SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-1
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-8186
Interra Financial Incorporated
(Exact name of registrant as specified in its charter)
DELAWARE 41-1228350
(State or other jurisdiction of (IRS Employer
incorporation of organization) Identification Number)
Dain Bosworth Plaza, 60 South Sixth Street,
Minneapolis, Minnesota 55402-4422
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 371-7750
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock, par value $.125 New York Stock
per share Exchange, Inc.
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (Section 229.405 of this
chapter) is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [ X]
As of February 29, 1996, 12,093,319 shares of common stock were
outstanding, and the aggregate market value of the common shares
(based upon the closing price at February 29, 1996, on the New
York Stock Exchange) of Inter-Regional Financial Group, Inc.,
held by non-affiliates was approximately $150,185,044.
Documents Incorporated by Reference
Portions of the Proxy Statement of Registrant to be
filed within 120 days of December 31, 1995 are
incorporated in Part III of this report.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON
FORM 8-K:
(a) Documents filed as part of this Report:
Page
1. Financial statements:
Reference is made to the table of contents to
financial statements and financial statement
schedule hereinafter contained...................... 42*
2. Financial statement schedules:
Reference is made to the table of contents to
financial statements and financial statement
schedule hereinafter contained for all other
financial statement schedules....................... 42*
* Refers to page number in original Form 10-K filing for the year
ended December 31, 1996.
3. Exhibits:
Item
No. Item Method of Filing
- -----------------------------------------------------------------
3.1 Restated Certificate Incorporated by reference
of Incorporation of the to Exhibit 4.1 to the
Company. Company's Registration
Statement on Form S-8 dated
May 12, 1997, File
No. 333-26947.
3.2 Amended and Restated Bylaws Incorporated by reference
of the Company. to Exhibit 4.2 to the
Company's Registration
Statement on Form S-8 as
amended on April 30, 1996,
File No. 33-58069.
4.1 Credit Agreement dated Incorporated by reference
June 29, 1995. to Exhibit 4.1 to the
Company's Quarterly Report on
Form 10-Q dated June 30, 1995.
4.2 First Amendment to Credit Incorporated by reference
Agreement dated March 14, to Exhibit 4.2 to the
1996. Company's Annual Report
on Form 10-K for the year
ended December 31, 1995.
4.3 Term Loan Agreement dated Incorporated by reference
October 16, 1992. to Exhibit 4(e) to the
Company's Annual Report on
Form 10-K for the year ended
December 31, 1992.
4.4 First Amendment to Term Loan Incorporated by reference
Agreement dated March 12, to Exhibit 4(g) to the
1993. Company's Annual Report on
Form 10-K for the year ended
December 31, 1992.
4.5 Second Amendment to Term Incorporated by reference
Loan Agreement dated June 23, to Exhibit 4(b) to the
1993. Company's Current Report
on Form 8-K dated July 15,
1993.
4.6 Third Amendment to Term Loan Incorporated by reference
Agreement dated November 30, to Exhibit 4(b) to the
1993. Company's Current Report on
Form 8-K dated February 11,
1994.
4.7 Fourth Amendment to Term Incorporated by reference
Loan Agreement dated to Exhibit 4 (b) to the
June 27, 1994. Company's Quarterly Report on
Form 10-Q dated June 30, 1994.
4.8 Fifth Amendment to Term-Loan Incorporated by reference
Agreement dated to Exhibit 4 (b) to the
September 30, 1994. Company's Current Report on
Form 8-K dated September 26,
1994.
4.9 Sixth Amendment to Term-Loan Incorporated by reference
Agreement dated June 29, to Exhibit 4 (b) to the
1995. Company's Quarterly Report on
form 10-Q dated June 30, 1995.
4.10 Seventh Amendment to Term- Incorporated by reference
Loan Agreement dated to Exhibit 4.10 to the
March 15, 1996. Company's Annual Report on
Form 10-K for the year ended
December 31, 1995.
10.1* 1986 Stock Option Plan, as Incorporated by reference
amended on April 24, 1987, to Exhibit 10(b) to the
May 9, 1990, March 3, 1993 Company's Current Report on
and April 27, 1993. Form 8-K dated July 15, 1993.
10.2 Form of Indemnity Agreement Incorporated by reference
with Directors and Officers to Exhibit 10(c) to the
of the Company. Company's Annual Report on
Form 10-K for the year ended
December 31, 1990.
10.3* Form of Non-Employee Incorporated by reference
Director Retirement to Exhibit 10(g) to the
Compensation Agreement. Company's Annual Report on
Form 10-K for the year ended
December 31, 1992.
