Iowan Charles E. Walsh thinks bigger isn't always better, and wants his state to opt out of interstate branching to prove it. The president of $152 million-asset Farmers and Merchants Bank and Trust, Burlington, Iowa, said that opting out of the branching component of the Riegle-Neal Interstate Banking and Branching Act would give Iowa's community banks more time to study how the change would affect them and the state's economy. About 85% of the state's 515 banks are state chartered, according to the Iowa bank commissioner's office. Only one bank company in the state - Norwest Corp. - has more than $5 billion of total assets. Mr. Walsh, who ends his one-year term as president of the Iowa Independent Bankers Association this weekend, stresses that his views do not reflect those of the trade group, which has not taken a position on interstate branching. The banker, who has been at Farmers and Merchants for 25 years, discussed Iowa community banking with American Banker before heading to Lake Okoboji, Iowa, where the association is holding its annual meeting this week.

Q.: What concerns you most about community banking in Iowa?

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