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Economic Development is . . . (increasing the flow) of capital through the community and reducing its leakage.

2010 EDIES Story 3 of 24: Iowa River Bancorp redirects $100 million Trust Fund to be managed locally

In order to form a foundation of economic development diversification, the Meskwaki Tribe acquired Pinnacle Bank.  In 2010, the Tribe moved the Sac & Fox Minors Trust Accounts to Pinnacle Bank’s new Trust Department.  Pinnacle currently manages an estimated $180 million in bank and trust assets. Meskwaki’s Economic Development Executive Director Larry Lasley and Pinnacle Bank’s President David Burrell explain.  Remind me – what are the EDIES.

HOW WE DID IT: A two-day strategic planning exercise in the spring of 2006 among tribal leaders and staff identified the need to diversify the Tribe’s business interests.  Research on bank ownership began in summer of ’06 which led to the hiring of consultants to address feasibility and regulatory atmosphere concerning a de novo bank.  Research findings were presented to the Meskwaki Community through public meetings and identified three goals: diversification of revenue streams, enhanced control over tribal finances, and the promotion of financial literacy.  Incredibly, Pinnacle Bank became available for purchase at an opportune time.

HOW WE GOT THE IDEA: We saw the need to diversify away from gaming as the market in Iowa became more saturated.  New forms of revenue have to be introduced to accommodate continued growth for the Meskwaki community.  Effective financial management, individually and collectively, becomes a necessity as economic conditions turn more challenging.

OUR GREATEST CHALLENGE: Our greatest challenge was proposing a de novo bank just as the commercial banking industry and Wall Street began to undergo tremendous stress.  This could compound the challenge of acquiring the tribal community’s support and also resulted in more restrictive bank regulatory environment.

HOW WE OVERCAME IT: By relying on the expertise of our consultants, we were able to provide very realistic analysis and recommendations to the community and they were supportive.  Our goals were challenging, but attainable.  The de novo opportunities pretty much closed with the banking meltdown, but then Pinnacle Bank became available for purchase.  The regulatory nature surrounding banks helped to assess the risks of acquiring Pinnacle Bank.

ADVICE TO OTHERS: With some good research, formal feasibility analysis, maybe a consultant, you can make good things happen in your community.  Be flexible, things don’t always go according to plan.  Don’t be afraid to think outside the box.

WHAT IS NEXT: Continue to grow the bank in our local, primary markets.  Remain a partner in future economic development efforts of the Meskwaki Nation and neighboring communities.  Promote financial literacy and skills of Meskwaki tribal members, young and old.  Provide trust and related financial management services to other communities in Indian Country.  For more information click www.bankpinnacle.us 

Economic Development Note: Congratulations Tama County Banks! A national independent review ranks 13 out of 14 Tama County’s Community Banks and Credit Union as 4 and 5 star based on their strong capital ratio.
Nationally only 59.7% banks stood recommended (56.8% in 2009)
State of Iowa 76% of banks stood recommended
Tama County 93% of banks stood recommended.

Source:
BauerFinancial Inc., Sept 30, 2010

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