10.4* IFG Executive Deferred Incorporated by reference
Compensation Plan dated to Exhibit 10(a) to the
March 31, 1993. Company's Current Report on
Form 8-K dated July 15, 1993.
10.5 Trust Agreement for IFG Incorporated by reference
Executive Deferred to Exhibit 10.5 to the
Compensation Plan dated Company's Annual Report on
February 11, 1994. Form 10-K dated
December 31, 1994.
10.6* Offer of Employment and Incorporated by reference
Restricted Stock Agreements to Exhibit 10.7 to the
between the Company and Company's Annual Report on
Louis C. Fornetti dated Form 10-K for the year
July 14, 1995, and July 17, ended December 31, 1995.
1995, respectively.
10.7* 1996 Stock Incentive Plan Incorporated by reference to
Exhibit 10 to the Company's
Quarterly Report on Form 10-Q
dated March 31, 1996.
10.8* Agreement between the Incorporated by reference
Company and David A. Smith to Exhibit 10.1 to the
dated September 26, 1995. Company's Quarterly Report on
Form 10-Q dated September 30,
1995.
11* Computation of net earnings Filed herewith.**
per share.
21 List of subsidiaries. Filed herewith.**
23 Independent Auditors' consent. Filed herewith.
24 Power of attorney. Filed herewith**
27 Financial Data Schedule Filed herewith.**
* Management contract or compensatory plan or arrangement
required to be filed as an exhibit pursuant to Item 14(c) of this
report.
** Refers to original Form 10-K filing for year ended December
31, 1996.
(b) No reports on Form 8-K were filed during the fourth quarter
of 1996.
REPORT FOR EMPLOYEE STOCK PURCHASE PLAN:
The financial statements required by Form 11-K is hereby
furnished as permitted by Rule 15d-21:
Schedules included:
Page
Independent Auditors' report.......................... 4
Statement of net assets available for plan
benefits as of December 31, 1996 and 1995............. 5
Statement of changes in net assets available for
plan benefits for the years ended December 31, 1996
and 1995.............................................. 6
Notes to financial statements......................... 7
Schedule 1 - Schedule of assets held for investment
purposes.............................................. 10
Schedule 2 - Reportable transaction for the year
ended December 31, 1996............................... 11
Exhibit 23 - Independent auditors' consent............ 13
<PAGE>
INDEPENDENT AUDITORS' REPORT
Interra Financial Retirement Benefits Committee
Interra Financial Incorporated:
We have audited the accompanying statements of net assets
available for plan benefits of the IFG Stock Bonus Plan (the
Plan) as of December 31, 1996 and 1995 and the related statements
of changes in net assets available for plan benefits for the
years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for plan benefits of the IFG Stock Bonus Plan as of
December 31, 1996 and 1995 and the changes in net assets
available for plan benefits for the years then ended in
conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
accompanying supplemental schedules are presented for purposes of
additional analysis and are not a required part of the basic
financial statements but are supplementary information required
by the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act
of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in our audit of the financial
statements and, in our opinion, are fairly stated in all material
respects in relation to the financial statements taken as a
whole.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
June 13, 1997
<PAGE>
<TABLE>
IFG Stock Bonus Plan
Statements of Net Assets Available for Plan Benefits
(In thousands, except number of shares)
<CAPTION>
December 31,
-------------------
1996 1995
-------------------
<S> <C> <C>
Assets:
Temporary cash investments $558 $780
Contributions receivable:
Employee 48 45
Employer 401 302
Investment in Interra Financial
Incorporated common stock, at market
(4,086,977 and 4,397,539 shares; cost
$46,183 and $43,632, respectively) 144,066 111,038
Participant loans receivable 3,478 2,743
Interest receivable 2 3
------- -------
148,553 114,911
------- -------
Liabilities:
Miscellaneous accounts payable 48 52
Net assets available for plan benefits
(includes $0 and $3,761, respectively, of
distributions due to plan participants
and $982 and $1,094 respectively, of
diversifications payable to IFG Profit
Sharing Plan) $148,505 $114,859
======= =======
<FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
IFG Stock Bonus Plan
Statements of Changes in Net Assets Available for Plan Benefits
(In thousands)
<CAPTION>
Year Ended December 31,
-----------------------
1996 1995
-----------------------
<S> <C> <C>
Investment income:
Dividends $2,351 $1,945
Interest 274 237
Net realized and unrealized gain on
securities 41,970 46,201
------- -------
44,595 48,383
Contributions:
Employee 5,320 4,861
Employer 3,071 2,644
Distributions:
To participants, at market (13,822) (10,889)
Diversification to IFG Profit Sharing Plan (3,124) (1,845)
Dividends paid to participants (2,319) (1,918)
Expenses:
Fees (75) (47)
------- -------
Increase in net assets 33,646 41,189
Net assets available for plan benefits:
At beginning of year 114,859 73,670
------- -------
At end of year $148,505 $114,859
======= =======
<FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
IFG STOCK BONUS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
1. Summary of Significant Accounting Policies
Effective January 1, 1997, the IFG Profit Sharing Plan was
merged into the IFG Stock Bonus Plan ("the Plan"). The combined
plan was renamed the IFG Retirement Plan. In February 1997, the
plan sponsor changed its name to Interra Financial Incorporated
("Interra") and the IFG Retirement Plan was renamed the Interra
Retirement Plan.
