Category Archives: conference coverage

Kemp offers board advice at BHCA seminar

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A board of directors must set clear direction for the bank. That was part of the message industry consultant David Kemp delivered at the Spring Seminar of the Bank Holding Company Association on Tuesday, May 7, in Bloomington, Minn. About 300 people attended the two-day meeting. Kemp was one of five main-stage presenters delivering ideas and analysis to the bank owners, board members and bank managers in attendance.

Kemp reminded the group that the CEO works for the board, “thus the board has a responsibility to the CEO to provide formal and informal feedback on performance.” He asked board members to consider how effectively they manage the CEO. Many boards implement some form of a performance management system, designed to enhance CEO performance.

The success of such systems, he said, depends on the ability to measure results. Kemp suggested using quantitative measures such as a 1-5 numbering scale, on areas such as leadership, communications, and administrative and organizational. Each area should include sub-points. The communications area, for example, might include further review in areas such as community relations and negotiating skills. Each area should include written comments.

The board should also be prepared to evaluate its own performance, he said. Board evaluations should happen every three to five years, he said. Often, the most effective evaluations are conducted by an outside facilitator. Areas that should be evaluated include: Willingness to improve banking knowledge, business planning and budgeting skills, meeting preparation, and communication. Board members should rate themselves and their peers on the board. Composite scores should be calculated and shared.

Kemp is president of Bankers Management Inc., based in Atlanta. Look for coverage of the BHCA Spring Seminar in the June 1 edition of NorthWestern Financial Review.

Mortgage software worth the expense, eventually

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In 2006, Northwoods Bank of Minnesota purchased Mortgagebot, a web-based mortgage origination software, to streamline its documentation process and make applications available to customers on line. Roger Stewart, president of the Park Rapids, Minn.-based bank, took some time to share with me about mortgage software at the Independent Community Bankers of Minnesota’s TechXpo in Minneapolis on April 23.

Initially the $110 million bank obtained the software to compete with larger banks. “It’s not so much that Wells Fargo has a large physical presence in our area as much as what customers expect. Customers can easily apply for a mortgage on Wells Fargo’s website; to compete we wanted to offer the same,” Stewart said.

The bank also purchased the technology for its compliance benefits. The program structures the loan documentation process so that bank employees follow all the steps required by mortgage regulation.

Stewart estimates that it took about six years for the bank to gain efficiency from the product. “After a year, I would have said the purchase wasn’t worth it, but now I think we have seen an efficiency gain from it,” Stewart said.

It took time for the bank to see an efficiency because customers were slow to go online to make application. Now, about 40 percent of the bank’s mortgage applications come online. “But we still end up having to talk with customers for about 10 percent of the applications, because they have filled out the application incorrectly,” Stewart said.

 

Tips for mitigating impact of robbery

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Bankers should take time to invite the local sheriff or police officer to visit the bank, have a cup of coffee with them and show them around so they understand the normal occurrences at the bank.

That was advice from FBI Special Agent Brian Endrizal, who spoke at the Iowa Division of Banking’s Day with the Superintendent in Des Moines yesterday. Endrizal offered a number of tips for mitigating the impact of being robbed.

He said local law enforcement can be more effective in the event of a crime if they are familiar with the bank. Also if they are familiar with the normal activities surrounding the bank, they can do a better job surveying the bank premises and taking note of anything unusual.

Endrizal advised:

  • Have clear procedures for opening and closing the bank;
  • During openings and closings, make an effort to survey the inside and outside of the bank, looking for suspicious objects, people watching the bank, or the same vehicle driving by the bank a number of times;
  • The first person to arrive at the bank every morning should vary their routine; i.e., park in a different place, etc.,
  • Windows in the bank should be free from obstruction;
  • Cameras should be checked frequently; more cameras are better than fewer; digital is better than VHS; some cameras should be set at face height; place some cameras outside;
  • The most common disguise is a cap and sunglasses; take note should an unknown person with cap and glasses enter the bank;
  • Talk about bank robberies during staff meetings; have a plan about how they will be handled. “If you don’t have a plan, you will free,” Endrizal said.

Endrizal said staff should comply with a robber’s demands. “We don’t want heroes, we want survivors,” he said.

