Morris Neighbor, who died at age 100,
actively supported many organizations
During World War II, Morris Neighbor was sent to Europe with the 11th
Armored Division of the U.S. Army, which fought in the Battle of the Bulge with
General George Patton’s Third Army.

An engraved brick in Neighbor’s office at Farmers State Bank in Marion
was a reminder of his involvement in the battle that helped turn the tide of
the war.

Henry Royer, former chairman and president of Merchants National Bank
(now U.S. Bank) in Cedar Rapids, said Neighbor was “a very unassuming, quiet
guy, but he had a lot of experiences,” including helping to liberate the
Mauthausen concentration camp.
But Gene Neighbor said his father, who was a member of Marion American
Legion Post 298, did not talk about his wartime experiences.

“I can distinctly remember we were at some event during the Vietnam
War,” Gene recalled. “He told someone that he served in the military so his
children did not have to (serve).”

When Neighbor was honorably discharged and returned home in 1945, he had
a Bronze Star and about $300 in his pocket.
“While he was returning home from the East Coast where the boat docked,
he was on a train that derailed in Chicago,” Gene Neighbor said. “His first
thought was, ‘I survived the war and now I’m going to die in a train wreck.’”
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Neighbor, chairman-emeritus of Farmers State Bank, was 100 when he died
on Feb. 11. He would have celebrated his 101st birthday March 18.
Neighbor was active in the community, having served as a past president
of the Marion YMCA, past chairman of the YMCA Metropolitan board of trustees
and a past board member of the Granger House.
“Morris Neighbor was involved at the very start of the Marion YMCA,”
said Bob Carlson, president and CEO of the Cedar Rapids Metro YMCA and the
Helen G. Nassif YMCA. “He was a huge Y supporter for all of us.
“He did a wonderful job of passing that down to his children, who served
on our board, and his grandchildren, who are serving on our boards.
“I would imagine that his great-grandchildren may also serve on our
boards.”
Carlson said Farmers State Bank made a $500,000 donation to the building
fund for the new Marion YMCA.


