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How to Deal
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A B A Annual
Is in Hawaii
Iowa Bankers
to Hold 102nd

Annual Agricultural Outlook —Survey
Federal Reserve Bank of St. Louis

Merchants National Bank’s
Newest Correspondent
This new PC-based platform
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complete banking tool.
Promising greater productivity
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See for yourself. Just stop by
Booth 105 at the convention.
And MNB’s technical systems
staff will show you the future of
For more information about
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Vice P residen t,
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Technical Sy stem s
Sp ecialist

Jerry Trudo
Vice P residen t,
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At The 102nd Annual
IBA Convention,
Des Moines.
September 18 - 20.
Booth 105.
Federal Reserve Bank of St. Louis

Merchants National Bank

is i


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Find out why
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turn to
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Lincoln, Nebraska and
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Federal Reserve Bank of St. Louis


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'First Bankers Securities
Federal Reserve Bank of St. Louis

200 Brick & Tile Building • Mason City, Iowa 50401
Toll Free - (800) 952-7899 • In Iowa - (800) 325-3030




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SEPTEMBER 1988 • 95th year • No. 1500





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.



Annual agricultural outlook





o rthw ester n



survey reports current conditions

The Minnesota drought picture

Minnesota Bankers Association study is released


Farm over-production

Noted editor Lauren Soth tells how to deal with it


Kiss deposit premiums goodbye

Dr. Doug Austin offers his solution on the FSLIC






102nd Annual Convention Program
Interview with Clair Lensing
You Will See Them at the Convention
Group Chairmen Report Area Conditions
Des Moines News


Twin Cities
South Dakota


North Dakota


Index of Advertisers

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.
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

Boatmen’s Bank Will Merge
7 in Kansas City Area

ABA annual convention

Honolulu is site for October 8-12 meeting


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
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

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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
 check more rates and returns,
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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.



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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.






Federal Reserve Bank of St. Louis



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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



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
Oct. 10-14—BAI Introductory Bank EDP
Auditing, Chicago, III.

C a n ’ t Pia


In s u r a r r^ e ?
Insure Your
at the B<


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

Sept. 15-18—Independent Bankers of Colo­
rado Annual Convention, Beaver Creek at
Vail, Avon.

Sept. 16-19 —Independent Community
Banks in Illinois Annual Convention and
Exposition, Adams Mark Hotel, St. Louis,


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
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.



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

Call (800) 821-5434
in Missouri (800) 892-5890

IA C Group, bank insurance
specialists since 1952.

Northwestern Banker, September, 1988
Federal Reserve Bank of St. Louis


Oct. 2-7— MBA Commercial Lending
School, Radisson Arrowwood, Alexan­

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.

3178 Republic Blvd., N. • Toledo, Ohio 43615 • 419/841-8521
Toledo • Chicago • Indianapolis • Springfield • Richmond • Des Moines

TO Y O U ?
(In Thousands)


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
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.



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 !

«I Inc.

B U SD m n sc

 A subsidiary of the
Federal Reserve Bank of St. Louis


Phone (



□ 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:



Paper Focuses on Managing
Allowance for Loan Losses



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

Your Correspondent Banking Bridge
c 1988 LaSalle National Bank
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



“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!

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
Federal Reserve Bank of St. Louis



William J. Beohm, President


Names synonymous with correspondent
banking at Drovers. Almost 150 years
combined experience.

Frank Bauder

Joseph M igely


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

Call toll free 1 - S0 0 - 621 - S9 91
In Illinois 1-SOO-572 - 249 S
^ m

Cole Taylor Bank/Drovers

4 7th and Ashland Avenue
TAYLOR Chicago, Illinois 6 0 60 9
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
Federal Reserve Bank of St. Louis

Conferences and




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®
• 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.


• 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
• 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.



l h e r e 1S no

Establishing build­

more critical

ing budgets. Growth


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



other factors is the

Without it, you build

rock solid founda-


on sand. Bank Build-


understand your uni- I

system ,

41111 que facilities requirements bet­
ter than any other organization

we have
Federal Reserve Bank of St. Louis

D evelop-


H ssSISIhi



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-



cial banking division since 1987,
which includes metropolitan and na­
tional business development depart­
ments, commercial lending, interna-


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.

b a n k in g

4333 Edgewood Rd. N.E.
P.O. BOX 1847
Cedar Rapids, Iowa 52406
A Banks o f Iowa subsidiary

Northwestern Banker, September, 1988
Federal Reserve Bank of St. Louis



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
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
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.”


