NorthWesternFinancialReview.com Blog

Congratulations to Tom Olson, president of the Lisco State Bank in the Western Nebraska community of about 100 people, who will be honored with the American Banker’s Association’s Bruning Award at the annual North American Agricultural Lenders Conference Nov. 7-10 in Omaha.

The award recognizes a banker who who has made significant contributions to agricultural banking over the course of their career and lifetime. That certainly describes Olson, who began working in 1960 at the bank his father started. Today, Olson still works at that bank, in addition to other banks he operates in Nebraska and Colorado. If you drive by the bank in Lisco anytime between 6:30 in the morning and 7 at night, you are likely to catch him in the office.

We featured Tom Olson on the cover of NorthWestern Financial Review in 1987, when he became president of the Independent Community Bankers of America. He has long been active in the industry, always advocating for community banks, particularly those located in rural areas. Mr. Olson is very very wise and I always look forward to visiting with him whenever I go to one of the industry meetings in Nebraska. I am always impressed by bankers who remain engaged in the industry long after they could have retired. The industry needs experienced elders, and Mr. Olson is among a select group of bankers who is filling that role.

Dave Nelson, longtime Wells Fargo and Norwest executive, will leave his post as president of Wells Fargo, Rochester, Minn., to become chairman and CEO of West Bank, and president/CEO of West Bancorporation, Des Moines. The Des Moines Register has the story. Here is the bank’s announcement.

The Bank of North Dakota is getting a lot of attention, not just from the Associated Press, but from politicians in California, Florida, Michigan, New Mexico, Ohio, Oregon and Washington state who wonder whether state-owned banks might be good for their states.

While we’re on the subject of banks with unique ownership structures, Stan Dardis, longtime CEO of St. Paul-based Bremer Bank will retire next month. Here is a profile of Dardis and his successor Pat Donovan. A snippet from Dardis:

“We make our way not through Wall Street, but through Main Street. We do business in our local markets, not in Chicago or New York. Our business is to serve the local communities where we have banks. This approach has served us well during good times and bad.”

John Ruan, owner of Bankers Trust, the largest independent bank in Iowa, passed away yesterday. He was 96.

Mr. Ruan, one of the titans of Iowa business and civic circles, is best known for starting a trucking company, now called Ruan Transportation Systems. He was a major positive force for the city of Des Moines, and in 1990 started a foundation that assumed sponsorship of the World Food Prize.

The 36-story Ruan Center is a hallmark of the Des Moines skyline; Mr. Ruan also is responsible for the construction of the 14-story Two Ruan Center and the downtown Des Moines Marriott Hotel.

“In John Ruan’s day, they called them self-made men — individuals with guts, determination and an ability to anticipate marketplace trends. Today a man like Mr. Ruan would be called an entrepreneur, a visionary. His spirit did not come from seminars or books, but rather life experiences and a belief in himself and the people around him,” said Suku Radia, who met Mr. Ruan in 1975. Today, Radia is president and CEO of Bankers Trust, which has been in the Ruan family since 1964.

Here is the press release issued by Ruan Transportation Corp. Here is the story in the Des Moines Register.

Several reviews of On the Brink, the new book by former Treasury Secretary Henry Paulson, pick up on an anecdote about a dinner party where Chuck Prince, former Citigroup CEO, gave a glimpse not just of his anxiety about Citi’s investment activities but also of his bank’s dependence on government guidance. Prince is quoted as saying:

“Isn’t there something you can do to order us not to take all of these risks?”

We know it’s wrong but we just can’t stop. Don’t over-regulate us, but do save us from ourselves.

Eleven community bankers and one credit union official met with President Obama at the White House today. The delegation included four Midwestern bank leaders and one CEO with strong ties to Minnesota:

• James McPhee, chairman-elect of ICBA and CEO of Kalamazoo County State Bank in Schoolcraft, Mich.
• Mark Schroeder, President, German American Bancorp, Jasper, Ind.
• Deloris Sims, chairman and CEO, Legacy Bank, Milwaukee
• Matthew Gambs, CEO, Diamond Bancorp, Schaumburg, Ill.
• Dorothy Bridges, who left Minneapolis last year to become president and CEO of City First Bank, Washington, D.C.

