Manager Steve Zey explains. “Now our TI computer handles all the transaction accounting in the bank. Our transition to in-house processing was smooth. “Most o f our people were using the sys tem within a few hours o f installation.” T I service and support won’t leave you short. Texas Instruments has been making and marketing reliable computer systems for almost 20 years and offers a coast-to-coast network to back them. 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. Te x a s In s t r u m e n t s [ODERN BANKING SYSTEMS, INC. 6969 GROVER STREET OMAHA, NEBRASKA 68106 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 402- 392-0151 ELECTRONIC BANKING IS TAKING A WHOLE / NEW \ DIRECTION. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Now the familiar sign of SHAZAM can take your customers in more directions than one. 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George, President * Call to register for A L M Seminar in October. h f Midwest Management Consultants 9140 West Dodge Road, Suite 270 Omaha, Nebraska 68114 (402) 391-1344 Develop Your Untapped Potential.. . at ABA’s 1988 National Agricultural Bankers Conference! Des Moines, Iowa November 13-16, 1988 You’ll harvest maximum benefits as you: • • • • • • Learn new techniques for handling the secondary market; Discover the best way to restructure drought-impacted farm loans; Gain the latest insights on new legislation and regulations; Acquire new, aggressive marketing strategies; Meet and discuss your concerns with nationally known speakers; And much, much more! Register by October 1, 1988 and you’ll get special “ earlybird” discounts: • $495— ABA Member Fee ($525 after October 1) • $445— when two or more people from the same member bank register at the same time • $630— Non-member Fee ($665 after October 1) Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis For More Information For registration/housing questions, call: (202)663-5274 For program information, call: (202)663-5430 Agricultural Bankers Division <W> AMERICAN BANKERS ASSOCIATION stock will provide for full payment of creditors of the failed bank. The liqui dation of Franklin National Bank will be officially terminated in the near future. Franklin National Bank was closed by the Comptroller of the Currency on October 8,1974. In this FDIC action, holders of the remaining shares of 4.60% cumulative preferred stock will receive par value of $100 per share plus a dividend of $2.70 per share accrued between November 1, 1987, and May 31, 1988. The FDIC previously announced the retirement of 50 percent of Franklin’s 177,119 outstanding preferred shares and payment to holders of the retired shares of $162.87 per share, compris ing par value plus dividends accrued from May 1, 1974, through December 31,1987. At the same time, a dividend of $62.10 per share was paid to share holders on the unretired shares. ABA Manuals Detail Small Business Financing Two manuals now available from the American Bankers Association provide bankers and borrowers with an easy, "how-to” approach to small business financing. ABA’s "Government Guaranteed Lending Manual: A Guide for Small Business Bankers” provides loan offi cers with an indispensable resource for determining the feasibility of a guaranteed loan program for their bank. 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There is a minimum order of 25 copies, but quantity discounts are available in excess of 50 copies. <|) # # • • * £ 0 0 # • • ® ® NO MATTER HOWYOU 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 55164 In Minnesota call 800-792-1030. All other states 800-328-9117. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Protection all ways flight across the Atlantic Ocean, Oscar was W bom and United Missouri Bank opened its Correspondent Banking Division. United Missouri announced Correspondent Banking Services in ’ 27. It didn’t make national headlines. It did make a difference. Since then, United Missouri has helped hundreds of banks improve their funds collection. The bank has done it by building a large direct send net work. And, by offering all correspondent banking services which only an experienced bank could offer. As a result, United Missouri customers have collected their funds faster and invested them faster. Today, United Missouri’s Correspondent Banking Divi sion still makes a difference. It can make a difference for y ou . Call United Missouri Bank for your bank’s funds collection. And, pick the proven performer. Ib UNITED MISSOURI BANK mm d of Kansas City, n.a. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis P.O. Box 419226, Kansas City, Missouri 64141-6226 816-556-7900 21 Annual Agricultural Outlook An Exclusive Northwestern Banker Survey ANKERS taking part in the Annual Agricultural Outlook Survey conducted by the N orthwestern B an ker for many years state that the full effects of this year’s drought, while a severe one, will not be felt to the fullest extent until next year. The majority of them expect to see carry-over debt from this year’s farm business and they expect that debt will be at a higher level than in former years. Two positive factors among these survey respondents are that banks are in a position to handle re structured debt, and that farmers continue to make debt reduction a priority from whatever source they have for funds. A limited number of selected bankers were surveyed in early to mid-August on a half-dozen questions of a timely nature. Several responses lend themselves to graph re porting, as shown in the accompanying charts. Three questions elicited comments that follow. Names of the survey participants are shown separately. Their comments are grouped by the states they represent, with each respondent’s name listed for individual comments. B ^ 0 ^ 0 H ow do you perceive the drought to be affecting • farm production and income in your area this year...including any effects on farmers, town business, and your bank? Q Nebraska Mr. Stull: Income to farmers is up and they are paying down their bank debt. Feed costs are higher, which raises ® the cost of grain and has lowered the profitability of fat cattle. Mr. Bass: I feel our area will have slightly below • average production this year; however, rain and cooler temperatures the next few days (written August 19) will make a significant difference. We have had excellent crops the past two years. Production was well above average. We are expecting a good irrigated corn crop, but dry® land corn will be approximately 20 to 40 percent less than last year. Irrigated soybeans and milo also are good, but a reduction of 40 to 50 percent in dry-land beans and a 30 to 50 percent decline in dry-land milo yields will not be uncommon. ® Most of the farmers are satisfied with their crops. The higher prices will compensate for the lower yields. One of https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis our biggest concerns is the possibility of returning the advanced deficiency payments. If the drought would worsen, this would have a tremendous impact on farmers. Minnesota Mr. Krogh: Farm production has been severely affected by the drought, but I don’t see much change in gross income since the bulk of the income is earned from dairy and livestock sales. Depending on the drought assistance plan (now enacted into law and signed by the President), there could be a large effect on net income. The majority of corn around here will be silage, the oats average yield has probably been 15 to 20 bushels, and the second crop of alfalfa hay about one-fourth of a ton per acre. Net income can be maintained if the assistance is adequate to provide hay and grain needs. Mr. Johnson: Hurt! Hurt! Hurt! We have less income, less buying power, stricter lending policies. Mr. Jensen: Farm production (crops) is down 50-75 percent. The income reduction has not yet affected town business noticeably, but we expect this and modification of loan repayment terms in the fall. Mr. Skaalen: Production levels are at best down 20 percent. We are not as hard hit as others in our state and should see reduced but fair production levels. New pur chases have been cancelled and ag businesses are report ing higher levels of receivables and lower sales. Illinois Mr. Herr: Farm production definitely will be low, with losses 50 percent or greater possible. While the exact loss at this time is still unknown, many days of 95 + tempera tures with less than an inch of rain in 2-3 months will have a profound impact on our crops. Income hasn’t been affected yet due to the fact that most area farmers hold crops until the following year to sell. Many farmers have reserve corn on which they have paid off their loan. Town business will be lower next year — less income means less money to spend. Mr. Rich: Production is down significantly in at least half of our county, which will translate into lower income for 1989. Our bank anticipates being able to handle most of the deficiencies through some form of loan restructur ing or guarantee programs. Machinery sales have died except for those committed for prior to about June 1. Northwestern Banker, September, 1988 22 Mr. Billingsley: Farm production of corn and soybeans will be reduced this year in our area. This will result in very careful spending by farmers, which will affect the town businesses to some degree. Our bank will be working closely with our farm customers during the next few months. Wisconsin Mr. Fogle: If I average all crops in our area (we are in cash grain country with little livestock) I expect 40-50 percent yields. I expect to see losses, moderated by old inventories, and break-evens at year-end. Mr. Syndergaard: The first crop hay yields were down somewhat; some second hay yields were almost non existent, but we have had some rains which have im proved the prospects for our corn crop and a third crop of hay. Feed costs are up and milk prices have not yet moved up. Dairy cow herds and replacements are being culled. If milk prices do not move up, net income will be reduced and this will affect main street in our community. South Dakota Mr. Waara: A dramatic reduction in cash income for local wheat farmers is only partially offset by Federal Crop Insurance. We’re experiencing a much smaller paydown on loans than usual. Livestock prices are holding up very well in the face of higher feed costs. The general business climate is fair to good in this area. Mr. Everson: We anticipate very little effect this year as droughts have a tendency to delay their effects for 1 to 1V2 years. Mr. Hossle: The drought has severely restricted crop production. Many cow herds have been moved to other areas and a lot of cow/calf pairs have been sold because of the shortage of grass and winter feed. The full impact of the drought will probably not be felt until next year. Iowa Mr. Souder: The drought has made farmers "hunker down” again. Some yields will be decent, especially on ( beans, but all crops have been hurt here. Some are totally gone; in fact, they are not good even for silage. Livestockdiversified farms will survive easier in the long haul. Farmers with a lot of grain stored are cashing in now and this will replace lost 1988 income to some degree, but we i still have no reserve moisture. We think 1989 will be variable, depending on rainfall amounts and timing. Mr. Plagge: It is very difficult to estimate the effect of this drought at this point (mid-August) but it is indeed very serious in Hamilton County. The last two weeks have ^ really taken their toll. In July, we at least felt we would get a reasonable soybean crop but soybeans are also now in jeopardy. I think the real effects will be felt in the spring of 1989 when new money is needed. We will not have the normal crop funds, and government payments also will be ^ absent with the higher grain prices. Main Street probably will feel it the worst at that time. Farm income will show the drop in 1989 when a good portion of the 1988 crop would normally be sold. We anticipate carry-over debt to be lower than those of th e' early 1980s. We haven’t seen carry-over in 1986 and 1987. North Dakota Mr. Roemmich: The drought will cause its most prob lems for the cow/calf operator who is short on pasture and ^ feed. Does he buy feed, sell calves early, liquidate, move cattle to where there is feed, or what? Even with the government assistance, these are very difficult and criti cal questions that need to be answered and also will have considerable impact on the bank. Since a vast majority o f' our crop producers were carrying crop insurance, it ap pears that they will be able to maintain similar levels of income as compared to previous years. what extent are you feeling increased competH • tion from the FCS, Land Banks, PCAs, and what are they specifically doing of concern to you and other bankers you know? Q To Minnesota • Richard Krogh, vice president, The First National Bank, Osakis. • Curtis Johnson, vice president, State Bank of Hawley, Hawley. • Kevin Jensen, president, The State Bank of Springfield, Springfield. • Christopher Skaalen, assistant vice president, Harmony State Bank, Harmony. N.D. WIS. S.D . Illinois Shawan Springfield Philip Yanktoi ' Harmony's • 1 Beloit Charles City Bridgeport N EB. Wisconsin Webster City IA. • S. F. Herr, president, Citizens Bank, Chatsworth. • Gene Rich, president, Illinois Trust & Savings Bank, Ottawa. • Wayne Billingsley, vice president, Farmers & Mechanics Bank, Galesburg. esburg • Mike Fogle, vice president, M &I Bank, Beloit. • John Syndergaard, senior vice president, Valley Bank of Shawano, Shawano. South Dakota ILL. Ag Survey Participants T HE following bankers took part in this special agricultural bank survey conducted by the N orthwestern B an ker : Nebraska • Dick Stull, president, The Bridgeport State Bank, Bridgeport. • Thomas D. Bass, president, Bank of Swanton, Swanton. https://fraser.stlouisfed.org Northwestern Banker, September, 1988 Federal Reserve Bank of St. Louis • Boyd Waara, vice president, The First National Bank, Philip. • Denny Everson, vice president, First Dakota National Bank, Yankton. • Dwight Hossle, vice president, Faulk County State Bank, Faulkton. Iowa • Chuck Souder, vice president, First Security Bank & Trust Co., Charles City. • Jeff Plagge, executive vice president, First State Bank, Web ster City. North Dakota • Dale Roemmich, vice president, Union State Bank, Hazen. 23 “ There continues to be considerable uncertainty about FCS, especially since they have been changing loan officers and do not offer consistency in who their client deals with.” 0 Nebraska Mr. Bass: I do not feel we are facing much competition from FCS, Land Banks or PCAs. Presently, I feel there is still some loyalty towards the community bank. Public ^ awareness of their (FCS’) astronomical losses is the best ^ advertising we can get as banks. I do believe, though, that they will play a larger role in the future. It will be tough to compete with them when the government is subsidizing their rates. • Minnesota Mr. Krogh: The Farm Credit System has been fairly cooperative and we have both had problems with mutual customers. We have not seen any big push for new ^ business and we have taken over more of their good loans than they have of ours. They are getting very competitive on interest rates and terms for the good operators. We are meeting the competition as it arises, but are reacting without any plan of action. ^ Mr. Johnson: We see less competition, adverse pub licity, changing policies, loss of confidence by members. Mr. Skaalen: The attitude in our area is for expansion of the FCS loan base. However, due to the fact that FCS closed its local office, many borrowers are either refinanc^ ing with us or other banks, rather than take on FCS at this time. Illinois: Mr. Herr: No pressure. FmHA is working with us on a ^ couple of cases. Mr. Rich: The Land Bank is seeing applications for new purchases. Their rates are below most banks in the area. PCA business appears flat and not actively pursued. Mr. Billingsley: I do not feel that we are experiencing ^ increased competition at our bank at this time. ^ ^ Wisconsin: Mr. Fogle: There is no real competition at the present time. Ag creditors are primarily in a defensive posture. There are greater voids in the market than in prior years. Mr. Syndergaard: New operating procedures may be reducing competition from the FCS in our area. FCS may be requiring FmHA guarantees on a high percentage of their operating loans and, in some instances, I don’t believe the request for guarantee is justified. South Dakota Mr. Waara: FCS appears to be charging competitive to below-market interest rates in select cases, and seem to be very anxious to generate volume. I hope they aren’t repeating past mistakes in that area. They have been contacting many of our customers soliciting their busi ness, without much success to date. I question whether they have fully addressed their past problems yet. Mr. Everson: The competition from FCS has been tremendous on interest rates!!! At their present capitali zation, how can they expect to become stronger financially https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis by granting loans at a rate equal to or below their cost of funds? Mr. Hossle: FCS, Land Banks and PCAs have not been a real threat in our area. However, we have heard that FCS is very aggressive in major parts of the state. Iowa Mr. Souder: FCS, in general, is doing a lot of rate cutting statewide; however, I’ve only heard of a couple of instances in our local area. Many borrowers still shy away from the FCS because of its past history and current rate cutting because they don’t feel the deal will "stay solid” through the life of the loan. I don’t feel the FCS is hurting banks much yet — expanded banking powers and a couple of years for memories to fade will give banks more competition. Mr. Plagge: Just starting to feel it from FLBA in rate competition. North Dakota Mr. Roemmich: Earlier this year, we lost three borrow ers to PCA. Two were of marginal quality and could not meet the loan terms that we were expecting. One was a high quality loan and switched because of a 9.9% interest rate, including stock. Farm credit services also has con solidated some of the debt that we were carrying on a split line basis with some of their borrowers. There continues to be considerable uncertainty about FCS, especially since they have been changing loan officers and do not offer consistency in who their clientele has been dealing with. We have attempted to work with our borrowers who have FLB loans on real estate and who also have FmHA guaranteed loans with our bank. FLB consistently has refused to work with our bank in writing guarantees, although a vast majority of the paperwork is completely to the detriment of the farm customer. They offer many types of programs but, again, consistently tie up applications with a considerable amount of paperwork that they never seem to process, which gives all ag lenders a black eye. lf your farm customers have improved income this • year from livestock and grains, how are they uti lizing that income? (Responses are charted; comments follow.) Q Nebraska Mr. Bass: We have preached debt reduction the past several years to our customers. Many will still reduce debt this year; however, capital improvements, and equipment purchases in particular, have been delayed so long that they are now forced to upgrade. We have seen a lot of equipment purchased so far this year. Minnesota: Mr. Johnson: Most are trying to improve their finan cial position. Illinois Mr. Rich: Loan volume has remained about equal to prior years even though our customer base has increased. Some machinery was purchased this spring. Wisconsin: Mr. Fogle: Profitability remains largely dependent AG OUTLOOK SURVEY. . . (Turn to page 30, please) Northwestern Banker, September, 1988 24 Ed. Note: Replies for the Minnesota Bankers Association survey reported in the following story were received for processing between July 13 and 21 and reflect ag condi tions in Minnesota at that time. Since that cutoff date, the drought has continued and worsened, although portions of Minnesota did receive some rains; consequently, the survey author told the N o r t h w e s t e r n B a n k e r s in the third week of August that conditions reported in the mid-July survey probably had worsened in all categories. N ESTIMATED 30 percent of all farm borrowers will need some form of credit assistance because of the current drought, according to a survey commissioned by the Minnesota Bankers Association. The statewide survey found that approximately 12 percent of Minnesota farmers cannot repay outstanding farm operating loans as a result of the drought. In addi tion, bankers estimate that 5 percent of drought-stricken farm borrowers may go out of business unless additional assistance is provided. "Clearly, there is a strong need for additional assis tance,” said Truman Jeffers, MBA executive vice presi dent. "However, government assistance and bank efforts to restructure farm loans will ensure that most farm borrowers will survive the drought. Our members will be developing plans for helping farm borrowers faced with debt repayment problems.” The survey, conducted by Professor Glenn Pederson of the University of Minnesota’s Agricultural and Applied Economics Department, polled 371 agricultural banks and 92 county extension directors. The 46 percent re sponse rate (154 bankers and 57 county extension direc tors) and the geographic distribution of the responses indicates that the survey results are representative of conditions in Minnesota’s major agricultural regions. A Estimated Crop Reporting District Statewide, the drought’s impact on crops and livestock ® is as follows (see attached tables for regional breakdown): • Corn grain yields are down 39.2 percent from nor mal levels. More than 60 percent of the state’s corn acre age suffered yield reductions exceeding 25 percent in mid-July. ® • Soybean yields are down about 25 percent. Approxi mately 42 percent of the planted acreage is reported to have yield reductions exceeding 25 percent. • Small grain yields are 51 percent lower than normal. ^ About 55 percent of small grain seeded acreage has lost at ^ least 25 percent of its normal yield. • Specialty crop yields are down 34 percent. About 57 percent of Minnesota’s specialty crop acres have yield reductions exceeding 25 percent. ^ • Hay crop production is down 47 percent. If the drought continues through August 15, an estimated 67 percent of the state hay production will be lost. • Market livestock herd reductions through mid-July range from 12 percent for dairy, hogs and sheep to just over ^ 20 percent for beef. The reasons: loss of pasture, antici pated feed shortages and cost increases. In general, federal crop insurance coverage is reported to be extremely low across the state. The drought has severely affected 16.3 percent of farm borrowers and ^ moderately affected 28.4 percent, according to the survey. Approximately one-third or slightly more of farm borrow ers in the moderately-to-severely affected categories carry crop insurance. The MBA survey found that the drought has taken its £ toll on farm credit conditions as well. The survey results found that: • An estimated 58 percent of operating loan volumes are moderately-to-severely affected by the drought. Ap proximately 63 percent of loans in these categories is £ either not covered, or not known to be covered, by federal crop insurance. • About 12 percent of outstanding operating loan vol ume cannot be repaid due to the drought. If the drought conditions persist through August 15, the estimated 0 percentage of nonrepayment rises to 36 percent. • Approximately 30 percent of farm borrowers have adequate crop and feed inventories to repay their bank debt. "Many of our member banks are already increasing Q loan loss reserves to deal with problem farm debt and ensure that the state’s banking system remains strong and healthy,” Mr. Jeffers said. □ M e a n P e r c e n t R e d u c t i o n in A c r e in Mid -J u l y by CRD Corn Corn 1g r a i n ) 1s i l a g e l Average Yields and Major Crop Soybeans - - percent Per Harvested Small Grains Specialty Crops Hay Crops. - 1 Northwest 19 .3 19 . 2 13.2 48.4 76.0 43.4 4 West 57.5 55.6 41.3 70.3 33.2 57 . 9 5 Central 54 . 2 56 . 0 34 . 6 57.6 35.4 55.6 7 Southwest 23.4 26.1 12.9 35 . 1 N/A 36.9 8 South 33.6 36 . 2 20.8 49.0 52.9 46.0 9 Southeast 28.9 34 . 2 17 . 3 30.0 53.2 33.2 State 39.2 41.3 25 . 1 51.0 33.6 47 . 1 Central Central https://fraser.stlouisfed.org Northwestern Banker, September, 1988 Federal Reserve Bank of St. Louis 25 How to deal with farm over-production By LAUREN SOTH Pulitzer Prize Winner Former Editor of Editorial Pages The Des Moines Register Des Moines, la. Y topic is “ How to Deal with Farm Over-Produc tion.” This year, nature is taking care of that pro blem in a painful and unpredictable way with the ^drought. But what you bankers want is dependability, ^predictability, reliability! We need an answer to over- or under-production that has plagued American agriculture for many years. I still feel the best answer is Joseph’s plan in the Old ^Testament—store up in the good years and dole it out win the bad years. Based on his perception of Joseph’s plan, Henry A. Wallace, when he was President Franklin Delano Roosevelt’s first Secretary of Agriculture, proposed the “ ever normal granary” to ^¡balance supplies between good and bad harvests. Ac tually, it was an “ever normal marketing” procedure. M CCC Created As a result of this proposal of Henry Wallace (former editor of Wallaces ’ Farmer, Des Moines, la.), the Commodity Credit Corporation was created and put in operation in 1934 and the government has been using it ever since to balance out supplies. Henry Wallace wrote at that time of his plan to alter basic 'crop planting to level out supplies. His “ ever normal granary” has not worked out perfectly, but it has done well. Our stored up crops in the late 1930s aided great ly during World War II. Our large surpluses going into this year have helped stabilize prices, which now would be a lot higher without those surpluses. Despite the drought, we’ll still have a one-half year corn crop in storage in September this year. We don’t have the control through acreage allot ments that Henry Wallace espoused because each farmer’s goal is to produce as much as possible. Volun tary controls simply don’t work. In principle, Digitized for farm FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ■ ABOUT THE AUTHOR—Lauren Soth won the Pulitzer Prize in 1956 for his Des Moines Register editorial promoting an interna tional exchange for USSR and USA agricultural leaders. That sug gestion led to the visit by Premier Nikita Khrushchev to the United States and to central Iowa where he visited the farm of Bob Garst, president of Garst Farms and Garst Seed Co., who had invited him to visit there. John Chrystal was then part of the Garst family farm management and later visited Russia with his uncle, Bob Garst. Subsequently, Mr. Chrystal has made 14 trips to Russia at the invitation of that government to analyze and critique Russian agricultural production and marketing. Mr. Chrystal has been a friend and admirer of Mr. Soth’s for many years and is the one who had the honor of introducing Mr. Soth to the members of the Iowa Independent Bankers when Mr. Soth addressed the MB con vention at Lake Okoboji in late July. This article is a summary of his remarks. mandatory marketing allotments is better. However, farmers just don’t like to be tied down to controls. Another problem is fair sharing of acreage allot ments. The farmer doing a great job of conservation farming is penalized under present policies. Need After-Harvest Controls What we really need is greater emphasis on after harvest supply controls. We should have a greater CCC program that gives the agency more power to con trol the sale of supplies. I also know the large grain companies wouldn’t like this. They want to control the market themselves, domestically and in foreign trade. But, they do like government subsidies when needed. The stabilization of farm supply, or farm supply man agement, can be done better after harvest than control ling it ahead of harvest. Right now our chronic exces ses produce more trouble with overproduction as op posed to underproduction. The overuse of our resour ces is creating a loss of top soil and pollution of our wa ter supplies. So far, fertilizers, chemicals and other ad ditives have offset soil loss, but these inputs to the soil will be reduced. Contour farming, tillage and other al ternative methods all will rise in use and favor over the next decade. This conservation will outweigh soil loss better than anything else. There is a changed attitude among farmers, not just environmentalists; for exam ple, they support the long-range farm conservation bill, the 10-year Conservation Reserve Program. Far mers are interested in using this program for environ mental reasons and also as an answer to over-produc tion. We have fostered over-production while depleting OVER-PRODUCTION. . . (Turn to page 30, please) Northwestern Banker, September, 1988 26 Management Consulting Kissing your deposit premiums goodbye Special Reading for Directors, M anagem ent Written especially for T he N orth w estern B an k er By DR. DOUGLAS V. AUSTIN President and CEO Austin Associates Toledo, Ohio and Professor Department of Finance College of Business Administration The University of Toledo Toledo, Ohio N JULY 4, 1988, my wife and I took our grand children to the Hillsdale, Mich. Fourth of July parade. What could be more American than a parade celebrating our country’s independence? Standing on a curb watching the parade within blocks of the Hillsdale County National Bank, The Old Kent Bank of Hillsdale, and Securities Savings Bank, I was reminded of the current hullabaloo concerning the safety of the FSLIC and the cries for a merger of the FDIC and FSLIC. This commentary arises out of some positive and not so positive thoughts concerning such a merger. O The Facts on Banks and S&Ls As Sergeant Joe Friday of Dragnet fame used to say, "just the facts, ma’am, just the facts.” At year-end, 1987, the unencumbered net worth of the Federal Deposit Insurance Corporation exceeded $18 billion. That is "billions and billions and billions of dollars,” to paraphrase Carl Sagan. As of the same date, depending upon whose audited statistics you choose to use, the net worth of the FSLIC was a negative $11.9 billion to $13.9 billion. Furthermore, the commercial banking industry in 1987 suffered its worst profitability since the founding of the FDIC 50 years ago. In 1987, the commercial banking industry earned only $3.7 billion, a drop from $17.9 billion in 1986. During the first quarter of 1988, profitability recovered to $5 billion for the first quarter, and would have been $6.5 billion except for the $1.5 billion loss at First Republic Bancorp, Dallas, Texas. Now for the guys who wear the black hats: the savings https://fraser.stlouisfed.org Northwestern Banker, September, 1988 Federal Reserve Bank of St. Louis and loan industry in 1987 lost $7.8 billion and during the first quarter of 1988, the lack of profitability reached $3.8 billion, occasioned by the gross lack of profits from south- ( western savings and loan associations. The top 20 savings and loan losers in the first quarter lost $3.0 billion of the $3.8 billion. The commercial banks are solvent, safe and profitable. The savings and loan industry is not profitable, nor safei and solvent. Unfortunately, this paints a bad picture for the 83% of the savings and loan associations which have positive cash flow. As of March 31, 1988, 341 savings and loans had negative Regulatory Accounting Principles (RAP) net worth while an additional 554 were insolvent^ under GAA1? both slightly down from year-end statistics. However, this means that a majority were capitally insolvent at the end of the first quarter. The real disaster is the 17% of the approximately 3,100 savings and loans nationwide who are bankrupt and should be closed.