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https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Financial Magazine o f the Mississippi Valley & Southwest Santa Goes to Work for Christmas Club—Page 56 These Correspondent Banking Officers represent Liberty’s resourcesto help solve your problems. Ron Leavell Pete Dowling , Each one can offer on-the-spot sugges tions and solutions. But, they can also put you in touch with one of Liberty’s experts for in-depth problem solving capabilities. Experts in fields like: Jim Kienholz George (Pat) Kelly Mortgage Banking Trust Services Bank Security Data Processing Investment Services Management Reporting Techniques Retail Banking Services International Banking There’s more. But you get the idea. Liberty’s Correspondent Banking Officers represent the total bank—working for you. They are backed by over 600 officers, employees and 20 internal departments. It’s a professional working arrangement for your benefit. Liberty works for 386 banks. Shouldn't we be working for your bank, too? Ken Fergeson teS LIBERTY T H E B A N K O F M ID -A M E R IC A Liberty National Bank & Trust Company of Oklahoma City • P.O. Box 25848 • 73125 • 405/231 -6164 • Member FDIC MID-CONTINENT BANKER is published 13 times annually (two issues in May) at 403 Olive, St. Louis, Mo. 63102. July, Vol. 73, No. 8, Second-Class postage paid at Fulton, Mo. Subscription: $10. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Fingertip Control for Decision Makers • Accounts Reconciliation • General Ledger • Central Information File • Mortgage Loan • Proof of Deposit • Commercial Loan • Payroll Processing As part of our total capability, our systems have numerous op • Reduction of clerical workload tions to fit your specific needs and as more automated systems are • Timely reporting developed for your use, they will be adaptable without any internal • Simplified auditing procedures conversion of your present Central Automated Financial System. • Management control In less than one year, we have introduced four additional new • Performance and profitability evaluation systems to meet the ever expanding needs of the market we serve. • Increased accuracy and efficiency They are: Central Automated Financial Systems give you the ability to • Bond Portfolio Analysis identify problems and trends, and the time to react quickly to profit • Accounts Reconciliation effective opportunities. We give you batch and on-line capabilities • Central Information File and thirteen systems representing the most advanced state of the • Proof of Deposit data processing art. All are supported by a major national data processing organization with 3,800 computer people of whom over All reports are available in micro-fiche and microfilm. 900 are specifically dedicated to financial systems. Take advantage of the opportunity to improve bottom line Our systems are: benefits by calling us. We will be happy to discuss these systems and how they can be custom-tailored to satisfy your needs. Call • Reserve Credit • Savings your Central Automated Financial Systems representative at • Installment Loan • Demand Deposit (312)443-7200. • Bond Portfolio Analysis • Certificates of Deposit Central National Bank in Chicago offers thirteen automated financial systems designed to simplify your life by providing you with the bottom line benefits of total operational efficiency These benefits include: W e’re com m itted to progress. Yours. CENTRAL AUTOMATED FINANCIAL SYSTEMS A Division of Central National Bank in Chicago 120 South LaSalle Street • Chicago, Illinois 60603 Telephone: (312) 443-7200 MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 How to win customers https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis In many communities, the key to getting a larger share of the home mortgage market is the Realtor.® It's a fact that many Realtors (and their prospects) don't know the advantages of a MAGIC loan. A lowdownpayment loan insured by MGIC. And how it helps sell more houses and close on them faster by eliminating government red tape. To help you get more of the existing home market, MGIC has put together a colorful promotional kit that's yours free for the asking. Each contains a counter card plus a supply of 8-page MAGIC loan booklets which explain mortgage insurance to home buyers. You can use it in your loan department, give it to Realtors, builders, stamp your name on it and give it to retail stores. For copies, mail in the coupon or call us at 800-558-9900, extension 6641. (In Wisconsin 800-242-9275.) or contact your MGIC representative. 5222 M ortgage Guaranty Insurance C orporation M G IC Plaza, M ilw aukee, Wisconsin 53201 □ Please send u s _________copies o f your Realtor prom otional kit. N a m e ______________________________________________ Address ------------------------------------------------------------- Firm________________________________________________ City & state_______________________________ Zip. MGIC Mortgage Guaranty Insurance Corporation. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis You want a bank that can back you ...over-line or overseas. Count on the total capa bility of Mercantile Trust in St. Louis. We can provide the over line support you need to take advantage of big opportunities And we can support you with a full range of specialized services. For instance, our International Department can help you and your customers with overseas contacts, docu ments, financing, even customs services. When you have an opportunity that calls for something specialcall 314-425-2404. We’re w ith you. M=Rcnrrni= BACK Mercantile Trust Company N.A. • (314) 425-2404 • St. Louis, Mo. • Member F.D.I.C. 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for July, 1977 Ju ly 17-23: ABA O p eratio n s/A u to m atio n Div. B usiness o f B a n k in g School, Ith aca, N. Y., C ornell U niversity. J u ly 24-29: ABA N atio n al School of B ank C ard M anagem ent, E vanston, 111., N o rth w estern U niversity. Ju ly 28-30: ABA N atio n al G overnm ental A f fa irs C onference, W ashington, D. C., W ash in g to n H ilton. J u ly 31-Aug. 12: C onsum er B a n k ers A ssocia tio n G rad u ate School o f C onsum er B anking, C h arlottesville, Va. Aug. 7-12: ABA N atio n al School of R eal E s ta te F in an ce, Colum bus, O., Ohio S tate U ni v ersity . . I „ , Aug. 13-19: B a n k M ark etin g A ssociation B ank M anagem ent School fo r M ark etin g M an agers, M adison, Wis., U n iversity of W is consin. Aug. 14-27: C en tral S tates C onference G ra d u a te School o f B an k in g , M adison, Wis., U ni v ersity of W isconsin. Aug. 15-26: ABA N atio n al T ru st S chool/N atio n al G rad u ate T ru st School, E vanston, 111., N o rth w estern U niversity. Sept. 8-9: R o b ert M orris A ssociates C om m er cial L oan T rain in g P ro g ram s: C ontent and M ethods W orkshop, C hicago, C ontinental Sept. ¿1-13: K en tu ck y B a n k ers A ssociation A n n u al C onvention, L ouisville, G alt House. Sept. 11-14: ABA B a n k C ard C onvention, A t lan ta, P each tree P laza H otel. Sept. 11-16: R o b ert M orris A ssociates L oan M anagem ent S em inar, B loom ington, Ind., In d ian a U n iversity. Sept. 12-15: B a n k M ark etin g A ssociation F o u rin -O n e Marketing S em inar, A tlan ta, OMNI In te rn a tio n a l Hotel. Sent. 12-15: N atio n al A ssociation of B ank W om en C onvention, A tlan ta, A tlan ta H ilton. Sept. 18-21: ABA N atio n al P erso n n el C onfer ence, A tlan ta, H y att Regency. Sept. 22-23: R o b ert M orris A ssociates V alue a n d C redit A ssessm ent in R eal E state L en d in g W orkshop, S an F rancisco, St. F ra n cis Hotel. S ept. 25-27: ABA S econdary M a rk et W ork shop. Chicago, H y att R egency O’H are. Sept. 25-27: B a n k M ark etin g A ssociation O f ficer Sales C all T rain in g a n d T ra in th e T ra in e r S em inar, C olum bus, O., Colum bus H ilto n Inn. Sept. 28-30: ABA S o u th ern R egional O pera tio n s a n d A u tom ation W orkshop, A tlanta, H y att Regency. Oct. 3-4: R o b ert M orris A ssociates L oan Q ual ity C ontrol W orkshop, S an F rancisco, M iyako. Oct. 15-19: ABA C onvention, H ouston. Oct. 23-27: C onsum er B a n k ers A ssociation Convention, P h o en ix , A rizona-B iltm ore. Oct. 26-28: ABA M id w estern R egional O pera tio n s an d A u to m atio n W orkshop, Chicago, H y att R egency O ’H are. Oct. 30-Nov. 1: ABA In te rn a tio n a l F oreign E xch an g e C onference, N ew Y ork City, W al d o rf A storia. Oct. 30-Nov. 2: R o b ert M orris A ssociates A n n u a l F all C onference, N ew Y ork City, N ew Y ork H ilton. Oct. 30-Nov. 2: B a n k M ark etin g A ssociation C onvention, H onolulu, H aw aii, H ilton H a w aiian V illage. Nov. 2-4: A ssociation of B ank H olding C om p an ies F all M eeting, B oca R aton, F la., Boca R ato n Hotel. Nov. 6-9: B a n k A d m in istratio n In stitu te C on v en tio n , H ouston, H y att Regency. Nov. 6-17: ABA N atio n al C om m ercial L ending School, N orm an, O kla., U niversity of O kla hom a. Nov. 13-16: ABA N atio n al A g ricu ltu ral B a n k ers C onference. K an sas City. Nov. 13-16: ABA M id -C o n tinent T ru st Con feren ce, H ouston, H ouston O aks Hotel. Nov. 13-18: ABA N atio n al P ersonnel School, Dallas, M a rrio tt M otor Hotel. Nov. 14-16: B a n k A d m in istratio n In stitu te C o rp o rate C ash M anagem ent fo r O perations P erso n n el S em inar, Boston. Nov. 15-18: B a n k A d m in istration In stitu te T ru st O p erations S h o rt C ourse, Dallas. Nov. 16-18: B an k A d m in istration In stitu te F i n an cial A ccounting an d R eporting S em inar, P a rk Ridge. 111. Nov. 17-18: R o b ert M orris A ssociates V alue an d C red it A ssessm ent in R eal E state L en d in g W orkshop, N ew O rleans, R oyal O rleans Hotel. Nov. 17-18: B an k A d m in istration In stitu te T ax R e tu rn P re p a ra tio n S hort Course, D al las. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Financial M agazine o f the1Mississ Mississippi Valley & Southw est .....................