Gene Neighbor, Farmers State Bank president and CEO, said he and his
siblings were led by their parents example of service to the community as they
were growing up.
“Dad always had us believing that we work in the community and the
community is our customer, and to reinforce that it is important to give back
to the community,” Gene said.
Morris was a member of Trojan Lodge No. 548 and Alburnett Christian Church.
In 2002, he was inducted into the Marion Independent School District’s Hall of
Fame for his support in education and the city of Marion.
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Neighbor also made major philanthropic donations to the public libraries
in Cedar Rapids, Marion and Hiawatha, the Marion and Alburnett Historical
Museums, St. Luke’s Hospital, Linn-Mar and Marion School Foundations, the
Alburnett Community Foundation and Lowe Park in Marion.
In 1995, Neighbor was recognized as a “50-year Banker” by the Iowa
Bankers Association.
“Morrie was a good, conservative banker,” U.S. Bank’s Royer said.
“He helped Marion when the town needed help. That bank is a good,
strong, conservatively run, well-managed company.“
Michael Dunn, chairman of F&M Bank in Manchester, also a
family-owned bank, said Neighbor was a “quality banker, very honest and very
prudent.”
He and Neighbor had known each other since 1974 when Dunn was working
for a bank in Greene, just south of Charles City.
Jim Dyer, a local businessman, said Marion has lost a friend with
Neighbor’s death.
“He helped many businesses succeed in life, and we were one of them,”
Dyer said. “In 1962 we started Brown and Dyer Construction, and Farmers State
Bank was the only bank that would give us a line of credit.
“Morris and FSB were there as the years passed by, and we built several
businesses together. They were always there when we needed them.”
Stoking the furnaces
When Neighbor graduated from high school in 1935, during the Great
Depression, he purchased a small panel truck, put in shelves and got a mechanic
to position a rack on top.
“I had routes on Monday and Tuesday, came to Cedar Rapids on Wednesday
to sell my fresh eggs, ran my routes on Thursday and Friday, and then I
returned to Cedar Rapids each Saturday to sell more eggs,” Neighbor told The
Gazette in a 2012 interview.
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“I had regular customers who wanted to buy fresh eggs and I sold them to
a number of stores and restaurants in Cedar Rapids.”
After the war, Neighbor landed a job as a teller at Farmers State Bank
in Alburnett, which recently had changed its name from Alburnett State Bank and
moved its charter to Marion.
His early duties at the bank included taking out the ashes and stoking
the furnace early each morning.
Working mornings at the Alburnett office and afternoons at the main bank
in Marion, he gradually moved up the ladder, eventually becoming executive vice
president.
In 1967, Neighbor and his wife, Betty, were offered the opportunity to
purchase majority ownership of the bank. Merchants National Bank in Cedar
Rapids was willing to loan them the money to buy the stock.
Neighbor, who became president of Farmers State in 1968, witnessed many
economic peaks and valleys in the local and national economy over the years.
The farm crisis of the early 1980s was a challenge for bankers, especially the
president of a locally owned family bank.
Royer was asked by Holmes Foster, chairman of Banks of Iowa, corporate
parent of Merchants National, to approach Neighbor about selling Farmers State
Bank.
After discussing it with his wife, who believed their children might
want to be bankers and noting the amount of taxes that would need to be paid on
capital gains, Neighbor declined the offer.
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“Over the years, there have been several suitors who wanted us to sell
to them and the answer has been the same all the way through,” Gene Neighbor
said.
“We want to keep the bank in the family as long as we have family
members that are interested and qualified. It needs to be a family-owned
community bank.”
Under Morris Neighbor’s leadership, Farmers State Bank’s assets grew, from
$19.4 million in 1968 to more than $650 million in 2012 when he relinquished
the position of chairman to his oldest son, Kent.
Today, the largest family-owned community bank in Linn County has assets
approaching $1 billion.
02
Financial Advisor: How to Buy
Actively Managed Funds V. ETFs in 2019
Duration: 01:15 2 days ago
Most financial advisors are currently in agreement that then way to be
invested in the stock market in 2019 is to use active fund management.
Broad-based index funds and ETFs, like an S&P 500 ETF or a sector ETF
(semiconductor ETF) are now more risky because global economic uncertainty
could drag major indices and sectors down. But exactly how should one go about
buying actively managed funds? After all, it's almost impossible for the majority
of active managers to outperform the market, making picking the best stock
pickers challenging. "We like active management at this point in the
economic and capital market cycles, particularly here in the United States as
we're in the tenth year of an economic expansion in the bull market -- there
are more opportunities for success through active management," said Albert
Brenner, Head of Asset Allocation at People's United Advisory. Here's the
catch: "Retail investors may be challenged to find an active manager that
they feel confident in," Brenner said. So don't fall into this trap:
"Too much investor behavior is buying the latest high-performing fund, and
that's not usually the best strategy to follow, so I would caution investors
about just buying last year's winners, and if you have no better way to make a
determination, then buy the ETF that's going to give you the broader
exposure," said Brenner. Jim Cramer's Five Themes Investors Should Watch
Out for in the First Quarter This video was originally published by TheStreet.
03
5 Smart-Beta ETFs to Replace Your
Actively Managed Funds
This month saw many investment professionals gathering for the Inside
ETFs conference. The conference features a wide variety of education, advice,
and panels on the state of the ETF and investment industry. One of the more
interesting facts to come from the conference is that investors are quickly
adopting smart-beta ETFs as replacements for underperforming active mutual
funds.
In fact, according to a Brown Brothers Harriman survey of respondents at
the conference, more than one-third highlighted the fact that they purchased a
smart-beta ETF to replace an actively managed mutual fund.
And you should probably join them.
Smart-beta ETFs use various factors or rules to build-out their
portfolios/indexes. Because of this, they blur the line between traditional
index investing and active management. The best part is, they are a heck of a
lot cheaper than many mutual funds. Thereby, providing better performance.
For investors building a portfolio, using smart-beta ETFs could result
in better returns and better long-term outcomes. With that, here are five
smart-beta ETFs that could find a home in your portfolio and replace your
active mutual funds.
iShares Edge MSCI Multifactor USA ETF
(LRGF)
The crux of smart-beta ETFs comes down to their use of factors to
develop their portfolios. This includes everything from stocks that exhibit
low-volatility or size to those that feature high relative strength or “value.”
The idea is that honing in on various factors will help a smart-beta fund
outperform a regularly weighted index. But, like anything else in the
investment world, not every factor will outperform at the same time. Choosing
the right one at the right time could be a fool’s errand.
And that’s why the iShares Edge MSCI Multifactor USA ETF (NYSEARCA:LRGF)
could be one the best starting places for investors.
LRGF tracks the MSCI USA Diversified Multiple-Factor Index. This index
combs through large-cap U.S. stocks for the four main determinants of overall
success: financially healthy firms, stocks that are inexpensive, smaller
companies and trending stocks. Better known in the smart-beta world as quality,
value, size, and momentum. LRGF then chooses 150 with the highest scores in
each category. What you get is a portfolio of the market’s overall best.
Current top holdings include Cigna (NYSE:CI) and Marathon Petroleum (NYSE:MPC).
The proof is in the pudding, the smart-beta ETF is up nearly 30% since
its inception back 2015. The best part is, LRGF is dirt cheap at just 0.20% in
expenses. That makes it an ideal ETF to own over the longer haul.
Vanguard U.S. Liquidity Factor ETF
(VFLQ)
When it comes to factors, there are countless ETFs that track the big
ones like value or size. However, there is one factor that most investors — and
smart-beta ETFs — ignore. And that would be liquidity.
According to Investopedia, liquidity is defined as “the degree to
which an asset can be bought or sold in the market without affecting the
asset’s price.” The idea behind the liquidity factor is that those stocks that
aren’t easily bought and sold can command a premium over those more frequently
traded or more liquid equities — if held for a long enough period. There’s
plenty of evidence for this.
The only smart-beta ETF looking at liquidity is the Vanguard U.S.
Liquidity Factor ETF (BATS:VFLQ). VFLQ digs through the Russell 3000 — which is
a total market measure of large-, mid- and small-cap stocks in the U.S. The ETF
then looks for the most illiquid stocks in the index based on trading data. The
nearly 889 holdings are vastly different make-up than its broader parent.
Being less than a year old, it’s hard to tell just how the new ETF will
do. Likewise, itself is pretty illiquid and features only about $20 million in
assets. However, as word gets out about the ignored liquidity factor, the ETF
should garner assets in the future. The Vanguard-low expense ratio of just
0.13% won’t hurt either.
Smart-Beta ETFs To Buy: Goldman Sachs
Access High Yield Corporate Bond ETF (GHYB)
If there is one area of the market that smart-beta ETFs can really
thrive it’s in fixed income and bond investing. That’s because traditional bond
indexes are weighted by the amount of debt issued. So, a firm with the most
IOUs will typically be the largest holdings in many bond ETFs. That’s kind of
counter-intuitive. There’s a vast difference in credit quality and the amount
of debt owed. And unfortunately, broad bond indexes don’t discriminate against
“good” debt and those with “bad.”
This is an even bigger problem when looking at junk bonds and high-yield
debt. With their focus on fundamentals and factors, smart-beta ETFs are made
for fixed income. And the Goldman Sachs Access High Yield Corporate Bond ETF
(NYSEARCA:GHYB) could be a great ETF in the sector.
GHYB sets itself apart from junk-bond ETF rivals like the popular SPDR
Bloomberg Barclays High Yield Bond ETF (NYSEARCA:JNK) by using various screens
to eliminate firms with shaky or deteriorating financials. High-yield bonds
already come with a hefty amount risk. They don’t call them junk bonds for
anything. But, if you can kick-out those firms that are experiencing lower
revenues or sinking cash flows, you have a better chance of making money and
not losing it.
For income seekers, this allows for a bit of safety as well as high
yield. GHYB currently has a 30-day yield of 6.16%. This yield and stability can
be had for a low active mutual fund beating 0.34% in expenses.
Invesco S&P 500 Quality ETF
(SPHQ)
Pop the hood on most active mutual funds and there’s a good chance that
managers look for stocks with rising revenues, strong dividends, the potential
for growth, etc. The hallmarks of so-called quality stocks. And that makes
these active mutual funds prime candidates for smart-beta ETFs.
One of the oldest quality stocks funds in the sector is the Invesco
S&P 500 Quality ETF (NYSEARCA:SPHQ).
Launched in 2005, SPHQ tracks the S&P 500 Quality Index. This index
digs through the bread and butter index and looks for stocks that score high on
three measures: return on equity, accruals ratio and financial leverage ratio.
Basically, stocks that getting the job done and are doing so with increasing
cash flows and low debts. SPHQ then selects the top 100 stocks in the index to
include in the fund. Currently, tech dominates at 40% of assets, with
healthcare stocks at a distant second place at just 11% of AUM.