^ However, unlike the FDIC policy of closing banks when they run out of capital, the FSLIC (even if it had such a policy) does not have the ability to close the savings and loans because it does not have the insurance proceeds to do so. Political Expediency Since 1933, the Federal Deposit Insurance Corporation has gathered financial assets by taxing the commercial banking industry through tax premiums on deposits, and® they are taxed on domestic IPC deposits. Since the advent of the FSLIC, the major source of premiums from the savings and loan associations has been the same. The difference is in the financial performance of the FDIC and the FSLIC. Today, with over $18 billion net worth, the® FDIC on an annual basis earns as much from its invest ment portfolio as from deposit premiums. Furthermore, it receives funds from recoveries of previous loans charged off at failed banking institutions. The FSLIC is approxi mately $14 billion in the hole and, with recapitalization™ under CEBA, it is estimated that the FSLIC will be 27 • “ There is no rational business judgment, decision-making process that would give a conclusion that the savings and loan industry should be bailed out by the commercial banking industry.” approximately $20 billion in the hole by the end of 1988. ^ Consequently, the FDIC is safe and solvent, and the FSLIC is not. ^ III a £ 0 So, what is the all-American way politicians have decided to solve this problem? Let’s marry the FSLIC (which is insolvent) with the FDIC (which is solvent) and that will solve the problem! There is an old Midwestern slang word for that: "heiferdust!” That will not solve the problem, it will only extend the problem from the savings and loan industry over into the banking industry. Commercial banks for the past 55 years have evolved under the appropriate management of the FDIC insurance trust fund of over $18 billion of net worth to assist in meeting emergency "deaths” when they occur in the banking industry. It is estimated by such nationally known figures as William Isaacs, former chairman of the FDIC and currently CEO of the Secura Group, that the FSLIC’s ultimate negative net worth may reach as high as $64 billion. Last week, this author read a congressional report which stated that the FSLIC could be as much as $80 billion in the hole within five years. There is no rational business judgment, decision-making process that would give a conclusion that the savings and loan industry should be bailed out by the commercial banking industry. In fact, for the past 100 years, they have been competitors, not friends, and why, in the time of need, should the savings and loan industry be bailed out by the banks? The answer is, they should not. ^ Environment Nothing will happen this year. The Financial Moderni zation Act of 1988, passed by the Senate on March 30, 1988, languishes in the House of Representatives, caught between two committees (banking and commerce) and in q the throes of political bickering and infighting. As of July 4, there was not even a second mark-up on the House version of the Modernization Act, and Congress was to recess on August 10, 1988 until after the election. There fore, don’t count on any solution for the FSLIC debacle HI until our new President is faced with the problem in 1989. "What a wonderful way to run a railroad.” The Repub licans and Democrats alike have thrown in the towel on the FSLIC bailout for 1988. This problem will not go away. It will get worse. Meanwhile, your wonderful elected HI Representatives and Senators have washed their hands of the subject until at least next year, when the problem should be about $10 billion worse. Proposed Solution: Marry the FDIC and FSLIC 0 The proposed solution of marrying the FSLIC and FDIC is analogous to many other solutions when one person is broke and somebody else is wealthy. For example, tax the wealthy, take care of the bums and the welfare people. Tax those with an income so that those who cannot save all of HI their life are taken care of when Social Security time comes around. Therefore, it is not surprising that a https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis proposed solution for the FSLIC reorganization and re capitalization would be to have the funds merged together — unfortunately, a negative plus a positive don’t equal a positive. As bank directors and senior managers you should be outraged and distressed at this proposed solution. Your precedessors and you have placed money into the FDIC trust fund to assist bank failures since 1933, and some group of "well meaning” politicians intends to bankrupt the FDIC trust fund by merging it with the FSLIC which has been completely financially irresponsible for the past two decades. It does not make any difference whether you are a Democrat or Republican, an IBAA or ABA member, a big bank or a small bank, a holding company affiliate or an independent bank, for this proposed solution is essen tially robbing you of your property. There are plenty of problems facing the FDIC because the funds will be needed to bail out banks and bank holding companies which have not operated profitably or soundly. The FDIC cannot give up $18 billion of net worth just to appease Congress. You have your work cut out for you. You have about a year to convince Congress that the proposed solution of merging the FDIC and FSLIC is not appropriate. If the FSLIC is to be bailed out, the people in the United States represented by Congress should have to bail the FSLIC out on its own. The political compromise is not a compro mise at all. It is a Congressional attempt to steal $18 billion of assets furnished initially to the FDIC by com mercial banks, without any taxpayer impact whatsoever. To borrow the $18 billion permanently to lessen the tax bailout impact on the Federal Savings and Loan Insur ance Corporation is not only not right, it is inequitable and unjust. Kill the FSLIC The proposed solution has one redeeming social benefit — if the merger of the FDIC and FSLIC will kill off the FSLIC, then the marriage would make regulatory and insurance sense. It is apparent after two decades of mismanagement, nonmanagement and irresponsible fi nancial solutions, that the FSLIC is probably better off dead than alive. If the FSLIC’s insurance powers were assumed by the FDIC, undoubtedly the FDIC could handle the supervision and regulation of the savings and loan industry better than the Federal Home Loan Bank System and the FSLIC have done over the past 20 years. It doesn’t take a genius to see the difference in competency of the two alternative regulatory insurance corporations. Even if you give the FSLIC some credit for attempting to ameliorate the far more pervasive impact of D.I.D.M.C.A. on the savings and loans, than on the commercial banks, the overall financial performance and management com petency of the FSLIC and its parent, the Federal Home DEPOSIT PREMIUMS. . . (Turn to page 32, please) Northwestern Banker, September, 1988 28 C.H. PISTOR, JR. President D.G. OGILVIE Exec. V.P. T.P. RIDEOUT Pres.-Elect 1988 ABA A nnual C o n v e n tio n October 8 -1 2 Honolulu, Hawaii HE LURE of Hawaii will attract another large crowd to Honolulu October 8-12 for the American Bankers Association annual convention. ABA Presi dent Charles Pistor, chairman and chief executive of ficer of NorthPark National Bank of Dallas, Tex., will preside at general sessions of the convention, including the business session at which new officers will be elected for 1988-89. Slated to succeed Mr. Pistor as president is Thomas P. Rideout, vice chairman of First Union National Bank of North Carolina, Charlotte. The ABA nom inating committee’s choice for president-elect is C.G. Kelly Holthus, president and chief executive officer of the First National Bank in York, Neb., who would then be in line to succeed Mr. Rideout as ABA president for 1989-90. Continuing as treasurer for the second year of his two-year term is L.W. Bill Stolzer, chairman and chief executive officer of Union National Bank and Trust Co., Manhattan, Kan. Donald G. Ogilvie, executive vice president, heads the ABA professional staff at national headquarters in Washington, D.C. T Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis After a native Hawaiian grand opening on Saturday, October 8, attendees will get down to business with the ever-popular banking industry sessions presented by™ leading consultants. Examples of subjects to be cov ered are innovative methods of raising capital, tools for productivity in the 1990s and employee compensa tion. Selected sessions will be repeated and new ones^ added in the following convention days. One special* feature that has always been presented to a packed house, the Government Relations Forum, will be repeated again this year. A noted guest appearing at the session focusing on taxes will be U.S. House W ay s^ and Means Committee Chairman Dan Rostenkowski* (D., 111.). U.S. Senator Daniel Inouye (D., Hawaii) will welcome convention attendees at the opening general session on Monday morning. ^ Headlining this year’s extensive spouses’ program will be actress Mary Martin and comedian Pat Paulsen. An array of the newest banking supplies and ser vices will be on display at the exhibits center at the^ 29 ^ f Hilton Hawaiian Village. Also located there will be the activity center, complete with native food, crafts and entertainment. Entertainment of all kinds will be an integral part of the convention, as usual. Sunday night’s gala reception at the Sheraton Waikiki will feature Bob Hope, courtesy of the Kirchman Corporation. Tuesday night’s reception, complete with Hawaiian cuisine and entertainment, will be held at the Hawaiian Village. State Dept, spokesman Bernard Kalb. • Address by FDIC Chairman L. William Seidman. P.M. 2:00 Banking industry sessions, Hilton Hawaiian Village. Tuesday, October 11 A .M . 8:30 General session, Neal Blaisdell Center. Friday, October 7 • Address by American Airlines Chairman and CEO Robert Crandall. • Installation of officers. • Address by incoming ABA President Thomas P. Rideout, vice chmn., First Union Natl. Bank of North Carolina, Charlotte. • Address by ABA Executive Vice President Donald G. Ogilvie. • Address by Federal Reserve Board Chair man Alan Greenspan. • Address by Fuji Bank Deputy President Toru Kusukawa. • Banking outlook panel, featuring J. Richard Fredericks, gen. partner, Montgomery Sec urities, San Francisco; John G. Heimann, vice chmn., Merrill Lynch Capital Markets, New York; James J. McDermott, Jr., exec, v.p., Keefe, Bruyette & Woods, Inc., New York; Alex Sheshunoff, pres., Sheshunoff & Com pany, Austin, Tex. P.M. 12:00 Registration desk open (until 9:00 p.m.). Saturday, October 8 A.M. 8:30 Grand opening ceremony, Hilton Hawaiian Village. 9:00 Exhibits open. 10:30 Banking industry sessions, presented by leading consultants. Meet the Regulators—Federal Reserve Board. P.M. 2:30 Banking industry sessions. Meet the Regulators—FDIC and Office of the Comptroller of the Currency. Sunday, October 9 A.M. 8:15 Fellowship prelude, Neal Blaisdell Center. 8:45 Fellowship gathering, Neal Blaisdell Center, featuring Bill Bright, Campus Crusade for Christ International. 10:30 Government Relations Forum, Hilton Hawaiian Village. Banking industry sessions. P.M. 6:00 ABA Reception, Sheraton Waikiki. Monday, October 10 A.M. 8:30 General session, Neal Blaisdell Center. (Order of presentations is tentative.) • Welcome by Sen. Daniel Inouye (D-HI). • Address by ABA President Charles Pistor, chmn., NorthPark Natl. Bank, Dallas. • Election of ABA officers. • Address by U.S. Comptroller of the Curren cy Robert L. Clarke. • Political analysis panel featuring New York Times columnist William Safire and National Public Radio congressional correspondent Cokie Roberts, moderated by former U.S. BMA Honors 17 Students 0 ^ ^ The Information Center of the Bank Marketing Association has accepted for its collection 17 marketing plans and case histories written by gradu ates of the 1988 BMA School of Bank Marketing at the University of Col orado, Boulder. The marketing plans and case his tories were judged by the Information Services Council of BMA as the most outstanding academic application of marketing principles. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis P.M. 2:00 Banking industry sessions, Hilton Hawaiian Village. 6:00 ABA reception, Hilton Hawaiian Village. Wednesday, October 12 A .M . 8:30 General session, Sheraton Waikiki. Economic outlook panel, featuring the chair man and two members of the A B A ’s Economic Advisory Committee: • Milton W. Hudson, s.v.p. and head of the economic analysis department, Morgan Guaranty Trust Company, New York (commit tee chairman). • James E. Annable, Jr., s.v.p. and chief economist, First Natl. Bank of Chicago. • Kathleen B. Cooper, s.v.p. and chief economist, Security Pacific Natl. Bank, Los Angeles. 10:00 Convention adjournment. □ This year’s reports contain infor mation on such topics as establishing a telemarketing operation, creating a m arketing database, targeting senior citizens, and selling mortgage products. The following three bankers from the NORTHWESTERN BANKER readership area were among the 17 who had their presentations accepted: James M. Roots, Commercial Na tional Bank, Peoria, 111. — Infor mation Management and Business Banking: Establishing a Corporate Database. Mary Ziegler Suess, United Bank of Broomfield, Broomfield, Colo. — A Marketing Plan for the School Community. Robert Zubella, Bank of Sturgeon Bay, Sturgeon Bay, Wis. — A Mar keting Plan for the Implementation of a Market-Driven, Results-Oriented B usiness D evelopm ent IR etention Program. Northwestern Banker, September, 1988 30 AG OUTLOOK SURVEY. . . (Continued from page 23) upon the ability of the 2,000-4,000 acre grain farmer to derive multiple payment limitations from A.S.C.S. Mr. Syndergaard: New loan requests are limited. Some requests to purchase feed and a few capital pur chases until the feed situation is resolved. A d d itio n a l S u r v e y Q u e s t i o n s 1. W h a t im p act do you e xp e ct the C o n g re s s io n a l D ro ug h t Aid Plan to h ave fo r fa rm e rs in y o u r area? G rea t im p act 3 M o d e ra te im p act South Dakota Mr. Waara: Livestock people are enjoying some dis cretionary income and doing some moderate improve ment in all phases of their operations. Mr. Hossle: The major portion of income for 1988 will come from livestock, due to the higher prices we have seen. Foundation herds have not been increased in the past year or two because these heifers have been worth good money and many operators have taken advantage of these higher prices to reduce debt. The farm program has kept farm income, excluding livestock, steady over the past two or three years. Iowa Mr. Souder: Reducing costs is the biggest goal for most farmers. Interest can still be the biggest cost for those with substantial debt. Improving seed-stock/production tech niques comes next. Not many people have "paint fever” today; the only machinery purchases are net income excess purchases. Mr. Plagge: We saw a great deal of paydown in 1986 and most of 1987. This past six months we saw machinery trades, vehicle trades and facility improvements. I doubt we will see extra proceeds this fall, but I expect most farmers to further reduce debts or hold onto it for 1989’s production expenses. 13 Little im p act 0 No im p act 1 Including D ro u g h t Aid, w h a t do you e xp e ct 1988 fa rm in co m e to be in yo u r a re a c o m p a re d to 1987? S lig h tly hig h e r 3 M o d e ra te ly low er 6 A b o u t the sa m e 4 S e ve re ly low er 3 D o n ’t know 1 2. W h a t p e rce n t of cro p loans in y o u r b a n k are co ve re d by F ederal C ro p In su ra n ce ? (S h o w in g 17 rep lies by states) Nebraska: 80% , Minnesota: 5% , 20% , Illinois: So. Dakota: 15% 80% , 1% 50% , 3 5 % No. Dakota: 10% , 1 % , 6% Wisconsin: Iowa: 10% , 10% , 7 5 % 90% 0% , 5% 3. If y o u r farm cu s to m e rs h ave im p ro ve d in co m e th is y e a r from live sto ck and gra in s, h ow are th e y u tilizin g th a t in co m e ? P aying d ow n d e b t Im proving live sto ck herds, live sto ck fa cilitie s or o th er fa cilitie s 14 M a ch in e ry p u rch a se 3 O th e r 0 D o n ’t know 0 2 North Dakota Mr. Roemmich: We have attempted to encourage producers to pay ahead on their payments by at least one year to act as a form of self-insurance. If that is accom plished, unless they have chosen to further reduce debt, we are working with them on a planned replacement of farm equipment and machinery. Obviously, the drought is having some impact on that arrangement. Producers, more than ever before, are attempting to get their debt £ back in line for the long run as well as maintaining their farming operation, including breeding herds and lines of equipment. □ OVER-PRODUCTION. . . (Continued from page 25) recreational facilities, clean water and wooded areas. • Since they are national custodians, why not pay them for this service? and plundering our soil resources. Our traditional answer has been to provide incentives to increase pro duction by paying huge subsidies, which is not good economic management. I think we can do better. Need Long-Term Thinking Bankers think in long-year terms like 20 to 30 years, f The trouble with our farm policy is that it is short term—one, two, three years or so. If we try to compen sate for the drought we will again deal with short-term demand. I am frankly worried that this policy will do damage to the Conservation Reserve Program and 0 would hate to think that a short-term drought would affect a good, long-term program. The unity of so many elements that has resulted in this conservation program has brought everyone together, finally, and we should use it now as a basis for new, long-term policies. There is one other aspect of long-term stability and that is business credit. The cycles in bank credit can be as devastating as farm controls. The dampening of over-production of credit to avoid the pain of over-debt in times of recession is your job. □ “ De-Coupling” Proposal Sens. Rudy Boschwitz (R., Minn.) and David Boren (D., Okla.) have presented a farm policy reform pro posal that calls for “ de-coupling” subsidies from farm prices. I think there is a lot of merit to this program, which is a way to subsidize farmers without encour aging them to produce surplus crops just so they can get subsidy payments. I like the 10-Year Conservation Reserve Program tied in with “ de-coupling,” and would like to add an amendment that would base payments to farmers on their performance as custodians of the countryside. Farmers also provide this nation with a beautiful en vironment for hunting and fishing as well as providing Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Your Partner in Correspondent Banking M&A Cash Letters Portfolio Analysis Asset Sales Custody To learn more about what we can do for you, call Dennis “Skip” Duffy at 312-732-4101 PERFORMANCE HAS ALWAYS BEEN A CHICAGO TRADITION F IR S T C H IC A G O The First National Bank of Chicago https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 32 DEPOSIT PREMIUMS. . . (Continued from page 27) Loan Bank System, has been dismal. Look at it another way: Why should you have to reorganize when your competitor does not know how to manage? The proposed solution of marrying the FSLIC and the FDIC simply makes the combined problem worse. The FDIC would be saddled with all of the liabilities of the savings and loan industry with no assets being brought to the marriage; but, if the FSLIC were to go out of existence and the responsibility and jurisdiction of the savings and loan industry were to be placed in the FDIC’s hands, then, over the long run, this sole bank/savings and loan/federal savings bank/mutual savings bank insurance corpora tion would be better able to handle problems of the industry than would be the FSLIC on its own. Bail Out the FSLIC First In 1989, the Congress of the United States will be faced with massive tax bailouts of the FSLIC. Using a middleto-average estimate of the problem ($50 billion) Congress will have to appropriate $50 billion from the national budget to bail out the savings and loans and their depositors. Put the blame where it should be placed, on the savings and loan associations and their regulators. As bank directors and senior management, you should not let your trade association leaders muddle up the waters by allowing Congress to combine the two insurance corpora tions and, thus, stimulate public perception that the commercial banking industry is in trouble. The FSLIC’s bankruptcy will be a major topic in 1989. Make sure that you are in the forefront in your state trade assocation and in your discussions with your Congressional people to assure this priority is not forgotten in 1989. The Long-Term Solution After the FSLIC has been bailed out in 1989, (i.e., gets a funding appropriation of $50 billion, not simply the bonding authority to borrow $10,875 billion from the money and capital markets as it did under C.E.B.A. in 1987), the FSLIC can be merged and its personnel as similated into the FDIC. The FDIC is the surviving insurance corporation that will supervise all federally insured commercial banks, savings and loans, federal savings banks, and mutual savings banks. This type of marriage makes more sense; this allows the bride to bring the dowry into the marriage, not 14 children and no money. One unique way of funding some of the FSLIC’s bailout is for Congress to require the Federal Reserve to pay statutory interest into the FDIC insurance fund on the nonearning reserves of commercial banks and other de pository financial institutions, under the Monetary Con trol Act of 1980 as it is implemented in 1988. Experts estimate that almost $2.5 billion per year would be paid to the FDIC insurance fund if Congress forced the Federal Reserve System to pay interest on reserves, such interest being earmarked for the safety of the FDIC/FSLIC resul tant insurance trust fund. Each year, the profits of the Federal Reserve System are put back into the United States general fund. In fact, the Federal Reserve System is the most profitable quasifederal government agency. Thus, in reality, the govern ment would get less of a budgetary surplus back from the Federal Reserve System but, at the same time, the interest on the reserves held by the transaction accounts of all DFIs would no longer be sterile, and would be earmarked for the safety and solvency of depository financial institutions throughout the United States. This is not a panacea, but one element of how Congress could implement a concrete and business-like approach to the salvation of the FSLIC and the savings and loan associa tions it supervises and regulates. Without some long-term financial planning and concrete thinking, the FSLIC bankruptcy problem will become a heavier burden on the taxpayers of the United States. The longer it continues, the more the political expediency of such a marriage will become a reality. In conclusion, do everything possible to make sure that the FSLIC does not merge into the FDIC, or all of your hard-earned premiums will go to waste. You cannot bail out a $50 billion problem with $18 billion of net worth, regardless of how good the FDIC is in managing its portfolio. Let’s face up to the problem and solve it the right way. Force the industry that got into the problem and its regulators to solve the problem, without expanding the problem to commercial banks and other depository finan cial institutions. ■ q 0 # # • • ® ® Robert Morris Associates Gives Details of Fall Conference About 2,000 RMA members and spouses are expected to attend the conference October 16-19 at the Hyatt Regency Chicago. Hosted by the Chicago Chapter, the theme for this year’s business program is "The Fu ture o f Banking: The Future Is Change,” according to the Conference P lan n in g C om m ittee Chairm an Thomas E. Boland and his committee of Chicago bankers. Topics to be covered during the busi ness program include identifying changes, meeting the challenges, and refining the approach to portfolio man agement; targeting commercial loan markets; revitalizing export financ ing; making the credit approval pro- Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis cess responsive to management’s plan; different approaches to loan review; portfolio valuation and assimilation in a merger/acquisition situation; and strengthening a bank through secur itization and loan sales and purchases. Also, regulatory perspectives and prospects; capital markets services; lending ethics; arbitration in commer cial banking; lender liability and en vironmental risk; and what corporate America thinks of commercial bank ing. Additional topics to be covered include the current condition of the U.S. economy; loan officer incentives in the credit and loan functions; artifi cial intelligence; current training trends for experienced loan officers; underwriting loans; valuing the corpo rate loan portfolio; the challenge of 0 being a generalist in a specialist world; accounting for risk in financial instruments; meshing credit policy ap proval and control systems once a merger or acquisition has occurred; and America after Reagan. Among those slated to give major addresses are RMA’s President Boland; Silas Keehn, president, Federal Re serve Bank of Chicago; Mickey Levy, chief corporate economist, Fidelity Bank, Philadelphia; Barry F. Sullivan, chairman and CEO, First National Bank of Chicago, and Paul S. Nadler, professor of Finance, Rutgers Univer- II sity, Newark, N.J. “If You Believe Your Investment Portfolio Should Contribute More To Your Earnings, We’re Out To Prove You Right.” Dr. Jam es V . B a k e r C h a irm a n , Jam es B a k e r & C o m p a n y T oday, m ore than ever b e fo re , the pressure is on you r investm ent p o rtfo lio to p ro d u ce higher earnings. E very day across the country, James Baker & C om pany is h elp ing hundreds o f clients ach ieve that o b je ctiv e . A LEADING SOURCE FOR FRESH IDEAS. Investm ent op p ortu n ities are constantly appearing that co u ld positively a ffect you r bank’s earnings. Like m any financial institutions you may not have the time o r resou rces to stay abreast o f today's investm ent markets. T his is w here James Baker & C om pany can bring you real value. T h e firm ’s institutional staff includes o v e r 20 invest m ent professionals with strong b ack grou n d s in a c co u n t ing, law and investm ent p o rtfo lio m anagem ent fo r finan cial institutions. P eop le w h o can give you r investm ent p o rtfo lio the time and attention it needs. CHALLENGE JAMES BAKER & COMPANY TO PROVE YOU RIGHT. T o learn m ore abou t what James Baker & C om pany can d o fo r you r institution, mail the co u p o n b e low or call Jim Baker at (405) 842-1400. W e ’ll send you ou r C om pany O verview con tain ing a brief history o f the firm , its p h ilos op h y and practices, and oth er reasons why James B aker & C om pany should be a part o f you r investm ent team . | Y e s , I w ant to k n ow m o r e a b o u t h o w J am es B ak er | & C o m p a n y can h e lp m e in crease m y earnings. I | Name___________________________________________________ T itle____________________________________________________ I BANKING ADVICE THAT GOES BEYOND BID AND OFFER. O ur a p p roach to increasing you r earnings begins with an in-depth discussion o f you r institution. E verything is con sid ered including you r p olicies, tax position , rate sen sitivity, capital position , and you r unique com p etitiv e environm ent. T h e em phasis on know in g you r overall position enables James B aker & C om pany to m ake appropriate re c o m m endations aim ed at increasing you r earnings. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis | Financial Institution___________________________________ Address_________________________________________________ I Citv____________________________________ State___________ Zip________________ I Telephone___________________________________________________________________ | I | I i James Baker & Company ! ( 4 0 5 ) 8 4 2 -1 4 0 0 ! 1601 N .W . E x p ressw ay, 20th F lo o r |B O k la h o m a City, O K 7 3 1 1 8 34 porations. This plan is contingent upon tax, regulatory, legal and other considerations. When this restructuring takes place, shareholders of First Illinois will then own shares in two separate, publicly traded entities; one en gaged in banking and the other in consumer finance. It is expected that the separation will be com pleted in the early part of 1989. First Illinois Corporation is the parent company for the First Illinois Banks of Evanston, Wilmette, Ar lington Heights, LaGrange and Willowbrook; First Illinois Finance Company; First Illinois Mortgage Corporation, and subsidiaries in in surance, leasing and check-pro cessing services. First Illinois to Separate Banking and Finance Units First Illinois Corporation, Evan ston, a $1.5 billion banking and financial services organization, an nounced recently that its board of directors favors separating its bank ing and consumer finance businesses into two separate publicly held cor Aledo Bank is Sold The National Bank of Aledo was sold last month to N.B.A. Holding Co. by Western Illinois Bancshares, Inc. John K. Figge was elected chairman of the new board of direc tors, and Gerald R. Waters was elected president and chief executive officer. The two men hold the same senior vice president responsible for marketing and business develop ment. He previously was senior vice president at First Oak Brook Baneshares, where he was head of mar keting for the holding company. Prior to that he was division manager for the Bureau of Business Practice. * * * Continental Illinois Corporation has reported second quarter net in come of $60.2 million, or 24 cents per share, compared with earnings of $68.5 million, or 28 cents per share, in the 1988 first quarter. First quarter earnings included a $15.1 million gain from the settle ment of a portion of the corpora tion’s pension obligations. * * * Matthew McKenney has joined The Exchange Bank of DuPage as Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Stratte P. Coorlas, Tony Morales, Zenaida Aviles and Chrysostom Kanaridis have assumed new managerial positions at North Com munity Bank in Chicago. Mr. Coorlas was named vice presi dent in operations. He joined the bank in 1981 and formerly headed the Riverview office. Mr. Morales was appointed assis tant vice president and branch manager of the Riverview office. He joined the bank in 1981 and formerly oversaw operations at the Clark Street office. Ms. Aviles moves from the Armitage and Halsted Street office to become the assistant cashier and branch manager of the Clark Street office. She has been with the bank since 1980. Mr. Kanaridis now heads the Armitage Street office. He was hired in positions with First Illinois Na- q tional Bank of Savanna, and will continue with their affiliation there. Marvin Lucas was advanced to senior vice president at the Savanna bank. # In addition to Mr. Figge and Mr. Waters, other members of the Na tional Bank of Aledo board of direc tors are Duane E. Anderson, Edgar Boney, William H. Longley and 0 Frank E. Smith. The National Bank of Aledo has $70 million in assets and the First Il linois National Bank of Savanna has $52 million in assets. # Named to Elk Grove Board Ruth A. Lentz has been appointed to the board of directors of Avenue ® Bank of Elk Grove, it was an nounced by board chairman Wallace E. Zook. Ms. Lentz is currently a partner of R.J. Lentz & Associates, an Elk • Grove based accounting firm. ILLINOIS NEWS. . . (Turn to page 94, please) 4) 1983 and previously was assistant branch manager of that office. * * * Two officers have been promoted at Colonial Bank. William Lloyd was promoted to vice president and controller at the bank. He has served as assis tant controller since 1987, and prior to that was a loan review of ficer for First W. LLOYD Colonial Bankshares Corporation. Marsha Regling has been pro moted to assistant vice president and manager of customer informa tion. She began her career with the< bank as a teller and most recently served as manager of time accoun ting. * * * • Mary T. Kelly has been promoted to electronic data processing auditing officer for The Mid-City National Bank of Chicago. Formerly an EDP auditing technician, she has# been with the bank for four years. 