% Volume 7 3 , No. 8 July, 1 9 77 FEATURES 31 FINANCIAL REORGANIZATION POSSIBLE Six-bill package introduced into Congress Rosemary M cKelvey 33 CREDIT-LIFE PROPOSAL UNWELCOME Adverse effects seen if it goes through Gene Moore 36 TRUTH-IN-LENDING SIMPLIFICATION An idea whose time is now Terrence H. Klasky SPECIAL CHRISTMAS SECTION 40 CHRISTMAS PROMOTION TIMETABLE 46 SUCCESSFUL SHOP-AT-HOME PROGRAMS 59 YULETIDE PREMIUMS VARIED, PLENTIFUL 70 A POTPOURRI OF CHRISTMAS IDEAS CONVENTION REPORTS 88 NEW MEXICO 90 INDIANA 92 ILLINOIS DEPARTMENTS 8 THE BANKING SCENE 10 BANKING WORLD 10 CORPORATE NEWS 12 PERSONNEL 14 INSTALLMENT LENDING 16 COMMUNITY INVOLVEMENT 28 MORTGAGE LENDING 21 SELLING/MARKETING 24 NEW PRODUCTS 26 AGRICULTURAL NEWS STATE NEWS 89 NEW MEXICO 96 ALABAMA 96 ARKANSAS 98 ILLINOIS 99 INDIANA 99 KANSAS 99 KENTUCKY 100 LOUISIANA 100 MISSISSIPPI 103 TEXAS Editors Ralph B. Cox Editor & Publisher Lawrence W. Colbert Assistant to the Publisher Rosemary McKelvey Managing Editor Jim Fabian Associate Editor Daniel H. Clark Assistant Editor Advertising Offices St. Louis, Mo., 408 Olive, 63102, Tel. 314/ 421-5445; Ralph B. Cox, Publisher; Mar garet Holz, Advertising Production Mgr. Milwaukee, Wis., 161 W. Wisconsin Ave., 53203, Tel. 414/276-3432; Torben Soren sen, Advertising Representative. 100 MISSOURI 103 OKLAHOMA 103 TENNESSEE MID-CONTINENT BANKER (publication No. 346 360) is published 13 times an nually (two issues in May) by Commerce Publishing Co. at 1201-05 Bluff, Fulton, Mo. 65251. Editorial, executive and busi ness offices, 408 Olive, St. Louis, Mo. 63102. Printed by The Ovid Bell Press, Inc., Fulton, Mo. Second-class postage paid at Fulton, Mo. Subscription rates; Three years $21; two years $16; one year $10. Single copies, $1.50 each. Commerce Publications: American Agent & Broker, Club-Management, Decor, Life Insurance Selling, Mid-Continent Banker, Mid-Western Banker, The Bank Board Letter and Program. Donald H. Clark, chairman: Wesley H. Clark, president; Johnson Poor, executive vice president and secretary; Ralph B. Cox, first vice president and treasurer; Bernard A. Beggan, William M. Humberg, James T. Poor and Don J. Robertson, vice presidents; Lawrence W. Colbert, assistant vice presi dent. 7 The Banking Scene By Dr. Lewis E. Davids Hill Professor of Bank Management, University of Missouri, Columbia Pension Terminations— A New Market S INCE SEPTEMBER, 1974, when the Employee Retirement Income Security Act (ERISA) was signed into law, there have been largely unnoticed terminations of literally thousands of retirement plans. According to Internal Revenue Ser vice (IRS) figures, in 1970, 2,306 such plans were terminated. In 1971 the figure jumped to 3,335 and by 1972 the number of terminations reached 3,550. In 1973, that number climbed to 4,130, advancing to 4,604 in 1974. But when people began to realize the implications of ERISA in 1974, there was a massive jump in terminations— 8,276 pension plans were discontinued. Hold your breath, because in 1976, 15,859 plans were ended! (It might have been 15,860. I had contemplated a similar step for my own plan, but was persuaded by knowledgeable peo ple that if I did so I would have had to endure additional filings, which would be even more onerous than the paper work already involved in the maintenance of my plan.) What’s interesting is that not one but two congressional committees have re ported that, since the Pension Reform Act became effective, the rate of new pension plan formations dropped from almost 60,000 per year in 1974 to 30,000 annually in 1975, and to only 26,000 in 1976. An extrapolation of these figures presents the frightening implication of “throwing the baby out with the bath water.” Some banks—mostly small ones—are among those institutions that no longer offer pension plans. Larger banks seem to have developed a tolerance to added paper work and have continued their ERISA plans. These banks appear to agree with Senator Gaylord Nelson (D.,Wis.), who said, “We certainly need to analyze the decisions on termi nations in detail and intend to do so. However, it is safe to generalize at this point that maladministration of the 8 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis statute is one of the chief underlying causes of the problem.” Needless to say, if banks were as prone to “mal administration” as the government, they would long ago have had their charters revoked! There is a real danger that many bankers, on observing some of their customers dropping their pension plans, may overlook the fact that these actions may be a blessing in disguise. The decision of a company, union or private individual to terminate a pen sion plan because of the obvious amount of paper work or poor perform ance of the plan is a good opportunity environment, can be attractive. The typical bank probably isn’t staffed to expeditiously handle or an swer questions of a complex nature on IRA “roll-over” accounts of terminated pensions. Further, 1RS rulings are quite technical about how time frames and capital gains may be handled. Even a moderate-sized city corre spondent may be of marginal advisory help in such matters. However, the new change in Regulation Q relating to Keogh and HR-10 accounts means that commercial banks now can com pete on equal footing with S&Ls for this interesting market segment. Some "(Banks offering pension plans) appear to agree with Senator Gaylord Nelson (D.,Wis.)r who said, '\Ne certainly need to an alyze the decisions on (pension plan) terminations in detail. . . However, it is safe to generalize . . . that maladministration of the (ERISA) statute is one of the chief underlying causes of the problem/ Needless to say, if banks were as prone to 'm aladm in istration/ as the government, they would long ago have had their charters revoked!" for an innovative bank. Why? The termination is accompanied by a distri bution of the proceeds of the pension to the beneficiaries who in turn will be receptive to the idea of an organization —such as your bank—helping fill the vacuum caused by that termination. This brings up a couple of questions. Can a terminating plan be handled by your bank in such a way as to save your customer unnecessary tax expo sure? And, can your bank make the termination financially attractive, con sidering the quantity of paper work in volved? For some of the small IRA termi nated plans, the latter probably is un likely, but some long-term employees or groups of employees may have sixfigure or better “roll-over” benefits. Such figures, even in today’s inflated S&Ls have put more than $1 million in additional deposits on their books in recent months as a result of their interest in and help to beneficiaries of terminated retirement plans. If S&Ls are able to master the com plexities of terminated plans, I’m sure most banks certainly can. Not every CPA or attorney who is a bank cus tomer may have the interest or compe tence to wade through the IRS proce dures for a beneficiary of a terminated plan, but some CPAs and attorneys do. It might not be a bad idea to locate such an attorney or accountant, so your bank can compete with S&Ls. That way, a customer of your bank who finds that his pension plan is being terminated can rely on a knowledge able individual to provide him with needed and valuable advice. • * MID-CONTINENT BANKER for July, 1977 "United Missouri’s bond department is one of the top 100 bond investment institutions in the country!” “So w hat?” “Well, there are thousands of banks and other financial and investment houses throughout the country who deal in municipals and governments. T h at’s why being in the top 100 means something!’ ‘‘How do you rank locally?” “Right up in front of the pack” “Okay. But, what does that mean to our bank?” “Maybe nothing. But, listen. How we got so big is im portant to you. And, now that we are big, what we can offer you is vital whenever you invest” “How did you get so big?” “This may sound vague. But, we got big because we have always been responsive to the basic needs of our customers” “What does that mean? In what ways?” “Well, we think of you —first. Where you are. Where you want to go. After all, it is your portfolio we’re talking about. We would, forexample, first evaluate your financial position before we would even rec ommend certain municipals” “Do you mean that you m ight advise me n o tto buy a given m unicipal?” “Absolutely. Relatively risk-free as most are. Taxexempt as they are. If we don’t think they’re right for your portfolio, we’ll tell you so.” “T h a t’s interesting. What else does bigness mean to m e?” “Quite a few things. Advantages we can offer you because of our sheer size and clout. It takes a large organization to investigate and analyze the munici pal bond offerings that merit our recommendations. And, that’s what we do” “Is that necessary?” “It is for us. One reason is that last year we participated in almost $1 out of every $2 of municipal general obligation bonds . . . sold at public sale...in Missouri and Kansas. That’s just for openers. Obviously, we have to know what we’re doing” “ How well do you evaluate every municipal o ffe rin g ? ” “That’s where judgment—earned the hard way through experience— comes in. We evaluate the credit worthiness of the bond before we sell it to you. We don’t just sell it, and forget it” “What do you mean by that?” “Since credit is continually changing, we contin ually re-evaluate it. We make secondary markets if you decide to sell” That’s good to know!’ “One other thing about proper analysis of all bond offerings. We may not look as flashy, but we’ll make fewer mistakes” “I ’m sort of interested. But, I want to think it over!’ “You should think it over and talk it over with our bond department people, whenever you have a few minutes to spare” “ I’ve got a friend in our trust departm ent who m ight be interested, to o ...” “Tell your friend to stop by—or give us a call when he has a minute—I’m sure we can help him, too” “Fair enough!’ UNITED MISSOURI BANK OF KANSAS CITY, N.A. United we grow. Together. 