Security State Bank, Alexandria, S.D., is vowing to rebuild its branch in nearby Spencer after much of the town was destroyed by a tornado last weekend.

Kevin M. Arend, president and chief executive officer of $44 million- asset Security, said all that remained of the $10 million-asset branch was its vault. Six of Spencer's 300 residents were killed, and about 150 were injured in the storm Saturday evening.

"The pictures don't do the damage justice," Mr. Arend said.

Security has ordered a temporary bank trailer to serve Spencer while residents rebuild, but it is not scheduled to arrive for two weeks.

In the meantime, calls to Security in Spencer are being forwarded to the branch manager's home, one of the few buildings in town left standing. Many Spencer residents are making the nine-mile trip to Security's Alexandria headquarters to do their banking - and to claim a $1,000 gift that the South Dakota Community Foundation has given to each resident.

Mr. Arend said bank executives had not yet discussed whether they would make low-interest loans or other assistance available to tornado victims.

The Federal Deposit Insurance Corp. said, however, that examiners would not criticize the bank if it alters or adjusts existing loans extended to those hit by the storm.

Saturday's tornado was not Security's first brush with disaster. Its Alexandria office was destroyed by fire in 1965.

"We rebuilt then and we'll rebuild now," said Mr. Arend.

***

A state trade group convention like Indiana's is not complete without an appearance by an officer of the American Bankers Association. This week it was ABA treasurer Harley D. Bergmeyer's turn to fire up the troops on bills pending in Congress, including legislation that would stop nonbanks from chartering thrifts.

"Unitary thrift holding companies scare the heck out of me," said the chairman, president, and chief executive of Saline State Bank, Wilber, Neb. Across the street from Mr. Bergmeyer's $53 million-asset bank is a State Farm insurance agency. State Farm has applied for a thrift charter.

"I can't bear to think of those folks going into banking," he said.

Mr. Bergmeyer also asked the bankers to lobby against legislation easing membership limits on credit unions. Mr. Bergmeyer said the 411-to-8 vote on the bill in the House proved Congress "is often wrong but never in doubt."

A $781 million-asset credit union for teachers in South Bend, Ind., is larger than 94% of the state's commercial banks and would have had to pay $1.8 million in 1997 taxes if it were not exempt, he said.

His final target was the Farm Credit System, which recently wooed a longtime Saline State customer with a 7.75% fixed-rate, 10-year loan. "That really hurts a small bank like mine," he said. "These people take business away from me all the time, and they do it with the blessing of the U.S. government."

- Barbara A. Rehm

***

Though he made the Forbes magazine list of most-underpaid chief executives, Donald R. Mengedoth, who heads Fargo, N.D.-based Community First Bancshares, said he doesn't have anything to complain about.

Mr. Mengedoth earned $3.1 million in 1997, putting him 11th on the annual list of the 15 most-underpaid executives. Forbes ranks the CEOs' salaries in proportion to their companies' total returns.

While Mr. Mengedoth's paycheck may not reflect Community First's 33% return, his investment in the company does: The markets pushed up the $5.3 billion-asset company's stock price by 90% during 1997.

"As a major shareholder, I'm happy with the stock valuation," he said.

- Laura Pavlenko Lutton

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