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
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Northwestern Banker, September, 1988
Federal Reserve Bank of St. Louis

For More Information
For registration/housing questions, call:

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Agricultural Bankers Division



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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
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.






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?


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
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
Most of the farmers are satisfied with their crops. The
higher prices will compensate for the lower yields. One of
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.
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.
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

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
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.
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?



• Richard Krogh, vice president, The First National Bank,
• Curtis Johnson, vice president, State Bank of Hawley, Hawley.
• Kevin Jensen, president, The State Bank of Springfield,
• Christopher Skaalen, assistant vice president, Harmony State
Bank, Harmony.



S.D .




' Harmony's


Charles City



Webster City


• S. F. Herr, president, Citizens Bank, Chatsworth.
• Gene Rich, president, Illinois Trust & Savings Bank, Ottawa.
• Wayne Billingsley, vice president, Farmers & Mechanics Bank,


• Mike Fogle, vice president, M &I Bank, Beloit.
• John Syndergaard, senior vice president, Valley Bank of
Shawano, Shawano.

South Dakota


Ag Survey Participants


HE following bankers took part in this

special agricultural bank survey conducted
by the N orthwestern B an ker :

• Dick Stull, president, The Bridgeport State Bank, Bridgeport.
• Thomas D. Bass, president, Bank of Swanton, Swanton.
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,
• Dwight Hossle, vice president, Faulk County State Bank,

• 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.


“ 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.
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.



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
how can they expect to become stronger financially
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.
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
Mr. Plagge: Just starting to feel it from FLBA in rate
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


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.
Mr. Johnson: Most are trying to improve their finan­
cial position.
Mr. Rich: Loan volume has remained about equal to
prior years even though our customer base has increased.
Some machinery was purchased this spring.
Mr. Fogle: Profitability remains largely dependent
(Turn to page 30, please)
Northwestern Banker, September, 1988


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.





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
• 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
"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



1g r a i n )

1s i l a g e l

Average Yields
and Major Crop













19 .3

19 . 2












57 . 9



54 . 2

56 . 0

34 . 6









35 . 1






36 . 2








34 . 2

17 . 3







25 . 1



47 . 1


Northwestern Banker, September, 1988
Federal Reserve Bank of St. Louis


How to deal with
farm over-production

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.


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
controls simply don’t work. In principle,
for farm
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
We have fostered over-production while depleting
(Turn to page 30, please)
Northwestern Banker, September, 1988



Kissing your
deposit premiums

Special Reading for
Directors, M anagem ent

Written especially for
T he N orth w estern B an k er

President and CEO
Austin Associates
Toledo, Ohio
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.


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
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


• “ 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
approximately $20 billion in the hole by the end of 1988.
^ Consequently, the FDIC is safe and solvent, and the
FSLIC is not.






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
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.


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
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
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
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
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
(Turn to page 32, please)
Northwestern Banker, September, 1988



Exec. V.P.


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.


Northwestern Banker, September, 1988
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
An array of the newest banking supplies and ser­
vices will be on display at the exhibits center at the^



Hilton Hawaiian Village. Also located there will be the
activity center, complete with native food, crafts and
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

2:00 Banking industry sessions, Hilton Hawaiian
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.

12:00 Registration desk open (until 9:00 p.m.).
Saturday, October 8
8:30 Grand opening ceremony, Hilton Hawaiian
9:00 Exhibits open.
10:30 Banking industry sessions, presented by
leading consultants.
Meet the Regulators—Federal Reserve Board.
2:30 Banking industry sessions.
Meet the Regulators—FDIC and Office of the
Comptroller of the Currency.
Sunday, October 9
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.
6:00 ABA Reception, Sheraton Waikiki.
Monday, October 10
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



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.
Federal Reserve Bank of St. Louis

2:00 Banking industry sessions, Hilton Hawaiian
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
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
The following three bankers from
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
Mary Ziegler Suess, United Bank
of Broomfield, Broomfield, Colo. —
A Marketing Plan for the School
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
Northwestern Banker, September, 1988

(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


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.
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.