10th & Grand, Kansas City, Mo. 64141 MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Telephone: (816) 556-7000 Member FDIC 9 BANKING WORLD LeMAISTRE LANE • George A. LeMaistre has succeed ed Robert E. Barnett as FDIC director. As announced last month, Mr. Barnett resigned to join a Washington, D. C., law firm. Mr. LeMaistre practiced law in Tuscaloosa, Ala., until 1960, when he became president of City National there. He was chairman and CEO when, in 1971, he was appointed to the FDIC’s board. • Mills B. Lane Jr. has been elected director emeritus, Citizens & Southern National, Atlanta. He is a former presi dent, vice chairman and chairman of the bank and joined it in 1934. Mr. Lane retired as an active C&S director just before being elected director emeritus. • Sheldon W. Stahl, vice president and senior economist, Federal Reserve, Kansas City, will become deputy gov ernor, office of finance and research, Farm Credit Administration, Washing ton, D. C., August 1. In his new post, Mr. Stahl will be responsible for mon itoring, coordinating and supervising the Farm Credit System’s financing programs and will oversee research on financing the FCS as well as research into agricultural and rural credit needs. Mr. Stahl joined the Fed’s research di vision in 1962, was named to the bank’s official staff in 1967 as research officer and was promoted to vice presi dent and senior economist in 1973. For about two years, beginning late in 1967, Mr. Stahl was research officer and economist at the Philadelphia Fed. • Bobbye Taylor, president, Nation al Association of Bank Women in 196970, has retired from First National, Lamesa, Tex., where she was assistant vice president. • Jerry J. Jason, assistant vice presi dent, Southeast First National, Miami, was elected AIB president at its annual convention in Phoenix May 29-June 1. Richard L. Killmon, vice president, Fidelity Bank, Oklahoma City, is the new vice president. Two of the four new councilmen are Mid-Continentarea bankers: William P. Liles, assist ant vice president, First National, Lub bock, Tex., representing District Six; and B. Paul Horne, accounting officer, Indiana National, Indianapolis, repre senting District 11. Corporate News Roundup • Integon Corp. An agreement in principle has been reached for Integon Corp., Winston-Salem, N. C., to acquire shares of Secura Corp., an Atlantabased mortgage guaranty insurance firm. Integon will trade 6/lOths of a share for each Secura share. The agree ment must be approved by Secura shareholders and regulatory agencies. Following the agreement with Secura, mortgage guaranty insurance will be a new insurance specialty for Integon. • Jon R. Brittenum & Associates, Inc. Dabbs Sullivan Jr. has joined this Little Rock-based investment banking firm as executive vice president and chief operating officer. He began his career in 1950 with Dabbs Sullivan Co., which, in 1967, was merged with Trulock & Co. to form Dabbs Sullivan, Trulock & Co. When Reynolds Secur ities, Inc., bought the merged firm in 1974, Mr. Sullivan was made vice pres ident. He continued in that capacity with Reynolds Securities until joining Jon R. Brittenum & Associates, Inc. SULLIVAN • Associates Commercial Corp. A national accounts division has been formed by this Chicago-based commer cial financing subsidiary of Associates Corp. of North America, a Gulf & Western company. The new division, headed by Vice President James E. Lewis, operates within Associates Com mercial Corp.’s industrial finance di vision. It provides seemed, mediumterm corporate financing in amounts from $500,000 to $10 million. Mr. Lewis goes to Associates with 11 years’ experience in commercial fi nancing and investment and commer cial banking. • NYTCO Services, Inc. The name of this St. Paul-based firm was changed to Collateral Control Corp. July 1. The change involves the name only, with no realignment of personnel, company services or alteration of corporate fi nancial structure. The former NYTCO is the outgrowth of three predecessor firms: St. Paul Terminal Warehouse, founded in 1916; New York Terminal Warehouse Co., organized in 1936, and Haslett Field Warehousing, founded in 1913. 10 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for July, 1977 Why banks suggested £ tn a Money for cash flaw m sinks and an acquisition in food. Because he lacked a strong cash flow —and couldn’t increase his bank credit line —the plumbing supply wholesaler was missing sizeable trade discounts* The bank suggested TEtna Money!“ Secured by accounts receivable and inventory, we quickly supplied the needed working capital in participation with the bank. Result? A more profitable operation for the wholesaler. And the bank retained a good customer. A food processor wanted to sell off a sub' sidiary, and three executives wanted to buy it. But where would the money come from? Solution? A bank mentioned TEtna Money. We provided a multbrnillion dollar loan secured by plant, equipment, inventory, and accounts receivable. Result? A smooth acquisition. And a new customer for the bank. TEtna Money. It’s flexible and quickly available for your customers. It’s a workable alternative for you. Call us. You get action with TEtna because our business is ^tna Business Credit, Inc. to help your business. ■■■Ml A lthough certain identifying facts have been changed to protect client confidentiality, these are authentic examples of ¿Etna Money at work. 200 West Monroe Street, Chicago, IL 60606 (312) 782-6189 • One Main Place, Dallas, TX 75250 (214) 651-0361 • One Allen Center, Houston, TX 77002 (713) 658-0349 • 530 North Water Street, Milwaukee, W I53201 (414) 272-3102 MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis College Instructor's Sabbatical Is Spent as Employee of Bank OLLEGE EDUCATORS often are accused of living in an “ivory tower,” of not knowing what’s going on in the so-called “real world,” al though they’re charged with teaching young people how to make their way in that world. Well, an instructor at the two-year Butler County Community College in El Dorado, Kan., took an 18-week “sabbatical” earlier this year to gain practical experience that he could share with his students—and he spent those 18 weeks in a local bank, Walnut Valley State. Sabbatical leaves traditionally are taken by college and university faculty members every seven years for the pur pose of study or travel. At Butler County Community College, the board of regents has adopted a policy of six months’ leave with full pay or a year’s leave with half pay. Ronald Seager, of fice education coordinator at the col lege, had an idea. Why not request a leave so that he could work within a business in the environment of Butler County, as he put it, “thereby pursuing my course of study and refreshing my experiences in this manner.” In asking for his leave, Mr. Seager wrote Carl Heinrich, president of the college, “I feel that this total immersion in a busi ness will improve my teaching effec tiveness tremendously, much more so than through the textbook or theoreti cal approach that would be achieved by enrolling in a semester of university study.” Mr. Heinrich agreed, and leave was granted. Before final action was taken, Mr. Seager called on various firms and sounded out his ideas to businessmen, who received him enthusiastically. One of those with whom Mr. Seager discussed his plan was Clifford Stone, chairman, Walnut Valley State. Mr. Stone had served the ABA as a mem ber of its personnel administration and management development commission and also as a member of the subcom mittee on training. He was quick to see the pragmatic aspects of Mr. Seager’s proposal and readily agreed to the ar rangement. The first meeting was followed by another last November 2. At that time, it was agreed that Mr. Seager would begin work at the bank on January 10, with his employment to continue until May 24—approximately 18 weeks. The work plan agreed on saw Mr. Seager in the dual roles of employee and observer. As a staff member, he went through the actual selection, training and work experiences of any new employee at the bank. This includ ed a facet regarded as absolutely indis pensable at the bank, the code of con fidentiality. This is a pledge required of every employee that banking-transaction information be treated with the utmost confidentiality and profession alism. As an observer, Mr. Seager was able to analyze staff assignments from the standpoint of one whose academic charge is to prepare students for just (Continued on page 28) Labor Dept. Seeks Debarment This case arose, according to a re lease from the Labor Department, when the Treasury Department, which has enforcement responsibility for the banking industry under the executive order, found—during a compliance re view—that NBC had not developed an acceptable written affirmative-action program. Specifically, says the Labor Department release, the bank refused to set goals and timetables for hiring and promoting minorities and women, had not made plans to correct under utilization of these groups in the bank and had not considered remedial mea sures for any past effects of employ ment discrimination. According to the Labor Department, the bank disputes the allegations and contends that the written affirmativeaction-program requirement is a viola tion of federal civil rights laws and con stitutes reverse discrimination when there has been no court determination of employment discrimination. However, the Labor Department points out that the executive order has the force and effect of law. According to NBC, the bank believes the department’s action was precipi tated by a lawsuit NBC filed last De cember. That lawsuit, in which the Secretary of Labor and the Secretary of the Treasury are named as defendants, is an action for declaratory judgment filed in the U. S. District Court in San Antonio. NBC has asked the court to rule whether the Treasury Department can require the bank to establish goals and timetables and take other affirma tive action in favor of minority and female employees and applicants to the exclusion of non-minority and male em ployees and applicants. NBC’s president, Robert H. Seal, says the bank brought its action be cause it’s strongly committed to a pol icy of equal-employment opportunity for all its employees and applicants, regardless of their race, color, religion, gender or natural origin. He adds that this action was taken to clarify an ap parent conflict between the two federal laws and to seek guidance for future employment policies. “We are concerned that the govern ment regulations in question are them selves discriminatory,” says Mr. Seal. Of NBC of San Antonio From Federal Contract Work SAN ANTONIO, TEX.