Look for more on bank robberies, and coverage of the Day with the Superintendent in the May 15 edition of NorthWestern Financial Review.

A primer on ag banking in Wisconsin

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Rose Oswald Poels shared a few agricultural facts about the state of Wisconsin at last week’s ABA ag bankers conference in Milwaukee. Poels is the president/CEO of the Wisconsin Bankers Association.

  • In the early 20th century Wisconsin produced about one-fifth of the beets in the United States. In the northern part of the state, farmers cultivated cranberries, while in the southern part a primary crop was tobacco. To some extent, tobacco is still grown today in Wisconsin.
  • Beet farmers turned to dairy cattle and growing feed crops. By 1915 Wisconsin had become the leading producer of dairy products in the nation and held that position for decades, which is why so many people refer to Wisconsin as America’s Dairy Land or the Dairy State.
  • The cheesehead is popular at Packer games. They were invented by a gentleman who lives in Milwaukee. They make more than 100,000 hats per year, sold in all 50 states and over 30 nations around the world.
  • Wisconsin ranks 11th in the nation for total net farm income. The state’s climate, natural resources, agribusiness and farm heritage keeps it one of the most diverse agricultural states in the country. Wisconsin agriculture contributes $59 billion annually to Wisconsin’s economy and $21.6 billion of that is generated by dairy alone. Ten percent of total employment or nearly 354,000 jobs are based in agriculture in Wisconsin. There were over $3 billion in farm loans outstanding at the end of the second quarter.
  • Wisconsin has 77,000 farms with a total of 15 million acres of farm land. There are over 3 million cattle and calves with just over 1 million cows in the state. These cows produce just over 26 billion pounds of milk per year, which accounts for over 13 percent of the milk in the entire United States. Each Wisconsin dairy cow generates more than $20,000 per year in economic activity.
  • Wisconsin ranks No. 1 in production of cheese. Wisconsin has the only master cheese maker program in the United States. While making any cheese in Wisconsin requires a license, making Limburger cheese requires a master cheese makers’ license. There are more than 350 varieties of cheese made in Wisconsin.
  • Wisconsin ag exports totaled $2.85 billion in 2011 and the state ranks 15th among all the states for the value of ag exports. The top five countries that were consumers of Wisconsin’s agricultural products were Canada, Mexico, South Korea, China and Japan.
  • Wisconsin has a long tradition of farming; it is a tradition still thriving today.  One of the reasons agriculture remains an integral part of Wisconsin is because of the state’s ag bankers.

U of M AD and author address bankers at UBB event

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United Bankers Bank of Bloomington, Minn., hosted University of Minnesota Men’s Athletics Director Norwood Teague last week at its Standard Bearer Grand Event. It was the 10th anniversary of the event UBB hosts to thank its customers/shareholders.

Teague opened the event conducted at the Westin Hotel in Edina, Minn., by saying “we need to invest in our athletic programs.” Speaking after breakfast, Teague said TCF Bank stadium is a great addition to the Twin Cities campus, but he said additional facilities need to be built, including a practice field and offices for coaches and staff. He cited new facilities at the University of Nebraska and the University of Iowa as examples of the competition the University of Minnesota faces when it recruits.

He also said the U of M needs a new practice facility for men’s basketball, saying the court in Williams Arena is difficult to use for practice because of its raised playing surface.

During a question-and-answer session after his presentation, the first question from the audience inquired about the University of Minnesota dropping the University of North Carolina from its football schedule in 2013 and 2014. The U of M paid an $800,000 fee to the University of North Carolina in order to drop the games. Teague said it was a difficult decision, but that he made it to accommodate a request by U of M Football Coach Jerry Kill. Teague explained no taxpayer money would be used to pay the fee, which is being paid over a few years. Teague said Kill asked to drop the games because Kill believes the pre-conference schedule, at this point, should be used for games that will build confidence among the Gophers. Teague said Kill believes the Gophers are improving, but the program is not advanced enough to take on a foe like North Carolina with confidence.

Closing the event with an after-lunch presentation was St. Paul author Vince Flynn. He shared stories about personal experiences with Presidents Clinton and George W Bush. Flynn is an internationally famous writer of spy thrillers.

