Robbery victim selling his Nebraska family bank

Northwestern Financial Review, Jan 1-Jan 14, 2005 by Dullum, Justin

Farmers State Bank, Maywood, Neb., has emerged victorious among six bidders vying for the Farmers State Bank in Big Springs, Neb. The banks incidentally share a name, but their histories stand separate. Notably, the Big Springs bank was the scene of a brutal robbery in 1965. Its president, Frank Kjeldgaard, survived an execution style shooting that killed three others at the bank, including his grandfather. All four were shot once in the neck and once in the back.

The shooting paralyzed Kjeldgaard's legs, yet he recovered and led the bank through the following decades. Community members who lived in town during the period remember the incident well, said Kjeldgaard. The crime and subsequent trial of the 22-year-old lone robber, Duane Pope, made national news and led a Supreme Court debate surrounding the death penalty. Pope is currently living out three life sentences in Oklahoma.

"It happened when I was 25," said Kjeldgaard. "I'm 65 now. I don't talk about it much and I'm not asked about it much. I stayed in the bank because that's what I knew how to do. That's what my family did. The bank stayed open because the community gave us support during an awful time."

Kjeldgaard has his eye on retirement. "No one in the family was coming along who wanted to be in the bank," he said. "Plus, it's getting harder and harder for a small bank to stand alone with compliance and so forth."

Kathy Thuman, president of Farmers State Bank, Maywood, said the Big Springs bank will remain independent for some time. Kjeldgaard will remain on as a consultant as he eases into retirement.

"The Big Springs bank primarily holds an ag portfolio," said Thuman. "I think they're under-loaned. They haven't been real aggressive. I don't pursue a real aggressive policy either, but I think there's an upside."

Thuman said she plans to diversify Big Spring's $22 million in assets. The two banks between them have $80 million in assets.

Montana bank expands grocery store presence

The Valley Bank of Ronan, Mont., is further propagating its strategy of expanding into familyowned grocery stores by opening a limited purpose office in Pablo Family Foods, Pablo, Mont. The branch will be the third of its kind for the $45 million bank, which has limited purpose grocery shops in Ronan and St. Ignatius.

"The Pablo store branch is more of a receiving office," said bank President Alien Buhr. "Our branches are situated along a resort corridor, and the kind of services offered by these locations are in demand."

The bank's decision to set up shop in family owned groceries is purposeful, said Buhr. The choice is half philosophical and half financial.

"One big issue is overhead," said Buhr. "Mainly, it has to do with a rent factor. It's $2,500 to $3,000 a month in big chains. That's prohibitive. The Pablo family store is happy to have you there. Some might think we're not making wise moves focusing on overhead. But it seems to work. We're growing."

Duluth bank opens in downtown Minneapolis

Park State Bank in Duluth, Minn., has opened a new branch in the Warehouse district of downtown Minneapolis. Park State President Dale Lewis said the Duluth market's growth potential is confined, and the move into the city marks a concerted effort to boost bank deposits.

"We looked at the Duluth summary of deposit report in June of'04, and if you compare that to 1994, there's been about $200 million in ten years - from $1 billion to $1.2 billion, which isn't great," said Lewis.

Lewis said the Duluth bank market hinges on stealing customers from other banks. "With a few new players in town, there's even more of that going on," she said. "The game is based on under-pricing, and I just can't afford it. More credit unions are coming in and the gap keeps closing."

Ryan Hebl has been chosen to head the branch effort. "Kathy and I took a walk in downtown Minneapolis to see if there was a location," said Hebl. "There are a ton of businesses down here that don't have a bank nearby. The financial district is blocks away and inconvenient for them."

The $29 million bank surveyed three hundred Minneapolis businesses and received a 30 percent response. "They said they want more one-on-one community banking," said Hebl.

"There are more businesses in that two-block radius than there is in all of downtown Duluth," said Lewis. "They are small, independent, creative businesses and professional offices. We're concerned about a lot of things they are, like historic conservation and independence."

The branch opened October 1. Hebl said the reception has been positive.

"We've gained a number of new commercial and consumer customers," said Hebl. "We're advertising on light rail and supporting Minnesota Public Radio. We've sent mailings. We're doing anything we can do to get our name out."