35 Appointed in Chaska D. MONSON New Presidents Named in Albert Lea and St. Cloud New presidents have been named at Norwest banks in Albert Lea and St. Cloud/Sauk Rapids, effective September 1. Dale Monson is the new president of the St. Cloud/Sauk Rapids offices • of Norwest Bank Minnesota Cen tral, N.A. He succeeds David R. Noack, who is retiring. Mr. Monson is president of the Albert Lea office of Norwest Bank Minnesota South • Central, N.A., where he will be suc ceeded by David R. Lundak, cur rently senior vice president at the Albert Lea bank. Mr. Noack has been with Norwest ® for 31 years and president in St. Cloud since 1986. • ^ f # First Bank System, which merged its 14 metropolitan banks in the Twin Cities into one First Bank last January, has announced crea tion of a new structure intended to streamline delivery of its communi ty banking and financial services products in the Twin Cities market and to make it more responsive to its customers. Pete Ankeny, chairman and CEO, said the new organization will be https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D. LUNDAK Mr. Monson has been with Norwest since 1971 and president in Albert Lea since 1984. A native of Elgin, N. Dak., he started his bank ing career at Norwest Bank LaCrosse in 1971. He since has served as vice president and manager of commercial lending at the Bloomington office of Norwest Bank Minnesota, and was senior vice president at Norwest Bank Kalispell, Mont., when he was elected president in Albert Lea. Mr. Lundak joined the Norwest organization in 1969 and was named senior vice president in Albert Lea in 1983. A native of Cresco, la., he joined Norwest in its management development program in Winona in 1969 and was vice president in charge of commercial agricultural lending at the Winona bank when he transferred to Albert Lea as senior vice president/loan administration in 1983. William M. Wise has been ap pointed senior vice president in charge of commercial and install ment lending for the First National Bank of Chaska, succeeding Tom Sachariason, who recently resigned. Mr. Wise most recently managed the credit process review function and headed up a loan support group for Norwest Bank in Minnesota. Prior to that he was executive vice president of Norwest Bank Fari bault. B. WISE S. SAAF Dwight G. (Skipp) Saaf has joined the bank as assistant vice president and manager of the mortgage and real estate department. He previous ly served as lending officer at the St. Louis County Federal Savings and Loan; as senior loan officer/business developer for Citicorp, and as assis tant vice president—mortgage len ding at Eastern Heights State Bank of St. Paul. called Community Financial Ser customers in these communities.” Mr. Sheffert said that all FBS vices and will be managed by Mark Sheffert, executive vice president of Twin Cities bank locations will be organized into four major First Bank System. “ What we’re doing is bringing markets—St. Paul/East Metro, Min decision-making and resources neapolis Central, South Metro and closer to the markets we serve in the North/West Metro. He explained Twin Cities,” Mr. Ankeny said. that each of these markets will be “This structure also will make it managed by a Community Banking possible for us to do a better job of president who will be responsible for delivering our wide range of finan all aspects of customer service and cial services and products to community activities. Northwestern Banker, September, 1988 Your Mom Your best buddy Your favorite teacher ThroughoutyourMeyou’ve Through your life’s experiences there has always been one element that helped you grow - trusted friends. People w ho care about you. And it’s no different now. The people w ho bring you th# Correspondent and Investment Services o f Marquette Bank haveprovided dedicated supportforyears and continue to do so. W e are here w ith investment and loan strategies that function https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis together to deliver the resources you need W ith people w ho understand the importance o f working as a team and custom izing plans for your specific situation. • Most importantly, w e re here when you need us. The same familiar faces, day in and day out. Bringing you know ledge, experience, and the warmth o f a trusted friend. So whatever your needs, just call. Y ou can count on us to com e through. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Marquette Bank Minneapolis Member FDIC Correspondent Services 341-6561 MN Wats 800-862-1452 National Wats 800-328-8155 Investment Department 341-6558 MN Wats 80 0 -6 4 3 -7 5 8 2 National Wats 800-328-8013 38 Minnesota News Mr. Sheffert announced the pro motion of four FBS executives who will serve as Community Banking presidents of the four newly created metro markets. They are: St. Paul/East Metro Market—Norb Conzemius, current president of First Trust; Minneapolis Central Market—Colleen McCoy, now head of private banking; Metro South Market—Neel Johnson, head of con sumer banking, and Metro North/ West Market—David Gilman, now head of small business banking for FBS’ North Market. As part of the new structure, Mr. Sheffert said that four major lines of business—banking services, finan cial services, trust services and credit services—will be organized to offer a wider array of financial ser vices and products via the in tegrated delivery system of the markets. He announced the appoint ment of the following four major lines of business managers: Philip Heasley, who has been in charge of credit management and processing support, will become senior vice president in charge of the banking group, which will provide traditional banking services. Michael Kozlak, currently head of FBS’ residential mortgage business, will be senior vice president in charge of the financial services group, which includes insurance, mortgage banking, brokerage, sales finance and student lending. Dennis Dills, president of Securities Processing, Inc., has been been named senior vice president of the trust services group and presi dent of First Trust. James Reissner, previously head of small business banking, has been named senior vice president and head of the credit services group, which includes credit quality, loan workout and credit support. * * * First Bank System, Inc. has reached an agreement to purchase Suburban National Bank of Eden Prairie for $5.7 million. The pur chase is pending regulatory ap proval. Under the terms of the purchase agreement, FBS would purchase the two bank locations—a main office adjacent to Eden Prairie Center and branch near Eden Prairie Mall. Two other branches—in Savage and Highview—have been sold to Signal est wishes to the Iowa Bankers Association for a successful 102nd Annual Convention.” Jim Russell Vice President & Manager Correspondent Banking Your Correspondent Parmer AMERICAI 'Li** Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank, West St. Paul. Excluding the Savage and Highview branches, Suburban National assets will total approximately $67 million. Lawrence O. Hauge, chairman of Suburban National, will pursue other business interests when the transaction is completed. Former Minnesota Bankers Association President (’86-’87) Roy Terwilliger, president, will join First Bank System when regulatory approval is granted. At that time, the bank will be called First Bank Eden Prairie. * * * John D. Taylor has been elected president and a director of the First System Foundation, succeeding David G. Herzer, who retired on June 30. Mr. Taylor will serve as senior vice president of community affairs for FBS, and will manage the company’s volunteer programs. Mr. Taylor has been associated with FBS since 1984 when he joined the company as senior vice president of public affairs for First Bank, St. Paul office. He most recently served as head of FBS’s metro public af fairs department. Prior to joining FBS, Mr. Taylor was with the Northwest Area Foundation for 18 years, where he served in a number of capacities, including president and chief executive officer. Elizabeth A. Melkerson, vice president of FBS government rela tions, also will assume responsibili ty for the company’s public affairs function in order to coordinate rela tionships with civic, neighborhood and local government groups. She joined FBS in 1975 and has served as vice president of government rela tions since 1985. * * * Douglas J. Strachan has been ap pointed senior vice president and manager of the capital markets operations and funds manage- Ip ment operations jjjL - . of Security Pro cessing Services, Inc., a subsidia ry of First Bank System . He comes to FBS D.J. STRACHAN with more than 20 years of experience in informa tion systems, most recently with Shearson Lehman Hutton in Lon don, where he was senior vice presi- Minnesota News 0 ^ ^ 0 • • • ^ ^ ^ 0 • • • dent and director of information systems. * * * Robert J. Reardon, president, CEO and chairman of Bremer Finan cial Corporation, announced his resignation as president and CEO ef fective August 1. He will continue as chairman of Bremer Financial Corporation and as a trustee of the Otto Bremer Foundation, the sole shareholder of BFC. Terry Cummings, president and CEO of Bremer Financial Services, Inc., has been elected Mr. Reardon’s successor as president and CEO of BFC. Mr. Reardon joined the Bremer organization in 1961 as executive vice president and director. He was selected as a trustee of the Otto Bremer Foundation in 1968. In 1967, Mr. Reardon was named presi dent and CEO of Bremer Financial Corporation. Mr. Cumming joined Bremer in 1976 as controller. In 1981, he was promoted to senior vice presidentcontroller. Mr. Cummings was elected president and CEO of Bremer Financial Services, Inc. in 1982. * * * Marquette Bank Minneapolis will open a new office in Edina in September. It will be located on the first floor, of the Jerry’s Foods Grandview Heights retail complex. The branch brings Marquette’s of fice total to eight. Dennis Maetzold, president of Marquette’s Edina branch, will also oversee the new Grandview Heights office. Marquette Bank has also an nounced the following additions to its staff: Kenneth Rerich has joined the bank’s mortgage department as assistant vice president. Previously, he was vice president in the builder division of Security Pacific Mort gage Corporation in both Phoenix and Denver. Prior to that, he was vice president of real estate lending with the First Federal Savings and Loan. Tim Murphy, business services officer, comes to Marquette with over seven years in public accoun ting with Ernst and Whinney and Arthur Andersen and Company. Kyle Schmidt is a new executive banking officer in Marquette’s executive financial services division. He was formerly with Norwest Cor https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 39 poration as a private banking officer loss per share of $3.17 in the same in St. Paul, a credit analyst in Maple six months a year ago. Grove, and an underwriter at Nor * * * west Mortgage. * * * FBS Business Credit, the assetKevin P. McShane has been based lending subsidiary of First named president and chief executive Bank System, Inc., has announced officer of The that it has signed a contract to pur Chanhassen chase $65 million in secured com Bank. He spent mercial loans from Denver-based the first seven Columbia Savings. The agreement is years of his pending regulatory approval and banking career standard closing conditions. with First Bank In June, FBS announced that it Edina. Prior to had signed an agreement to pur joining The chase an 88 percent interest in Cen Chanhassen tral Bancorporation, Inc., a DenverBank, he was based bank holding company with K.P. McSHANE vice president $2 billion in assets. and manager of commercial lending Since 1983, Columbia Savings has at the Bank Wayzata. provided commercial banking ser * * * vices to middle market companies Norwest Corporation has headquartered in the Denver metro reported record net income of $51.3 area. The sale of its commercial loan million for the quarter ended June portfolio is part of the company’s 30, 1988, compared with a net loss of restructuring plan announced in $167.1 million resulting from the April. Clay Speas, vice president, will special international charge of $204 million in the second quarter of head the new Denver office of FBS 1987. Net income per common share Business Credit. He has overseen was $ 1. 11, compared with a net loss the development of the Columbia per share of $3.74 in the second Savings commercial banking port folio. The company’s four employees quarter of 1987. For the six months, net income will be retained. was $101.4 million, compared with a The firm will operate under the net loss of $139.7 million in the first FBS Business Credit name and will half of 1987. Net income per com conduct business for the Central mon share in the first six months of Bancorporation office complex in 1988 was $2.18, compared with a net downtown Denver. Meet Mike Norwest’s Corre spondent Banker for Northern Minnesota. When you have correspondent banking needs, he’s a good person to know. Mike makes it his business to understand the special needs of commun ity banks. And he wants to do business with © 1988 Norwest Banks Member FDIC you. Talk to Mike about our complete line of specialized correspon dent banking services. When it comes to correspondent banking, he’s got you covered. !!■!■ NORWEST BANKS s w CORRESPONDENT BANKING Norwest Bank Minnesota, N.A. Northwestern Banker, September, 1988 40 Minnesota News Norwest Bank Minnesota has pro moted Peggy O’Connell Roush to vice president and manager of its service industries division of cor porate banking. She was a relation ship manager in the corporate bank ing national department. She joined Norwest in 1979 in its international department after working five years with Chase Manhattan Bank in Hong Kong and New York City. P.O. ROUSH D. LAIRD Debbie Laird has been appointed manager of Norwest’s Convenience Banking Center in downtown St. Paul. She joined the bank from Sioux Falls, S. Dak., where she was area direct of telephone services for Citicorp. * * * Ronald Whitcomb has been named president of the Bloomington office of Norwest Bank Minnesota, N.A. He was president of the bank’s 1221 Nicollet office in Minneapolis. Named to succeed Mr. Whitcomb as president there is Fred Mann, who was vice president and manager of loan support for Minnesota com munity banking. R. WHITCOMB Frank M. Fuller has been named division of Norwest Bank Minne sota in St. Paul and was appointed assistant vice president of commer manager of the loan support team in cial and correspondent division A. Mr. Fuller joined the bank in 1984 1986. as management trainee and most * * * recently was commercial loan ofKeenen Dämmen has been ap ficer. pointed vice president and mortgage Kevin P. Pedelty was named sales manager for the mortgage assistant vice president of commer trading and finance group of FBS cial division B. He has been with Na Mortgage—Residential. tional City Bank since 1986, most Mr. Dämmen has worked with the recently as commercial loan officer. FBS Capital Markets Group, Donna M. DeMatteo has been Salomon Brothers and Residential named assistant vice president of Funding Corporation. the executive and professional divi * * * sion. She came to the bank in 1987 American National Bank has an as executive and professional bank nounced the promotion of Debra L. ing officer. Phyllis J. Strand was named Rusch to assistant vice president in assistant vice president and com the trust division. She joined the bank in 1986 as a trust officer. Prior pliance officer. She has been with to joining American, Ms. Rusch was the bank since 1977, most recently employed by Richfield Bank in a as assistant vice president and assis variety of employee benefit admini tant manager of the personal bank ing division. strative positions. Susan E. Martenson was named * * * personal banking operations officer. James H. Hearon, III, chairman She joined the bank in 1977, and and CEO of National City Bank of most recently served as supervisor Minneapolis, recently announced of personal banking operations. the following additions to the bank’s Steven A. Nelson recently joined staff: NCB Mortgage Company as loan of ficer and manager. He was previous ly with Investors Mortgage as a loan officer. * * * Jacqueline Supinski has joined St. Anthony Park State Bank and has been elected auditor/compliance officer. She has had extensive experience in bank operations and auditing at Heritage National Bank in North St. Paul and Capital City Bank, St. Paul. ^ £ % # # • • ® q F. MANN Mr. Whitcomb succeeds William Wilkening, who has left the com pany. Mr. Whitcomb joined Norwest in 1982 as president of the Olson High way office of Norwest Bank Min nesota and was named president of the 1221 Nicollet office in 1985. Mr. Mann joined Norwest in 1978 as vice president of commercial len ding at the Midland office of Nor west Bank Minnesota. In 1985, he became manager of a special asset Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D. DeMATTEO P. STRAND Paul E. Olmschenk has been named mortgage loan officer of the bank. He most recently was with Knutson Mortgage Corporation and ® previously was with First Min nesota Bank. *• S. MARTENSON æ æ m .m S. NELSON TWIN CITIES NEWS. . . (Turn to page 55, please) 41 ^ 0 • • • ® ® Norwest Changes Told Norwest Bank South Dakota, N.A., has announced various staff changes at its banks. D o n a ld S. Hooper has been elected senior vice president, commercial banking mana ger for the Sioux Falls branch. He previously D. HOOPER served as vice president, client executive for business banking and manager of correspondent banking. Mr. Hooper joined Norwest in Great Falls, Mont, in 1963. In 1968 he was named trust officer and in 1970 he transferred to Aberdeen as vice president and manager of the trust department. He was named senior vice president, investments for Norwest Trust in Sioux Falls in 1976. In 1981 he was named vice president/manager of asset liability for Norwest Bank South Dakota and in 1983 was named vice president and client executive for business banking. He was named to his previous position in 1985. Randy Huewe has been named vice president/senior credit officer for Norwest A g Credit, Inc. in Sioux Falls. He joined Norwest in Dell Rapids in 1977. In 1982 he was named assistant manager of the Norwest Bank in Parker and in 1984 was named assistant vice president, ag banking at Parker. He joined Norwest A g Credit, Inc. in 1985 as an assistant vice president. James L. White has been pro moted to vice president, ag banking for the Groton Norwest branch. He joined the Britton branch in 1976 as an ag banking officer. In 1982, he transferred to the Groton branch as assistant vice president, ag banking. Arden Gilbert has been promoted to vice president, ag banking at the Aberdeen branch. He joined Nor west in Redfield in 1980 as an ag management trainee and in 1981 was named an ag banking officer. In 1983, he transferred to the Aberdeen branch as an assistant vice presi dent, ag banking. Mark Gj ernes and Richard Bures have been promoted to assistant vice president, ag banking for the Aberdeen branch. Both joined the bank in 1984 as ag banking officers. Lynn J. Hurley has been pro moted to assistant vice president, ag banking for Norwest in Sioux Falls. He joined the Rapid City branch of Norwest in 1981. In 1983, he was named operations and systems of ficer and in 1984 was named a per sonal banking officer. Jeff Johnson has been promoted to assistant vice president, ag bank ing, and Jim Bartling has been pro moted to assistant vice president, ag and business banking, for the Gregory branch of Norwest. Mr. Johnson joined Norwest in 1975 and has served as personal banking of ficer, ag banking officer, and ag/ business banking officer. Mr. Bart ling joined the bank in 1972 and has served as an insurance agent, per sonal banking officer and ag bank ing officer. James B. Voorhees has been pro moted to assistant vice president, business banking for the Rapid City branch. He joined the bank in 1980 and has served as a personal bank ing officer, a credit officer and a business banking officer. M ark M arcellus has join ed Norwest as trust officer and manager of the Watertown trust of fice. He previously was a trust of ficer with First National Bank in Sioux City. Named in Aberdeen First Bank System has named Charles Habhab to vice president and trust officer in the trust services division of First Bank of South Dakota, Aberdeen. Mr. Habhab joins FBS from E.F. Hutton and Company where he served as an account executive. He also has held positions with Toy Na tional Bank in Sioux City, la., and Norwest Capital Management and Trust Company. Added in Yankton Mike Hall has joined Valley State Bank, Yankton, as vice president. He comes from First State Bank of Loomis, Neb., where he had been vice president in agricultural len ding for five years. Norwest Achievers Honored Lois Besmer, Paula Clemens, Shelly Gardner, Larry Hamre, Don H ooper, D arice H uber, Lynn Hurley, Craig Johnson, Bill Lind quist, Bill O’Connor and Jeff Platek were recently honored by Norwest Bank South Dakota for outstanding sales perform ance for second quarter 1988 and named regional 1 A. GILBERT M.GJERNES https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis J. JOHNSON SOUTH DAKOTA NEWS. . . (Turn to page 56, please) Northwestern Banker, September, 1988 42 NDBA Receives ABA Award Two Honored by NDBA Tw o B elfield bankers were honored by the North Dakota Bankers A sso ciation for 30 years of service to banking, at the N D B A ’s re cent convention. J o s e p h Z ilkow ski, p re si dent and direc tor of The First National Bank J. ZILKOWSKI of Belfield, was recognized for over 30 years of ser vice. Mr. Zilkowski has been in bank ing since 1957, when he joined The First National Bank of Glendive, Mont., as a bookkeeper. In 1959 he joined The First National Bank of Belfield as a bookkeeper/teller, and advanced to assistant cashier, cashier, vice president, and finally president in 1980. Mr. Zilkowski served as president of Badlands Chapter of BAI in 1977-78. He also served as a member of the N DBA Executive Council from 1983-85, and on the education and insurance committees of the NDBA. Mr. Zilkowski is a 1976 graduate of the North Dakota School of Bank ing. He graduated from the Col orado School of Banking in 1979, and the Graduate School of Retail Bank Management in 1984. Also honored was Martha Jur gens, vice president of The First Na tional Bank of Belfield. She started her career in banking in 1945, as a bookkeeper and teller at the bank. She resigned in 1948. In 1958, she resumed her career. She served as assistant cashier, cashier, and was advanced to vice president in con sumer lending in 1981. She has been active in the Sakakawea group of the National Associa tion of Bank Women for many years. Mrs. Jurgens retired from bank ing on June 30. Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CHERYL Thompson of the North Dakota Bankers Association (right) accepts the American Bankers Association’s Personal Economics Program State Service Award from Lee Mulder, manager of the PEP pro gram. The NDBA was one of four state bankers associations to be honored at the national PEP states meeting held recently in Washington. The awards are given to recognize excellent programs to educate schools and the public in personal econo mics. The NDBA received a plaque and $500 towards its PEP program. North Dakota and South Dakota. Community First North Dakota Bankshares, Inc., Community First North Dakota Bankshares, Inc. and Community First South Dakota Bankshares, Inc. acquired the banks last year from First Bank System of Minneapolis. Total assets of the three companies’ subsidiary banks are about $650 million. Karen J. Kelly has been promoted to human resource officer. Ms. Kelly joined the Community First organi zation in 1987 as an employee in the human resource department. Prior to joining Community First, she was employed in the commercial loan department and human resource department at First Bank Fargo. Appointed in Grand Forks ^ 9 0 • • Dr. Mark Langemo has been ap pointed to the board of directors of Community National Bank of Grand Forks. He is a professor in the Col- £ lege of Business and Public Ad ministration at the University of North Dakota, and a native of Fingal. He was the 1984 “ Universi ty of North Dakota Teacher of the a Year.” Promoted in Fargo The boards of directors of the Community First bank holding com panies headquartered in Fargo have promoted Donald W. Green to the newly created position of executive vice p resid en t—bank services manager. Mr. Green joined the Com munity First organizations in March as senior vice president—human resources after his retirement as president of First Bank—Bismarck. Wyo. Natl. Reports Earnings Wyoming National Bancorporation, Casper, has reported its finan cial results through June 30. R.W. Miracle, president and CEO, said, “ The company earned $786,000 in the quarter ending June 30, 1988. This compares to a loss of $1,808, 000 in the second quarter of 1987. Year to date earnings are $1,392,000 as compared to a loss of $1,274,000 in the first half of 1987.” “ The company has now been pro fitable seven of the last eight quar ters,” Mr. Miracle said. “ On a per D.W. GREEN K.J. KELLY share basis, primary earnings for the quarter are 52 cents, as compared In his new position Mr. Green will with a $1.52 loss in the second be responsible for managing the quarter of 1987. Year to date pri banking operations of the organiza mary earnings per share are $1.03 tions’ subsidiary banks with offices versus a loss of $1.07 for the same in 21 communities in Minnesota, period last year.” ® ^ ^ ^ BANK H - *• . r - 'i ' I BUILDING :r - 1 CORPORATION k 'W j! AU : . kCS here is not a successful finan cial institution in the country today that does not recognize that it must aggressively promote itself to attract customers and sell them the broadest possible set o f services. Financial institutions are recognizing that their facilities should be customeroriented, a marketing tool. They must be highly functional in design, efficient, attractive and pleasant places to conduct business. ♦ It hasn’t always been that way. The bank o f the 1920s was a fortress, a https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank Building s First Office (1913) Roman temple o f finance. ♦ With their heavy ornamentation and rich use o f mahogany and marble, the buildings projected an aura o f solid ity, secu rity and success. Unfortunately, they were also dark, inefficient and unfriendly. They were bulletproof and very nearly customer-proof. ♦ The transition from customer-proof to customerfriendly began shortly before the Second World War. It was spear headed by Bank B uilding and Equipment Corporation, headquar tered in St. Louis, Missouri. Th e history of Bank Building Corporation mirrors the rise of the modem U.S. financial institution. Founded in 1913, it has literally grown up with the industry, assisting J.B. Gander, Founder, Bank Building Corporation banks to make the change to customer-oriented institutions... thrifts to respond to the overwhelming post World War II growth opportunities.. .and credit unions in their continuing move from sponsored space into their own modern, full-service facilities. ank Building itself has grown with its clients, maintaining strong relationships over the decades, always respond ing quickly as client needs have changed. he company has always been in the forefront of innovation, showing a resiliency that has permitted it to prosper even during periods of extreme adversity. This tradition of Parallel Histories innovation has gathered momentum, with Bank Building developing and promoting the ideas that have led to the open, consumer-oriented lobby, the branch bank, driveups and the modern teller station. From Fixtures to Design/Builti as the St. Louis installing fine hen founded in 1913 Bank Equipment Company, the firm specialized in manufacturing and wood cabinetry, teller cages, letter trays and other wood fixtures. close of World War I, the company had added vaults, iron bars, gates and other metal products to its line. he company did more than broaden its product line. Recognizing that fixture instal lation involved broader planning and design questions, Bank Building expanded its services to include planning, design and construction, he decision was a momentous one. As the first design/build firm serving the financial industry, Bank Building was positioned to begin seriously the research of operations and customer-service delivery. This research enabled the company to gradually take the leadership role in financial facility design. he first 25 years were not without their problems. During the depression for example, there was an almost complete halt in bank construction and remodeling. The company turned to the manufacture of pinball machines and furniture, and designed and built Cover Photo: American National Savings Association Baltimore, M aryland https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis mausoleums, to keep its builders, planners and cabinetmakers together. The Stick M en Bank robbers have never been slow to take a d van ta ge o f weak points in se curity permitted by poor design. ■ A fter the depression, banks a ll over the country were tearing out their old, high-security teller cages, replacing them with fa r frie n d lie r and more open stations. The new stations still featured protective ornamental grills, but gave tellers direct contact with the customer. Contact that was a little too direct, as it turned out. m Money was dispensed from a “ b e lly bu tto n cash dra w e r’ ’ directly across from the cus tomer. The grille arrangement, together with the length o f the deal plate, made the drawer inaccessible, m And so it was, EPOS IT unless the crook, known at the time as ÍL T S a “ stick m any was armed with a short - stick with a gummy substance on the tip ...a n d a little manual dexterity. The stick man had only to distra ct the te lle r’s attention while the drawer was open... perhaps by dropping a little change...to have an open fie ld fo r snagging bills. ■ The practice proved extremely popular, so m uch so th a t organized team s o f stick men would move into a locality and hit as many as 15 or more banks in a day. M Bank Building responded by creat — - ing a fully redesigned fixture that incorp orated ideas s till in use today. Their new design placed the cash drawer o ff to the side, with a curb on either side of the deal plate, effectively blocking the stick men from wielding their gummed sticks. The financial temple, circa 1926. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Changing Attitudes, Evolutionary Design In the later 1930s, prompted by Bank Building personnel and other visionaries, the Under Bank Building leadership, the cold and inefficient lobby o f the 2 0 ’s . . . gave way to more open and functional space . . . attitude of the banking community began to change from one in which financial services were viewed as the privilege of the few and the mighty. Legislation estab lishing the Federal Deposit Insurance Corporation reassured the public that its money was at least as safe in a bank as it was in a mattress—and, as the bankers were quick to point out, it earned interest. B a n k s no longer needed to project the image of a fortress. Bankers for their part began to realize that to woo back customers scarred by the experiences of the depression, they would have to court them. B a n k Building responded quickly and decisively to the changing situation with the development of the “ open lobby” concept prevalent today. C a llin g it “ functional planning,” Bank Building promoted the now-universal ideas of space planning for efficiency and attractiveness to customers. Company personnel argued that the cold, formidable lobbies and fortress-like buildings increasingly discouraged customers, and had become monuments to operational inefficiency and poor customer-service delivery. Bank officers began to realize that they needed to be seen as less remote, less distant. Their facilities needed to be better lit, more open, more welcoming to customers who could and would take their business elsewhere. The Wat Years: Ideas In Ferm ent T hese ideas did not really take hold until the close of the war. Though the company had completed almost 1,000 separate contracts for financial facilities when the war began, the demands of the war effort put a virtual halt to this type of construction. T h e company found itself again forced to supplement its core business with other activities that took full advantage of its architectural and construction expertise. It secured government contracts for grain bins, housing, and even storage crates. T h e company, however, continued during those years to develop and refine its ideas on the changing role of the financial facility. As a result, it was well positioned at the close of the war to influence the future course of financial facility deisgn. . . . which in turn gave way to the modern, w ell-lit and welcoming lobby o f the modern financial institution. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Lobby: Where the Revolution Began Nowhere is the changing role o f the financial institution in the community— and the contribution o f Bank Building —— — .— ...— ~— ------— _ Corporation—more apparent than in the evolution o f the lobby. The open lobby concept, first developed by Bank Building in the late 1930s, dictated that the bank lobby be designed to be as highly effi cient in its function as possible, while at the same time being a warm and wel coming space that would help the bank to attract, serve and hold customers, m Bank B uilding began prom oting its consumer-friendly lobby ideas at a time when armed guards, b u lle tp ro o f gla ss, inadequate lighting, tellers’ wickets, and in e ffic ie n t la you ts were the rule. Cus to m e rs con du cte d bu sin e ss th ro u g h voice tubes or steel grillecages. The offi cers were entirely separated from the lobby area in private offices, accessible only to the privileged few. m Foliowing the close of the war, the consumer-friendly concept gained widespread acceptance; by 1952, a ll the bars and barriers that had isolated staff from customer were already down, m Bank Building was de signing slightly raised officers’ platforms in the main banking area, making the officers more accessible and encouraging customers to feel com fortable in ap proaching them, m Initially, a gated railing separated lobby from platform. As the idea o f openness and accessibility grad ually caught on with financial institutions, the gate came out. Then the railing was removed, and finally the raised platform https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (continued on next page) 5 The Lobby (continued) The Postwar Period: Ideas in Action disappeared, putting officers and cus tomers on an equal le v e l . .. a m ajor psy I t was a time of massive growth, massive shifts in population to the suburbs chological change. m The pendulum has now swung again. Financial institutions are attempting to market a basket o f more and the west, the acceleration of the age of the automobile, and of unprec edented prosperity for millions of Americans. F o r Bank Building Corporation and the financial services industry, it was a period of great growth as well. The need for new facilities had never been more apparent.. .and the expansion in resources was there to support their construction. B u t even though the pie was getting bigger, competition was intensifying and customers were becoming more sophisticated. Customers found they had a variety of options. To capture and hold them, financial industry executives—previously reluctant sophisticated services. Private offices are again in vog ue ...bu t with a difference, to shed their traditional ways—embraced the concept of functional planning. T hrifts led the way. The unprecedented demand for mortgage loans created dictated by the need for economy and careful space management. The loan offi cer who sits down to talk in the privacy of a corresponding boom in the savings and loan industry, which literally grew up with the shifts in population to the suburbs. B a n k Building Corporation an office may do so in a supplemental office shared by other officers. Sim ilarly, his computer equipment may be centralized designers were able to give full vent to their creative abilities in responding to the special opportunity the savings and loans presented: an opportunity and made accessible through careful space planning to other officers. ■ The lobby has changed in other significant ways as to create architecture that was recognizably that of a financial institution, yet could take full advantage of the service-oriented, customer-friendly well. Bank Building has led the industry in introducing concepts that are in keep functional design concepts the firm had pioneered. ing with the new economic realities of high labor costs, lim ited budgets and rapidly changing market conditions. Innovative space planning, together with new tech nology, have made individual tellers far more efficient. Drive-up banking and ATMs have further reduced the lobby teller workload, and the space required for the transaction function. Bank vaults, once a pmminent design feature of the lobby, have given up their costly central locations and are now found offto the side or even in the basement, u New space has been added lo r other departments such as new accounts and financial investment. 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Full-service branch, 1961 The Birth o f the Branch Citizen ’s Bank ofLas Cruces Las Cruces, New Mexico F ina ncial services, p a rtic u la rly tra n s action services, and convenience are in separable in the eyes of today’s customer ...a n d branch banks, drive-up facilities and automated teller machines are as ®mmw much a part o f the landscape today as *<*H IHWMH fis swÏ S gas stations o r convenience stores. ■ Bank Building first began working with the concept of satellite banking facilities during the Second World War. The com pany, to survive, was at the time design ing and constructing cocktail lounges and bars for the hotel industry, including a series of regional offices for a brewery, m Bank Building Chairman Joseph B. Gander recognized that satellite loca tions promised immediate advantages of increased market penetration through im proved customer convenience. The con cept was not entirely new, but had not gained widespread consideration in the financial services industry. Following the war, Bank B uilding actively advocated the developm ent and fou nd the th rift industry to be most responsive, u Branch design has always varied according to the purpose the facility was to serve. At one extreme, branches are little more than financial service stations, drive-ups or a m ini branch set in a grocery store. At the other extreme is the full-service facility, staffed with a complete set o f bank officers. ■ The key consideration for the future in the development of satel lite system s m ay w e ll be fle x ib ility , a concept explored by Bank Building in its 1981 “ Branch o f the Future” program, u The systems w ill necessarily be more and more tailored to serve specific market ing goals, with units in the system vary ing from fu ll service institutions to ATMs, and from lavish marble-and-bronze in stallations to more simple facilities suited https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis to more modest local conditions. W h ile savings and loans arguably took the lead in embracing the new concepts, the traditional banking community was not far behind. Both new and remodeled projects stressed customer convenience, with well-lit, open lobbies, multiple teller lines, etc. In keeping with the prevailing style of the day, fixtures were simple, streamlined, contemporary. T , e architecture of financial institutions rapidly became less monumental in outward appearance, as the conventions of the bank-as-financial- New Concepts, New Architecture temple were cast aside in favor of operationally efficient space. B a n k Building architects found themselves more free to work with the new architectural styles and ideas of the day, seeking always to project an image to the community consistent with the unique philosophy and personality of the board and management. innovation and the Automobile Bank Building innovation went beyond the open lobby concept. The automobile has had a profound impact on American life—and how Americans bank. Again a The Banco Central tie Honduras, one o f many facilities b u ilt by Bank Building in Central America, was featured on an a ir m a il stamp. pioneer in anticipating these changes, the company’s research led to installation of (1958) the first drive-up teller unit and contributed to the widespread proliferation of the full-service branch bank. In 1963, on the occasion of Bank Building’s 50th anniversary, then president Louis J. Orabka observed, “ Changes in customer habits, plus the continued applications of automation, are major forces altering bank operations and in turn planning and design. Decentralization of service delivery is with us now and destined for much wider application in the future.’ ’ T h e past 25 years have proved Orabka correct. They have been years of deregulation, the growth of the “ nonbank The quest fo r increased efficiency and customer convienence quickly moved Bank Building drive-up design from sim ple window arrangements to systems o f manned, free-standing teller islands. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis bank“ the rapid centralization of banking and savings and loan industries, and the maturation of the credit union movement into full-service financial institutions. (1957) Transition to the Autom obile Age The first drive-up win drow m a y w ell have b e e n in s ta lle d in a Bank Building projects over the decades have varied from the multi story financial center to traditional colonial facilities for small town banks. ba n k in Connecticut b y B a n k B u ild in g C o rp o ra tio n in th e e a rly 1950s. It w as a rudim en tary affair, consisting o f a hole cut in a bank w all which faced on the alley. A w indow an d tray w ere in stalled, an d the age o f driveup banking was underway. Bank Building worked to expand an d refine the driveup concept, researching strategies th at w ould m ove traffic quickly, reduce the n e ed for p e rsonn el an d use space effi ciently. U nder the com pany 's leader s h ip th is id e a w a s la t e r e x p a n d e d to m ultiple w indow s set flush in the wall. ; w Custom ers lin ed up single file, an d drove in a s e rp e n tin e p a tte rn a ro u n d o th e r c u s to m e rs to th e fir s t op en te ller. Another e a rly B ank B uilding innovation resu lted in setting the window s a t a 15 degree an gle to the wall. The arrang e m en t gave better visibility an d access to th e te lle r w indow , w h ile re d u cin g to ta l space requirements. Further research led to the free-standing te lle r island, con nected b y tu nn el to the m ain facility. The islands grea tly im proved traffic flow and efficiency, but still suffered from the fact th a t each islan d housed a sep a rate te lle r window, an d requ ired a fu ll tim e teller. These problems were resolved b y the security com panies with the u ti liza tio n o f p n e u m a tic tu be technology, allow in g a single te lle r to cover m ultiple lines. It was only a s m a ll additional step fo r B ank B uilding designers to re configure the lobby to p e rm it the tellers to w ork both drive-up an d lobby lines. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ew concepts have been needed to meet the changed demands of an entirely new financial services landscape. Much of Bank Building’s mission since 1963 has been to refine, broaden and improve concepts first pioneered by the firm before and during the war. E v e n more important, during the late 1950s and early 1960s, Bank Building developed a new approach for applying the results of the systematic analysis of a The Im portance o f Research financial institution’s business and future growth prospects to an architectural program. T h e “ project analysis’ ’ approach permitted the development of an architectural program based on anticipated future personnel and space requirements. It was a quantum leap over the hit-or-miss method—still common today—which relies solely on someone’s unscientific best guess as to future growth and space requirements. R esearch remains a fundamental component of the company’s service offering. The company formalized and broadened the scope of its commitment to research in 1973 with the formation of its Financial Research Associates division. Since then, the division has completed countless research assignments for banks, credit unions and thrifts for Bank Building clients, plus more than 700 independent consulting assign ments for banks, credit unions and thrifts in 50 states. The unique contribution made by Financial Research Associates has benefited every client served by Bank Building whether they are from rural, suburban and urban markets, or from ten million to multi-billion dollar institutions. Trane Employees Federal Credit Union, La Crosse, Wisconsin. German American Bank Jasper, Indiana (Above) Digitized 10 for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Operations Center computer room Albuquerque Federal Savings & Loan Albuquerque, New Mexico Oak Ridge National Laboratories Federal Credit Union, Oak Ridge, Tennessee. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank Building has grown up with its clients. The 1960s remodeling job (left) and 1980s headquarters building (below, left) are projects in a relationship that spans four decades. R Look a t the Future I S f ever reluctant to apply new ideas and new technology, Bank Building has continued to look to the future. In 1984 the company introduced the DART-I concept, a team approach to design and estimating that integrates the professional skills of research ana lysts, architects, engineers, interior designers and estimators. DART-I makes it truly cost-effective for the first time to examine all the alter natives inherent in a design sol ution. It is as great a leap over the traditional approach to the evalu ation of alternatives still employed by architectural and other design/ build firms, as the project analysis system was over the haphazard methods used at the time to project future space needs. As competition has continued to intensify, facilities have moved to the center of the overall competitive strategy. There is no longer a mar gin for error. The facilities decisions made today will have a fundamental impact on every facet of a financial institution’s future competitive position. They affect its ability to deliver services; its image in the marketplace; its ability to respond effectively to growth and change; the profitability of its operations, even the morale and productivity of its employees. Bank Building has responded to the realities of today’s financial ser vices marketplace with the intro duction of the Unified Facilities Development system. This stream lined project management process draws together Bank Building’s 75 years of specialized experience, its leadership in financial facilities research, its proprietary, techno logically driven team approach to design and estimating, as well as its innovative cost control and value determination programs and its proven construction management system. From these component parts, a new project management system has been forged that, like the open lobby, branch and drive-up facility concepts, the “ project analysis” system and the DART-I concept, represents another unique Bank Building contribution that may well shape the future of financial facility American National Savings Association Baltimore, Maryland https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank Building Corporation * 3630 South Geyer Road • St. Louis, MO 63127 • 1-800-325-9573 55 Governor’s Association Adopts Resolution A resolution regarding bank regulation by individual states was recently adopted by the Western Governor’s Association. The resolu tion was supported by Montana G overnor Schwinden and was ^ passed unanimously. The resolution opposes enactment by U.S. Congress of any law limiting the authority of individual states to prescribe the products and services ^ that may be offered by state chartered banks, to limit the authority of the states to permit other activities banks may engage in, or to prohibit state banks from || offering permitted products and ser vices through bank subsidiaries. It also urges Congress not to pass banking legislation that would dim inish the s t a te s ’ role in H regulating the banking and in surance industries. ^ 1986 and m ost recently was associated with Norwest Bank Min nesota as assistant vice presiden tloan review. Ms. Kjome began her banking career in 1982 with Richfield Bank and Trust, most recently serving as assistant credit manager. * * * for commercial lending schools in M innesota, Iowa, Kansas and Nebraska. In 1987, the American Bankers Association published his textbooks titled Commercial Len ding and Loan Officer Development, which are used by the American In stitute of Banking nationally. * * * Stock’s Insurance Services has been acquired by First Insurance Willmar to form one agency housed in the First Bank Building in Willmar. Ralph Stock, who has owned his own agency in Willmar since 1980 and has 23 years of insurance industry experience, will serve as ac count executive of the combined agency. The original First Insurance Willmar has been active in the com munity for over 13 years. Ken Ohl is the manager of First Insurance Willmar. * * * Piper Capital Management Incor porated, a subsidiary of the invest ment firm of Piper Jaffray Incor porated in Minneapolis, has added five new mutual funds to its family of funds, according to Ed Kohler, president. The five funds are: the National Tax-Exempt Fund; the Minnesota Tax-Exempt Fund; the Institutional Government Income Portfolio; and two money market funds, the TaxExempt Money Market Fund and the U.S. G overnm en t M oney Market Fund. * * * George E. Ruth, senior vice presi dent of MetroBank, Bloomington, has graduated from the American B a n k ers A s s o c ia t io n S ton ier Graduate School of Banking. He was one of over 300 bankers from around the nation to be 1988 gradu ates of the three-year program. Mr. Ruth joined MetroBank in 1987, and has responsibility for credit administration for all of the MetroBanks. He is a lead instructor In an effort to assist community members suffering from the recent heat wave, Twin Cities First Banks gave away 10,000 fans to the elder ly, disabled and young children. The 20-inch box fans were available at 18 First Bank locations over a four day period in July. Cold drinks were also served to bank visitors during the giveaway. TW IN CITIES NEWS. . . (Continued from page 40) 0 0 Stephen D. Showalter has joined Liberty State Bank, St. Paul, as assistant vice president in the com mercial loan departm ent, and Carmen M. Kjome has been hired as credit department manager. Mr. Showalter began his banking career with the First National Bank and Trust in Oklahoma City. He joined Richfield Bank and Trust in Meet Rick Graft, Norwest’s Corre spondent Banker for Montana. When you have correspon dent banking needs, he’s a good person to know. Rick makes it his business to under stand the special needs of community banks. And he wants to do business with © 1988 Norwest Banks S.D. SHOWALTER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member FDIC you. Talk to Rick about ur complete line of specialized correspon dent banking services. When it comes to correspondent banking, he’s got you covered. ¡M l NORWEST BANKS CORRESPONDENT BANKING Norwest Bank Great Falls, N.A. C.M. KJOME Northwestern Banker, September, 1988 56 SOUTH D AK O TA NEWS. . . (Continued from page 41) 100% Club winners. Paula Bickett, Bill Hageman, Jan Klein, Beth Mills, Dick Munce and Pam Pfeifer were honored on the local (facility) level. Joel Blankers, Cathy Woods, Don Fick, Patrick Knigge, Brenda Hill and Donna Johnson were honored as regional service excellence winners. Facility service excellence win ners from Sioux Falls are Michele “ Mike” Brady, Karen Ebeling, Dee Fletcher, Rick Messer, Mary Kay Moran and Pat Rath. According to Rob Oliver, presi dent of the Sioux Falls branches, the 100% Club was created to recognize employees who achieve the highest levels of sales performance. Before being named a 100% Club winner, employees must meet facility and regional sales goals. The Service Excellence Program was created to honor employees who take particular pride in performance and give quality customer service. Rapid City Banker Becomes 15,000th RMA Associate JAMES Benson, r ig h t, v ic e p r e s id e n t, P io n e e r B a n k & T r u s t C o ., R a p id C ity , r e c e n tly b e c a m e th e 1 5 ,0 0 0 th a s s o c ia te in R o b e rt M o r r is A s s o c ia te s , th e n a tio n a l a s s o c ia t io n o f b a n k lo a n a n d c r e d it o ffic e r s . C o n g r a tu la tin g M r. B e n s o n is h is b a n k ’s k e y r e p r e s e n ta tiv e in R M A , Scott M. Clark son, le ft, a n e x e c u tiv e v ic e p r e s id e n t in P io n e e r ’s B e lle F o u r c h e h o m e o f fic e . M r. B e n s o n , M r. C la r k s o n , a n d tw o o th e r P io n e e r b a n k e r s — Gale D. Ballenger a n d John Helmbaugh— r e c e n tly w e re w e lc o m e d in to th e S io u x la n d G r o u p o f R M A ’s M is s o u r i V a lle y C h a p te r. Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FBS and CBI Announce Management • IRST Bank System, Inc. an nounced July 28 that three key managers have assumed new roles with Central Bancorporation, Inc. of Denver. First Bank System signed an agreement which is pending regulatory approval to acquire an 88 percent interest in the Denver bank holding company. F for Central Bank of Denver. Mr. Kropf has 29 years of banking ex perience and joined CBI in 1986. Joseph R. Lincoln, president of • Central Bank of Denver and execu tive vice president of CBI, will retire effective September 15. James B. Osbourn, executive vice president of Central Bank of Denver and strate- ® gic business unit head of CBI, will also retire e ffe c tiv e O cto b e r 28. □ CNB Reports Income The three FBS managers moving to Denver are David A. Baumgarten, Douglas E. Aden and John R. Danielson. Mr. Baumgarten, senior vice president, First Bank, will be con sulting with C B I’s corporate and commercial markets. He has 15 years of banking experience, nine of those with First Bank System in corporate banking. Effective upon c o m p le tio n o f the p u rch a se, Baumgarten will assume respon sibility for corporate banking for CBI. Mr. Aden will be consulting with C B I’s community banking area. He is the president of First Bank Bill ings, Mont., and has more than 18 years of experience with First Bank System. Mr. Aden will become the head of C B I’s community banking upon completion of the acquisition. A new president for First Bank Bill ings will be named at a later date. Mr. Danielson, senior vice presi dent of corporate development and strategic planning for First Bank System, will provide management support to ensure a smooth transi tion. He has been with First Bank for 16 years and his experience in cludes commercial banking, real estate, finance and strategic plan ning. CBI announced that Robert A. Krane, president and CEO of CBI, will assume the additional role of CEO of Central Bank of Denver, CBI’s lead bank. Robert Kropf, senior credit officer for CBI, will begin serving as senior credit officer Colorado National Bankshares, Inc. has announced net income of $2,750,000 or $.26 per share for the second quarter of 1988, compared to $824,000 or $.08 per share for the same period in 1987. For the six months just ended, the company reported net income of $5,928,000 or $.55 per share, compared to $1,131,000 or $.11 per share for the first six months of 1987. CNB Chairman and President Will F. Nicholson, Jr. noted that the company’s second quarter and six month net income reflected a tax ex pense of $526,000 and $1,706,000, respectively, as compared to tax credits of $516,000 and $1,538,000 for the second quarter and the first six months of 1987. • ^ ^ ^ £ £ Pres. Elected at Brighton John Rhoades has been elected president and CEO of United Bank • of Brighton. Mr. Rhoades has been with the bank since 1984, serving as senior vice president and manager of len ding. His responsibilities included • managing the consumer, agricul ture, real estate and commercial len ding areas and chairing the compli ance committee for the seven North ern Region United Banks. His bank- ® ing career spans 13 years. State Manager for Colorado Record Data, a subsidiary of q TRW Inc., has announced the ap pointment of Corey R. Barker to state manager for its Colorado Statewide Service Center at 777 Grant Street, Suite 403, Denver. q Prior to joining Record Data, Mr. Barker held positions as title super visor, title officer and manager with several title companies in Colorado. He joined Record Data in April, 49 1988. W e're breaking a long tradition in correspondent banking. i|| i|| We're the Financial Institutions Unit of Colorado National Bank of Denver. Since 1871, we have been known as Correspondent Banking. But we changed our name to reflect a new commitment to correspondent service. A new range of innovative products that go beyond traditional correspondent banking. And new personnel with the expertise and authority to really make an impact on your business. We're re-dedicating ourselves to competitively priced products, a regular calling program, and quick response to every | request. In short, everything you've wanted to get from a correspondent bank, but haven't. We'll be calling on many financial institutions this year. If you'd like to hear from us, but haven't yet, call the Financial Institutions Unit at 303-893-1862. See what real | response is. COLORADO NATIONAL BANK OF DENVER We make big ideas happen. © 1987 C olora do National Bankshares, Inc. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 17th an d C h a m p a , D en v e r, C o lo ra d o 8 0 2 0 2 , 3 0 3 -8 9 3 -1 8 6 2 M em ber FDIC 3 300. A bank’s paperwork used to be rather easy to m anage. Today it’s a bit more challenging. Today, efficient information management is the key to efficient bank management. We’ve been helping banks accomplish both ^ goals for over 20 years. One reason for our success is the fact that we’re bankers serving bankers. We know exactly what you need. We offer comprehensive bank processing, from balanced bank to microbased, to remote capture with on-line service and ATM support. We take pride in offering immediate service, which is crucial in today’s banking environment. q To demonstrate our commitment to data processing, we’ve established five strategically located data centers, four in Nebraska and one in Denver, Colorado. New hardware in our Lincoln center jp includes some of the latest systems technology has to offer. Our services are available to banks in the Midwest. Call us at (402) 472-4440 to leam more 4) about all we offer. We’ll provide some very tangible information that you can easily process. NBC/CSC National Bank of Commerce Computer Services Corporation a illFiRsr C ommerce company. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis P.O . Box 8 2 4 0 8 , Lincoln, Nebraska 6 8 5 0 1 Telep hon e ( 4 0 2 ) 4 7 2 - 4 4 4 0 ® 59 • N B A Holds S ix Area M eetings By BEN HALLER, JR. Publisher Hospital in Lincoln to Madonna Rehabilitation Center in Lincoln for therapy. Mr. Brandt, he said, is MPORTANT legislative matters walking daily and responding very were the center of attention for well to treatment. He urged bankers speakers addressing the six areato continue sending cards and notes meetings hosted last month by the of encouragement to Mr. Brandt at Nebraska Bankers Association. The the Center, 2200 S. 52nd Street, Lin meetings were held August 16, 17, coln 68506. Mr. Bergmeyer reported that the 18, 23, 24 and 25 at the Red Lion Inn, Omaha; Norfolk Country Club; Bank Management Committee is Beatrice Elks Club; Scottsbluff planning a full year of conferences Country Club; North Platte Holiday and seminars. The Marketing Com Inn, and Grand Island Riverside mittee is planning a campaign to en hance the “ white hat’ ’ image of Golf Club. Speakers addressing each of the bankers and their industry. The Len m eetin gs in clu ded H arley D. ding Committee has scheduled an inBergmeyer, president of the NBA depth lending survey that will be and president, Saline State Bank, reviewed soon for all NBA members. Wilber; James F. Nissen, president In addition, he announced that elect of NBA and chairman and Duane Acklie, chairman of the Bank CEO, Vistar Bank, Lincoln; Stan of Norfolk, has accepted chairman Matzke, NBA executive vice presi ship of the important Economic dent, Lincoln; Ron Sedlacek and D evelopm en t C om m ittee, and Bob Hallstrom, N BA assistant former NBA President A.C. Skip general counsels, and Bill Osterberg, Hove, Jr., chairman and CEO of president of Jones & Osterberg, Minden Exchange Bank & Trust, Inc., Oakland and Omaha, who is Minden, will be chairman of the agent for the N BA Voluntary NBA Centennial Planning Commit Employees Beneficiary Association. tee. Mr. Bergmeyer reminded his au Steve Farson, a banker and humorist/professional speaker from diences that former NBA President Scottsdale, Ariz., was the dinner C.G. Kelly Holthus, president and CEO at First National Bank, York, speaker at the area meetings. In his brief introductory remarks will be installed as president-elect of and report on the standing commit- the American Bankers Association tee meetings conducted recently, during the A B A annual convention Mr. Bergmeyer first gave the in Honolulu in October, and urged as welcome news that N BA General many bankers as possible to attend Counsel Bill Brandt, who suffered a to show support for Mr. Holthus. Mr. Hallstrom reviewed several severe heart attack July 12 while in the Chicago O ’Hare Airport, had im- important state issues. On the mat proved enough that he had been ter of written credit agreements, he m oved from Bryan M em orial said Minnesota law specifies there is I # H • ® ® ® _ “ no contract and no liability if the commitment is not in writing, and that a potential borrower may not file suit on oral statements. Kansas law, he noted, improved on that by requiring also that borrowers must be notified of this fact by lenders and they (borrowers) have a claim only insofar as assigned documents provide. Mr. Hallstrom added that K ansas B ankers S u rety had dropped insurance premiums in that state by 15 percent after passage of the law. Dave Abendroth, KBS senior vice president, spoke from the floor to state that if such a law is enacted in Nebraska then KBS would file immediately for a 15 per cent premium reduction for Neb raska banks. Mr. Hallstrom said some county auditors are requiring banks using securities as collateral on county funds to provide monthly valuation of those securities. The NBA, he said, will seek uniform guidelines throughout the state. The NBA, he said, has pledged its support for implementation of the new voluntary mediation law, which was enacted after NBA opposed mandatory mediation. He said a fil ing for voluntary mediation pro vides creditors with two exceptions: 1. If the debt is $40,000 or more, and 2. The lender may seek a court order to halt mediation if it believes the borrower plans to dispose of, dissi- VISITING after the business meeting in Omaha were these bankers, left to right: NBA Pres. Harley Bergmeyer, pres., Saline State, Wilber; 41 Jerry Roe, pres., Bank of Bennington; Ed Kohout, pres., Packers B&T, Omaha, and Bill Osterberg, pres., Jones & Osterberg, Inc., Omaha, NBA insurance consultant. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Northwestern Banker, September, 1988 Your If you want your investment dollars to work hard, you need a hard-working team behind you. Your FirsTier Investment Division team. When we put our heads together, things happen. Investments earn healthy returns without sacrificing liquidity or safety. Plus, we can help you gain even greater profit through many tax-free instruments. Our professionally-trained team has the experi ence and knowledge to assist you in developing a https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis portfolio that will earn the maximum return and meet your quality and liquidity objectives. From Municipals, Governments and Com mercial Paper to Negotiable CDs and Mortgage o Backed Securities, we know the markets and the innovative techniques to assist you in meeting your investment needs. For investment management that outperforms ^ your most ambitious expectations, let our Invest ment Division team perform for you. nrsner leant Lincoln - (Left to Right) Marlene Wagner, Vance Mehrens, Jay Callahan Here to serve you well. F irs T ie r B an ks Omaha Lincoln In Nebraska: 800-642-9305 Outside Nebraska: 800-228-9175 In Nebraska: 800-742-7462 FirsTier Bank, N.A., Omaha and FirsTier Bank, N.A., Lincoln, Members FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 62 Nebraska News ALSO at the Omaha area meeting were, from left: Ron Kranz, exec, v.p., First State, Fremont; NBA Pres-Elect Jim Nissen, chmn. & CEO, ® Vistar Bank, Lincoln; Stan Matzke, NBA exec, v.p., Lincoln; Ron Lahm, asst. br. mgr. & a.v.p., Federal Reserve Bank of Omaha; Al Schmid, v.p., American Natl., Omaha, and Ron Sedlacek, NBA asst. geni, counsel, Lincoln. pate or harm collateral in the hands of the borrower. The subject of bond issue pooling, which the NBA helped defeat in the last session of the legislature, ap parently wil be revived. Bankers ex pressed concern that LB 1083 would pool both the borrowing side and the cash flow side of school district funds, thus removing all local school funds from local use. One banker questioned from the floor the rate at which the state Treasurer could offer this money as loans to school dis tricts. William March, president of Municipal Bond Underwriters, Inc. (MBU) of Omaha, said one concern is that “ if such easy money is available, a school board might spend more money than it should.” Mr. Sedlacek addressed his remarks to the increasingly impor tant area of compliance with regula tions by banks. He reviewed a list of 20 “ hot” compliance issues. Mr. Nissen reported as chairman of the special Task Force appointed at the May convention by President Bergmeyer to formulate an NBA policy statement on the FSLIC pro blem. He said the Task Force’s two meetings discussed the size of the FSLIC deficit, estimated to be $50 billion; the fact that insolvent s&ls provide unfair competition, the fact that Congress “ won’t touch this with a ten foot pole until it’s a crisis,” and the fact that “ if we bankers don’t act now we could lose the FDIC to the FSLIC.” The Task Force, he said, thinks quality s&ls should be allowed “ to join the FDIC and then live by our ground rules. Don Ogilvie (executive vice presi dent of the ABA) says this may be the biggest opportunity in years for banks.” Mr. Nissen reported that the Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NBA Task Force draft will be out soon. Further, the NBA report was presented to the recent meeting of the Central States Conference (16 state associations) at Mackinac Is land, with the invitation to other state associations to join Nebraska in this study. He said Iowa, Kansas and North Dakota immediately com mitted their support, and others are expected to join in “ for a more representative midwest statement that can be president to Congress and the regulators.” Mr. Nissen also reported on an NBA meeting held with James Kirk, president of the Farm Credit System Omaha office. “ Jim Kirk and his people are coming out with guns blazing to get business and be ex tremely competitive,” Mr. Nissen said. “ It looks like it could broaden out from that. You can be helpful by being specific in all documentation you can provide the NBA office. Mr. Kirk says he’ll match any com petitive prices, but that’s not what we hear. Our reports are that they 're initiating the price-cutting.” Mr. Osterberg stated that the IRS has ruled that the premium value for all employer-provided life insurance over $50,000 must be reported on the W-2 form and be subject to FICA and income taxes. The employer, he noted, may report this on a monthly, quarterly or an nual basis. Mr. Osterberg said the premium is set by Section 79 of the IRS Code and is age-rated. □ NBA Begins Centennial Plans Hove, chairman and CEO of Minden Exchange Bank & Trust, the com mittee has already met to discuss plans. Other bankers serving on the committee are: • NBA President Harley Berg meyer, president, Saline State Bank, Wilber. • NBA President-Elect Jim Nissen, chairman and CEO, Vistar Bank, Lincoln. • Mel Adams, chairman, president and CEO, Adams Bank & Trust, Ogallala. • Herman Brockmeier, president, Farmers State Bank, Eustis. • John Cattle Sr., president, chairman and CEO, The Cattle Na tional Bank, Seward. • Henry Gramann, president and CEO, Adams State Bank, Adams. • Don Johnson, president, Farmers National Bank, Pilger. • Bill Cook Sr., chairman, Beatrice National Bank, Beatrice. • Burnham Yates (retired from First National Bank of Lincoln). • Jim McBride (retired from First National Bank of Aurora.) Record Data Appointee ^ • ® ^ ^ ^ w ^ ^ Record Data, a subsidiary of TRW Inc., has announced the ap pointment of Nancy E. Price to state manager of operations for its Nebraska Regional Service Center (| serving Nebraska and Iowa from The Exchange Building, 1905 Harney Street, Omaha. Ms. Price joined Record Data in February, 1988, as title facilities # manager, and was named to her cur rent post in June. Prior to that time, The Nebraska Bankers Associa tion will be celebrating its 100th year of service in 1990, and a special Centennial Task Force has been as sembled to plan activities for the oc NEBRASKA NEWS. . . casion. Chaired by A.C. “ Skip” (Turn to page 94, please) 63 ordination of the construction of the new branch building in Omaha. He is currently in charge of the person nel and financial control depart ments. Mr. Hamilton joined the Reserve Bank in Omaha in 1962. He was pro moted to the official staff at Omaha in 1965 and named to head the branch in 1972. Although Mr. Shewmaker will not formally assume responsibility for the branch until January, he plans to start work in Omaha about November 15. • John Cochran, president o f Norwest Bank Nebraska N.A., has announced that the following per sons have been promoted: Dan m Finken to senior v ice presi® dent/manager of retail banking, Mary Ann Lydick to vice president and manager of delivery support, and Michaela Patterson and Craig Callendine to credit adjustment ofv ficers. Mr. Finken began working at the Norwest Bank in Hastings as an in stallment loan officer. He was pro^ moted to a mortgage loan manager, marketing manager and retail manager. In January of 1985 he moved to Omaha to head the retail services department and in 1986 ^ was promoted to manager of del ivery support. He will be responsible for the consumer banking, private M. PATTERSON C. CALENDINE https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis banking and business banking departments at the downtown loca tion. He will office at 1919 Douglas Street in downtown Omaha. Ms. Lydick began working for Norwest Bank six years ago and worked over 12 years in the financial industry. She was previously direc tor of training and development in San Diego, Calif, and was vice presi dent of training and development at Norwest Bank prior to this promo tion. To Buy on Sell ■MHiyiTIMilKl We specialize in tax-free financing and inve stm en t se rvice for N ebraska banks. Please call us for bond offer ings, bids and appraisals. * * * Harold L. Shewmaker will become vice president and branch manager of the Omaha branch of the Federal Reserve Bank of Kansas City, effective January 1, 1989. He will succeed Robert D. Ham ilton, who has h ea d ed th e branch for over 16 years. Mr. H. L. SHEWMAKER Hamilton is transferring to Kansas City to take charge of the bank’s business development activities in the seven-state Tenth Federal Re serve District. Mr. Shewmaker joined the Kan sas City Reserve Bank in 1961 following service with the U.S. Navy. After a number of assign ments in the fiscal agency depart ment, Mr. Shewmaker was ap pointed assistant manager and later manager of the department. He was named to the bank’s official staff in 1979 and has been responsible for a variety of operations, including co COMPARATIVE TAX FREE YIELD vs TAXABLE YIELDS FOR 34% BANKS AFTER 20% TEFRA ADJUSTMENT AVERAGE COST OF FUNDS YIELDS 5.0% 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 10.0 5.00% 7.06 7.82 8.58 9.33 10.09 10.85 11.61 12.36 13.12 14.64 6.00% 6.96 7.72 8.47 9.23 9.99 10.75 11.50 12.26 13.02 14.53 7.00% 6.85 7.61 8.37 9.13 9.88 10.64 11.40 12.16 12.92 14.43 8.00% 6.75 7.51 8.27 9.02 9.78 10.54 11.30 12.05 12.81 14.33 9.00% 6.65 7.41 8.16 8.92 9.68 10.44 11.19 11.95 12.71 14.22 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 V J Northwestem Banker, September, 1988 64 Nebraska News ba“k%nPf9%rsZdbircIiieUn: First National of Nebraska W ill Acquire • joinedNorwest*in* 1980 . First National Columbus Bancorp** IRST National Bank of Nebras A1 J. Schmid has been elected vice ka, parent corporation of First president-marketing at American National Bank of Omaha, an N ation al C or nounced last month that it has poration. Active entered into an agreement to pur in banking in the chase First National Columbus Ban O m aha area corp, the principal owner of First since 1956, Mr. National Bank and Trust Company Schmid founded of Columbus. O m aha S ta te The purchase price will be ap Bank. He served proximately $22,000,000, making as its president this the largest acquisition ever of a and chairman of Nebraska bank. The transaction is the board prior subject to regulatory approvals, and to joining Amer is expected to be completed in ican National Corporation. Mr. Schmid is a past president of December of this year. The First National Bank of Colthe Omaha chapter of the American Institute of Banking, a former member of the Nebraska Bankers A ssociation Bank Management Committee, and has served on the pany of Omaha as a vice president in A IB ’s District 10 Education Com the lending division. He has more than 17 years experience in commer mittee. cial and real estate lending. The past * * * ten years he has been associated Scott D. Bradley has joined with commercial lenders in the Southwest Bank and Trust Com- Omaha area. F Lincoln FirsTier Bank Lincoln President Orrin A. Wilson has announced the following promotions: Donita G. McElhose, assistant vice president and underwriting ad ministrator, municipal and govern ment bond division. Loena F. Mathews, assistant vice president and personal trust ad ministrator, trust division. Greg D. Ernst, municipal bond trader, municipal and government bond division. Vickie A. Smith, executive assis tant. Ms. McElhose joined the bank in Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1981 and previously was an under writing administrator. Ms . Mathews has been with the bank since 1972. Mr. Ernst joined Firs Tier in 1983. Ms. Smith came to the bank in 1977 and became assistant to Chairman William C. Smith in 1984. * * * West Gate Bank, Lincoln, has filed application with the FDIC to acquire South Ridge Bank, also in Lincoln. Under the agreement, South Ridge Bank would become a branch office of West Gate Bank. umbus has approxim ately $210,000,000 in assets and is the seventh largest bank in Nebraska and the second largest outside of Omaha and Lincoln. For the year 1987, the First First National Bank of Columbus reported net income of $2,277,000. Bruce R. Lauritzen, president of the First National Bank of Omaha, stated: “ I have long admired the outstanding performance of the First of Columbus. It is one of the best run, highest rated banks in this area of the country. The bank will continue to operate independently as the First National Bank of Col umbus, with continuity of staffing and its own board of directors.” John Peck, president of the First National Bank of Columbus, stated: “ We are pleased the First National Bank of Columbus will maintain its identity and will be operated as an independent bank by the new owners. We have always felt that our human resources were in strumental in our success. The friendly people who have served our customers will still be here to provide the excellent service to the community that has been provided in the past. In addition, we will have the additional assets of a two billion dollar organization to support continued growth in our community.” This is the second major acquisi tion to be announced this summer by First National of Nebraska. In June, the company stated that it had entered into an agreement to ac quire the First National Bank and Trust of North Platte. The First of North Platte has $90,000,000 in assets, and is the largest bank in its com m unity. Bot h transaction s should close during the first quarter. First National of Nebraska is an interstate multi-bank holding com pany which owns Valley State Bank in Yankton, S. Dak. and has offices in Chicago, Dallas and Minneapolis. As of June 30, First National of Nebraska had assets of $1.35 billion. Its largest subsidiary, First National Bank of Omaha, was the state’s fourth largest bank with assets of $1 billion. With these two acquisitions, the First National chain of related banks will exceed $2 billion in assets. <9 # # • • • ^ _ * ^ 0 0 0 0 ! If This k All The . Tiw C a n A f o d ,^ N e e d T o T a lk . A powerful, modern, top-of-the-line electronic data processing system is not beyond your reach, regardless of the size of your institution. We have one for you. Two, in fact. First National Bank of Omaha’s Information Processing System is as versatile, efficient and powerful as you’ll find anywhere. And it’s available to you. Dozens of banks are already linked with us electronically to receive the full competitive benefits of this state-of-the-art service. Our In-House Processing System, established in your institution, is fully controlled by your management and functions on your timetable. Staff time is conserved, overhead reduced, processing costs stabilized and services improved. It’s designed for optimum efficiency in financial institutions of varying sizes and requirements. Our EDP services are your most affordable and valuable option. Give us a call; we need to talk. Michael J. Dooley •National Marketing Director • First National Bank of Omaha One First National Center • Omaha, Nebraska 68102 •(402) 341-0500 firs!naHonal bank of omaha https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis one first national center om aha, nebraska 68102 Bankers Trust is Iowa's International Bank. If you thought you had to go to Chicago or New York to do your overseas banking, think again. International services aren't foreign to Bankers Trust. Our International Banking Division has over two decades of experience and an exten sive worldwide correspondent and telecom munications network. So we can handle your international banking needs from right here in Des Moines. Our International Banking professionals are trained to help Iowa companies and banks do business in global markets. Bankers Trust is your full-service international bank. We can handle all of your international banking needs, including letters of credit, foreign fund transfers, collec tions, foreign exchange and foreign drafts. Our telecommunications system directly links Bankers Trust to money center banks on every continent. In addition, Bankers Trust is the banking affiliate of the Iowa Export-Import Trading Company. Call Patricia Rourke any time for advice and service, 245-5284. Our staff is ready to improve your international business horizons. Bankers yu s t International Banking Division 665 Locust •Des Moines, Iowa 50309 (515) 245-5284 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member FDIC, Federal Reserve System 67 COOPERATION O p t im is m OPPORTUNITY “ The Winning Combination P eople Iowa Bankers Association 102nd Annual Convention Des Moines Convention Center September 1 8 -2 0 il I OWA bankers will meet to learn about the “ winning I combination” they need to succeed, at the 102nd An nual Convention of the Iowa Bankers Association, September 18-20. Once again the group will gather at the Des Moines Convention Center, this time under the (II banner “ Cooperation - Optimism - Opportunity People—The Winning Combination.” Clair Lensing, president of Farmers State Bank, Marion, will preside. Scheduled to succeed him as president of the association is Donald Snyder, presi• dent and CEO of Manufacturers Bank & Trust, Forest City. Continuing as IBA Treasurer is Thomas Gronstal, president and CEO of Carroll County State Bank, Carroll. Neil Milner is executive vice president of the association. • Scheduled to be inducted as president-elect for the 1988-89 term is Thomas Smith, chairman of Brenton Bank, Marshalltown. Assuming the new position of treasurer-elect is Dale Froehlich, president and CEO of Ankeny State Bank, Ankeny. • The convention kick-off is “ The Court Avenue Ex perience,” held from 4:30 to 7:00 on Sunday the 18th in the historic Court Avenue district of Des Moines. Refreshments and samplings of the district’s fine https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis cuisine will be available under a big top tent, with music and horse and buggy rides for your entertain ment. At 7:00 bankers can go to the adjacent Civic Center for “ A Very Special Evening” featuring come dians Steve Allen, Sid Caesar and Imogene Coca. Keynote speaker Monday morning will be Dr. John G. Stoessinger, professor of international affairs, Trinity University, San Antonio, Tex. He is an inter nationally recognized political analyst and a prize win ning author of ten leading books on world politics. American Bankers Association President Charles Pistor will address the convention, followed by a presentation by management consultant Thomas Faranda of Faranda and Associates, Inc.vMinneapolis. Monday afternoon and Tuesday morning, bankers will be able to select from 12 concurrent sessions on a variety of pertinent subjects. Tuesday morning’s tradi tional Ag Breakfast will feature U.S. Trade Represen tative Clayton Yeutter. On Tuesday afternoon Shelburn Wilkes will present “ Parade of Presidents,” and Marquette Bank Minneapolis President Carl Pohlad will speak. Monday night’s President’s Dance will be held at the new Iowa Historical Museum. Titled “ Sentimental Northwestern Banker, September, 1988 68 Iowa News C. PISTOR Journey,” the dance will feature The Big Band Sound. Tuesday evening, bankers will gather for the In augural Dinner and Show, featuring Dr. Timothy Schmidt, a concert pianist and music professor from Waldorf College in Forest City. The convention program and spouse program follow: Sunday, September 18 A.M. 2:00 3:00 4:30 7:00 Registration desk open. IBA and IBIS Annual Meetings. “ Court Avenue Experience.” “ A Very Special Evening,” Civic Center. Monday, September 9 A.M. 8:00 Registration desk and exhibit hall open. 9:00 General session: Tribute to Clair J. Lensing. “Turning America Around at Home and Abroad” —Dr. John G. Stoessinger. Remarks by Charles Pistor. “ Ten Commitments to Excellence in Growing Your Banking Business Profitably” —Thomas W. Faranda. P.M. 1:30 Concurrent sessions: “ Becoming a Better Bank Spokesperson” — Thomas Faranda. “ Theories of Investment Portfolio Manage ment” —Steve Porter, Jim Wolfe and Chuck Bonsteel. “ Economic Development—Tapping the State’s Resources” —Leonard C. Goldman, Jude Conway, Jack Bailey, Bruce Gerleman and Myrt Levin. “Opportunities in Bank-Sponsored Invest ment Brokerage” —David W. Miles. “Coping with Change” —Dr. Charlene Bell. “ ABA Laser Pro” —Gary Livesay. “A Passion for Customers” —videotape pre sentation by Tom Peters. 3:15 Concurrent sessions repeated. 5:00 Exhibit hall reception. 8:30 “ Sentimental Journey” President’s Dance. Tuesday, September 20 A.M. 7:00 Ag Breakfast with Clayton Yeutter. 9:00 Concurrent sessions: Northwestern Banker, September, 1989 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C. POHLAD T.W. FARANDA J.G. STOESSINGER (» “ Your Board of Directors and the Credit Review Process” —Douglas Austin and Mike • Hopson. “Dealing with the Regulators” —Mary Curtin. “ Negotiating Skills for Bankers” —Art Pulis. “Underground Waste Disposal Liability” — Martha Steincamp. ® “Farm Lending and Farmer Mac—The Secon dary Market Arrives” —Jeff Rodman. “ABA Laser Pro” —Gary Livesay. “ A Passion for Customers” —videotape pre sentation by Tom Peters. ® 10:45 Concurrent sessions repeated. 11:30 50-Year Banker and Past Officer Luncheon. P.M. 1:30 “ Parade of Presidents” —Shelburn Wilkes, ^ CAE, Wilkes Management Associates. Remarks by Carl Pohlad. 4:30 Convention adjourns. 6:30 Inaugural dinner and show. Spouses’ Program Monday, September 19 A.M. 9:00 General session and Crafters’ Gallery opens. 10:45 Workshops: “ W hat’s Out There for M e?” Victorian Christmas. P.M. 12:15 Younkers luncheon and fashion show. 2:00 Workshops: Pre-Death Financial Planning. Creative Twist Doll. Tuesday, September 20 A.M. 8:45 Sherman Hill Tour. 9:00 Workshops: Eating Healthy. Ink and Scrub (craft). 11:30 Kate Hasten Luncheon. P.M. 1:30 Workshops: Wardrobe and Travel Tricks. Current Health Issues. Deck the Halls (craft). 3:00 Prize Drawing. Our Correspondent Team includes (seated from left): Jim Perkins, Assistant Vice President and Mike Bauer, First Vice President; (standing from left); Larry Makoben, Correspondent Banking Officer; John Oliger, Correspondent Banking Officer; Barry Richards, Vice President and Dave Howell, Corres pondent Banking Officer. Davenport Bank’s winning lineup. When it comes to banking services, you want results without hassles. Our Correspondent Team is competent, competitive and creative. We blend the right balance of personal attention with state-of-the-art technology to give you the quality service you demand. A great game plan. We offer you a full line of banking products and services to meet your operational and investment needs. Our Federal Funds investments and competitive rates on certificates enhance your profit picture. And we lead the competition with safety and strength second to none. Experienced veterans who know the score. Whatever your goals, you’ll have the benefit of the hands-on experience our talented team of professionals has accrued as well as the latest in financial computer hardware. In short, we deliver. Call us today. Let us tell you more about what we can do for you. We’ll show you a professional performance that nets you the results that will make you a winner. Phone (319) 383-3429 D /V t/E IN P O R T B A IN K -------------------A IMO TRUST COMPANY------------------MEMBER FDIC 203 WEST THIRD STREET, DAVENPORT, IOWA 5 28 0 1-1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 70 Iowa News Enthusiasm Optimism Opportunity A Northwestern B anker interview with CLAIR J. LENSING, President Iowa Bankers Association and President, Farmers State Bank, Marion “ My ten years with the department of banking were among the best of my life. That job gives one an awfully good background on analyzing credits and the bond portfolio. It was terrific training!” HEN Clair Lensing assumed his duties as presi dent of the Iowa Bankers Association during the 101st annual convention last September in Des Moines, he brought to the job two special traits that have characterized his entire banking career—enthu siasm and optimism. Both of these traits were evidenced when he an nounced at the 1987 Inaugural Dinner that the theme he selected for his year as IBA president would be “COOP” ; i.e., Cooperation, Opportunities, Optimism and People. He defined that as cooperation among all Iowa banks, whether large or small, independent or holding company; working with entrepreneurs to start a resurgence of the cycle of new business and job opportunities that have built Iowa; a forward-looking attitude on the part of all business, government and civic leaders, and recognizing the Iowa workers who have proved to be 35 percent more productive than workers in any other state. Promoting economic development through COOP has been a primary goal of his administration. Fueling the effort to make “ COOP” a reality this year has been the hard work Clair has dedicated to the job. But, that’s the way he has attacked every task he’s undertaken—at full throttle with a full head of steam! Unexpected Start in Banking His reputation as an enthusiastic, optimistic young man got him a start in banking. Clair relates, “ I came home one weekend in 1954 early in my second year at the University of Iowa and Dad told me that Vince Kelly, who was president at that time of the State Bank of Lawler, had driven out to our farm near Law ler to talk with Dad about whether I’d be interested in a job at the bank. I saw an opportunity in that so I visited with Vince on Saturday. I’ll never forget that as long as I live. Vince said, ‘I think there’s a real op portunity for you but I want you to stay here for only about three years and learn all I can teach you.’ W Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Vince must have done that over the years helping young people get started. Sure enough, in 1957, after I’d been there about three years, Vince called Lee Chandler, the Iowa superintendent of banking, and 0 asked him to talk to me. I drove down to Des Moines for the interview and when we finished our discussion Lee Chandler gave me a typewriter and brief case to take home. That homecoming was another memorable event. Mom was coming down from the chicken house () and Dad came over from the barn when I told them about my new job. “ I was with the department of banking ten years and was a senior examiner six and a half of those years under Holmes ‘Sherlock’ Foster, the deputy superin- () tendent. We called him ‘Sherlock’ because he was a genius at reviewing any and all clues and putting the right answer together on any problem we’d bring to him. Holmes and that job gave me a concentrated education on credits. I’ll have to say those were among the ten best years of my life. That job gives one an awfully good background on analyzing credits. Also, understanding and analyzing the bond portfolio was terrific training. Overall, it was just a great experience in learning what to look for. And what a great oppor- 4) tunity it was to dialogue with bankers who had been in business for 30 to 40 years and to learn first-hand from those who lived through the Depression.” Job Offer in Marion — All of this training, learning and absorbing ex periences of veteran bankers prepared Clair to move on to another banking opportunity after ten years with the department. “ W.N. Shellenbarger, then owner and president of Farmers State in Marion, offered me a job ^ two or three times,” Clair recalls, “ so I finally took it. I started as a vice president in the commercial lending department in December, 1966. Shelly sold the bank in 1968 to Morris Neighbor, who succeeded him as presi dent, Shelly became chairman, and I succeeded Morris ^ as executive vice president. Morris moved up to the Iowa News ® chairmanship in 1984 and I was elected president at that time.” Farmers State Bank of Marion now has assets of $135 million. In the meantime, Clair had an opportunity to ac quire ownership of two smaller banks. He purchased ® Citizens Savings Bank of Hawkeye from Volney Palmer in 1978 and that bank currently has assets of about $14 million. In 1983 he acquired the Maynard Savings Bank, which now has assets of $18 million. He has active managers running both banks. ® Clair’s wife, Mary, is a native of Lawler, They were married April 28, 1962. Their oldest son, C.J., is with the Linn Co-op Oil Co. in Marion; their daughter, Susan, is with TLS in Cedar Rapids, and their younger ^ son, Jim, is a junior at the University of Iowa. Service with Iowa Bankers Association Clair’s years of solid experience with a rural bank, as a senior examiner and, more recently, as president of a larger bank in the Cedar Rapids suburban city of Marion have enhanced, not dimmed, his enthusiasm and optimism. His desire to serve the industry that opened doors of opportunity to him led to service within the Iowa Bankers Association, culminating this year in his presidency of the IBA. # The 50-plus years of economic, social and historic events that transformed this nation and the world since the Great Depression coincide with Clair Lensing’s life span. He was born on the family farm near Lawler September 1, 1934, just as President Franklin # D. Roosevelt’s New Deal was getting underway in its effort to drag the nation’s economy and its people from the doldrums. Those early Depression-fighting policies, proposed and enacted in great part by a Con gress that was trying to undo and overcome the ex9 cesses and bad business practices that led to the 1929 crash and subsequent Depression, are now coming under attack in a world that has changed drastically in the ensuing five decades. Problems and conflict have beset the commercial • banking and financial industry, but Clair’s philosophy is that with all of the problems there must also be op portunities. “ Almost since 1940,” he recalls, “ we have been in an inflationary period and a stronger regula tory environment, especially regarding interest rates ® and the types of investment one could offer. And then, when we became deregulated on interest rates, that opened up a new means of deposit growth and patterns and made it a much more competitive market, both within the industry and outside.” Iowa Banks Lost $2 Billion Recalling the severe adversity of the 1980s, Clair said, “ The serious ag recession of 1982-83 eroded billions of dollars of personal net worth and collateral. ® All of this was devastating to our industry and the State of Iowa. It cost Iowa banks $2 billion in chargeoffs, of which $1 billion was in ag credits. This actually represents a contribution on the part of Iowa banks to their communities. As result of this traumatic period, ® we have all become better bankers—more astute and knowledgable, and so have our borrowers. We have weathered this severe storm and are back to better len ding practices. We’re requiring more documentation _ and credit information, such as cash flow projections, * copies of tax returns, updated and modified state ments, possible more than annually. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 71 “ The recession cost Iowa banks $ 2 billion, of which $ 1 billion was ag credits — a contribution by Iowa banks to the communities.” “ Banks are really back in the profit mode again and showed record first quarter earnings this year. The cur rent drought probably will have a minor effect on 1988, but more so in 1989 because we won’t have grain in the bins next year when the ’88 crop does not show up. Coupled with government drought relief payments, diverted acreage payments and higher livestock and grain prices, the effect should be minimal in ’88, if we get adequate rainfall from here on.” The Opportunities Ahead Looking ahead to opportunities for Iowa and the banking industry, Clair states, “ With economic development a household word in Iowa, and with all our banks being involved at the grass roots level in economic development, this effort has brought and will continue to bring in a lot more industry to our state. This will expand our deposit base and create new job opportunities, which further enhances the deposit base. “ I’m very optimistic and I think the future of bank ing is excellent for those who want to enter the business. There is opportunity for community banks. Real opportunities lie in new products and services banks are able to provide, such as the sale of annuities and mutual funds, insurance products, credit cards, and the expansion of things like ITS’ new Bill Payer program. I think the latter item has great potential, and I also think we will have vast growth coming in the area of products and services. “ We are becoming more of a one-stop financial in stitution that takes care of a customer’s checking ac counts, investment, insurance payments and the pur chase of securities. Banks will find a better mix of fee income with the traditional income derived from loan interest and securities. We experienced the first of this with the significant loan drop in the early 1980s and we recognized we had to depend on other sources of in come.” Role of IBA In discussing the part that the Iowa Bankers Association plays in this scenario, Clair said, “ The IBA plays a very important role in banking in Iowa through various conferences, schools and the total educational thrust of various products and services. I believe an association provides legislation, education and compliance as the three most important services it can render its members.” How good does the future of banking look to Clair Lensing today? He responds to that by stating, “ If I had a son wishing to go into the banking business I would very strongly encourage him to do so today. The legislative changes, new economic opportunities and new technology such as our computer systems all make it a more challenging industry with which to be involved. I believe the opportunities are unlimited! □ Northwestern Banker, September, 1988 72 Iowa News You Will See Them at the 102nd Annual Iowa Bankers Convention HE 102nd annual convention of the Iowa Bankers Association will be held September 18-20 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. T Cedar Rapids Merchants National Bank: Corres pondent Services Division—Jerry Trudo, vice president & manager; Terry Martin, Richard Retz, Dennis Earhart and Robert Louvar, vice presidents; Douglas R. Bass, assis tant vice president. Technical Sales and Support—Rudy Frey, vice presi dent; Michael Kell and Leo McLain, assistant vice presidents; Brent Schmidt, technical support special ist. Donna Lewis, investment of ficer. Peoples Bank and Trust Com pany: John M. Sagers, president; Don G. Ellis, executive vice presi dent; Kenneth A. Strother, Lawrence E. McGrath and James L. West, senior vice presidents; Margaret Billings, vice president. Chicago Cole Taylor Bank/Drovers: Frank Bauder, chairman; Max A. Roy, senior vice president; Betty Bauder, officer. First National Bank of Chicago: Nevin Bowser, Robert English and John Sugent, vice presidents; Den nis Duffy, James Gislason and Karen Seermon, assistant vice presidents; Robert Schlemmer, in vestment officer; Ronald Coleman, marketing representative. LaSalle National Bank: Terence Brennan and John Lynch, senior vice presidents and division heads; Nick De Leonardis, senior vice presi dent; Wayne Bismark and Delmar Rogers, Jr., vice presidents; Joel Warland, loan officer; Jon Munsel, investment officer. Northern Trust Company: John V.N. McClure, senior vice president; Michael L. Kubacki, Maureen H. https://fraser.stlouisfed.org Northwestern Banker, September, 1988 Federal Reserve Bank of St. Louis Keane and John P. Merriman, vice presidents; Mark A. Short, and Stephen M. Hamadej, second vice presidents; David Bishop, bond sales officer. Des Moines Bankers Trust Company: John Ruan, chairman of the executive committee; John Chrystal, chairman of the board and chief executive of ficer; Dennis R. Wood, president and chief operating officer; Thomas D. Smith, executive vice president; Joseph J. Bustin, senior vice presi dent and chief financial officer; Ben G. Eilders, senior vice president; Donald H. Jordahl, vice president; Steven D. Brewer, assistant vice president. First Interstate Bank of Des Moines: Robert G. Millen, president; Randy P. Steig, vice president; Jeff A. Sims, assistant vice president; Stuart J. Becker and David B. Bryant, commercial banking of ficers. Norwest Bank Des Moines: John C. Nelson, chairman; George F. Milligan, vice chairman; H. Lynn Horak, president; John P. Rigler, Richard Pedersen and Larry Reding, vice president/managers; Mark Con way, Thomas L. Quinlin, John Cretzmeyer and Jay Nichols, second vice presidents; Dorothea Wolfe, ad ministrative officer; Gary McClimen, Kathleen M. DeLucca, Col leen Monahan and Mitchel Christen sen, vice presidents. Norwest Investment Services, Inc.: William VanLent, vice president/manager; John D. Hunt, vice president; Michael Trafton and Lyle Hiatt, investment officers. Norwest Technical Services: John Reynolds, Chuck Horton, Harriett Bauer, Michael McDermott, Bev Jansen and Bridget Soja. Valley National Bank: J. Locke Macomber, chairman; Marvin E. Mazie, president; Will J. Hoekman, Verne C. Bates and William A. Wishman, senior vice presidents; James F. MacLean, H. Peter De Rosier, Dennis J. Hagedorn and Mark L. Hamilton, vice presidents. Dubuque American Trust & Savings Bank: Nicholas J. Schrup, chairman; William D. McGeehan, president; Leo F. Kane, executive vice presi dent. Kansas City Commerce Bank of Kansas City: Stephen P. Hall, senior vice presi dent; Tom R. Jennings, assistant vice president; Steven Fletcher, bond officer; Joe Nixon, bond representative. United Missouri Bank of Kansas City: J. Lyle Wells, vice chairman; Phillip D. Straight, executive vice president; Richard H. Muir and Jef frey P. Goble, vice presidents. # ® £ ^ q • _ w 4) Minneapolis/St. Paul American National Bank: James ® A. Russell, vice president; Gregory A. Larson, correspondent bank offi cer. First Bank, N.A., Minneapolis: q Correspondent Banking—Kenneth IBA Convention Event Sponsors Midwest Marketing Consultants, Inc.: President’s Dance (par ticipating). CSC Credit Services: Inaugural Dinner grand prize. Kirk Gross Company: Court Avenue entertainment. Dataplex Information Services: Inaugural Dinner entertainment. Data Business Equipment, Inc.: flowers at registration desk. McGladrey & Pullen: flowers at registration desk. Reichardt’s Clothing: door prize drawings. Plumbs Jewelers: spouse grand prize. Madeline Shepard Ltd.: Marriott luncheon door prize. Dickinsons’: Marriott luncheon door prize. Image Q uality Service # Satisfied customers and a growing client list prove our track record. Kirk Gross Company believes in doing the project right and getting it done on time, on budget. Kirk Gross Company has built or remodeled over 300 financial institutions in Iowa alone. Each one unique. . . each w ith individual requirements. Kirk Gross Company can handle the challenge w ith full architectural, interior design and construction capabilities under one roof. You can get one phase or the whole project completed quickly w ith one source of responsibility We call that Turn Key building. Let us show you h o w a Turn Key program can save you time and money on your next building project. For more information, call or w rite The Kirk Gross Company, 4 0 15 Alexandra Drive, Waterloo, IA 50704. Phone (319) 234-6641. fa s KIRK GROSS CO Kirk Gross Company has built or remodeled over 300 financial institutions in Iowa. J. Bruce First N ational Bank of Dubuque “Kirk Gross Company gave us the unique Image w e w ere looking fo r" . . . A rnold Schultz/Presldent Grundy National Bank R. Scott Fetner/Presldent Iow a N ational Bank Corp & The N ational Bank of W aterloo “Kirk Gross Company did an excellent jo b on our renovation". . . m https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "The quality and service provided by Kirk Gross Company Is unsurpassed'. . . 74 Iowa News Bell & Howell, Waukesha, Wis.: ® Gary K. Nickerson, regional sales manager; John Mahler and John Bailey, sales reps; David Johnson, systems specialist. Blunt, Ellis & Loewi, Inc., Waterloo Milwaukee: Larry Schmidt. The National Bank of Waterloo: Brandt Systems, Omaha: J. R. Scott Fetner, president; Erl Schmiesing, executive vice presi David Grimes, district sales man dent & cashier. Correspondent bank ager; Mark Grimes, sales manager; 0 ing—William J. Rickert and T.P. Rudy Cary, Dennis Steele and Herb McDermott, senior vice presidents; Duysen, sales reps. John Cunningham and Joe Vich, Broadway & Seymour, St. Paul: vice presidents. Data services—- Richard Fergesen. James Freet, senior vice president; Central States Health, Omaha: Dennis Thoren, assistant director; John Benson, assistant vice presi LeRoy Bell, assistant vice president; dent; M ike Sullivan, regional Chuck Yagla, data processing of manager. ficer. Judy DeGroote, vice presi Omaha Cherry Corner Agency, Inc., ® dent, operations. First National Bank of Omaha: Atlantic, la.: George Howard. Bruce Lauritzen, president; Gerry ChexSystems, Inc., Minneapolis: Investment, Equipment Tomka, vice president—correspon Karen Dooley. and Service Firms dent banking; Tim Smith, corres Crest Microfilm, Cedar Rapids, ^ pondent banking officer; Scott ABA Laser Pro, Des Moines: la.: Jay Johnson, vice president and Prusia, correspondent banking rep. Gary Livesay. general manager; John E. Weber FirsTier Bank: Richard YeshnowAssociated Software, Cleveland, and David D. Airy, senior mar ski and Gene Noell, vice presidents; Oh.: Cindy Choi. keting specialists; Brad Goulding, John Wear, assistant vice president. £ Austin Associates, Toledo, Oh.: account rep, BIS division. Norwest Bank Nebraska: Robert Douglas V. Austin, president and Cummins-Allison Corp., Des Zaback, senior vice president/man- chief executive officer; Michael W. Moines: Ralph Haskins. ager, financial institutions group; Hopson, vice president and man Data Business Equipment, Des Sam O ’Neal, financial institutions ager, Des Moines office. Moines: Waldo Geiger, president; officer. Bank Building Corporation, St. Tom Kolb, marketing manager; Jim Sioux City Louis: Roy Wingers, senior consul Landuyt and Parker Schmitz, mar keting reps. First National Bank: Max J. Lar tant. son, president; Gary W. Stevenson, Banking Careers Ltd., Des Drexel Burnham Lambert, Min Moines: Jean Eden. vice president. neapolis. ® Evergreen Systems, Omaha: Ralph G. Noren, president; David C. Stochl, marketing director. Financial Forms & Supplies, Ur- ^ bandale, la.: John Hocker. Financial Information Trust, Des Moines: William A. Hammock, director of sales; R. Gregory Lawler, marketing support manager; M ark® S. Havemann, account executive; William Clark, account manager. First Bankers Securities Corp., Mason City, la.: David Kingland. First Interstate Information Systems of Iowa, Des Moines: Richard Davis, president & COO; Patrick McNerney, chairman and business with you. Meet Sam CEO; Larry Glass, Rich Bro and to Sam about our complete line of O’Neal, Norwest’s C laude D aw son , sen ior v ice specialized services. When it comes to Correspondent correspondent banking, he’s got you Banker for Northern Nebraska and presidents; Dave Akehurst and Sue covered. Southwest Iowa. Sam’s extensive Andersen, vice presidents; Evan background in A g lending makes him a IR S NORW EST B A N K S Branson, director, commercial pro good person to know for correspondent ducts; Scott Mitchell, director, a m CORRESPONDENT BANKING banking needs. And he wants to do telecommunications; Denise Ralph, Norwest Bank Nebraska, N.A. Member FDIC © 1988 Norwest Banks assistant manager, customer supA. W ales, senior vice president/advisor; Ken S. Bezdicek and Allen G. Highum, vice presidents. FBS Capital Markets Group—Rich ard C. Swanberg, senior vice presi dent; Duane A. Senneseth, vice president; Donald D. Mikkelson, assistant vice president; Chris topher M. W ilson, investment representative. Marquette Bank Minneapolis: Mark E. Schabert, vice president, correspondent services; Rob Pope, investment consultant. Norwest Bank Minnesota: John Sampson, senior vice president; Robert L. Rasmussen, vice president/manager. https://fraser.stlouisfed.org Northwestern Banker, September, 1988 Federal Reserve Bank of St. Louis Security National Bank: Richard A. Waller, senior vice president; Ron E. Kiel, correspondent banking of ficer. Iowa News • ^ • ^ Ä • port; Steve Turner and Walt Astor, financial marketing officers; Rebec ca Orr, commercial products rep. Government Securities Corp., Houston: Jerry Campbell. Graduate School of Banking, Boulder, Colo. HBE Bank Facilities, St. Louis: Arnold Goodman, regional sales manager. IAC Group, Des Moines: Craig Ross, Iowa director; Dave Boyer, western Iowa rep. Inter Innovation/LeFebure, Des Moines: Lawrence Stewart. International Trade Centers, Des Moines: Rob Dillard. Investment Centers, Inc., Bismarck, N. Dak.: Larry Tweed. Iowa Bankers Insurance & Ser vices, Des Moines: Frank Gleeson, president; Margie Schaefer, Millie Uding, Gary Livesay, Ron Meyer, Larry Gille, Bill Carr, Jim Jensen, Merritt Krause and Steve Looney, vice presidents. Iowa Bankers Mortgage Corp., Des Moines: Sam E. Callahan, presi dent; Daniel Vessely, vice president/treasurer. 75 Iowa College Aid Commission, Cune, Kevin L. Prust, Mike Wheeler Des Moines: Laurie Wolf, director, and Paul Hayes, partners; Linda field services; Brian Mohr, Bob Red Cottington, principal; Jack Ingle, man, Rose Chapman and Jo Barnes, senior manager; Cindy Ramsell, Dick TenBraak and Tim Hansen, field reps. managers. Iowa Department of Economic MidAmerica Management Corp., Development, Des Moines: Lisa Cedar Rapids, la.: Michael ScherrLyle. man. ISC Systems Corporation, Liber MidAmerica Student Loan Co., ty Lake, Wash.: Jackie Williams. West Des Moines, la.: Michelle ITS, Inc., Des Moines: James E. Durand-Adams. Ferree. Midwest Management Con James Baker & Company, Oklaho sultants, Omaha: Ronald George. ma City. Modern Banking Systems, Inc., Kansas Bankers Surety Co., Omaha: Bill Pierce, national sales Topeka, Kan.: Don Towle, president; manager; Mike Reynolds, regional Dave Abendroth, senior vice presi sales manager. dent. NCR Corporation, West Des Kirk Gross Company, Waterloo, Moines: Robert Lapinski, region la.: Gerald L. Gross, chairman; director, financial systems; Steve Robert T. Buckley, president; Krejsa, district manager, financial Robert H. Jamerson, architect. systems; Fred Vaughn, district M&I Leasing Corp., Des Moines: manager, account processing; Lori Gene Monroe, vice president; Tim Bents, ATM specialist. Mercer, area manager. Norwest Technical Services, Inc., MABSCO Capital, Inc., Des Minneapolis: John Reynolds. Moines: Jeffrey Rodman. Office Concepts, Ltd., Waterloo, McGladrey, Hendricksen & la.: Harold Schoonover, president; Pullen, Des Moines: John L. Mc- Ross Schoonover, vice president; When at the Iowa Bankers Association Convention, be sure to see Leo Kane. American «Trust 0 Savings Danl^ The Dank^qf O pportunity Dubuque and Dyersville Dubuque, Iowa 52001 Leo F. Kane Executive Vice President Commercial and Correspondent Banking https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member FDIC Amtrust Northwestern Banker, September, 1988 76 Iowa News Jerry Spurgat, vice president-senior designer; Geoff Grimes and Tim Jones, architects. Omaha Financial Life Insurance, Minneapolis: George Foster. Ontario Systems Corp., Muncie, Ind. Pioneer Hi-Bred International, Inc., Johnston, la.: Bill Alexander and Don Short, area sales managers; Don Barber, sales administration manager; Chuck Brice, manager of business development; Tom Gray, manager of sales. Student Loan Marketing Associa tion (Sallie Mae). Trans Union Credit Information, West Des Moines, la.: Pascale Petrie-Albert. Unisys Corp., West Des Moines, la.: L arry E ilers, m a rk etin g manager; Ronald Campbell and Chris Madsen, marketing support; Gian Anspach and Chris Gunnare, account reps. USLIFE Credit Life Insurance Co., Schaumburg, 111.: Joseph Hammen. Valley Systems, Inc., Appleton, Wis.: Todd Luft. Peoples W aterloo Elects Kabourek Pres. & CEO William F. Kabourek has been elected president and chief executive o ff ic e r of P eop les Bank and Trust Com pany of W a terloo. F rom 19731977, M r. Kabourek was secon d v ic e p re sid e n t/co m m ercia l loa n s W. KABOUREK with the Omaha National Bank. As vice president in the metropolitan division, he worked with manufacturing, wholesaling and retail commercial loans. In 1977, he joined Security National Bank Sioux City as senior vice president/senior loan officer. Mr. Kabourek joins Peoples Bank after serving as chairman, president and CEO of State Bank and Trust, Coun cil Bluffs since 1982. Currently, Mr. Kabourek serves as vice president and director of Iowa Business Development Credit Corporation, a state-wide lending company specializing in creating https://fraser.stlouisfed.org Northwestern Banker, September, 1988 Federal Reserve Bank of St. Louis jobs by making qualified SB A loans. Thomas P. McDermott was presi dent and CEO at Peoples Bank until joining National Bank of Waterloo earlier this year as vice president in the farm and correspondent bank division. Al F. Tinder Dies A1 F. Tinder, 69, who retired May 15, 1986, as president of Iowa B a n k e rs In surance & Ser vices, Inc., and took full retire ment from IBIS on September 1 of that year, died July 28 in a Des Moines hospital after an illness of se v e ra l months. A- TINDER Mr. Tinder joined IBIS April 1, 1978, as office manager, later being promoted to executive director and then president. Under his direction, IBIS expanded greatly its service to members of the Iowa Bankers Association and built a professional staff of qualified insurance ex ecutives to handle the sales and ad ministration of IB IS ’ wide array of coverages. He was widely known and respected throughout the state of Iowa within the banking and in surance industries. His 1986 retirement concluded a 34-year insurance career that began when he joined Continental In surance Company of New York in 1952 as a special agent in the farm and hail department in the Iowa division. Mr. Tinder was promoted to state agent in 1958 and served in various field and managerial posi tions with Continental until retiring from that company April 1, 1978, at which time he joined Iowa Bankers Insurance & Services as office manager. Mr. Tinder is a native of Chariton, la. After graduating from high school there he attended Chariton Junior College and Drake Universi ty. He served in World War II for two years in the 97th Infantry Divi sion, with duty in both the Euro pean and Asiatic theaters. Upon returning from the service, Mr. Tinder worked in various retail operations from 1946 to 1952, en ding in Tipton, la., as manager of a retail furniture store before embark ing on his insurance career in 1952 with Continental. # Mr. Tinder had served on the boards of IBIS, Interstate Banking Insurance Services, Inc., IowaMidwest Insurance Company, and Iowa Bankers Mortgage C orpora-# tion. He served also for three years as treasurer of the Iowa Conference of the United Church of Christ. Mr. Tinder is survived by his wife, Sue, at their home at 3908 7 2 n d # Street, Des Moines 50322, and a son, Dick, of Indianola. Iowa National Bankshares Reports Earnings Increase # Iowa National Bankshares Corp., the parent holding company of The National Bank of Waterloo, Midway Bank & Trust, and Peoples Trust & * Savings Bank of Indianola, reported that its second quarter earnings ex ceeded the previous record earnings of the first quarter of this year, and — together produced net income o f * $3,794,000 compared to $3,001,000 in 1987 for an increase of 26%. Operating earnings, which represent net income excluding profits from ^ the sale of investment securities, were up 38% to $3,592,000 com pared to $2,598,000 in 1987. Net in come represented a return on average equity and assets of 16.85% ^ and 1.45%, respectively. R. Scott Fetner, INB president, stated that “ The improvement in net income was due to several fac tors, the most important of which^ was a reduction in the provision for loan losses from $945,000 in 1987 to $177,000 in 1988. In addition, while the loan and deposit activity at all three of the company’s banks has in-|| creased strongly from a year ago, management was able to control ex penses to the point that the addi tional volume contributed greatly improved profit margins.’ ’ # The quality of IN B ’s loan port folio also continues to improve, with a substantial reduction in past due loans of 90 days that are still accru ing interest and nonaccruals from # $1,450,000 at March 31 of this year to $1,128,000 at June 30, 1988. Net loan losses in the first six months of this year were only $83,000 com pared to $893,000 the prior year. # Mr. Fetner also stated that the pending acquisition of the Oelwein State Bank by Iowa National Bankshares continues to move forward in anticipation of closing the tra n s# action prior to December 31, 1988. Two Stronger Correspondent Banks £ _> The National Bank of Waterloo The National Bank puts its financial strength and outstanding corresp on den t banking services to w ork for a larger num ber of banks in Northeast Iowa. Our state of the art com pu ter p rocessin g equipm ent is design ed to m eet all your needs and is on e of the largest processin g centers in the state. Even m ore important, the experien ced m anagem ent team can provide advice and banking expertise for all financial questions. We are responsive to your needs. You can n ow put our unm atched com bin ation o f an exp erien ced team and expanded services to w ork for all your correspon den t banking needs. Give us a call for m ore d eta ils. . . 1-800-772-2411 or 319-291-5200. Thomas R McDermott Josef M. Vich Vice President Sr Vice President John Cunningham Peoples Trust and Savings Bank Now the sam e financial strength and services in correspon den t banking are available to bankers through Peoples Trust and Savings Bank o f Indianola, an affiliate of Iowa National Bankshares and The National Bank of W aterloo. W e offer full services including purchase of excess funds, b o n d advisoiy, data processin g services, autom ated a ccou n ts receivable billing systems and other com plete correspon den t bank services. In Indianola, call 515-961-6241 for m ore details o n our expanding corresp on den t bank department. Put our financial strength, our financial perform ance and our continued financial growth to w ork for you. Call any m em ber of our team for m ore information. Everett R Brown President Vice President Mike Coppess, CPA Vice President Eileen Thompson Assistant Vice President Erling Schmiesing Wm. J. Rickert James Freet Dennis Thoren Leroy C. Bell Robert Cook Charles E. Yagla Executive Vice President Sr. Vice President Sr Vice President Assistant Director Assistant Vice President Assistant Vice President Data Processing Officer The National Bank OF WATERLOO 100 East Park https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • P eoples Savings Bank 515-961-6241 Waterloo, IA 50703 ■(319) 291-5200 FDIC Insured up to $100,000 Subsidiary of Iowa National Bankshares Corp EAST SIDE SQUARE - WEST ROADS CENTER INDIANOLA, IOWA 78 Iowa News Group Chairmen Report Area Conditions EPORTS on farm and business by the President this week, is expected conditions around Iowa have been to help some producers in Group 1. The full effect of the drought will not be reported by group chairmen, or their designees, of the Iowa Bankers Associ known until harvest. One point is clear, Federal Crop Insurance will be a ation, as follows: hot product next year. G roup 1 While we seem to be experiencing a Jam es Miller, chairman, Pioneer near disaster, bankers in Group 1 are Bank, Sergeant Bluff: Let me begin by reporting an improved economy. High re p o rtin g that er commodity prices have created ex this week (midtra dollars in our communities. Local August) has seen businesses are doing well. Some live record tempera stock producers have been profitable tu re s and h ot enough to pay off old lines of credit. winds and that Land prices have continued the re crops are rapidly covery from lows of two years ago. d e t e r io r a t in g . Sales are being reported that reflect a Bankers in our $200-$300 per acre increase over last Group have al year. It appears that the buyers are ready e x p e r i local, well established people with enced crop losses cash or very large down payments. When asked about loan /deposit in their areas that range from a 90% crop to a low of less than 50%. ratios, all banker respondents report The bean crop in one area is report ed increases. These increases ranged ed to be about 10% of normal. One from 3% to 50%. Most bankers needed customer of my bank had a field of corn more loans. In keeping with the trends being adjusted as a total loss. Another area banker reported a near normal crop of reported, my fellow bankers are hav corn and beans. ing a good year. Earnings have im The Drought Bill, passed and signed proved and bankers expect to finish R Committed to making your bank stand apart from the https://fraser.stlouisfed.org Northwestern Banker, September, 1988 Federal Reserve Bank of St. Louis 1988 with earnings improved from 10% to 50% over last year. While prospects for crops this year are limited in some areas, they are near normal in other areas. Some pro ducers will have trouble, while others do very well. Most banks in Group 1 are confident they will finish 1988 with good profits. G roup 2 Paul H. Johnson, president, Iowa State Bank, Algona: Crop conditions at mid-August in our part of the state are deteriorating due both to dryness and extreme heat. In the southern part of Group 2, which would include most of Humboldt and Webster counties and parts of the surrounding counties, the drought conditions earlier in the sum mer have taken a severe toll and it would appear that in many of these areas production of corn and soybeans will be down as much as 75%. The overall reduction in yield for the eight counties that make up Group 2 will , probably amount to 30% to 35% from the average. The newly legislated drought relief bill and increased prices will offset some of this loss. According to a local agronomist, the i extreme heat is currently having as much of an effect as the lack of mois ture. In many areas of Group 2 there is still adequate moisture in the ground but the crops simply cannot withstand i the stress caused by temperatures in the 100° range. Additional rainfall at this time in most of Group 2 would be a small benefit to some of the corn but could make a considerable difference i in the yields on soybeans. Therefore, it is impossible to assess the final out come at this time. General business conditions seem to be good in spite of the weather prob- ' lems, although I believe it would be fair to say that conditions are not as robust as you would find in other parts of the state. I believe that most of the banks in Group 2 are experiencing 1 much better earnings results than in recent years. It does not appear at this time that the drought will have a large impact on bank earnings or growth. Land prices continue to accelerate 1 in most of the Group 2 counties. I am aware of a recent sale in the north ern part of Group 2 at $2,250 per acre for an unimproved quarter section. I am concerned that this acceleration ( in prices may be too rapid and that some fall-back could be experienced. It does appear, however, that the peo ple buying land are not borrowing a high proportion of the purchase price ( and at this time a recurrence of WE ARE YOUR BANK'S IOW A JNCE l A FULL SERVICE INSURANCE AGENCY FOR n FULL SERVICE BANKS v...,.