Contributions - Employee contributions are recorded when
payroll deductions are made for the Plan participants. Employer
contributions are generally accrued at the time employee
contributions are recorded. Participants who reach the legal
pretax limit during the year may have a portion of their employer
matching contributions paid at year end.
Investments - The investments in Interra Financial Incorporated
(formerly Inter-Regional Financial Group, Inc.) common stock are
carried at market value. Market value is determined based on the
closing price of the common stock on the New York Stock Exchange.
Purchases and sales of securities and the related gain or loss,
if any, are recorded on trade-date.
A three-for-two stock split effected in the form of a 50
percent stock dividend was paid on December 20, 1995 to
shareholders of record at the close of business on December 6,
1995.
Distributions - Consistent with generally accepted accounting
principles, amounts payable to participants who have elected to
withdraw from the Plan are not reflected as a liability on the
statement of net assets available for benefits. The amounts are
included in net assets and reported in a parenthetical notation
on the statement.
2. Plan Description
Eligibility
The Plan is a defined contribution plan which provides
incentive to employees by giving them an opportunity to increase
their interest in Interra through ownership of its common stock.
Any employee of Interra or its participating subsidiaries may
begin making pre-tax contributions to the Plan the January 1 or
July 1 after completing six months of service consisting of at
least 750 hours of service and if they are at least 21 years of
age. Participants will be eligible to receive company
contributions beginning the January 1 or July 1 following one
year of service consisting of at least 1,000 hours of service and
if they are at least 21 years of age.
Contributions
Participants may contribute 1 to 12 percent of recognized
compensation to either the Plan or the IFG Profit Sharing Plan.
However, total participant pretax contributions to the Plan and
the IFG Profit Sharing Plan cannot exceed 12 percent of
recognized compensation. The participant receives a 40 percent
employer match on pretax contributions up to 5 percent of pay.
Matching contributions are limited to $3,000 annually. All
matching contributions are paid to the participants' accounts
under the Plan. Recognized compensation is defined in the Plan
and generally consists of salary, commissions and other regular
compensation paid to a participant during the Plan year, subject
to certain aggregate limitations under federal regulations.
Vesting
Employee contributions are always fully vested. Participants
will fully vest in matching employer contributions after they
have attained five years of service. Special rules apply for
rehired employees. Employer contributions become fully vested
if, while employed, the participant dies, reaches age 55 or
retires because of total and permanent disability. Employer
contributions will also become fully vested if the Plan is
terminated, there is a "change in control" as defined in the
Plan, or there is a complete discontinuance of employer
contributions to the Plan.
Loans
Participants are eligible to borrow up to 50 percent, not to
exceed $50,000, of certain account balances. Loans are allowed
for any reason. Participants may elect a loan term of between
one year and four and one-half years for all loans other than a
home purchase for which a 10 or 15-year term may be elected. All
loans are charged an interest rate equal to the prime rate plus
one percent on the first working day of the quarter in which the
loan was originated. All loans are repaid through monthly
payroll deductions.
Diversification
Eligible participants may direct the sale of their stock
holdings in the Plan. Proceeds from the sale of Interra common
stock are transferred to the IFG Profit Sharing Plan for
investment as directed by the participant. A participant who
reaches age 50 with 10 years of service may elect to transfer up
to 25 percent of his or her account balance each year.
Participants ages 55 to 59, may transfer up to 50 percent each
year and participants age 60 and older, up to 100 percent,
subject to a $3,000 minimum. A participant with 15 years of
service, regardless of age, may diversify up to 25 percent of his
or her account balance each year.
In-Service Distribution
Participants age 60 and over may request a full or partial
distribution from the Plan. In addition, participants may
request in-service distributions for financial hardship purposes.
