An association for holding companies

Northwestern Financial Review, Sep 18, 1999 by Olmsted, Monte

Nation's only regional group for bank holding companies focuses on education; draws members from 12 states

Twice annual trips to the Twin Cities have left personal and professional impacts on Montana banker Bill Kearns, leader of a small, one-bank holding company in the Rocky Mountains.

Kearns knows that the out-of-state sojourns are for the good of his business because he learns more about bank issues meeting with peers and industry experts through the Minneapolis-based Bank Holding Company Association.

It's a brain trust he can't gain access to in a small town.

"It really helps me keep up on trends, and I love the contacts I meet as there are special needs for a bank holding company. Almost every year, there's someone I call for extra advice," said Kearns, chairman of SBT Financial Inc., the holding company for the $25 million The State Bank of Townsend.

With BHCA's help, Midwest bank directors, senior officers and owners such as Kearns get guidance and support on issues such as management succession, insurance, taxation and estate planning through its spring and fall seminars. The association's next seminar is slated for Oct. 7-8 in Bloomington, Minn.

The non-profit BHCA is a think tank for the top dogs of bank companies, where knowledge gets bandied about amongst its members. It's the only regional group that serves bank holding companies in the country, and the BHCA's leaders are glad and eager to get its message across.

"Education is what we really strive on. A lot of groups have conventions mixed with social events, but our focus is education," said Steve Kirchner, BHCA's current president, and leader of Richfield State Agency Inc., holding company for Minnesota's $543 million Richfield Bank.

Small-town bankers such as Kearns and Lorren Henke, president of the $38 million Wishek (N.D.) Bancorp. Inc. are typical members of BHCA. Roughly 75 percent of the 280 members are one-bank holding companies with fewer than $100 million in assets. Even so, banking giants such as Norwest, U.S. Bank, Firstar and Marquette also are members.

LiKe hearns, North Dakota's Henke said his company benefits from being a BHCA member. At one seminar, Henke said he learned the importance of planning the company's future and soon after, spoke with an estate tax attorney. He's also appreciative of the array of non-banking speakers such as politicians and economists who bring new perspectives on banking topics.

"We don't have all the answers internally," said Henke who leads Security State Bank. "So it's always good to get someone not really inside our business to bring their thoughts and say, `Hey, people in banking, here's the way we see you.' "

Speakers have included former U.S. House Rep. Tim Penny of Minnesota, bank consultant Bert Ely.and former FDIC head William Seidman. At the spring seminar in May, the group struck a major coup when Minnesota bankers Scott Jones, president of the American Bankers Association, and Bob Barsness, president of the Independent Community Banks of America, spoke together. It was the first time the two had shared a stage as leaders of their respective organizations. (Barsness, leader of Prior Lake State Bank, was the charter president of BHCA in 1981.)

When it comes to the seminars, it's the peer factor that ranks high on the list for BHCA member and immediate past president, Dan Klein, leader of Chaska, Minn.-based Klein Financial Inc., an $832 million eight-bank holding company. Klein said he always enjoys visiting with other bankers.

"It's an excellent opportunity to network with our peers," said Klein. "I have met and continue to meet great people. We share ideas, and I think we're a better organization because of it. It's one thing to share ideas, and it's another thing to implement them. A lot of members have implemented ideas that have turned out to be good things."

The BHCA is not only for bankers. Among its associate members is Eden Prairie, Minn.-based HTG Architects, a company that has completed more than 700 bank projects in the last 40 years. Jon Thorstenson, HTG president, said he joined to learn more about the banking industry. The business contacts followed.

"We have met some people who we've been able to develop friendships with, and that has developed into business contracts," Thorstenson said.

There's only one other known bank holding company organization in the country, and that is Washington-based The Financial Services Roundtable, formerly known as The Bankers Roundtable. That group serves as a lobbying arm for the largest 125 bank holding companies in the nation.

Also, the now-defunct Arkansas Association of Bank Holding Cos. in Little Rock was set up in the early 1980s, but dealt with the formation of holding companies, a new concept at the time, said a spokeswoman for the Arkansas Community Bankers Association.

Beginnings

The Bank Holding Company Association has changed dramatically from its 1980 origin, when the group started as a reaction to the bank branch movement in Minnesota. Known as the Bank Holding Company Association of Minnesota Inc., the group rallied the state's community bankers.