—The U. S. Labor Department last month filed a complaint against the National Bank of Commerce, seeking debarment of the bank from present and future govern ment contracts for allegedly refusing to abide by federal equal-employment-op portunity regulations. If debarred, NBC would be the first bank to lose Treasury Department con tracts for serving as a federal depository and for issuing and redeeming U. S. savings bonds and redeeming savings notes. Executive Order 11246 prohibits fed eral contractors and subcontractors from employment discrimination based on race, color, sex, religion or national origin. It’s administered by the Labor Department’s Office of Federal Con tract Compliance Programs in the Em ployment Standards Administration. 12 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Ronald Seager, office education coordinator, Butler County Community College, El Dorado, Kan., is shown at two different tasks in that city's Walnut Valley State Bank. Mr. Seager took 18-week "sabbatical" at bank to become reacquainted with business world. MID-CONTINENT BANKER for July, 1977 THE LOOK OF HIGH FINANCE ,.,„1, traditional or contemporary, but it must have that feeling, that certain aura, that says the person who occupies this space is a professional. We understand that at Arrow Business Services. Our Design Department specializes in that look. We cater to it with 16,000 square feet of custom showroom. Furniture. Decor pieces and accessories. People and paper flow systems. Even supplies. And all of it is in active inventory in our 25,000 square feet of warehouse behind the showroom. We also understand some thing else at A rrow . . . even the look of high finance should be supplied at a BUSINESS SERV ICES IN C. an affiliate of M em p his B ank & Trust reasonable cost. Call us, and let us take 3 0 5 0 M illbranch • M em phis, Tenn essee 38116 a look at your needs. HRROM4 MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 13 Installment Lending_______ Married Women Can Get Credit History But Could Suffer from Mate's Negligence EW PROVISIONS of the Equal Credit Opportunity Act that took N effect June 1 permit a married woman to establish a credit history in her own name, but could also mean she would share in a bad credit history built by her husband, according to officers at Continental Bank, Chicago. “Although the legislation will allow many married persons to share the good credit rating they’ve built togeth er, certain adverse consequences could result if they are not prudent,” said James A. Matthews, vice president in charge of consumer lending. “For example,” he said, “if a hus band repeatedly neglects to make pay ments on schedule to an account in his name, but of which his wife is an au thorized user, as his spouse, any detri mental credit report also would reflect his wife’s name.” ". . . ¡ f a husband repeatedly neglects to make payments on schedule to an account in his name, but of which his w ife is an authorized user, as his spouse, any detrimental credit report also would reflect on his wife's name.” In the past, reports to credit bureaus on accounts used by both husband and wife generally were made in the hus band’s name only, said Janice P. Ven tura, Continental’s family economics analyst, even when credit was original ly extended in the names of both spouses, or when the wife’s income was used to open the account. Miss Ventura said that, under the new legislation, creditors, including banks, are currently in the process of asking account-holders to decide whether they wish to add a second name to their accounts so that credit information concerning their accounts can be reported in the names of both husband and wife. “The second name added by most individuals probably will be that of either a co-obligor—a spouse or an other person liable for payment—or an authorized-spouse user, who typically used the account but is not liable for payment,” Miss Ventura said. 14 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis For example, if a man and his em ployed wife decide to include the wife’s income and signature on an ap plication for credit, the wife becomes a co-obligor, and her name would ap pear on the account. The couple may require the lender to report informa tion about the account in both names, even though the monthly statements might show only the first name on the credit application. A different situation exists if a man obtained a bank card solely on his own financial credentials but listed his wife as an authorized-spouse user, Miss Ventura noted. The couple still could instruct the lender to show both names on any reports to credit bureaus, even though the wife only used, but was not liable for payment on, the account. Mr. Matthews said that Continental, in the future, plans to give its Master Charge cardholders the option of hav ing a separate card made up in the name of each authorized user, so a married woman might carry a card bearing her name even though she was not liable for payment on the account. “The legislation doesn’t require lenders to issue separate cards,” Mr. Matthews said, “but we feel this is an other simple step we can take to help married women establish their own credit history.” Mr. Matthews noted that, since 1975, when the first provisions of the Equal Credit Opportunity Act went in to effect, the percentage of women ap plying for credit at the bank has in creased. “We expect to see a further increase, since more women are working or heading households now and, as such, qualify on their own for credit without counting a husband’s income,” Mr. Matthews said. He also noted that the equal credit provisions have made women more confident of their ability to be granted credit. “The law used to tell lenders what they couldn’t do, such as follow dis criminatory lending practices,” Mr. Matthews said. “Now, lenders are told what they must do, and some credit applicants may feel more comfortable in that kind of an environment.” * * This is portion of auto show held on lot of shopping center adjacent to Citizens Nat'l branch, Danville, Ky. Show was held by bank in conjunction with local auto dealers, drew two-day crowd of 2,500. Good Weather, Free Food Help Draw Crowd of 2,500 To Bank's First Auto Show DANVILLE, KY.—Thanks to a helping hand from Mother Nature in the form of excellent weather, and lots of free hot dogs and soda, 2,500 per sons showed up for the first annual auto show of Citizens National, which was held in cooperation with five local car dealerships. The show was held in the shopping center adjacent to the Citizens National branch and was advertised via televi sion, newspaper and radio. During the show itself, a live radio show was broadcast from the bank, during which bank and auto-dealer personnel were interviewed. Auto dealers were pleased with the turnout. One representative says, “Con sumers who never had been in our showroom walked through our area, and we had a chance to demonstrate our new cars and trucks.” Needless to say, the bank was pleased with results of the show, since the branch received exposure, bankers were able to meet with prospective car buyers and bank-auto dealer relation ships were enhanced greatly, a Citizens National spokesman says. The spokesman went on to say of the auto show, “The consumer is given the opportunity to shop and compare the various automotive products on the market in one central location without showroom pressure, and showing the consumer that Citizens National has an interest in the local automotive busi ness encourages them to finance their purchases with us.” To publicize auto show, local radio station set up live broadcast from bank lobby. Broadcast featured interviews with bank, auto-dealer personnel. MID-CONTINENT BANKER for July, 1977 We believe in hard work for what we want, and we know how to work hard together. We think our attitude is one of the most important, most positive of our state’s many resources. We’ll bet you don’t know all the facts about the good things we’re doing in Mississippi. Find out more from First National Bank •• L r j you’ll be interested in what you hear. Jackson. Mississippi Member FDIC MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 15 A New Posi: Public Affairs Post Is Created by Bank H. Kris Ronnow has joined Harris Bank, Chicago, as public affairs officer, a newly created post. The position en compasses philan thropic giving, the bank’s participation in civic and cultur al activities, banksponsored youth activities, bank em ployee social and athletic organiza tions and related activities. Mr. Ronnow formerly was director of the community relations department, Village of Oak Park, a Chicago suburb. In that post, he was responsible for fair housing and employment, public accommodations ordinances and policy and program development related to equal opportunity and racial diversity of the comriitmity. Mr. Ronnow holds a master’s degree in social work from the Jane Addams Graduate School of Social Work and a master’s of divinity degree from Mc Cormick Theological Seminary. Economic-Illiteracy Fighter: 'Let's Talk Business' Program of Okla. Bank Featured in Publication “Let’s Talk Business,” an economicsinformation and education program de veloped and sponsored by Liberty Na tional, Oklahoma City, and the Okla homa Chamber of Commerce, is fea tured in the July installment of the D uns Review series, “Corporate Amer• » ica. In its year-long series, D uns Review is recognizing outstanding corporate programs designed to improve under standing and appreciation of America’s free-enterprise system. Launched early in 1973, “Let’s Talk Business” encompassed wide-ranging public-information and educational pro grams, including financial support for primary/secondary-school economic ed ucation, financial incentives to teach ers for creativity in economic education and “Viable New Business Ideas,” a contest that solicited young people’s suggestions for starting their own busi nesses. The program utilized the print and broadcast media, informational literature, audio/ visual presentations and other communications tools. 