- I •.WÊ 1 .. n ,:}*h E» ÆÊÊÈÊ m _____ __ — )ver 5 Million Dollars in Dividends returned to Iowa Banks in the past ten years. During the Convention, ordially invited to visit our Office Iowa Bankers Insurance Services, Inc. Sixth and Grand Avenue 3 0 0 Liberty Building Des Moines, Iowa 5 0 3 0 8 (515) 2 8 6 -4 3 0 0 Call our toll FREE WATS number 1 -8 0 0 -5 3 2 -1 4 3 2 Owned by Banks in Iowa for the Benefit o f Iowa Banks https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 80 Iowa News numerous defaults on land payments is not anticipated. Group 3 W illiam G. H erb rech tsm eyer, president, First Security Bank & Trust, C harles City: Ag bankers g e n e r a lly are feeling better be cause o f few er loan problems. I am not sure we are doing any bet ter than one to three years ago b eca u se o f r e duced loan vol ume. I think we’d rather have reduced earnings than high earnings and high loan losses, however. The drought has made borrowers "hunker down” even more when cou pled with financial crisis. Since 40 percent of the reduced ag debt came out of the hides of banks, we bankers would like to "hunker down” also, but the loans are already made. The drought relief package looks like it will feed the family and pay the costs of production and, therefore, pay oper ating loans, but it won’t generate the profit necessary to make land and ma chinery payments. Not enough farm ers around here have gotten back into livestock to diversify their risk and income. Crop losses are estimated at 50 to 75 percent in this area. Land prices got a little higher in the past year. Supposedly, those better prices are still here but nobody is spending money for land either. A "wait and see” attitude prevails. Land prices are back up about 20 percent from the low but there is not much land moving. JlP E ftM A £LZST A M P Loan volume this year is about the same as last year. Government pro grams have been about the same the last two years so advance government payments reduced our loans about the same the last one or two years. We might actually have higher loan vol ume now because of farmers buying sealed grain back and waiting to sell cash grain. These are quite short term loans, however. G roup 4 James P. Lage, president, Citizens State Bank, Postville: As 1987 came to a close and 1988 began, we w it nessed renewed optimism in the agricultural and business condi tions of our area. Due to p rofits g e n e r a te d in 1987, almost all of our customers had an income tax liability, something that most of them had not experienced for several years. It proved to us that 1987 was a good year. Even though the weather forecast for 1988 was for hot and dry condi tions, our farmers and businessmen were riding the waves of 1987. The equipment dealers were experiencing renewed interest in the sales of new equipment. Businesses had collected receivables they had carried for a long time and were displaying more opti mistic views for the future. As the planting season began, the optimism continued. As the growing season developed we have witnessed this optimism change to concern. This concern continues as I write this arti cle (August 15). In visiting with fellow bankers from Group 4, I found this same concern expressed by each of I them. Crop yields, at this time, are dif ficult to assess. However, it appears that we will experience at least a 50% reduction in corn and soybean yields. ( Many corn fields are not going to pro duce anything and some could produce as much as 80 bushels to 100 bushels per acre. These fluctuations are result ing from different soil types, planting < dates, seed varieties and weed control. Soybean yields will vary due to the same problems as I have mentioned for corn above. In addition, soybean yields will be influenced further from * spider mite infestations. The oats yields surprised many of our customers. Many of these farmers had written off their oats crop prior to harvesting. After they combined the* crop, sold the oats and sold the straw, they realized more than double the gross income of the past several years for this crop. Livestock prices are causing con-* cern for everyone. The hog/corn ratio has narrowed significantly due to low er hog prices and higher feed costs. Fed cattle prices have remained somewhat stable; however, feed prices will cer tainly create a squeeze on any profit ability that had been projected. Our dairymen are also experiencing dif ficulties due to feed and roughage, prices, and concern over their ability to produce enough forage and grain for the coming year. Land prices in the area this spring were up 10% to 15%. Farm land was^ selling, a renewed interest was evi dent. When the soil began to dry out, the interest in farm real estate "dried up” with sales almost nonexistent at this time. Interest rates will be an^ additional factor for future sales. Business conditions on the main streets of Northeast Iowa have not MAKES BETTER IMPRESSIONS THE STAMP YOU CAN BANK ON SAVES TIME! SAVES MONEY! • NO INK PAD • THOUSANDS OF NEEDED IMPRINTS • THE INK IS IN • NO RE-INKING THE STAMP REQUIRED W on’t leak or dry out. 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Through these partnerships, our staff o f professional bankers provides our friends with a com petitive edge in their loca l marketplace with services like loan overlines, investm ents, credit card services, and data processing. W h ile m any p eop le refer to these banks as “ respondents” , w e prefer to call them friends. If y o u ’ re look in g for a friend, give us a call at (712) 2 7 7 -1 5 0 0 . W e ’ d like to get to k now y o u .” “See you at the Iowa Bankers Association Convention. ” First National Bank m sioux city 1 5 1 Member FDIC • Sioux City • A 'BANKS OF IOWA' BANK • (712) 277-1500 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis StiengÜiïôuCanBankOn. 82 Iowa News really felt the impact of the drought conditions yet. Many farmers have redeemed their sealed crops and sold them at much higher prices, thereby generating profits and cash flow for 1988. We feel that this cash flow injec tion will assist the cash flows for the balance of this year but certainly causes concern for the coming year. The agricultural economy does indeed create an impact on the businesses and banks of our area. The future of this area depends on how well we "weather the storm.” G roup 5 Thom as D. Whitson, chairman, president and CEO, Council Bluffs S avin gs Bank, Council Bluffs: Southwest Iowa has been more fortunate than most of the state. Up until the past few w eeks, we had virtually no co rn cro p in southwest Iowa that would have been completely lost because of the extremely dry weather conditions. If we receive additional rainfall dur ing the rest of the summer and early fall, I would anticipate total corn yields would be roughly 60%-70% of last year. Obviously, the cut in yield, even with increased prices, will have a negative impact on farm income. The soybean crop up until the last week had been progressing very well because of the soybean’s ability to go into a dormant situation and wait for precipitation. However, the extremely hot, dry weather we have been experi encing is happening at a time when the beans are just finished blooming and making pods. In my opinion, this will probably make for smaller beans and a reduced yield. If you assume that beans will sell for $9.00 per bushel at harvest time as compared to about $6.00 per bushel last fall, the farmers could stand a 30% reduction in yield and still have the same gross dollars. Land sales throughout the area have picked up and I would say that land is selling for $150-$ 175 per acre more than it would have brought at this time a year ago. The poor land has appreciated the least and the better land the most. One good thing about our situation is that 1987 was a very good year for the farmers and area business people. Most of them were all able to clean up all of their 1987 operating expenses. Also, the first six months of 1988 for the livestock operator were very profitable. I think the general attitude of most people in the area is pretty positive in spite of the rather harsh weather. Re tail sales in the population centers continue to be very strong and bank earnings continue to grow. The results for 1988 will probably be somewhat mixed. However, compared to the troublesome times in agriculture that we have been through, southwest In Iowa, John Rigler’s got you covered. Meet John Rigler, Norwest’s Corre spondent Banker for Iowa. When you have correspondent banking needs, he’s a good person to know. John makes it his business to understand the special needs of community banks. And he wants to do business with you. © 1988 Norwest Banks https://fraser.stlouisfed.org Northwestern Banker, September, 1988 Federal Reserve Bank of St. Louis Member FDIC Talk to John about our complete line of specialized correspondent banking services. When it comes to corre spondent banking, he’s got you covered. m::NOR WEST B A N tes o w CORRESPONDENT BANKING Norwest Bank Des Moines, N.A. Iowa is much better off and is facing # the future with optimism. Group 6 Jam es M. Schipper, president, American State Bank, Osceola: The ^ extreme drought and poor crop con ditions in South ern Iowa have been well docu mented and wide ly publicized. The total im pact is difficult to evalu ate at this time; however, many banks in Group 6 are heavily dependent on agriculture, and the reduced farm income will cer tainly have a negative impact on the £ loan portfolios of most banks in our area. The ag economy had improved sig nificantly over the past two years and 1988 will certainly be a setback from # the progress that had been made. Ag credit leaders will undoubtedly be as sisting their clients in obtaining all the drought relief assistance that becomes available to help buffer the negative# impact of reduced farm income. On a positive note, those banks that are not as heavily dependent on agri culture appear to have prospects of a good year in 1988 in terms of bank # performance. Many banks are report ing significant improvement in earn ings over the past few years. The Des Moines economy continues strong. New housing starts in the met- • ro area continue at a rapid pace. New jobs continue to be added, retail sales are strong and loans are up in area financial institutions. The Polk Coun ty area continues to be short on rain- ® fall but probably is more fortunate than many sections of the state. Group 7 # Arnold Schultz, president, Grundy National Bank, Grundy Center: The weather has dom inated our con v e rs a tio n , our current outlook on life, and has certainly aborted a recovery in the ag sector of our rural economy. The full extent of the drought and heat damage is unknown at this time (August 17).# Rainfall has been very spotty, but the 3 of every 4 IOWA BANKS ARE NOW BONDED BY THE KANSAS BANKERS SURETY COM PANY 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. 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Valley National Bank I« 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, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis heat has been everywhere. As of a j week ago, I would have estimated yields in different areas of Grundy County to run 30-80% of normal. To day, I would lower that estimate be cause this is the fourth consecutive ( day of 100 + degree temperatures with no immediate relief in sight. While driving through Iowa and Pow eshiek counties last week, it was ap parent that the crop damage is more ( severe, with an entire crop being lost in some extreme situations. Most bankers report improved earn ings for the first six months of 1988. Improved operating efficiencies, more i fee income and a decrease in the loan loss provision are the positives for improved performance, while pres sures continue on interest margins. Loan demand has increased because 4 of rising grain prices as farmers are borrowing from the bank to buy back sealed grain. Favorable crop prices will temper some of the yield loss, especially for those who received the 4 benefit of the spotty rainfall. Rising prices also help in those situations where large quantities of reserve and sealed grain are still on hand. The drought relief package passed by Con- 4 gress certainly will help many to cover crop input expenses, but again the details are not fully known as of today. Without a doubt, farmers have de layed or decided against capital expen- 4 ditures that were contemplated ear lier in the year. The bottom line is a negative for the farm operator, the landowner, the farm supplier, the county elevator, the implement dealer, 1 the main street businessman and the banker. I am especially concerned about the impact on country elevators as they face decreased storage and drying income. * Land values continued to rise this spring and, in some instances, ex ceeded the value which can be justified based on the income potential of those. farms. If affluent farm operators and1 investors continue to push land and rent prices higher, the average farmer with less available cash may again be adversely affected as he competes on^ either an ownership or rental basis. Several weeks ago it appeared that cash rents might increase because of the psychology associated with higher grain prices. Hopefully, this apparent^ trend will not develop during the cur rent lease renewal period because gross returns for most farm operators will be down as the result of the drought conditions. 4 Should grain prices remain above CCC loan rates, marketing of crops Iowa News ^ will return as a major challenge for farmers. Lenders will be requiring marketing and risk management plans of their farm borrowers before committing to new seasonal lines of ^ credit. How things change! Several years the government farm program was viewed as the market place for grain producers and appeared to be the case in foreseeable future. The sum0 m e r of 1988 may have changed all of that. G roup 11 Daniel Doyle, president, Wellman § Savings Bank, Wellman: The agricul tural conditions in Group 11, or S ou th ea stern Iowa, are, needill» less to say, poor. The full impact of the drought has not been felt. De spite the appar®ent willingness of Congress to pro vide needed sup port for the farmer, problems will be most prevalent in the rural areas ®where agribusiness sales will fall. Ele vators, equipment dealers and feed stores will feel the effect immediately as farm customers contract their planned expenditures. ® I think we can all be thankful that the drought arrived in an election year. It appears that our legislators have been able to pass what we hope will be a workable drought relief bill ®that will enable the farmer to at least repay his crop input loans. However, as of yet, no help is in sight for the business that is dependent on the -farmer. Our local businesses will suf f e r , including banks, until the farm customer becomes optimistic and is able to make capital improvements that make financial sense and require ^funding. The banks themselves in our w group appear to be having a better year than in 1987, although we, too, are dependent on the final substance of federal relief. ^ In the manufacturing/city areas, bankers tell me they see continued improvement in local economies. In dustrial concerns appear to be leaner, more efficient, and willing to make ^some capital improvements. However, just as we in the rural areas are farm dependent, these areas and banks are as well. The overall feeling of many bankers <^pf our area can best be described as cautiously optimistic. Loan demand https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis appears to be picking up and earnings improving in the more commercial/ manufacturing areas of Group 11, as well as rural areas. G roup 12 J a m e s L. C u tte ll, president, George State Bank, George: Lyon County happens to be the most Northwest Coun ty in the State of Iowa. Crop condi tions within Lyon County run from excellent to total disaster. Some of the crops in the Sheldon and Mar cus area could be among the best crops in the State. We seemed to have a large number of farmers who just couldn’t quite pull the plug on the sale of their sealed crops. Even after two run-ups in the price they let their greed control their destiny and still own too much old crop, plus most of the new crop. Some of the fat hogs going to market are showing red on the balance sheet, while a 50# feeder pig is being priced at $35.00. Fat cattle have rebounded, with a customer selling 50 Charolais on August 15 for $70.00. Feeder cattle have already jumped to a price that reflects red on the balance sheet. Give some farmers forage to feed and they run over each other to fill the lots with cattle. Land prices in Northwest Iowa are 85 probably the best in the State. Sioux or O’Brien county land commands prices in the $2,000 range, with a quarter in Lyon County, next to the Minnesota border, bringing $1,525. It appears that most of the land sales continue to be bought with cash or a small amount of financing. The Congressional Drought Farm Plan sounds too good to be true. It appears that customers who were not even in any program will be eligible for assistance. One of my customers who has paid the insurance premium for over 20 years was not happy that everybody now has some coverage. I wish the government would give some of the main street business places the same type of checks that they write for the farmers. Loan demand remains flat, with bank profit rem aining stable. It sounds as though most of northwest Iowa’s bankers have worked through their problem loans and now are pre pared for bigger and better things. The local Coop gas station did hand me the keys this week. Anybody want to buy a gas station with underground storage? Joins Urbandale Board Steven G. Chapman, executive vice president o f International Travel Associates, Inc., West Des Moines, has been named to the board of directors for First Inter state Bank of Urbandale. ILAW LER Austin P. Lawler & Associates, Inc. COST REDUCTION PROGRAMS Is reducing operating expense one of your priorities? If so, you’ve probably already taken steps internally to reduce costs. But how much can realistically be accomplished when it’s only a part time ef fort at best? We have the time, expertise and objectivity necessary to bring about the improvements you know you need. Our firm is the largest provider of cost reduction programs to Iowa banks. Let us tailor a program to meet your needs and deliver positive results. Our preliminary analysis can show you how dramatic improvements can be made at your bank. For a list of references or more information call 312-584-5757. Austin P. Lawler & Associates, Inc. 40W274 Winchester Way St. Charles, IL 60175 Northwestern Banker, September, 1988 86 Iowa News Fort Madison B&T Sold to Fort Madison Financial Approval was received August 15 from the Federal Reserve Board for the purchase of Fort Madison Bank & Trust Co. from Banks of Iowa by Fort Madison Financial Co. The lat ter is a one-bank holding company owned by Larry Wenzl, chairman and president of United Bank & Trust, Ames; James Baier, a Fort Madison auto dealer, and Doyle Hoyer, a Fort Madison retail clothier. The Fort Madison Financial Co. previously owned the $26 million assets Iowa State Bank in Fort Madison but sold it on July 1 to State Central Bank of Keokuk to enable it to purchase the larger Fort Madison Bank & Trust, which had $54 million assets at mid-year. Clos ing date will be September 30, accor ding to Mr. Wenzl. A meeting will be held at that time to announce the new board of directors and staff of ficers. In addition to United Bank & Trust in Ames, where he is chief ex ecutive officer and will continue to reside, Mr. Wenzl is principal owner of the one-bank holding company that owns Panora State Bank, of which he is chairman and chief ex ecutive officer. Mr. Wenzl also owns the Bank of Alexis and the State Bank of Girard, both in Illinois. Gary Harstick, vice president for marketing at Banks of Iowa, said, “ These are fine, experienced people and we know they will do well in ser ving the Fort Madison community. Although it is unusual for a holding company to sell a bank, we con tinually review our banks and the needs of the markets they serve. We considered merging Fort Madison Bank & Trust with our First Na tional Bank in Burlington and mak ing an office in Fort Madison. How ever, it seemed to us that in the long term the decision to sell to local peo ple was in the best interest of the bank, the community we serve there and for us, and not to have a branch office that couldn’t do the job pro perly in that instance. “ Our banks generally are in larger Iowa cities and we feel that’s where we can be most competitive.’ ’ Tri-County Bank, Zearing, Will Merge with Hubbard Donald W. Heineking, president of Security State Bank in Hubbard, Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis and William E. Brown, president of Tri-County State Bank in Zearing, announced last month that Security State Bank has entered into an agreement for the purchase of assets and assumption of liabilities of Tri-County State Bank and TriCounty Insurance Agency, subject to the approval of regulatory agen cies. Application also is being made to merge Tri-County State Bank into Security State Bank and maintain an office at Zearing. In addition, the Hubbard bank also would retain the Zearing bank’s office at Garden Ci ty. Zearing is ten miles due south of Hubbard on Hwy. 65. Garden City is to the west, located about eight miles from each of the other two towns. Mr. Heineking has been president of the Security State Bank in Hub bard since 1963. At 1987 year-end, the Security State had assets of $19,530,000, deposits of $16,330, 000, loans of $7,623,000, and total capital accounts of $2,995,000. The Tri-County State Bank in Zearing was chartered in January, 1943, with $41,250 in capital. Mr. Brown’s father, W.H. Brown, was cashier, and a director and an organizer of the bank. W.H. Brown became president of the bank in 1946, continuing in that capacity until selling his controlling interest in 1968 to J.G. Edge of Baxter, who served as president from that year until selling it back to William E. Brown in 1980. Mr. Edge has served as chairman since 1980. William E. Brown became an as sistant cashier at Tri-County State in 1953, was named cashier in 1960, executive vice president in 1968, and has served as president since pur chasing Mr. Edge’s interests in 1980. Two banks served Zearing for many years until both went under in the Great Depression in 1930. An of fice was opened in 1931 by UnionWhitten State Savings Bank of Union. A year later it became an of fice of Story County State Bank of Story City, with W.H. Brown as manager, the position he held until helping organize the charter for TriCounty Bank in 1943. The bank has grown from initial deposits of about $300,000 in 1943 to its present level of $9,104,000 at 1987 year-end. Assets total $10,101,000, loans are $4,744,000 and total capital is $898,000. Added in W aterloo # R.E. Lauterbach, president of Peoples Bank and Trust, Waterloo, r e c e n tly an n ou n ced th a t Gary Dodge has joined the bank as vice president in charge of per sonal banking. Mr. Dodge was the con su m er loan department manager for two G. DODGE years with MidAmerica Savings Bank in Waterloo. ’ Prior to that he spent six years as a consumer loan officer at Waterloo Savings Bank. Pres. Named in Mason City • Ronald J. Havlik has been named president and chief executive officer of Norwest Bank Mason City, N.A. He succeeds Arlan Tengwall, w h o ^ has retired. Mr. Havlik previously was president of Norwest Bank Sauk Rapids, Minn. Mr. Havlik joined the Norwest or ganization in its corporate executive # training program at its bank in Dawson, Minn., in 1959. He has since worked in the corporate credit department in Minneapolis, as of ficer in charge of installment lo a n s# and commercial lending at the Norwest bank in Virginia, Minn., and as vice president and second of ficer at the Norwest bank in Denison, Iowa. He served i n # Denison from 1968 to 1975, when he was elected president of the Sauk Rapids bank. Iowa Holding Companies Names New Officers # The board of directors of the Association of Iowa Bank Holding Companies elected William H. Bren- ^ ton as president at a meeting held on August 2. Mr. Brenton is chairman of Brenton Banks, Inc. Oliver Hagen, president and CEO, First In terstate of Iowa, Inc., was named q vice president; Holmes Foster, chairman and CEO, Banks of Iowa, Inc., was named treasurer, and Paul D. Dunlap, chairman of Hawkeye B a n c o r p o r a t io n , w as n a m e d f secretary. All are in Des Moines. The Association was originally formed in July, 1987 to support legislation to modernize Iowa’s banking laws and to allow for the in- if* terstate affiliation of Iowa banks. Bill, Marena, John, Pat, Left to right: Bill Brockway, . Assistant Vice * President; Marena Lare, Operations Assistant; John Schricker, First Vice President and Pat Bear, I Assistant Vice President. Person-to-person credit card service from our experienced team behind the scenes You may never meet Bill, Marena, John or Pat face-to-face. But we want you to know they’re here, ready to deliver the kind o f credit card service that will keep you on a first-name basis with your customers. They’re behind the scenes —but not behind the times. It takes a competent, experienced crew to make a credit card program succeed. Our team has more than six decades of banking experience. Their attention to detail will help you get the most from our modern processing system. Our fees, finance charges and merchant pricing are among the lowest around. And our commitment to service after the sale is second to none. Your name appears on every card and application, so your customers keep their important ties to you —the bank they know and trust. You may not know Bill, Marena, John or Pat on a first-name basis. But with the quality service they give, you’ll feel as though you do. Call (319) 383-3407 for more infor mation or to arrange for a representative to call on you. □ A V E IN P O R T B A IM C -------------------AND TRUST COMPANY------------------ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 203 WESTTHIRD STREET, DAVENPORT, IOWA 5 28 0 1-1977 MEMBER F DIC 88 Iowa News City State Bank, Madrid, to Remodel PICTURED above is the design for an extensive remodeling project for City State Bank, Madrid. Bank President and CEO R.J. Sundberg has announced the commencement of con struction, which involves an expansion to the east and a total renovation of both levels of the existing bank. The completed bank will be 6,134 square feet in area. The main banking level will have four private offices, a board room, a small conference room, four teller win dows and one sit-down teller station. The lobby with have a uniquely shaped receptionist station and a customer service desk. By utilizing full height glass on the south wall of the lobby and creating a large decorative staircase that is open to the lower level, the design permits sunlight to penetrate in the bookkeeping department, meeting room and staff lounge on the lower level. A new drive-up window and drive-up remote lane will also be con structed. The Kirk Gross Company of Waterloo is in charge of the project. Completion is ex pected in seven to eight months. Joice Bank Purchased Farmers Savings Bank, Joice, has been purchased by Donald E. Sabbann of Clear Lake and Richard A. Halverson of Corwith, from the Royden and Crystal Christianson family, long-time Joice residents. Mr. Halverson has been assisting the bank as a consultant since September 15, 1987. Mr. Sabbann and Mr. Halverson have owned and operated the Corwith State Bank in Corwith for the past 13 years as president and CEO and as executive vice president, respectively. They also purchased last January the Far mers State Bank of Grafton, of which Mr. Halverson is president. Mr. Sabbann has been elected chairman and Mr. Halverson has been elected president at Farmers Savings Bank of Joice. A1 Hagen, with the bank since 1984, has been promoted to vice president. Jean Miller, with the bank since 1976, has been advanced from assistant cashier to cashier. Keokuk Banks to Merge Norwest Bank Keokuk, N.A., and Keokuk Savings Bank and Trust Company have signed a letter of in tent for Keokuk Savings to acquire the Norwest bank. The transaction is subject to a definitive agreement and the approval of Keokuk Savings https://fraser.stlouisfed.org Northwestern Banker, September, 1988 Federal Reserve Bank of St. Louis stockholders and regulatory author ities. Terms were not disclosed. As of June 30, Norwest Bank Keokuk had assets of $37 million and Keokuk Savings had assets of $48 million. Named in Morningside Kelly A. Florke has been named president and chief executive officer of Morningside Bank and Trust. He joined the bank in 1984 as assistant vice president and commercial loan officer. In 1987, he was appointed executive vice president responsible for lending. In addition, Roger L. Bobolz has been promoted to assistant vice president and compliance officer. He joined the bank in 1985 as manager of its installment loan department, and was named marketing director in 1987. Joins West Liberty Bank Dennis Batty, president of the West Liberty State Bank, West Liberty, has announced the appoint ment of Drew Lewis as vice presi dent and cashier. Mr. Lewis’ res ponsibilities will include operations and ag lending. He was formerly associated with the Hardin County Savings Bank of Eldora since 1976, resigning there recently as a vice president to accept the West Liber ty appointment. Elected in Mapleton • The board of directors of the Mapleton Trust & Savings Bank recently elected James T. Whiting director and chairman of the board^ and N.E. Perrin vice chairman. M rT Whiting succeeds his father, James G. Whiting, who died June 26 after serving as chairman since 1984. This is the fourth generation of t h ^ Whiting family to chair the bank. James T. Whiting has spent the past 15 years in banking in Min neapolis, in the areas of operations, management and lending. He cu r^ rently is manager of a lending department at Investor’s Savings Bank in Minneapolis. IBA’s Neil Milner is Named As ASAE Chairman-Elect Neil Milner, executive vice pres ident and CEO of the Iowa Banker^ Association was e le cte d c h a ir man-elect of the American Socie ty of Associa tion Executives at the ASAE an nual m e e tin g held last month in Toronto, Can ada. ASAE, head quartered in Washington, D.C., is an individual membership organization with more than 16,500 association execu tives and suppliers. Its members manage leading trade as sociations and professional societies across the