Retiring banker says next crisis not matter of if, but when

IOWA CITY — Richard “Dick” Summerwill believes it’s not a matter of if, but when the next banking crisis will occur.

“You say to yourself ‘Do you think that Congress stopped the fact that we’re going to have one banking crisis after another?’ If you take history as a judge, you will say ‘Absolutely not,’” said Summerwill, 74, who will retire April 21 as chairman of MidWestOne Financial Group and MidWestOne Bank.

“I didn’t learn anything specifically from this banking crisis except that we’re going to have another one sometime and you had better prepare for that one. You keep doing what you’ve done successfully for a long time.

“You don’t get greedy and you don’t follow the herd when they run over the cliff. You also need to mix a little integrity with common sense and you will stay out of trouble.”

Summerwill said he’s not upset about Congress passing new federal regulations in response to the most recent banking crisis.

“What I’m really irritated with is that we didn’t have the good sense as bankers to do what we should have been doing all along, so someone had to regulate us,” he said. “We were unable to regulate ourselves, which is typical of any industry.

“Banking is, by and large, going back to basics and that’s going to help banks like MidWestOne. We collect deposits and make loans and investments, which is good for the community, the state and the nation.”

The “dean” of Iowa City bankers joined the former Iowa State Bank and Trust Co. in 1963 and served in various executive positions before becoming president and chief executive officer in 1984. Summerwill, a third generation banker, guided the bank through the dark days of the Iowa farm crisis before becoming chairman in 2000.

Summerwill has vivid memories of Dec. 5, 1985, when fellow banker John Hughes, 46, president of Hills Bank and Trust, was fatally shot by Dale Burr, 63, a farmer distraught over debt he owed the bank.

“It was just awful,” Summerwill’s recalled with a change of demeanor. “I was leaving the bank at noon that day to get lunch. A police officer virtually tackled me and asked where I thought I was going. When I said that I was going out to get lunch, he said ‘No you’re not. A farmer who shot a banker in Hills is still at large and we think he may be looking for more bankers.’

“I decided that I really didn’t need to go to lunch that day.”

In March 2008, Iowa State Bank & Trust and its corporate parent, ISB Financial, merged with MidwestOne Financial Group of Oskaloosa in a “merger of equals.” Summerwill, asked why the organization took the MidWestOne name, said it was done to avoid potential conflicts with other Iowa financial institutions.

“We had nine Iowa State Banks in the state that we were going to overlap with the merger, so we absolutely could not take Iowa State Bank as our name,” Summerwill said. “It was an easy ‘give up’ on our part, although I have to say personally it was a strain on my heart, but it was an easy decision when you looked at all the factors. We’re going to keep growing along the St. Louis-St. Paul corridor and that growth would cause problems with the name.”

Summerwill has deep roots in Iowa City’s banking history. His grandfather, Ben Summerwill Sr., helped organize Iowa State Bank and Trust in 1934 after he had closed its predecessor and eight other failed Eastern Iowa banks as an employee of the Iowa Division of Banking.

The former South Dakota cattle rancher and Odebolt native lost his business in the Great Depression and returned to Iowa as a bank liquidator. He served as president of Iowa State Bank until 1953 when he became chairman of the board.

Like his grandfather and father (Ben E. Summerwill) before him, Richard Summerwill has been active in civic affairs. He has served as chairman of the Iowa City Area Development Group and witnessed the development of the Cedar Rapids-Iowa City Technology Corridor.

“We have worked so much more closely together because frankly we need the jobs and industrial base of Cedar Rapids and they need our university and intellectual base to draw companies to the area,” Summerwill said. “It’s really a natural fit for both sides. We need to take advantage of that more fully and keep it going.

“We have a good start on being a ‘City of Literature,’ one of only four in the world. That would be a real natural for this area.

“The other real natural would be something to do with physics. A James Van Allen complex would deal with astronomy, science and physics.”

Summerwill expects technology to play an increasingly larger role in banking. He also believes that the costs of increased regulation will prove too great and force more community banks to merger.

“The old verbiage is ‘Where you have a strong bank, you have a strong community’ and I think we’re going to lose that,” Summerwill said. “In addition to the financial support they provide, bank employees donate thousands of hours to organizations in their communities.

“I think the machine that has revolutionized banking is the ATM because it allows our customers to bank with us at any hour of the day.  We don’t have to build as many brick-and-mortar branches.

“What won’t change is the fact that banking is a people-to-people business. When you need something that is more than a transaction, you want to talk with someone.”

While he will be a director emeritus of MidWestOne, don’t look for Summerwill to attend every board meeting.

“I enjoy golf and windsurfing, among other things,” he said. “I planned to improve my golf handicap over the last 10 years since I ended my active involvement with the bank, but I’ve actually played less golf. Now, I’ll have the time to really work on that handicap.”

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