16 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Community Involvement The D uns Review article features one “Let’s Talk Business” print adver tisement, headlined: “You’re offered a better rate on your savings account than most businesses get in profits.” The ad noted that the average business profit margin at the time was 4%, a lower rate of return than a contempo rary passbook-savings account or short term CD would have yielded. The ad was one of a series produced by Liberty National to explode myths and explain facts about American business and eco nomics in general. Thousands of persons of all ages were exposed to various aspects of “Let’s Talk Business” through the com munications media, speaking engage ments, schools and other types of pre sentations. Subsequent surveys, accord ing to the bank, revealed that the pro gram helped increase audience under standing of the U. S. business system significantly. For this achievement, Lib erty National received the 1973 George Washington Award of the Freedom Foundation at Valley Forge, Pa. Caring for Others: Bank of Oklahoma Assists In Aid for Accident Victim When 16-year-old Charla Willyard of Tulsa was permanently paralyzed from the chest down in an auto acci dent, the medical bills to her family were staggering. Although her parents carried health insurance, the drunken driver that caused the accident was in sured only for the minimum-amount liability. The week following the accident, From I., Cathy Harned and Alice England, Bank of Oklahoma, Tulsa, join Tulsan Jack Mohatt in admiring works in art sale held in bank's lobby. Sale was organized by Mr. Mohatt and held to benefit Charla Willyard, 16-year-old Tulsan who was paralyzed from chest down in auto accident. Connie Munson, a teller at Bank of Oklahoma, Tulsa, and a good friend of Charla’s mother, set up a trust fund for the girl. The bank then aided Miss Munson in publicizing the fund by in teresting a newspaper, two television stations and a radio station in Charla’s story. Within weeks, $1,401 had been contributed to the fund, including more than $200 from Bank of Oklahoma em ployees. But because of Miss Munson’s efforts in Charla’s behalf, another Tulsan, Jack Mohatt, entered the picture. Mr. Mohatt had read that the paralyzed girl was interested in poetry and art. But in addition to their mutual interest in art, Mr. Mohatt and Charla have more in common: Five years ago, doc tors had told him that he never would walk again. “Thanks to physical ther apy and mental therapy in the form of art lessons,” said Mr. Mohatt, “I now am able to walk without a cane.” Mr. Mohatt drew a charcoal portrait of Charla, an idea that eventually led to an art sale to benefit the stricken girl. Bank of Oklahoma made space avail able on the ground level of its new 52story building, and more than 50 paint ings, drawings and etchings were donated by area artists. Students from Tulsa Junior College helped Mr. Mo hatt staff the six-day exhibit/sale. The result? Thirty pieces of art were sold, netting $1,300 for the Charla Marie Willyard Trust Fund! “But most importantly, said Mr. Mohatt, “all the attention she has been getting has changed Charla from a heartbroken invalid to a young woman full of hope.” Community Help: H C Helps School Public On Available Federal Aid St. Louis-based Mercantile Bancorp., Inc., has retained the services of St. Louis’ Community Program Develop ment Corp. to assist the HC, its mem ber banks and those banks’ communi ties in linking federal resources with local goals and objectives. The HC is sponsoring a series of meetings throughout Missouri with member banks and community leaders to discuss government programs and their availability with Community Pro gram Development Corp. representa tives. A key figure in Community Program Development Corp. is its president, Louis G. Berra, who is said to have ex tensive knowledge and background in federal programs, legislation, the nu ances of federal regulations and the management, evaluation and accounta bility for federal monies. MID-CONTINENT BANKER for July, 1977 to r fifty years, our way of banking has been to help your bank do m ore banking* A world of extraordinary banking skill, massive resources, and person to person performance. Since July 18,1927, we’ve grown to offer the kind of solid, full-range support that banks everywhere must have to remain competitive in the financial world today Third National Bank’s Correspondent Division delivers it to over 350 banks in Tennes see, Kentucky and Alabama. With services like Profit Shar ing R e t i r e i ^ ^ ^ Trust, Lock BoxUnd complete Cash Man2 agement, Leasing^! temational Services,! and other services offered by our bank. Services that produce results. If you discover a banking service you’re not equipped to handle just yet, put Third National’s Corre spondent Division to work for you. Contact one of our representatives today. Our Tennessee WATS line is (800) THIRD 2 342-8360. In neighbor NATIONAL ing states, dial (800) BAN 251-8516. As we celebrate our 50th Anniversary may we express our apprecia tion for the | confidence youhave shown IN N A S H V IL L E in lie Call on o u r experience. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 17 You’ll be Santa’s best helper when you offer w to seal any small gift . . . or cash . . . in this YOU I C very special #2 can. Each can is decorated • >. with a bright Christmas red and white label Wi l l in your choice of two attractive styles. The unique three dimensional gift/tag bow adds 3 F"l Ci the finishing touch to this colorful giftwrapped package. And, the tag can be imprinted with your firm ’s name. You’ll be the most popular place in town when people £j 0 0 0 discover your Santa’s Cannery. In less than twenty seconds, you'll seal each can smoothly with our special sealer (it’s about the size of a blender, and clamps on the edge of a desk). 10C31 Those receiving this unique gift package will not know what is inside until they open the can with a can opener. It's really https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis clever and fun. Opened, the can converts to a year-long savings bank with its own slotted plastic snap-over lid. Over 800 firms have proven this program to be their best Christmas customer relations idea. , . n 3 r ity . | e S |t! By selling your gift-cans you can offer this program PROFITABLY (the gift cans selfliquidate at 50C per can). Some businesses have chosen to donate the proceeds to a charitable group, such as a local orphanage, etc. Either way, your program is sure to become a tradition for years to come. A TOTAL advertising and promotional package is included in the program. Exclusivity for your area can be reserved by returning the postage-paid order card next to this ad Selling /Marketing The 'UAB Special': Race C ar 'Package' Marketed by Bank A professional race car as a bank’s advertising medium? That’s the case in Wichita, where United American Bank is sponsoring a Lola Formula B T2 42 race car, with Jim Maetzold as the driver. “Granted, sponsoring a race car is an unusual way to promote a bank,” admits Vice Chairman Mike Michaelis. “But we liked the idea because of its uniqueness, and we were very im pressed with the complete package that Jim Maetzold offered.” Mr. Maetzold approached UAB about sponsorship several months ago. Because there’s seldom a purse in pro fessional road racing of this type, local support is essential to a race car’s suc cessful operation. Mr. Maetzold de vised a plan that would make sponsor ship an attractive marketing proposi tion. Race car driver Jim Maetzold (r.) gives some pointers to Mike Michaelis, v. ch.r United American Bank, Wichita, sponsor of Mr. M aetzold's Lola Formula B T2 42 race car. Note bank's logo (in red, white and blue) on front of car. The total package includes the red, white and blue logo blazoned on the race car, called the “UAB Special,” with the crew and driver wearing UAB uniforms. Exposure for the bank is strong throughout the summer months be cause Mr. Maetzold is scheduled to race in five amateur and two profes sional events. In addition, the package includes a variety of display options at the close of the season. UAB may use the car for a lobby display and may set it up for public viewing in central Wichita loca tions. In cooperation with Goodyear Tires’ racing division, Mr. Maetzold will offer a racing and driver safety program to area youth groups. The program will consist of slides, a movie, discussion and a display of the “UAB Special.” “For a relatively low cost,” says Mr. Michaelis, “we net a lot of publicity for the bank. We will be associating our selves with an extremely popular sport that has a loyal base of support. Pre sentation to youth groups will give us the added advantage of contributing to a public service.” Auto racing is said to be the second fastest growing spectator sport in the U. S., with attendance last year reach ing more than 50 million, a 25% in crease in the past decade. It’s the kind of promotion whose specific gains for the bank may elude researchers. However, Mr. Michaelis points out that indirect marketing can be very effective, if the idea is a win ning one. And, according to him, “The ‘UAB Special’ is sure to be a winner.” The Orient in Missouri: Bank Lobby Transformed Into Japanese Garden For two weeks this spring, the lobby of the Bank of Ladue, Mo., was trans formed into a Japanese garden, com plete with drip fountain and garden shelter. The traveling exhibit was cre ated by the Missouri Botanical Garden of St. Louis in honor of its new 13.5acre Japanese garden. Bank of Ladue had the honor of being the first site for the traveling exhibit. During the first week of the display, the bank offered customers special prices on spring trees, plants and shrubs for minimum deposits. Bank of Ladue has garden displays Young People Are Target: New Service, Birthday Plugged During One Event Colonial National, San Antonio, re cently celebrated its third year of op eration, and during the celebration the bank was able to promote a new ser vice, its Young Leaders Club Account. The special account is aimed at the 21-35 age group and is a checking ac count offering special extras such as parties, trips and discounts for res taurants, movies and businesses in San Antonio. A fee of $3.50 per month is charged for the service, but people signing up for the club during the bank’s anniversary event received the first month at no charge. Fifty prizes were given to lucky reg istrants during the birthday celebration of the institution. In addition, anyone visiting Colonial National during the two-week event received a gift. Grand prize was a family trip for four to the Six Flags Over Texas amuse ment park. Besides the grand prize, other prizes included savings accounts at the bank for $100, $50, $25, and 25 pairs of tickets to Six Flags, as well as twenty two-dollar bills. During the two Fridays of the cele bration, a “resident” of the amusement park, “Professor Cyrus Cosmo,” was on hand to aid guests of Colonial National in registering for prizes. On the second of the two Fridays, Professor Cosmo drew winners’ names for prizes. This Japanese garden was on display at Bank of Ladue, Mo., for two weeks this spring in honor of new 13.5-acre Japanese garden at St. Louis' Missouri Botanical Garden. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis each spring, and they are the brain child of Howard F. Baer, a bank di rector. 21 president/ advertising, said, “We have a lot of divorced, single and widowed women who can quality for a mortgage loan, but the market was being totally ignored in this area.” The ad campaign was introduced last March and probably will be con tinued until sometime during the sum mer. The campaign is being run con currently with other S&L promotions and appears about eight times monthly in six daily newspapers in the United Federal area. It’s also being aired on a number of “easy listening” radio sta tions. ■BN---* Ü J f i At I., Clarence C. Casey, pres., Rosedale State, Kansas City, Kan., admires special cake made by Guyneth Lawler (r.), bank staffer, for bank-sponsored concert for members of its Golden Arch Club for customers aged 60 or older. At r., Jeannie Turner, customer since bank's 1903 opening, receives floral arrangement from Mr. Casey during event. Elders Honored: Bank's Golden Arch Club Treated to Free Concert In observance of Kansas Bank Week, Rosedale State, Kansas City, Kan., held (Advertisement) Concern for Wildlife Is Big Business When the people of Missouri passed only one statewide tax in 1976, they confirmed their determination to pre serve our wilderness. Have you noticed the number of TV spectaculars, radio commentaries and the whole new indus try of magazines, books and newspaper features devoted entirely to this sub ject? A concern for our environment is rapidly becoming one of the most pow erful voices in our nation. Until now, there has been little an advertiser could do to capitalize on this deep commitment of all the people in this country. Just developed, though, is a weekly series of eye-catching illustrated news paper columns called, “Your Wilder ness.” In these columns, offers of spe cific bank services are combined with interesting stories of the importance of wildlife and intriguing puzzles—sure to get response from readers. This format, in similar series, has been acclaimed by customers and bank ers every time it has been used. “Your Wilderness” columns, with an unusual guarantee of readership, are now being distributed as a syndicated service through Country Press, Inc., City Bank Bldg., Suite 301, Div. E, 4625 Lindell Blvd., St. Louis, MO 63108. Write for details and samples of this unique means of creating improved community involvement. 22 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a free concert for members of its Golden Arch Club. The club is com prised of bank customers aged 60 or older. The event was held at the Rosedale Middle School and featured the Foggy River Boys, musicians from the Ozark town of Branson, Mo. They entertained the audience with country, popular, gospel, western and folk music. The Foggy River Boys were preced ed by a piano recital by local high school student Randy Bush, winner of the Kansas state music competition this year. Rosedale State staffers were on hand during the event to serve cake and punch. Guyneth Lawler of the bank’s staff made a display cake for the concert. The cake was decorated with a golden arch. As a climax to the evening, the floral piece that graced the punch ta ble was presented to Jeannie Turner, a customer of Rosedale State since its 1903 opening. “The concert was one of the most successful promotions Rosedale State has ever held,” said Clarence C. Casey, bank president. “We have received a number of letters and phone calls from people in appreciation of the event, and the concert still is a prime topic of conversation among members of the Golden Arch Club.” Titled “Dream Girl,” newsprint ads for the promotion feature a fashionmodel-type sketch and copy that asks, “Remember when you could only get a mortgage loan with help from your Dad, your brother or your uncle? Those days are gone at United Fed eral . . .” Scents for the Ladies 'Dream G irl': "Unattached" Females Are S&L's Targets By targeting a mortgage-loan promo tion at a “new” market, that of the un attached female, United Federal S&L, Fort Lauderdale, Fla., realized what an S&L spokesman has termed “a no ticeable increase in . . . loan applica tions.” Kate Hartland, United Federal’s vice J. William Sabo, pres., Heritage First Nat'l, Lockport, III., presents a Mother's Day greeting and a vial of Chanel No. 5 perfume to Mrs. Leon Wilhelm, a bank customer. As a tribute to mothers of its area on Mother's Day, the bank presented the first 400 women to visit Heritage First Nat'l with Chanel "scents." MID-CONTINENT BANKER for July, 1977 How to get the most for your safekeeping dollar: take the depository route, via Manufacturers Hanover. Cuts holding and handling costs. For p ro fit’s sake, count yourself in on the most advanced way to process securities — by electronic book entry, w ith Manu facturers Hanover Trust as custodian. Automatically, you “piggy-back” on our long position at Depository Trust Com pany which entitles you to lower rates. You not only cut out the expenses that certificates Delivery service to expe dite trade confirms and settlement. The fewer the fails, the better control you have of your funds. And we prom ptly credit dividends on the payable date. Tells you where you stand. entail—clerks, guards, vault space—but depository processing actually costs you less than a traditional safekeeping service. Gets you your money faster. We have the expertise w ith DTC’s Institutional Were quick to relay the facts you need for recon ciliation. In addition to conventional reporting means, we now have one of the most advanced on line Securities Movement and Control systems —so advanced it can report your transactions on a daily basis. But hardware can’t do it all. A t MHT, you deal w ith a staff whose experience in securities administration averages well over 10 years. Leaves liability worries behind. When you participate via MHT, you’re relieved of the immense pressures that come from safeguard ing securities. In fact, M H T has more than $5 billion of its own trust assets on deposit at DTC. To learn more about how your bank can profit by MHT’s relationship with DTC, contact Brian V. Carty, Manufacturers Hanover, 350 Park Avenue, N ew York, N.Y. 10022. (2 1 2 )3 5 0 -4 6 5 8 . MANUFACTURERS HANOVER Member FDIC MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 23 • Diebold, Inc. A new vault de signed for financial institutions with satellite or temporary offices or for large offices needing point-of-use pro tection for cash and securities has been announced by Diebold, Inc., Can ton, O. The Porta-Vault can be moved and installed quickly, according to the manufacturer, and its interior arrange ments include safe deposit boxes, teller • Brandt, Inc. The Model 801 high speed bill counter and verifier has been introduced by Brandt, Inc., Watertown, Wis. The machine operates on a photoelectric cell counting principle rather than a mechanical one and fea tures a receiver area that is 25% larger New Products and Services fusion surrounding this ruling. The booklet is available at $4 each, paid in advance. Write: Consumer Bankers As sociation, 1725 K Street, N. W., Wash ington, DC 20006. lockers and open-storage arrangements. The safe is available in stainless steel or in one of eight optional colors ac cented with stainless trim. Besides in corporating a number of protective de vices, the Porta-Vault has built-in pro vision for optional alarm contacts. Write: Diebold, Inc., Canton, OH 44711. • Federal Deposit Insurance Corp. A new consumer-information brochure has been released by the FDIC, Wash ington, D. C. The second in a series of consumer educational pamphlets from the FDIC, this new release focuses on six federal consumer-protection statutes enforced by the FDIC for member banks. In addition, the new brochure includes a detachable form for use in detailing the nature of a bank-related complaint or inquiry and instructions for requesting assistance from an FDIC office. Copies of the brochure are avail able at no charge. Write: Federal De posit Insurance Corp., Publications and Graphics Service Branch, 550 17th Street, N. W., Room 825, Washington, DC 20429. • American Express. A revised ver sion of the Travelers Letter of Credit is being offered by American Express, New York City. The most noticeable new feature of the Travelers Letter of Credit is its reduced dimensions, which now are business-envelope size. In addition, drafts that must be pre sented to banks for encashment have been provided with the document. Spe cial security features also have been in corporated into the Travelers Letter of Credit, and it is available in amounts from $2,000 to $100,000. Write: H. S. Thomson, manager, Travelers Letter of Credit Department, American Express