For more meeting coverage, see the Nov. 15 edition of NorthWestern Financial Review.

BHCA bankers assemble for semi-annual meeting

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The Bank Holding Company Association hosted its 63rd seminar on October 4-5. On opening night, more than 125 bankers gathered to hear Col. Steve Russell, the U.S. Army infantry officer who led the capture of Saddam Hussein, give an account of the long search for the once-dictator of Iraq.

Here are some photos of opening night.

Russell encouraged bankers to stay the course amidst criticism. “Don’t heed the critics and the cynics who say you will fail,” he said. He also told bankers to take it day-by-day and carry on through adversity. “What if I had given up?” he asked. “What if it would have taken one more raid to find Saddam Hussein? For you, what if it only takes one more business decision to find success.”

Russell’s book, “We Got Him,” gives a full account of his search for Saddam.

On the second day of the seminar, industry leaders like FDIC Director Tom Hoenig, industry consultant Mike Woody and economist Lindsey Piegza spoke to bankers on issues they face day in and day out. Here is the local newspaper’s coverage of Hoenig’s comments.

You can find coverage of the meeting in the November 1 issue of Northwestern Financial Review magazine.

Bankers gathered in Des Moines for annual convention

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As usual, the Iowa Bankers Association hosted a tremendous convention, Monday and Tuesday in Des Moines. It was conducted at the newly-remodeled Veteran’s Memorial Auditorium, as the old downtown convention center is now closed. We will have convention coverage in our Oct. 15 edition of NorthWestern Financial Review.

The convention always closes with a luncheon honoring bankers who have served the industry for 50 years or more. This year, former IBA executive Neil Milner was included among those honored. He began his work in the banking industry in 1961 at the Ohio Bankers Association, before taking the executive’s job at the South Dakota Bankers Association, and then coming to the Iowa Bankers Association in 1972 and serving through 1996, when he left to head the Conference of State Bank Supervisors in Washington, D.C. He retired from that post last year. This year, he and his wife, J.C., are traveling around the country attending several state association meetings.

Neil noted that 4,836 people attended the IBA convention in 1962. Back then, the convention was free, although there was a fee for the annual agricultural breakfast and other accompanying events.

Milner said Comptroller of the Currency Jim Saxon spoke at the IBA convention 50 years ago. He explained that Saxon took bold steps to give national banks the ability to offer credit cards and to get into leasing. These were significant new powers for banks and in the coming years many larger banks dropped their state charter to get a national charter so they could get in on these new businesses.

By 1968, Milner said, he was working at the South Dakota Bankers Association and that state was rewriting its banking laws. When Milner reviewed one of the early drafts, he commented that there was nothing in the new rules to allow state banks to issue credit cards or do leasing. He said these were essential if the state charter was going to be competitive with the national charter. Milner said that a banker working on the rewrite told him at the time: “Neil, there will never be a bank in South Dakota issuing credit cards.”

Milner shared other interesting stories, but one that I liked in particular was one about the Iowa Bankers Association in the early 20th century setting up a radio communication system across the state. The “alert system” was set up to notify banks when a bank was robbed. Typically, the robbers struck several banks in succession so if they could get the word out after an initial robbery, other banks could prepare. Milner said that radio system eventually grew into either “state police radio or WHO; I have never been able to confirm which.”

Earlier at the convention, IBA honored three banks as winners in its Community Betterment Awards program. They are: First National Bank of Muscatine , Shelby County State Bank in Harlan, and State Bank & Trust in Nevada. Click here for a few photos posted of the award recipients. Accepting for First National are Charla Schafer and Bonnie Nichols; for Shelby County are Kevin Campbell and Janet Buman, and for State B&T are Steve McGill and Diane White. Also in each picture are presenters Tom Pohlman, Ames National Corp, and Joseph Steil, KSB Bank, Keokuk.