Little im p act


No im p act


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


M o d e ra te ly low er


A b o u t the sa m e


S e ve re ly low er


D o n ’t know


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% ,

So. Dakota:

80% , 1%

50% , 3 5 %

No. Dakota:

10% , 1 % , 6%



10% , 10% , 7 5 %


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


M a ch in e ry p u rch a se


O th e r


D o n ’t know



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. □

(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
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
Federal Reserve Bank of St. Louis

Your Partner in Correspondent Banking
Cash Letters
Portfolio Analysis
Asset Sales

To learn more about what we can do for you,
call Dennis “Skip” Duffy at 312-732-4101


The First National Bank of Chicago
Federal Reserve Bank of St. Louis

(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
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. ■









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
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 .

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
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
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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.


T itle____________________________________________________


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
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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.
Federal Reserve Bank of St. Louis


Financial Institution___________________________________


Citv____________________________________ State___________ Zip________________






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


O k la h o m a City, O K 7 3 1 1 8

porations. This plan is contingent
upon tax, regulatory, legal and other
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
* * *

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
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
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.
(Turn to page 94, please)


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
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




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.


Appointed in Chaska


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.




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
Federal Reserve Bank of St. Louis


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



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




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
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.
Federal Reserve Bank of St. Louis

Marquette Bank

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


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
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
Jim Russell
Vice President & Manager
Correspondent Banking

Your Correspondent Parmer


Northwestern Banker, September, 1988
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 .
comes to FBS
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















dent and director of information
* * *
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
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
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
* * *
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
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
Federal Reserve Bank of St. Louis


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
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
chase an 88 percent interest in Cen­
tral Bancorporation, Inc., a DenverBank, he was
based bank holding company with
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 Bank Minnesota, N.A.

Northwestern Banker, September, 1988


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.



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
* * *
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.


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
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
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
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
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.











Mr. Whitcomb succeeds William
Wilkening, who has left the com­
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
Federal Reserve Bank of St. Louis



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.



(Turn to page 55, please)









Norwest Changes Told
Norwest Bank South Dakota,
N.A., has announced various staff
changes at its
D o n a ld
Hooper has been
elected senior
vice president,
banking mana­
ger for the Sioux
Falls branch. He
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
Federal Reserve Bank of St. Louis


(Turn to page 56, please)
Northwestern Banker, September, 1988


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
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
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
Mrs. Jurgens retired from bank­
ing on June 30.

Northwestern Banker, September, 1988
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






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

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
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.”







*• .

r - 'i '



:r -



k 'W


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
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

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

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.


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
M aryland
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,


unless the crook, known at the time as


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
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.
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.
Federal Reserve Bank of St. Louis

The Lobby:
Where the Revolution
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
Federal Reserve Bank of St. Louis

(continued on next page)


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

u New space has been added

lo r other departments such as new
accounts and financial investment.

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


much a part o f the landscape today as


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,


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
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


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.
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.


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

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

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.
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)

10 for FRASER
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.
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.


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
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
Federal Reserve Bank of St. Louis

Bank Building Corporation * 3630 South Geyer Road • St. Louis, MO 63127 • 1-800-325-9573


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
* * *

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,
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

(Continued from page 40)


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

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

Norwest Bank Great Falls, N.A.

Northwestern Banker, September, 1988

(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



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
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.


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

CNB Reports Income

The three FBS managers moving
to Denver are David A. Baumgarten, Douglas E. Aden and John R.
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
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
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.
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

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N B A Holds S ix Area M eetings

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
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









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.
Federal Reserve Bank of St. Louis

Northwestern Banker, September, 1988


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Outside Nebraska: 800-228-9175

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Federal Reserve Bank of St. Louis


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
Mr. Nissen reported that the

Northwestern Banker, September, 1988
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
Other bankers serving on the
committee are:
• NBA President Harley Berg­
meyer, president, Saline State Bank,
• 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








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)

ordination of the construction of the
new branch building in Omaha. He
is currently in charge of the person­
nel and financial control depart­
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


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

To Buy on Sell


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inve stm en t se rvice for N ebraska
banks. Please call us for bond offer­
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* * *
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







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Underwriters, Inc.
Investment Bankers • Underwriters
208 South 19th Street, Omaha, Nebraska 68102
(402) 341-1144

In Nebraska Call Toll Free (800) 642-4413


Northwestem Banker, September, 1988


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
Bank of Omaha, an­
N ation al C or­
month that it has
poration. Active
agreement to pur­
in banking in the
Columbus Ban­
O m aha
of First
since 1956, Mr.
Schmid founded
of Columbus.
O m aha S ta te
The purchase price will be ap­
Bank. He served
$22,000,000, making
as its president
acquisition ever of a
and chairman of
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
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.


