Notes, news and views on community banking

Northwestern Financial Review, Feb 15-Feb 28, 2007

Momentum on ILC issue

Bankers and association executives from 28 states flew to Washington, D.C., to visit with members of Congress the day after President Bush delivered the State of the Union address on Jan. 23. The visits were coordinated by the American Bankers Association.

George Beattie, president/CEO of the Nebraska Bankers Association, participated with Matt Williams, president/CEO of Gothenburg State Bank & Trust Co. Beattie commented that Congress has so many issues on its plate that it is not likely to get to many banking issues in 2007, "other than ILCs." Beattie said there seems to be a lot of interest among members of Congress to address the industrial loan company charter so it is not further used to breach the separation of banking and commerce.

"There is a lot of interest from the Nebraska delegation, and I have heard from others as well," Beattie said. "There is bi-partisan support for this. They want the FDIC to bifurcate the moratorium - move forward with what they need to but leave Wal-Mart and Home Depot behind until they can get a sense for what Congress wants. There is a push to get a 'Dear Colleague' letter signed and to get cosponsors on a bill."

Two Bloomington, Minn., banks report strong profits

After opening on Nov. 2, 2005, Bridgewater Bank of Bloomington, Minn., is reporting pre-tax net income of $1.4 million for 2006. As of Dec. 31, 2006, the bank had assets of more than $165 million on $158 million in loans and $151 million in deposits. During 2006, the bank posted more than $220 million in new loan originations.

First Commercial Bank, another new Bloomington bank, is reporting nearly twice the annual income for 2006 than it reported in 2005. First Commercial Bank was founded in 1999.

"The growth and operating results for our first full calendar year in business were well ahead of plan" said Jerry Baack, president and CEO of Bridgewater Bank. "The bank continues to receive strong support from its existing customers and has generated many new relationships from clients who are intrigued by our successes and business banking model. New referrals from existing customers and shareholders coupled with our ability to attract former clients will continue to drive our growth."

Rachael Petersen, the bank's chief financial officer added, "We set our original three-year asset projections at $77 million based on the record of other new banks in the area. We exceeded those projections by the end of six months and have since revised our projections to better match our growth rate and future expectations."

On Nov. 1, 2006, the bank added a second location - a 5,600-square-foot facility located on Highway 7 in Greenwood, Minn., close to Lake Minnetonka.

"We chose Greenwood for our second branch because of the area's rich entrepreneurial personality and the need for a bank that understands the commitment, enthusiasm, vision and challenges entrepreneurs face to build and grow a business. Greenwood provided the perfect opportunity to tap into this market" Baack commented.

First Commercial Bank reported net income of $3.66 million for 2006, an increase of 96.90 percent from the $1.859 million earned in 2005. Return on average equity for the four quarters of 2006 was 30.33 percent.

Net interest income for 2006 was $6.114 million, an increase of $2.481 million or 146.45 percent from the results reported for 2005.

"Our success is attributed to the fundamental value we place on client relationships. We have built a team of dedicated, talented employees who serve a dynamic and loyal client base," said CEO Brad Meier. "The company continues to perform extremely well in terms of return on equity to our shareholders, return on assets, and net income, while consistently delivering a superior product to the market. First Commercial Bank continues to exceed projections while comparing quite favorably within the industry."

Four Midwest banks among top five ag lenders

First Dakota National Bank, Yankton, S.D., is ranked as the fourth-largest community ag bank with the largest farm loan portfolios in the United States.

"This is a terrific honor to be ranked in the top five and be recognized as a leader in farm loans," said Denny Everson, president of First Dakota's Agri-Business Division.

First Dakota has seen a 16.6 percent increase in loans from previous years to help them reach this fourth place ranking. Other banks listed in the top five were: First Financial Bank, Ark.; New Frontier Bank, Greeely, Colo.; United Bank, Ida Grove, Iowa; and Investors Community Bank, Manitowoc, Wis. The list was reported in the American Banker newspaper on Jan. 3.

First Dakota National Bank has assets exceeding $650 million and more than 230 employees working in 12 offices.

Extras...

* The Independent Community Bankers of Minnesota are gearing up for their next TechXpo, set for May 15-16 at the Saint Paul Rivercentre.

* William Hartman, CEO of Citizens Republic Bancorp of Flint, Mich., and Randy Petereon, the company's Green Bay-based regional chairman of Wisconsin and Iowa, rang the opening bell at the Nasdaq Stock Market in New York on Jan. 24.