Co., American Express Plaza, New York, NY 10004. • Consumer Bankers Association. “Elimination of Holder in Due Course —How It Affects Consumer Bankers,” by Ralph J. Rohner, the former chief counsel to the Subcommittee on Con sumer Affairs, Senate Banking, Hous ing and Urban Affairs Committee, has been released by the Consumer Bank ers Association, Washington, D. C. This booklet examines the Federal Trade Commission’s regulation on the preservation of consumers’ claims and defenses and is designed to clarify con24 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • Mosler. A 38-page comprehensive manual on lock security systems now is available from Mosler Safe Co., Hamilton, O. It’s designed, says Mos ler, to help customers determine riskmanagement programs commensurate with their loss potential and stresses preventive security measures. Also cov ered are nearly every standard lock ap plication and protection, combination locks, time locks and key locks. There’s also a glossary of terms. Write: Mosler Safe Co., Department PR-087, 1561 Grand Boulevard, Hamilton, OH 45012. than in previous models. The Model 801 can count up to 500 bills per min ute and can operate in a batch mode. The unit’s housing is of high-impact cycolac plastic in a non-reflectiVe tan finish. The Model 801 weighs 23 pounds and can be moved easily, ac cording to the manufacturer. Write: Brandt, Inc., Watertown, WI 53094. • Bankers Systems, Inc. Although bankers in the Mid-Continent area can not offer NOW accounts at the present time, legislation is before Congress that, if passed, would extend NOWaccount privileges to banks across the country. Therefore, a booklet called “NOW Account Management” should be of interest to bankers. The publica tion is designed to be given to cus tomers holding NOW accounts and may help reduce customer errors, im prove the financial institution’s image in the community and promote better customer relations, according to Bank ers Systems, Inc. NOW-account terms, the anatomy of a NOW check, how to write it and how to make a deposit are included in the booklet. Also explained are a NOW checkbook register and reconciliation of the statement. Write: Bankers Systems, Inc., P. O. Box 1457, St. Cloud, MN 56301. • Federal Reserve System. “The Equal Credit Opportunity Act and . . . Women,” and “The Equal Credit Op portunity Act and . . . Age” are new consumer pamphlets available from the Federal Reserve System. Copies of the Equal Credit Opportunity pamphlets may be obtained singly or in bulk free from the Board of Governors in Wash ington, D. C., or from any of the 12 Federal Reserve banks. MID-CONTINENT BANKER for July, 1977 The two-sided story o f d ie 60-second money order. analysis of your present system for The story of the American Express® and that they write in the payee’s you, just mail the coupon below to name themselves for privacy they Financial Institution Money Order Gil Rosenwald, Director of Money (FIMO) has a happy ending for both don’t get with most money orders. No matter which side you’re on, Order Sales Development, sides. Yours and your customer’s. FIMO is a story with a happy ending. American Express Company, New FIMO will not only save your York, N . Y. 10004. Or call him col If you’d like more information, or tellers valuable time at the counter, lect at (212) 480-3226. they’ll also eliminate costly cashier’s would like us to prepare a financial checks and processing. i--------------------------------------------------------------------------------------------------1 I Gil Rosenwald, Director of Money Order Sales Development Am 7 ] All your tellers have to do is American Express Company, American Express Plaza, NY., N.Y. 10004 issue FIMO in the specified amount. The FIMO story interests me very much. Cd Please send me more infor They don’t even need an officer’s mation. □ I am interested in the financial analysis. Please tell me more. authorization. Then you just mail a weekly report to American Name------------------------- :------------------------------------------- ---------------------------Express and your work is done. Institution’s Name We do all the processing— including reconciling, storing, filing and ordering. We’ll even run down exception items and stolen money orders. And handle refunds. As for your customers, they’re sure to appreciate the fact that FIMO American Express FIMO. The money-making money order« can be issued in under a minute, MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 25 Agricultural News Ag Lenders Discuss Methods to Help Farmers Weather D rought Tight Credit G LENDERS in plains and western A states have real problems in find ing ways to help their customers stay in business, according to a sampling of bankers from those states, who partici pated in an ABA-sponsored ag bankers seminar for news media recently. Five bankers who work daily with the financial problems of farmers and cattlemen discussed the current credit situation. They agreed that uncertainties be yond the control of the farmer—the drought and the pricing of grains and cattle—have pushed many farmers, grain producers and cattlemen in the plains and western states into a pre carious capital-short position. A lack of cash flow is creating the most problems, said panelist Marvin Rohn, vice president, Omaha National. “Cash flow is the gross income of prod uct produced and sold, less expenses incurred in the production of that product,” he explained. The banker observed that, because of the large production of corn and wheat in 1976, prices of these com modities fell below the cost of produc tion. Farmers anticipate the same prob lem this year. “Drought in 1976 created a shortage of feed grains for the livestock feeder and a shortage of cash from the sale of soybeans,” said Ed W. Claussen, chairman and president, Farmers State, Schleswig, la. “These factors, plus high land, machinery, fuel and fertilizer costs, have all contributed to the tight cash flow situation,” he said. Walter W. Minger, senior vice presi dent, Bank of America, San Francisco, panel moderator, noted that livestock people deserve special attention. “Cowcalf operators have experienced poor markets for three years, drought for WHY THE SCARBOROUGH MAN FOR YOUR BANK INSURANCE He is a professional who understands the special insurance needs of banks. Are you over-insured or under-insured? In either case, you will be losing m oney. . . reason enough to see your Scarborough man. His experience and the knowledge gained from serving only banks provide him with the expertise to recommend the specific insurance coverage your bank requires. Ask him a b o u t. . . • Bankers Special Bond • Trust Operations Surcharge Liability Insurance • Employee Accident, Health, Dental, Life Coverages • Directors and Officers Liability Insurance • Credit-Life, Accident & Health Coverages Doug Cushin Missouri/Southern Illinois two years and increasing operating ex penses. The earnings base of many ranchers has been shrunk at the same time that unit production costs have increased.” Panelist Dean D. Haddock, presi dent, Guaranty State, Beloit, Kan., agreed that there has been a severe weeding out of cattle feeders with some expected to not have re-entry capability. “Beef cow operations have just held on for the past three years, operating at a loss and with a prayer for better days,” Mr. Haddock observed. “Many lines of farm credit have been able to stay in business only through the bene fit of the continued appreciation in land values.” Mr. Rohn agreed that increased values of land have allowed additional long-term debt to be placed against term assets, stretching out the expense side of cash flow and placing an in creased availability of cash for other uses. “Operators in the tightest squeeze are the younger ones who started into business during the early 1970s, when prices were profitable,” said Wayne D. Gibson, vice president, First Security, Bozeman, Mont. “The young farmer has little room to fall back on his equity and consequently, in some cases, is being forced to sell out.” The panelists agreed that the tight money situation will be with us for at least a year, even with normal crops and good livestock prices in 1977. Ag lenders must study every avenue available to help their customers stay in business without further eating into the equity they have in their farm op eration, Mr. Gibson said. “Reducing operation costs for the farmer and rancher and financing his operation un til such a time as prices return to a level profitable for continued opera tion,” are two methods Mr. Gibson cited. “We are encouraging customers to cut back on nonessential purchases and closely study all marketing avenues to improve their income,” he said. “The grower or rancher must first perceive that a change in operations or style of management is needed be fore borrower and lender can sit down with any hope of reaching a mutually acceptable solution,” Mr. Minger con cluded. 8 8 To meet y ° ur bank insurance specialist write or call Scarborough the bank insurance people Scarborough & Company, 222 N. Dearborn St., Chicago, Illinois 60601 Phone(312)346-6060 26 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for July, 1977 “Being a First correspondent bank helped us succeed in landing im portant new business like Floyd Fairieigbs feed yard.” * mmvmmm » j y :/ ■»!»