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
Ms. McElhose joined the bank in

Northwestern Banker, September, 1988
Federal Reserve Bank of St. Louis

1981 and previously was an under­
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
* * *
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.

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
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.














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Federal Reserve Bank of St. Louis

Member FDIC, Federal Reserve System


O p t im is m

“ The Winning Combination

P eople
Iowa Bankers Association 102nd Annual Convention
Des Moines Convention Center
September 1 8 -2 0


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
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


Iowa News


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

Sunday, September 18

Registration desk open.
IBA and IBIS Annual Meetings.
“ Court Avenue Experience.”
“ A Very Special Evening,” Civic Center.

Monday, September 9
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.
1:30 Concurrent sessions:
“ Becoming a Better Bank Spokesperson” —
Thomas Faranda.
“ Theories of Investment Portfolio Manage­
ment” —Steve Porter, Jim Wolfe and Chuck
“ 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
7:00 Ag Breakfast with Clayton Yeutter.
9:00 Concurrent sessions:

Northwestern Banker, September, 1989
Federal Reserve Bank of St. Louis




“ Your Board of Directors and the Credit
Review Process” —Douglas Austin and Mike •
“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.
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
9:00 General session and Crafters’ Gallery opens.
10:45 Workshops:
“ W hat’s Out There for M e?”
Victorian Christmas.

12:15 Younkers luncheon and fashion show.
2:00 Workshops:
Pre-Death Financial Planning.
Creative Twist Doll.

Tuesday, September 20
8:45 Sherman Hill Tour.
9:00 Workshops:
Eating Healthy.
Ink and Scrub (craft).
11:30 Kate Hasten Luncheon.

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

/V t/E IN P O R T B A IN K
-------------------A IMO TRUST COMPANY------------------MEMBER FDIC

Federal Reserve Bank of St. Louis


Iowa News

A Northwestern B anker interview with
Iowa Bankers Association
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
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.’


Northwestern Banker, September, 1988
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
possible more than annually.
Federal Reserve Bank of St. Louis


“ 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
“ 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
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


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
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


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
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.
Cole Taylor Bank/Drovers: Frank
Bauder, chairman; Max A. Roy,
senior vice president; Betty Bauder,
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.
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
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
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.
American Trust & Savings Bank:
Nicholas J. Schrup, chairman;
William D. McGeehan, president;
Leo F. Kane, executive vice presi­
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
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.









Minneapolis/St. Paul
American National Bank: James ®
A. Russell, vice president; Gregory
A. Larson, correspondent bank offi­
First Bank, N.A., Minneapolis: q
Correspondent Banking—Kenneth

IBA Convention Event Sponsors
Midwest Marketing Consultants, Inc.: President’s Dance (par­
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.

Q uality

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 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". . .

Federal Reserve Bank of St. Louis

"The quality and service
provided by Kirk Gross
Company Is unsurpassed'. . .


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.,
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
ficer. Judy DeGroote, vice presi­
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.
dent banking; Tim Smith, corres­
Crest Microfilm, Cedar Rapids, ^
pondent banking officer; Scott
ABA Laser Pro, Des Moines:
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;
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.
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
O’Neal, Norwest’s
C laude D aw son , sen ior v ice
specialized services. When it comes to
correspondent banking, he’s got you
Banker for Northern Nebraska and
presidents; Dave Akehurst and Sue
Southwest Iowa. Sam’s extensive
Andersen, vice presidents; Evan
background in A g lending makes him a
Branson, director, commercial pro­
good person to know for correspondent
ducts; Scott Mitchell, director,
banking needs. And he wants to do
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
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.
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

Iowa News







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
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.