In a release describing the meeting, ICBA gave some perspective on community banking’s role in a key White House priority: expanded lending to small business:

“while community banks with $1 billion in assets or less represent about 12 percent of all bank assets, they support 31 percent of all small business loans that are less than $1 million. “

ABA CEO Ed Yingling commended the meeting but commented on loan demand, an important variable in this discussion:

“As is typical during a recession, consumers and small businesses tend to save more and spend less.  In some regions of the country, loan demand is down considerably. However, lending is our business – it is what banks do, and we stand ready to make credit available to worthy borrowers.”

Beside the Midwestern bankers mentioned above, community bankers from New York, New Mexico, Arkansas, Connecticut and New Hampshire attended the meeting, as did an official from a credit union in Mississippi.

Beside a lousy economy and a sense (if not a certainty) that they’re suffering for the excesses of their most ruthless competitors, self-described “good” banks are facing plenty of consequent headwinds. Just a few, gleaned from magazine interviews over the last few months:

• Paying for strength: the financial crisis may have drawn customers to banks with lots of capital and liquidity, but those things are expensive to maintain. Will customers continue to pay for strength? Bankers and consultants note that it’s the weak banks that have to pay up on deposits–but good banks have to compete with the weak ones for funds–and it’s not easy to sell stability over basis points.
• Guiding perception: customers and employees may be aware that your nonperforming loans and charge offs are higher. Is it beneficial to compare your results to your competitors’? If your problem loans are higher now but still noticeably lower than what your competitors are reporting, do you highlight that information?
• Maintaining morale: can employees accept that “least bad” or “relatively good” are as good as it gets in some cases? Bankers say it’s an ongoing challenge to help employees understand why they should feel good about their banks, especially when employees perceive that they could make more money at bigger–albeit more troubled–banks. As one banker said: “you need to be happy making less money if you work for a good bank; it’s a lifestyle decision.”

Five of the 14 members of FDIC’s new advisory committee on community banking are from the NorthWestern Financial Review readership area. They include leaders from three community banks, one bankers’ bank and the Graduate School of Banking in Boulder, Colo. The committee is charged with advising FDIC on policy issues affecting “small community banks from around the nation.” The Midwestern members are:

• Craig M. Goodlock, chairman and CEO of Farmers State Bank, a $63-million bank based in Munith, Mich.
• Jack E. Hopkins, president and CEO of CorTrust Bank, N.A., a $542-million bank based in Mitchell, S.D.
• Timothy W. Koch, president of the Graduate School of Banking, Boulder
• Bruce A. Schriefer, president of Bankers’ Bank of Kansas, N.A., based in Wichita
• Matthew Williams, chairman and president, Gothenburg State Bank & Trust Company, a $106-million bank based in Gothenburg, Neb.

University of Wisconsin men’s basketball coach Bo Ryan was the closing speaker at the Community Bankers of Wisconsin annual convention in Madison last week. Ryan is very popular. How else can you explain more than 200,000 hits on this YouTube video? While most of the convention featured speakers addressing legislative issues, regulatory concerns and operational challenges, Ryan talked about leadership. He offered this 10-point outline for being a leader:

1) Build Self-esteem. “People need to feel they are part of something special,” he said. “Make every person on your team feel important.”  

2) Set demanding goals. “People have dreams, that’s a good thing. Focus on substance, not flash,” he advised.

3) Always be positive. “The more adversity you face, the more positive you need to be,” he said.

4) Establish good habits. “Practice smart; organize your day… do the unpleasant things first,” he said. Also, he said, do your homework and stay in good physical shape.

5) Master the art of communication. Accept the fact that you can’t win every discussion, but leaders motivate people to do things.

6) Learn from role models. “Learn from the experience of others,” he said. And, don’t confuse a role model with a celebrity. “A role model teaches you something on your journey to success.”

7) Thrive on pressure. “Pressure means opportunity,” he said. “Prepare for the moment, and stay positive under pressure.”

8 )  Be ferociously persistent. But don’t be obnoxious. “The pursuit of excellence is not a sprint but a marathon,” he said. “The harder you work, the tougher it is to surrender; the only time failure is bad is when you quit.”

9) Learn from adversity. “Don’t blame others, accept responsibility for your actions,” Ryan said. “Handle yourself with class and dignity.”

10) Survive success. “Don’t forget the work that it took to get you where you are and don’t forget those who helped you get there,” Ryan said.