The making of a community banking advocate

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Terry Jorde of the Independent Community Bankers of America, and her husband Mike, participated in the 50th annual convention of the Independent Community Bankers of Minnesota, conducted last week in Alexandria, Minn. Terry addressed the bankers on Saturday morning, a day that happened to be Mike and Terry’s 33rd wedding anniversary. Before Terry got into the details of ICBA’s latest legislative efforts, she shared a little about her personal background and how she came to be such a passionate advocate for community banking. Following are excerpts of her story, in her own words:

Back in 1962, I was just a toddler living with my parents in Pennsylvania. We moved to Minneapolis when I was in grade school, and then my dad was transferred to Chicago when I was in high school. I had no plan to be a banker, let alone a community banker. My plan was to be a doctor. It wasn’t until my junior year at the University of Illinois when I decided I had had quite enough organic chemistry and calculus, and that I decided I was going to switch my major to finance. I don’t really know why I decided on finance, but I conjured up this plan that I was going to live on Chicago’s Lake Shore Drive, live in one of those high rise condominiums, and work at Continental Illinois because Continental had just been named one of the five best managed companies in the United States. That was just before they went on to become one of the biggest bailouts in U.S. history. I could see my name on my office door of my high rise, skyscraper bank building, clearly as I am looking at you today. That was my plan and I was pretty excited about it.

It might have gone that way had it not been for ladies night at the Rueb-N-Stein Bar in Northfield, Minn., where I met my husband-to-be at St. Olaf’s, which is where my best friend went to school. Of course, Mike waited until we were madly in love before he decided to tell me that his plan was to return home to North Dakota to take over the family potato farm.

I have to admit that I was a bit tentative about moving from the suburbs of Chicago to this farming town where the water tower reads: “You can do better in Cando.” Cando’s population was exactly half the size of my high school, and the nearest shopping mall was in Grand Forks, a two-hour drive away. I knew nothing about farming. I guess I had this vague notion that potatoes grew underground. I remember the first time Mike brought them home for dinner, I was just surprised how dirty they were. We go married 33 years ago today. It was in Minnesota and it was on a Saturday morning.

And I got a job at the local bank as a teller. I remember in those early days wondering what in the world I had gotten myself into. My starting wage was $3 per hour, which was just a little less than I had envisioned. And I prayed that my friends would not come and visit me because they were all working at these really big companies like AT&T and IBM. And I was just jealous of their big city life because I was sure they were achieving all of this success, and that there was no opportunity for me to find a good career out in this little town out in the sticks.

But it didn’t take me long to realize there were wonderful opportunities in this community that had adopted me – opportunities I never would have found on Chicago’s Lakeshore Drive. Because the fact is in rural communities like North Dakota and South Dakota and Minnesota, Iowa, and Montana, we not only have the opportunity to get involved, we have the obligation. It is up to us, we have no choice. We control our destiny. And as a result we are sometimes forced outside of our comfort zone and into a leadership role even before we think we are ready.

I learned this back in 1990 at the age of 32. I had been at the bank for 11 years. We were on the heels of an agricultural crisis. I was six months pregnant. And the president of our bank decided he was going to take a job at a larger bank in Fargo. So the board asked me to step in and serve as president and chief executive officer. It was a tremendous leap of faith for them. The change in top management triggered a surprise FDIC exam, just two weeks after I gave birth, eliminating any plan I might have had for a maternity leave. And there was no question about it; I was way outside my comfort zone… but what an opportunity to grow and learn, one that I never would have had at Continental Illinois.

And while all of this was happening, something else was also going on in my head. I was becoming very defensive of this little town that I had moved to. I was in awe of the perseverance of my board of directors who taught me there was nothing we couldn’t accomplish if we just got focused. None of my board members worked in the bank. They were farmers and electricians and small business owners, but they helped me to understand something that was already becoming very clear to me. My bank was critical to the survival of this town, that I now call home, and my bank depended upon the very existence and support of my community for its success. And in my science classes I remembered they called that a symbiotic relationship.

So as a young banker I became very passionate about community banking. And I decided that I needed to get involved. Back in the ag crisis, our industry was consolidating rapidly and I knew if we didn’t do something, it would be a great loss for towns like ours to lose their local bank. So I got active in my state association, ICBND, and I got active in my national association, the Independent Community Bankers of America. I had the opportunity to go before Congress on numerous occasions and testify to try to explain to them what the real world looks like from main street, not Wall Street.

For more coverage from the ICBM convention, watch for the Sept. 1 edition of NorthWestern Financial Review magazine.