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The Carletonian

C&C: First National Bank faces increased government oversight

<ong>First National Bank faces increased government oversight

The bank that once held off Jesse James and his gang now has to hold off on losing more money as the federal government increases their oversight of the bank. Last Friday, First National Bank of Northfield signed a new regulatory agreement with the Office of the Comptroller of the Currency, the agency responsible for nationally chartered banks like First National, to increase their oversight.

First National lost about $600,000 in 2009, enough for the federal government to take a closer look at the bank. Vice President of Business Development Rick Estenson said that the loss was caused by bad commercial loans made to local individuals and businesses. The bank added about $700,000 into its equity to compensate for the losses.

According to First National’s new agreement, the bank must appoint an officer to handle credit management problems within 60 days. Bad loans also must be confronted by implementing a “risk rating system” to identify troubled assets and by reviewing and revising its loan policy.

First National is not the first Northfield bank to face increased government oversight for money lost in the recession year of 2009.  Community Resources Bank had to sign a new regulatory agreement with the Federal Reserve last month after losing $938,000 during the first three quarters of 2009.

Like Community Resources, First National Bank did not lose money in 2008 and had net income of $494,000 that year. Along with the recently added $700,000, First National still had over $10 million of equity for its $129 million of total assets.

Northfield’s very own cereal company?

Like First National Bank, Malt-O-Meal has been a Northfield institution for years. While Malt-O-Meal has been manufacturing cereal in Northfield since 1927, it has had its corporate headquarters in Minneapolis since moving from Northfield in 1936.  But is there a cereal company that completely originates from Northfield, MN?

Unlike Malt-O-Meal bags, Mom’s Best Naturals cereal boxes list an address in Northfield. On its website, Mom’s Best lists that same Northfield address and says that it has been owned by the same family for four generations. The question is what family has owned this second Northfield-manufactured cereal company?

It turns out it is the same family as Malt-O-Meal. Despite having no mentions of the Malt-O-Meal Company on its website, Mom’s Best Naturals is a brand name of Malt-O-Meal. Mom’s Best has not existed for four generations like its website implies. The brand was introduced in 2007.

According to Rachel Rademacher of Kohnstamm Communications of St. Paul, the firm that does marketing for Mom’s Best, a distinction is made between Mom’s Best Naturals and Malt-O-Meal brand cereals to emphasize that Mom’s Best is made of no artificial ingredients. A different marketing firm, Northwood Advertising, handles the Malt-O-Meal brand cereals.

“In order to create brand recognition for this new cereal line,  Malt-O-Meal hired a separate public relations firm to help create brand awareness with that targeted demographic in mind—consumers who are interested in an all-natural, value cereal,” Rademacher said.

 Despite being owned by Minneapolis-based Malt-O-Meal, much of Mom’s Best’s Naturals operations come from Northfield. All of Mom’s Best varieties are manufactured solely in Northfield. Malt-O-Meal also has manufacturing plants in Tremonton, Utah and Asheville, North Carolina. All of Mom’s Best production team works out of the Northfield plant from which those cereal aromas travel to Carleton.  Still the managers and sales directors that work with Mom’s Best work in the Minneapolis Malt-O-Meal headquarters.

Long story short, Northfield does not have its own independent cereal company. But every time you fill your mouth with cereal from your Mom’s Best box, you can know that it comes from Northfield.

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