Distributions are limited to the vested balances of certain
accounts within the Plan. All distributions from the Plan are
made in shares of Interra common stock, including cash for any
uninvested contributions and fractional shares.
Dividend Pass-Through
The Plan is an Employee Stock Ownership Plan which has elected
dividend pass-through to participants. Dividends received by the
Plan on shares of Interra common stock which are allocated to
participant accounts are distributed from the Plan to
participants as ordinary income. Dividends received by the Plan
on shares not yet allocated to participant accounts are allocated
to participant accounts as earnings.
3. Contributions
Amounts contributed by each employer and its employees were as
follows for the years ended December 31, 1996 and 1995,
respectively (in thousands):
<TABLE>
<CAPTION>
1996 1995
--------------------- ---------------------
Amount Contributed By Amount Contributed By
--------------------- ---------------------
Employee Employer Employee Employer
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Dain Bosworth
Incorporated $3,406 $2,084 $3,134 $1,741
Rauscher Pierce
Refsnes, Inc. 1,499 795 1,387 748
Interra Clearing
Services Inc.
(formerly known as
Regional Operations
Group, Inc.) 306 122 239 106
Interra Financial
Incorporated
(formerly known as
Inter-Regional
Financial Group,
Inc.) 80 41 70 27
Interra Advisory
Services Inc.
(formerly known as
IFG Asset Management
Services, Inc.) 29 29 31 22
----- ----- ----- -----
$5,320 $3,071 $4,861 $2,644
===== ===== ===== =====
</TABLE>
The 1996 and 1995 employer contributions include a match of
$1,136,000 and $940,000, respectively, on participant pretax
contributions to the IFG Profit Sharing Plan. Employer matching
contributions have been reduced by forfeitures of $447,000 and
$371,000 for the years ended December 31, 1996 and 1995,
respectively.
Any forfeited benefits are utilized to reduce future employer
contributions unless the participant returns to employment before
a specified date as defined by the Plan.
4. Trustee and Administration of the Plan
As of December 31, 1996, First Trust National Association was
the Trustee of the Plan. As of December 31, 1996 the Plan was
administered by a three-member committee appointed by Interra's
Board of Directors, all of whom were employees of Interra or its
participating subsidiaries. Administrative costs and expenses
were paid by Interra or its participating subsidiaries; however,
trustee fees and fees associated with the plan's dividend pass-
through administration were paid from plan assets.
5. Federal Income Taxes
The Plan administrator received a favorable determination
letter dated September 26, 1995, from the United States Treasury
Department stating that the Plan constitutes a qualified plan
under Sections 401(a) and 4975 (e)(7) of the Internal Revenue
Code (the Code) and that the trust created under the Plan is
therefore exempt from federal income taxes under the provisions
of Section 501(a).
The Plan administrator believes that the Plan and its related
trust continue to qualify under the provisions of Sections
401(a), 4975(e)(7) and 501(a) of the Code and are exempt from
federal income taxes.
Participants are not taxed currently on their pretax
contributions, on the employers' contributions to the Plan, or on
net earnings allocated to participant accounts. Dividends paid
to participants on Interra common stock allocated to their
accounts are subject to tax in the year received. Distributions
are generally subject to federal income tax at the time of
distribution if not rolled to an individual retirement account or
other qualified plan.
6. Reconciliation to Form 5500
Net assets available for plan benefits in the accompanying
financial statements differ from Form 5500 as filed with the
Internal Revenue Service, as follows (in thousands):
<TABLE>
<CAPTION>
December 31,
------------------
1996 1995
------------------
<S> <C> <C>
Net assets available for plan benefits
disclosed in Form 5500 $147,523 $110,004
Adjustments for distributions and
diversifications payable 982 4,855
Net assets available for plan benefits ------- -------
disclosed in accompanying financial
statements $148,505 $114,859
======= =======
</TABLE>
7. Party-in-Interest Transactions
First Trust National Association is a party-in-interest with
respect to the Plan. In the opinion of the Plan's Trustee,
transactions between the Plan and the Trustee are exempt from
being considered as "prohibited transactions" under ERISA Section
408(b).
<PAGE>
Schedule 1
<TABLE>
IFG STOCK BONUS PLAN
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
(In thousands, except number of shares)
<CAPTION>
Identity of Issuer Market
or Borrower Description Shares Cost Value
- -----------------------------------------------------------------
<S> <S> <C> <C> <C>
Interra Financial Interra Financial 4,086,977 $46,183 $144,066
Incorporated (1) Incorporated
Common Stock (1)
First Trust First American 588 588
National Prime Obligations
Association Fund
Plan Participants Loans Receivable
(rate of interest
ranges from 7 to 11
percent) 3,478 3,478
------ -------
$50,219 $148,102
====== =======
<FN>
(1) Formerly known as Inter-Regional Financial Group, Inc.