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.
Iowa Department of Economic
MidAmerica Management Corp.,
Development, Des Moines: Lisa
Cedar Rapids, la.: Michael ScherrLyle.
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.
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.
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
Federal Reserve Bank of St. Louis

Member FDIC


Northwestern Banker, September, 1988


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,
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
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
P eop les Bank
and Trust Com­
pany of W a­
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
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
Northwestern Banker, September, 1988
Federal Reserve Bank of St. Louis

jobs by making qualified SB A
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

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
se v e ra l
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
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.

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Correspondent Banks
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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
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Vice President

Sr Vice President


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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
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Vice President

Mike Coppess,
Vice President

Eileen Thompson
Assistant Vice

Erling Schmiesing

Wm. J. Rickert

James Freet

Dennis Thoren

Leroy C. Bell

Robert Cook

Charles E. Yagla

Executive Vice

Sr. Vice President

Sr Vice President

Assistant Director

Assistant Vice

Assistant Vice

Data Processing

The National Bank

100 East Park
Federal Reserve Bank of St. Louis


P eoples Savings Bank

Waterloo, IA 50703 ■(319) 291-5200
FDIC Insured up to $100,000
Subsidiary of Iowa National Bankshares Corp



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


Committed to
making your
bank stand
apart from the
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





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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

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
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


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Member FDIC • Sioux City • A 'BANKS OF IOWA' BANK • (712) 277-1500
Federal Reserve Bank of St. Louis



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
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

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Northwestern Banker, September, 1988
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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
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

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Iowa News

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Northwestern Banker, September, 1988
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.
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
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
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
Land prices in Northwest Iowa are


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.

Austin P. Lawler & Associates, Inc.

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


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
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
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
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
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
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
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

Added in W aterloo


R.E. Lauterbach, president of
Peoples Bank and Trust, Waterloo,
r e c e n tly
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
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.

John, Pat,

Left to right:
Bill Brockway,
Assistant Vice
Marena Lare,
Operations Assistant;
John Schricker,
First Vice President
and Pat Bear,
Assistant Vice

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.

-------------------AND TRUST COMPANY------------------
Federal Reserve Bank of St. Louis




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
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
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

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
ConAgra Flour
M illin g
C om pany
•Omaha. Prior to
that, he was a
commercial pro­
perty manager
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
Federal Reserve Bank of St. Louis

Pacific National




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
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
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

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
The school addresses basic skill
development for teller trainers, and
focuses on four key areas: guidelines


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


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
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
* * *
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
se n io r
auditor. He is a
graduate of the
U n iv e rs ity o f
Northern Iowa
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
Federal Reserve Bank of St. Louis
Federal Reserve Bank of St. Louis


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
N o rw e s t
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
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
Federal Reserve Bank of St. Louis

The current head of the division to
whom Dorothea reports is John P.
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
“ 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-

^ 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
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
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
• 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
• 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-

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.

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

(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
Federal Reserve Bank of St. Louis

(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.
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
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
For more information, contact
Sandra C. M cAvoy, Director of
Education and Public Relations,


Community Bankers Association of
Illinois, 300 West Edwards Street^
Springfield, IL 62704, 217/753-4331.
The preliminary schedule is as
Friday, Sept. 16
10:30 Golf tournament at Quail
Creek Golf Club.
12:30 Tour of St. Louis Arch
7:30 Welcome reception and din­
Saturday, Sept. 17
9:00 O p e n i n g
“ Seeing New Business Op­
portunities,” Rich Pisani.
10:30 T o u r
C h a rl e s
10:30 Breakout sessions.
11:45 Business meeting, luncheon.
1:30 Exhibits open.
2:30 Breakout sessions.
6:15 “ A Night at the Races” with
dinner at Fairmont Park (op­
Sunday, Sept. 18
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
9:00 Drovers Bank Breakfast
and CBAI Recognition Pro­
gram, Julius Hunter,
11:00 Adjournment.

f 1st In A Series From American Express T


+ $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
If you’d like more information on how
to increase your sales, call Lou Eilerat



U.S. Travelers Cheque Sales 1983-1987

- $ 1 8 8 MILLION
Visa-logo travelers cheques are actually issued by Citicorp, Barclays Bank and BankAmerica.
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

Investm ents • Insurance • Banking

© 1988 Norwest Banks
Federal Reserve Bank of St. Louis

Member FDIC

Norwest Bank Des Moines, N.A.