Performance for the ETF has been mixed over the years. But that’s mostly
because SPHQ used to track two different indexes: the Value Line Timeliness
Select Index and the S&P 500 High-Quality Rankings Index. The switch to its
current index was a smart move as the S&P 500 Quality Index has long been a
top performer vs. the regular S&P 500.
With expenses of just 0.15%, SPHQ is a great addition to a portfolio and
replacement for many active large-cap mutual funds.
Fidelity Dividend ETF for Rising
Rates (FDRR)
One of the earliest styles of smart-beta ETFs to hit the market has been
dividend-focused funds. The Fidelity Dividend ETF for Rising Rates
(NYSEARCA:FDRR) is the latest incarnation of those ETFs.
Dividend stocks and ETFs loose some appeal in the rising rate
environments like today. Investors flee these higher yielding instruments for
safer bonds as the Fed raises. However, historically, dividend growers have
increased their payouts at faster rates than measures of inflation and interest
rate hikes. These sorts of stocks continue to do well as the Fed increases
benchmark rates.
And that’s what FDRR does.
The ETF tracks a proprietary smart-beta index that follows a basket of
large- and mid-cap dividend growth stocks that have a positive correlation of
returns to increasing 10-year U.S. Treasury yields. In a nutshell, FDRR combs
through all the dividend-paying stocks out there and finds the ones that
actually see increased buying activity thanks to their dividend growth as the
Fed raises rates. You’re basically getting high income and the ability to see
that income grow over time.
Given the Fed’s pace of rate hikes, FDRR could be a wonderful smart-beta
ETF to replace an expensive equity income fund in your portfolio.
At the time of writing, Aaron Levitt owned a long position in LRGF.
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