United States and in 27 other countries. # Mr. Milner, who has earned the Certified Association Executive designation, was sworn in as chairman-elect at A S A E ’s officer in stallation banquet August 17. H # will serve in this position for one year and move into the ASAE chair man position next summer. As chairman, he will oversee the entire ASAE organization and its board c# directors from 1989 to 1990. A Leesburg, Ohio native, Mr. Milner is a graduate of Ohio State University. He has been executive vice president of IB A since 1975# Previously, he served as executive manager of the South Dakota Bankers Association and deputy manager and public relations direc tor for the Ohio Bankers A s s o c ié tion. Iowa News • Named in Council Bluffs Michael Thomas Phelps has been named farm manager at Council Bluffs Savings Bank. He was • p r e v i o u s 1y e m p lo y e d at ConAgra Flour and M illin g C om pany in •Omaha. Prior to that, he was a commercial pro perty manager M.T. PHELPS for The Lund •Company in Omaha. Arthur J. Frey Dies Arthur J. Frey, a Chicago cor r e s p o n d e n t banker well known among Iowa bankers for many years, died July 17 at the age of 85 at Condell Memorial Hospital in Libertyville, 111. Mr. Frey had been •associated for 41 years with the Con tinental Illinois National Bank and Trust Company of Chicago, and had worked for five years earlier in his career with Iowa banks. • Mr. Frey was born July 23, 1902, in Emmetsburg, la. He joined Pat terson Savings Bank in 1921 as as sistant cashier. He moved the fol lowing year to Des Moines National •Bank in Des Moines, and later that same year moved again to Perry where he was elected assistant cashier of Peoples Trust and Sav in g s Bank. On January 4, 1926, Mr. •Frey accepted an offer to join Conti nental Bank of Chicago as a general clerk, progressing through several positions until his election as a vice p re sid e n t on January 11, 1952. • He was associated with Continen tal’s correspondent bank depart ment for many of his 41 years with that bank, traveling Iowa, where he J)ecam e personally acquainted with noankers throughout the entire state. When he retired in 1967, his retire ment party, titled “ Frey-Day,” was held appropriately in Des Moines • p d was attended by more than 200 Io w a bankers as well as four senior executives of Continental Bank and six of his department associates. Mr. Frey is survived by his wife of ^ 5 years, Dorothea, at their home at 851 A Garfield Avenue in Libertyville 60048. He is survived also by a daughter, Marilyn Friede of Libertyville, and one son, Richard D. Frey, •vho is a senior vice president in the Hong Kong offices of Security https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Pacific National Angeles. Bank of Los Security Natl. Contributes to Special Olympics Security National Bank recently completed a successful major multimedia promotion in which the bank joined forces with the Northwest Iowa Special Olympics. The mar keting campaign was designed to raise funds for and publicize the Special Olympics while demon strating Security National’s “ Extra Effort” commitment to being a com munity minded citizen. Security National contributed to the cause in two ways: first, by pro viding volunteer help at the track meet, and second, by contributing $2,700. Throughout June, each time a transaction was completed on one of the bank’s ATM machines, Secur ity donated ten cents to the Special Olympics. Awareness was raised through TV, newpaper and radio ads, as well as outdoor and lobby signs and direct mail. Manchester Bank to Remodel James A. Wiewel, president of First State Bank, Manchester, has announced plans to remodel and re furbish the interior space of the bank. One of the focal points of the pro ject will be the new oak teller line, which will be staggered to increase customer privacy. The customer ser vice area is being expanded and relocated to a new area in the bank. All new furnishings and a total new color scheme will provide a fresh new look. Kirk Gross Company of Waterloo is handling the p roject, and estimates work to be completed by mid-October. IBA to Hold Teller Training School in October The Iowa Bankers Association is sponsoring a new and unique school for individuals in charge of training tellers. The school, entitled “ Com prehensive Teller Development: A School for Trainers” will be held Oc tober 5-6 at the Hotel Savery in Des Moines. The school addresses basic skill development for teller trainers, and focuses on four key areas: guidelines 89 for developing a three-week training curriculum, an in-depth five-day training schedule that focuses on basic teller skills, a performance points rating system and a certifica tion program. Sample forms, schedules and tests as well as a separate resource directory of training materials will be given to attendees. Workshop leader will be Bev Licata, vice president, Financial Education and Development. Registration fee for IB A members is $275, which includes breakfast, breaks, lunch and materials. Sub scriber fee is $325 and non-members pay $375. A higher fee will be charged after September 23. Con tact the IB A for more information. Bank at Ida Grove Sold First State Bank in Ida Grove has been sold, pending regulatory ap proval, to a local group headed by Richard A. Bogue. He is president of H IW AY Products, Inc. The $15.8 million bank is owned by the former Toy National Bank of Sioux City. Toy acquired it in 1985 when the previous owners defaulted on a bank stock loan. The bank was not among the assets included in the sale of. Toy National to Norwest Corp. last year. The investment group buying the bank has 12 members. Terms of the sale were not disclosed. Appointed in Dubuque William D. McGeehan, president of American Trust and Savings Bank, has an nounced the ap p o in tm e n t o f Jerry R. Renz to installment loan officer. Prior to joining the bank, Mr. Renz was a loan officer with the Richardson C ou n ty B ank and Trust, Falls City, Neb. He has also worked as a manager with Security Pacific Finance Corp. in Des Moines. Elected in Moville Susanne Weaver has been elected assistant cashier of the First Trust and Savings Bank, Moville. She has been employed by the bank for over 12 years. Northwestern Banker, September, 1988 90 Iowa News C.P. “ Buck” Moore, chairman of Norwest Agricultural Credit, Inc., and John C. Nelson, Norwest regional presi dent for com munity banking in Io w a , a n nounced on July 29 plans to ex pand N orw est A g r ic u lt u r a l Credit’s opera T.L. RICKE tions in Iowa with the opening of a branch office in Des Moines on August 1. The branch, in the Douglas office of Norwest Bank Des Moines, will serve as a resource to all Norwest banks in Iowa, but will concentrate on making loans in central Iowa. The new office will be headed by Thomas L. Ricke, a farm lending specialist who served with the Farm Credit System for four years and for the past three years has been assis tant vice president, agricultural len ding, at Norwest Bank Mason City. * * * Banks of Iowa, Inc. reported net income of $3,203,000 for the second quarter and $7,783,000 for the first six months of 1988, compared with $2,408,000 and $6,102,000 earned in the same periods of 1987. Net in come for the second quarter was down from the $4.6 million earned in the first quarter of the current year.^ The company previously announced that it expected lower second quarter earnings due to additional provisions for loan losses. Earning per common share were $.72 an c^ $1.84 for the second quarter and first six months, compared with $.52 and $1.74 for the same periods last year. * * * | Mark D. Whitham has been named comptroller of Banks of Iowa effective J u ly 15. Mr. Whitham joined the co r p o r a te staff in 1983 and had previously been se n io r auditor. He is a graduate of the U n iv e rs ity o f Northern Iowa M.D. WHITHAM and a certified public accountant and a certified in-® ternal auditor. * * * Brenton Banks, Inc. has reported record operating earnings for the s e # cond quarter and the first six months of 1988. Net income for the second quarter of 1988 totalled $2,271,149 or $.93 per share com pared to $1,353,867 or $.53 per share# for the same period last year. Earn ings for the six months ended June 30 totalled $4,180,977 or $1.71 per share, compared to $2,558,510 or $1.01 per share in 1987. # UMB Investment Seminar Held UNITED Missouri Bank, Kansas City, recently held its annual Golf/lnvestment Seminar at the Hyperion Field Club in Des Moines. P a # ticipating in the afternoon seminar were, from left: Dave Anderson, sr. v.p., inv., UMB; Jeff Gobel, v.p., UMB; Chuck Orr, partner, McGladrey, Hendrickson & Pullen, Iowa City, and Steve Race, sr. field exam., FDIC. Also present were, from left: Dick Cousin, pres., Iowa Tr. & Sav., Oskaloosa; Dwight Seegmiller, pres., Hills Bk. & Tr.; Becky Herman, inv. acct. off.; Greg Bernard, v.p.; Larry Russell, vice chmn. inv. bkg., and Mark Bailey, a.v.p., all with UMB. Bankers gathered early for a round of golf and lunch “ on the go,” followed by the investment seminar. The seminar featured current bank investment strategies including municipal bonds, variable rate securities, mortgage backed securities and the many new investm e# products available today. A social hour and dinner followed to conclude the day long event. Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 92 Iowa News First Interstate of Iowa, Inc. recorded net income of $2,525,000, or $.21 per share, for the three months ended June 30, compared to $510,000, or $.04 per share, for the corresponding period in 1987. A net loss of $2,265,000 for the six months ended June 30 resulted from the es tablishment of a special litigation reserve amounting to $6,938,000, or $.58 per share, for an unfavorable judgment in a lawsuit entered against a subsidiary in the first quarter of 1988. The judgment has been appealed. Dorothea W olfe Retiring D orothea A. W olfe, adm ini strative officer in the financial insti tutions division at N o rw e s t Bank D es M oines, N .A ., will conclude a 26-year banking career when she r e tir e s fro m N o rw e s t on September 30. In her 26-year ca re e r w ith Norwest, Dorothea Wolfe worked as a secretary in the installment loan department the first four years, then in 1962 was transferred to the correspondent bank division where, for the past 22 years, she has become widely known throughout the state among Norwest’s cor respondent community banks. Her expertise in expediting important and routine matters inside the bank for correspondent customers and her staff associates has given her a respected reputation for “ getting the job done . . . and well.” In her 22 years with the corres pondent bank division at Norwest Des Moines, Dorothea has served under eight division heads, several of whom have gone on to other posi tions of responsibility within the bank and the Norwest system. One of them is George F. Milligan, who headed the correspondent division from 1974 to 1980 and later became president and chairman of the bank. He is now vice chairman of the board and has announced his own plans to retire at the end of this year. Other division heads she worked with who have taken on other duties with the bank include Voldy Vanags, senior vice president, and Bernard Kersey, vice president. Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The current head of the division to whom Dorothea reports is John P. Rigler. After graduating from Alexander High School, Dorothea completed classes at Hamilton School of Business in Mason City. She worked for companies in Gladbrook, Clear Lake and Des Moines before joining Norwest in 1962. During her work at the bank she c o m p le te d co u r s e s w ith the American Institute of Banking and also is a member of the Des Moines Chapter of the Bank Administration Institute. She has served as treasurer and in committee posi tions with the American Business Women, and was secretary in 1976-77 of the National Association of Bank Women, Inc., of which she is still a member. Dorothea’s attendance at and par ticipation in the Iowa Bankers Association convention September 18-20 will be her last official ap pearance at an Iowa bankers meeting before her retirement. A farewell party for her is planned by fellow workers. John Rigler, who has been associated with the depart ment for a number of years and now serves as vice president and manager, paid this tribute to Doro thea: “ In Dorothea’s 26 years at Norwest she has developed exten sive relationships with our cus tomers in Des Moines, as well as with our network of correspondent bank relationships throughout Iowa. In her career at Norwest she has focused on providing prompt, ef ficient and friendly service to all those with whom she has dealt. Many of the correspondent relation ships which Norwest enjoys can be directly attributed to Dorothea’s strong relationships with those bankers. After her retirement from Norwest, she will be missed by all of her co-workers and customers.’ ’ Centennial Celebrated by Onawa State Bank The Onawa State Bank, Onawa, is celebrating its centennial this year. C.H. Huntington, a prominent financier from northwest Iowa, organized the original stockholders, and the bank opened its doors in April, 1888 at 914 Iowa Avenue, a building occupied today by the Onawa Chamber of Commerce. In 1934 the bank moved to larger quarters at 901 Iowa Avenue. I i # 1961 the bank opened a still larger building at 1030 10th Street, its pre sent location. The occasion was observed with an open house held at the bank o r# August 21. Investment Center Opens in Council Bluffs # The Investment Center of Council Bluffs, located at the First National Bank of Council Bluffs, began opera tions on August 1, Tony Payne, president and CEO of the bank, has® announced. Cindi Keithley, a regis tered representative of Integrated Resources Equity Corp., will man age the center, which will provide a wide range of securities p ro d u ct^ and services. Ms. Keithley has several years of experience in the financial industry, most recently at the Houghton State Bank in Red Oak. ® U. of Iowa Offers Accelerated MBA Program The University of Iowa College o P B u sin ess A d m in istra tio n has developed a new accelerated pro gram through which business pro fessionals can earn an M BA d eg re^ without leaving their jobs. ® The Iowa M B A Program for Emerging Managers is patterned after the ten-year-old Executive M BA Program, the difference being^ that while the latter is designed foir experienced, high-level business peo ple, the new program is geared to entry-level managers. The first group to participate irw the program began in August, 198'r and will graduate in May, 1989. The 29 students meet for class at the University in Iowa City on alternate weeks, Fridays and Saturdays only^ except for one full week of class in August. The students have two months off in the summer and two weeks Christmas vacation. Class time consists of three and gq half hours each morning and each afternoon. An additional 20 hours per week study time is typical. At any given time, students are en rolled in two courses, and by the en<# of their studies will have taken 20 courses in areas such as marketing, finance, accounting, administration and law. Tuition is $7,500 per year, w hicl# covers tuition and fees, books, sup- 93 ^ plies, lunch each class day, and full food and lodging for the full week in August. In most cases, students’ employers pay a portion or all of the tuition. 0 Participants are required to have formal permission from their em ployers in order to enroll, and also permission from spouses. No attri tion is expected in the program, so # students are encouraged to work out the details of their commitment carefully with employers and fam ilies. The program is designed to en# courage group support and inter action. Says George Daly, dean of the College of Business Administra tion, “ Our program is built around small-group interaction and close, informal student-faculty relation ships. A variety of social and pro fessional events are scheduled to en courage communication between faculty and participants. Spouses and special guests are invited to par ticipate in a number of events designed to familiarize them with the program.’ ’ The Executive M B A Program and the M B A Program for Emer ging Managers are seeking appli cants for future sessions. For more information, contact Jana R. Wes sels, Director, M B A Admissions, U. of Iowa College of Business Admini stration, 121 Phillips Hall, Iowa Ci ty, IA 52242, or call (319) 335-1037. FDIC Bails Out First RepublicBank HE Federal Deposit Insurance Corporation, the Comptroller of * he Currency and the Board of Gover nors of the Federal Reserve System on July 29 announced approval of the acquisition by NCNB Corporation of ^subsidiary banks of First RepubwiicBank Corporation, Dallas, Tex. The arrangement approved in prin ciple by the regulators accomplishes the restructuring and recapitalization First Republic banks in Texas, and ensures the full protection of all de positors and general creditors. All of the banking offices will continue to operate without interruption. ^ FDIC Chairman L. William Seidman said major features of the restruc turing and recapitalization program include: • The establishment of a new bank, 4^0 be called NCNB Texas National Bank, with one hundred percent of the voting stock to be owned by NCNB Corporation. • The FDIC, as receiver for First Re p u b lic banks, will transfer its assets and liabilities to the NCNB Texas National Bank. • NCNB Corporation, based in Char lotte, N.C., has agreed to infuse be tw e e n $210 million and $240 million in NCNB Texas National Bank, an amount equal to 20 percent of the new bank’s total equity capital. • The FDIC will infuse between $840 Pnillion and $960 million in new equity capital into NCNB Texas National Bank, an amount equal to 80 percent of its total equity capital. • The FDIC will retain an 80 percent •lonvoting equity interest in NCNB Texas National Bank. NCNB Corpora- T https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tion will, during the next five years, have an exclusive option to purchase the FDIC’s 80 percent equity interest.* NCNB Corporation will pay the FDIC a premium over the book value of the bank’s stock at the time of purchase. • The FDIC will provide assistance to NCNB Texas National Bank in the form of a capital contribution in order to eliminate negative net worth. The FDIC will also guarantee certain prob lem assets. • NCNB Texas National Bank will be responsible for administering and col lecting the problem assets. • NCNB Corporation will manage NCNB Texas National Bank under contract during the interim period un til the recapitalization is consum mated. After implementation of the restructuring, NCNB Corporation will continue to manage the new bank. The FDIC’s initial outlay for this transaction is expected to be approxi mately $2 billion, in addition to the $1 billion advanced in March. Further outlays are expected to be about $1 billion. Although it cannot be accu rately estimated at this point, the FDIC’s net cost for this transaction is expected to be significantly lower than its total outlays. This action follows the FDIC’s deci sion on March 17, 1988, to provide $1 billion in emergency assistance to the subsidiary banks of the First RepublicBank Corporation. That assistance was advanced because of concerns among depositors regarding the safety of their funds. The obligations of the failed banks’ parent com panies, First Repub licBank Corporation and IFRB Corpo ration, including approximately $1.2 billion in debt and preferred stock, will remain with the parent companies. NCNB Texas National Bank will not assume any of the obligations of the holding companies. The FDIC’s total outlay after con summation of the permanent assis tance program will be approximately $4.0 billion, including the $1.0 billion loaned to the First RepublicBank banks on March 17, 1988, and not repaid. The ultimate cost to the FDIC from the permanent assistance pro gram depends on the amount of collec tions on and the value of the assets in the special asset pool; the amount of troubled assets transferred to the sep arate asset pool; the amount of divi dends received by the FDIC while it holds stock of NCNB Texas National Bank; and the price the FDIC receives on the sale of its stock in NCNB Texas National Bank on sale to the public or to a third party or on the exercise by NCNB Corporation of its option to purchase the FDIC’s stock. INDEX OF ADVERTISERS September, 1988 American Bankers A ssociation..........................................18 American Express Travelers Checks................................. 95 American National Bank, St. P a u l..................................... 38 American Trust & Savings, Dubuque................................. 75 Austin Associates............................................................... 8 Baker, James & Company................................................... 33 Bank Building Corporation....................................... 13,43-54 Bankers Trust Co., Des Moines ......................................... 66 BICS Banking S ystem ..........................................................14 Cole Taylor Bank/Drover, Chicago..................................... 12 Colorado National Bank, D enver....................................... 57 Davenport Bank & Trust Co............................................. 69,87 Des Moines Stam p................................................................80 First Bankers Securities Corporation .............................. 4 First Bank System, Minneapolis....................................... 6-7 FirsTier Bank Omaha/Lincoln....................................... 60-61 First Interstate Bank, Des M oines..................................... 91 First National Bank, C hicago............................................. 31 First National Bank, O m aha............................................... 65 First National Bank, Sioux C it y ......................................... 81 Gross, Kirk Co., W aterloo....................................................73 IAC Group............................................................................. 8 IBAA Bancard, Inc................................................................ 9 Imperial House Restaurant................................................. 80 Information Technology, Inc............................................... 3 Investment Centers of America, Inc.................................... 11 Iowa Bankers Insurance & Services, Inc.............................79 ITS, Inc............................................................................... 16-17 Kansas Bankers Surety Co...................................................83 LaSalle National Bank, Chicago ........................................10 Lawler, Austin P. & Associates, Inc.....................................85 Marquette Bank Minneapolis ....................................... 36-37 Merchants National Bank, Cedar R ap ids........................ 2 Midwest Management Consultants, Omaha ................... 18 Modern Banking Systems, Inc............................................. 15 Municipal Bond Underwriters, Inc....................................... 63 National Bank of Commerce, Lincoln............................... 58 National Bank of W aterloo.................................................. 77 North Central Life Co............................................................ 19 Norwest Bank Des M o in e s ................................................. 96 Norwest Bank Iow a..........................................................74,82 Norwest Bank M innesota................................................... 39 Norwest Bank Montana....................................................... 55 Office Concepts, Ltd., Waterloo......................................... 78 United Missouri Bank, Kansas C ity ................................... 20 Valley National Bank, Des Moines..................................... 84 Northwestern Banker, September, 1988 94 NEBRASKA NEWS. . . (Continued from page 62) she held positions as title officer and search department supervisor with several title companies. Norwest Pilots Account Norwest Banks in Omaha have in troduced a new checking account specifically designed for young adults. The “ Startline Account" has been piloted in several Norwest banks in North Dakota and Iowa and is now being offered in Omaha. The Startline Account is an interest-bearing checking account designed for customers approx imately 18-29 years old. It can be opened with $100, but requires no minimum balance and has no regular monthly charge. Customers will be entitled to write eight checks per month at no charge and will have unlimited, free automatic teller machine access in a ten-state area. Customers who have more than eight checks posted to their account within a monthly cycle will be charged a $4.00 service fee and 25 cents per check. Sid Bostic, president of Norwest Bank Nebraska, N.A., said the Startline Account is one of an array of specially-targeted financial pro ducts being made available to this customer group. Startline custo mers may be eligible for a Vi% dis count on new installment loans of $3,000 or more and they will have access to a special Startline credit card application form for a Norwest Visa or MasterCard. Promoted in Norfolk Clayton “ K ay" Curtis has been promoted to vice president/consumer banking manager of Nor west Bank Neb raska in Norfolk. Mr. Curtis was a police officer, an educator, an ad justor for State Farm, and man ager o f o p e r ations at the N o rfo lk L iv eK‘ CURT,S stock Market before entering bank ing in 1983. At that time he joined Norwest Bank as an ag loan officer, and was promoted to facility man ager of the Plaza Office in 1986. Northwestern Banker, September, 1988 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ILLINOIS NEWS. . . (Continued from page 34) IBA Promotes Rohlfing to VP Martha Rohlfing was recently promoted to vice president, public affairs, of the Illinois Bankers Asso ciation by its board of directors, upon recommendation of IB A Ex ecutive Vice President William J. Hocter. A member of the IB A staff since 1985, Ms. Rohlfing was initially given responsibilities in media rela tions and member communications, and later was also named editor of Illinois Banknew s and Illinois Banker magazine. Last year her title was changed to director of public affairs, r e fle c tin g her additional responsibilities in federal legislation and regulation. Ms. Rohlfing graduated from the University of Illinois and then taught German in Freeport for tw c^ years before enrolling in graduate school at Indiana U niversity, Bloomington. While there, she was a teaching assistant in the German department. She later taught at^ South Dakota State and the Univer sity of Chicago, and also developed technical German programs for the Robert Bosch Corporation and Rochester Products. £ Ms. Rohlfing expected to com plete her M B A degree in marketing from DePaul University, Chicago, this summer. CBAI to Hold Convention Sept. 16-19 HE Community Bankers A sso ciation of Illinois will hold its 14th Annual Convention September 16-19 at the Adam ’s Mark Hotel in St. Louis, Mo. This year’s theme is “ Gateway to Opportunity.” Keynote speaker will be Rich Pisani, who will address the topic “ Seeking New Business Opportuni ties." Mr. Pisani was named one of the nation’s top 25 young entre preneurs by Arthur Anderson & Co. Both Senator Bob Dole and Con gressman Richard Gephardt asked him to head their Midwest cam paigns for the presidency. He also teaches marketing at St. Louis Uni versity, heads his own franchising company and serves as a bank direc tor. Addressing the Drovers Banksponsored Recognition Breakfast will be Julius Hunter, St. Louis’s top TV news anchor. In addition to the annual golf tournament, other fine recreational activities are planned. On Saturday evening, attendees may travel to Fairmont Park for a night at the races, featuring a buffet dinner. Sun day night’s theme party is “ Show boat’s Coming," and the Adam ’s Mark ballroom will be decked out like the Old St. Louis riverfront and filled with the sounds of a jazz band. The Convention also features nine choices for educational breakout ses sions, an exhibit hall and tours for spouses. For more information, contact Sandra C. M cAvoy, Director of Education and Public Relations, T Community Bankers Association of Illinois, 300 West Edwards Street^ Springfield, IL 62704, 217/753-4331. The preliminary schedule is as follows: Friday, Sept. 16 4 A.M. 10:30 Golf tournament at Quail Creek Golf Club. 12:30 Tour of St. Louis Arch (spouses). 4 7:30 Welcome reception and din ner. Saturday, Sept. 17 A.M. breakfast" 9:00 O p e n i n g “ Seeing New Business Op portunities,” Rich Pisani. 10:30 T o u r of St. C h a rl e s (spouses). * 10:30 Breakout sessions. 11:45 Business meeting, luncheon. P.M. 1:30 Exhibits open. ^ 2:30 Breakout sessions. 6:15 “ A Night at the Races” with dinner at Fairmont Park (op tional). Sunday, Sept. 18 P.M. 1:00 Breakout sessions. 7:00 “ S t e a m b o a t ’ s C o m i n g ! ’ ’ theme party. Monday, Sept. 19 £ A.M. 9:00 Drovers Bank Breakfast and CBAI Recognition Pro gram, Julius Hunter, speaker. A 11:00 Adjournment. □ f 1st In A Series From American Express T TRAVELERS CHEQUI FACTS IN THE LAST FOUR YE ARS AMERICAN EXPRESS’ TRAVELERS CHEQUE SALES SKYROCKETED. VISA'SALES DECLINB). + $4 .6 BILLION From 1983 to 1987 American Express Travelers Cheque sales in the U.S. have increased dramatically— by more than $ 4 .6 billion. Visa-logo cheque sales, on the other hand, have declined by $188 m illion (Source: Visa annual reports). If you’re selling Visa-logo cheques and your sales haven’t lived up to your expectations, why not sell the Cheques that have unparalleled sales year after year. American Express Travelers Cheques. If you’d like more information on how to increase your sales, call Lou Eilerat 1-800-221-7282. o$ o$ U.S. Travelers Cheque Sales 1983-1987 VISA* TRAVELERS CHEQUES - $ 1 8 8 MILLION Visa-logo travelers cheques are actually issued by Citicorp, Barclays Bank and BankAmerica. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis © 1 9 8 8 American Express Travel Related Services Company, Inc. ® VISA Is a registered trademark of VISA U S A Inc. George Milligan H. Lynn Horak John Rigler Dick Pedersen Mark Conway Tom Quinlin John Cretzmeyer Jay Nichols Dorothea Wolfe will be there. And w e look forward to seeing you. W hy not stop by and pay us a visit while you’re in Des M oines. Our office is located at 7th and Walnut, downtown. Iowa Bankers Convention Septem ber 18-20,1988 Des M oines Convention Center T he national election is only w eeks away. W hat better time to gather at the Iowa Bankers Convention and discuss the changes that could affect our business in the future. A ll of us from Norwest Bank Des M oines Norw est B an k D es M oines, N .A . 7th & Walnut, D es M oines, Iowa 50304 (515)245-3131 Investm ents • Insurance • Banking « ill NORWEST BANKS « V ID E S M OINES © 1988 Norwest Banks https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member FDIC Norwest Bank Des Moines, N.A.