See accompanying independent auditors' report.
</TABLE>
<PAGE>
Schedule 2
<TABLE>
IFG STOCK BONUS PLAN
ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands, except for transactions)
<CAPTION>
Fair Value
of Asset
Description Number as of
Party of of Purchase Selling Date of Net
Involved Transaction Transactions Price Price Transaction Gain
- ---------------------------------------------------------------------
<S> <S> <C> <C> <C> <C> <C>
First Purchases 63 $8,834 $8,834 --
Trust of First
National American
Associa- Prime
tion (1) Obligations
First Sales of 73 $9,057 $9,057 --
Trust Frist
National Amiercan
Associa- Prime
tion (1) Obligations
First Purchases 68 $9,416 $9,416 --
Trust of Interra
National Financial
Associa- Incorporated
tion (1) Common Stock
(2) (3)
First Sales of 17 $18,334 $18,334 $11,294
Trust Interra
National Financial
Associa- Incorporated
tion (1) Common Stock
(2) (3)
<FN>
(1) Known to be a party-in-interest.
(2) Purchases include both public market and intra-plan
purchases. Sales represent intra-plan sales only.
(3) Formerly known as Inter-Regional Financial Group, Inc.
See accompanying independent auditors' report.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Report to be signed on its behalf by the undersigned
thereunto duly authorized.
INTERRA FINANCIAL INCORPORATED
By: Louis C. Fornetti
---------------------
Louis C. Fornetti
Executive Vice President and
Chief Financial Officer
Dated: June 27, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant in the capacities and on the dates
indicated:
Signature Title
- --------- -----
Irving Weiser Chairman of the Board,
- ----------------------- President, Chief Executive Officer
Irving Weiser (Principal Executive Officer)
and Director
Louis C. Fornetti Executive Vice President,
- ----------------------- Chief Financial Officer
Louis C. Fornetti (Principal Financial Officer)
Daniel J. Reuss Senior Vice President, Controller
- ----------------------- and Treasurer
Daniel J. Reuss (Principal Accounting Officer)
John C. Appel Executive Vice President
- ----------------------- and Director
John C. Appel
William A. Johnstone Executive Vice President and Director
- -----------------------
William A. Johnstone
J. Evans Attwell Director
- -----------------------
J. Evans Attwell
Susan S. Boren Director
- -----------------------
Susan S. Boren
F. Gregory Fitz-Gerald Director By Louis C. Fornetti
- ----------------------- -----------------
F. Gregory Fitz-Gerald Louis C. Fornetti
Pro Se and as
Attorney-in-Fact
Dated: June 27, 1997
C.A. Rundell, Jr. Director
- -----------------------
C.A. Rundell, Jr.
Robert L. Ryan Director
- -----------------------
Robert L. Ryan
Arthur R. Schulze, Jr. Director
- -----------------------
Arthur R. Schulze, Jr.
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Interra Financial Incorporated:
We consent to the incorporation by reference in Registration Statement
No. 333-26947, Registration Statement No. 333-03113, Registration Statement
No. 333-20487, Registration Statement No. 33-58069, Registration Statement
No. 33-54223, Registration Statement No. 33-54907, Registration Statement
No. 33-59426, Registration Statement No. 33-39182, Registration Statement
No. 33-25979, post-effective amendment No. 1 to Registration Statement
No. 33-13068, post-effective amendment No. 2 to Registration Statement
No. 33-10243, post-effective amendment No. 2 to Registration Statement No.
33-10242, post effective amendment No. 4 to Registration Statement
No. 2-90634, post-effective amendment No. 8 to Registration Statement No.
2-61514, post-effective amendment No. 11 to Registration Statement No.
2-57759, post-effective amendment No. 15 to Registration Statement
No. 2-53289 and post-effective amendment No. 16 to Registration Statement
No. 2-51150, on Form S-8 of Interra Financial Incorporated, and subsidiaries
of our report dated February 4, 1997, relating to the consolidated balance
sheets of Interra Financial Incorporated (formerly known as Inter-Regional
Financial Group, Inc.) and subsidiaries as of December 31, 1996 and 1995,
and the consolidated statements of operations, shareholders' equity and cash
flows and the related financial statement schedule for each of the years
in the three-year period ended December 31, 1996, which report appears in
the December 31,1996 Annual Report on Form 10-K of Interra Financial
Incorporated.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
June 27, 1997