**«** . .. *M — M r Gepe Fonça niton, First NatioftaWBankpf Kansas Çjfy ßti&wtoy State Baafco^Scott City *■**] Feed Yfurds The Security State Bank Scott City, Kansas is a true success story. A correspondent bank relationship has helped it grow and maintain important new accounts. It began in 1967 when Duane Ramsey of Security State solicited the agri-business of Mr. Floyd Fairleigh of Scott City. To handle his sizeable credit needs, Security State sought the participation of the First National Bank of Kansas City. First National responded by offering a major line of credit and the agri-business expertise of people like Gene Foncannon. Correspondent help like this has played a part in the growth of Security State Bank. And as Floyd Fairleigh’s small feed yard operation has grown to six agri-business corporations, Security State has grown with many new accounts. If your bank needs a productive correspondent relationship to solicit and obtain new business, extend credit, add expertise and a depth of personnel in your area of interest, call the professional staff of the First National Bank Correspondent Department. We take pride in the success p f Security State Bank. Our correspondent banking tradition has been built on help like this. Why not put our strong tradition of excellence to work for your success. Ybur success is our tradition. First . National D n K > l ^ b f KANSAS CITY. D O l UVMISSOURI An Affiliate of First National Charter Corporation MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member FDIC 27 added that, while it may not lessen the broad cyclicality of the mortgage mar ket, it will help temper disintermedia tion and lessen its chronic stops and starts. * * Mortgage Lending Bank of America Plans Public Offering O f Mortgage-Backed Certificates REGISTRATION statement has A been filed with the Securities & Exchange Commission by Rank o£ America covering the proposed public offering of about $150 million in mortgage-backed pass-through certifi cates. According to the bank, the proposed issue will be the first public offering by a private mortgage lender of ownership interests in a pool of conventional single-family mortgage loans. The pool will be patterned after the structure used by the Government National Mortgage Association (GNMA) for its mortgage-backed securities; however, neither the certificates nor the under lying mortgages will have any govern mental insurance or guaranties. The registration statement covers 1,500 certificates with a face value of about $100,000 each. Net proceeds from the sale are expected to be used LARGEST IN MICHIGAN NATIONAL BANK OF DETROIT assets over 7 billion dollars Member Federal Deposit Insurance Corporation _____________________________ 28 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis by the bank to originate new conven tional residential mortgage loans. The certificates will be of the “pass through” type, the bank said, with each certificate entitling its holder to 1 / 1,500th of the principal and interest received on the pool each month, less the bank’s servicing charge on the loans. The certificates will not be a debt obligation of the bank, but the mort gage pool will have the benefit of a mortgage guaranty insurance policy, which is limited in scope and amount. Insurance for the issue will be pro vided by Mortgage Guaranty Insurance Corp. (MGIC). According to MGIC President Leon T. Kendall, the issue is a breakthrough for conventional loans. “The use of mortgage-backed securi ties is an area long championed by MGIC as a vehicle to get additional funds into the housing market,” Mr. Kendall said. “Conventional mortgagebacked securities will attract new money to home loans from nontraditional sources such as pension funds, bank trust departments and even internation al investors,” he said. Mr. Kendall said MGIC will insure the top 5% of the outstanding principal balance of the issue, which initially will be $7.5 million. Mr. Kendall pointed out that the is sue is significant in that it is the first marketable, privately sponsored regis tered pass-through mortgage security that does not require over-collateraliza tion. He said once the bank creates its pool, it has no liability other than to fulfill its servicing contracts. “When the market accepts this,” he said, “it will be accepting mortgages as mortgages, rather than relying on the general credit of the originator, or requiring over-collateralization of sig nificant amounts.” He said that the issuance of increas ing amounts of securities backed by conventional loans and protected by mortgage guaranty insurance “will greatly expand the market for our in dustry.” The influx of funds through mort gage-backed bonds will make the mortgage market more efficient and will tie it more closely to the general capital markets, Mr. Kendall said. He Instructor's Sabbatical' (Continued from page 12) such assignments. Bank officers provided Mr. Seager with opportunities to see other banks’ operating procedures, attend informa tional and training sessions and other wise gain an overall perspective of commercial-bank operations as seen through a trainee’s experiences. He also kept a diary in which, each day, he re corded his job experiences and reac tions. Because Mr. Seager also is respon sible for a program at the college under which students can receive college credit for part-time work, this sabbati cal in the day-to-day business world is additionally valuable. “This was an extremely interesting experience,” says Mr. Seager. “I am so very pleased at having been accepted by officers and employees of the bank. They knew why I was here, and they approved.” Mr. Stone, a contributor to financial publications and a frequent speaker and panelist at national and regional banking seminars, is equally enthusias tic about the “Seager project” and plans to encourage other bankers and businessmen to investigate the possibil ities for similar projects in their com munities. After obtaining a bachelor’s degree in business administration in 1960 from Emporia (Kan.) State College, Mr. Seager spent three years in the business world, at Commercial Credit Corp. in Stockton, Calif. He returned to Emporia State College in 1963 to work toward a master’s degree. He also held an administrative post there while doing so. His teaching post at Butler County Community College is his first, and he’s now in his 12th year there. It was that long absence from the business world that helped him decide to return to it for a little while. As he pointed out in his letter to Mr. Hein rich, business, just as other segments of society, has changed tremendously during the past 15 years. He believes his 18 weeks at Walnut Valley State have helped bring him up to date in the world of business. • • MID-CONTINENT BANKER for July, 1977 H a rla n d bank forms can cure all your internal aches and pains. They are simple, ef ficient and inexpensive, and are designed to keep the internal business at your bank flowing smoothly. Harland internal forms are available in several stock styles and colors, or can be custom designed to meet your specific needs. They are economical to buy and use, and are https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis printed and shipped to you in a minimum amount of time. And they are all right here in the Harland Bank Forms brochure. To get your brochure, simply write Harland or talk to your Harland representative. Hell show you how to save money and time with Harland a urn n a y internal forms. P O#S T O lFFIC/E B1O X/ 105250ATLANTA, v l / 1G EO / RG VIA3 0 3I4 8 / - A Heller participation loan keeps your customers’ interest in your bank. When a good customer or prospect comes to you with a loan request larger than you may be willing to provide, you don’t have to lose him. A bank/H eller participation loan gives you the leverage to maximize your customer’s credit availability. You provide his normal banking functions, retain his deposit balances and generate interest income from your portion of the loan, typically 30% to 50% . HELLER Financial Services 30 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Heller assumes responsibility for all administrative and supervisory details, plus keeps you close to the situation with periodic examination reports. Heller has been exercising this kind of financial creativity for over a half-century with banks of all sizes. Today, Heller is not only the most experienced, but very likely, the best in the business of participations. Contact the Heller office nearest you today. Your customers and prospects are too im portantto lose. Walter E. Heller & Company 105 W. Adams St., Chicago, III.. 60603 New York • Boston • Philadelphia • Baltimore • Syracuse ‘ Detroit • St. Louis Charlotte • Kansas City • Denver • Atlanta • Miami • Birmingham New Orleans • Houston • Dallas • Phoenix • Los Angeles «San Francisco Portland • San Juan P.R. Heller services also available through Heller Companies in Canada and twenty other countries around the world. MID-CONTINENT BANKER for July, 1977 Are Introduced Into Congress Sponsors Include ABA, Administrationj S&I Groups, Mortgage Bankers and Senator Thomas McIntyre HERE ARE no summer doldrums in the 95th Congress, at least as far T as banking is concerned. This was made evident by the introduction June 9 by Senator Thomas McIntyre (D., N.H.) of six bills that propose major changes for the financial industry. The bills reflect the interests of the Admin istration, ABA, Mortgage Bankers As sociation, National S&L League and U. S. League of Savings Associations. The sixth bill is being sponsored by Senator McIntyre himself. Hearings were scheduled to begin June 20 on the proposals. The Administration’s bill (S. 1664) would extend NOW accounts nation wide and allow the Fed to pay interest on required reserves it holds. The ABA bill (S. 1668) embodies in legislative language the position developed on be half of banking by more than 300 bankers at the ABA’s banking leader ship meeting in April at The Green brier, White Sulphur Springs, W. Va. The ABA points out that all elements of the banking industry’s position are being put before Congress for consider ation. All six bills are being considered by the Senate Financial Institutions Super vision Subcommittee, of which Senator McIntyre is the chairman, but the sub committee will forward only a single legislative proposal to the Senate Bank ing, Housing and Urban Affairs Com mittee. The ABA bill and the Administra tion’s measure are substantially similar, but there are several differences be tween them : First, under the ABA bill, all institu tions that choose to offer third-partypayment accounts—whether they pay interest or not—would come under the same interest-rate ceilings for all classes of time and savings accounts. Under the Administration bill, even if a thrift or credit union chooses to offer NOW accounts, it still would be able to pay By ROSEMARY McKELVEY M anaging Editor its customers higher interest on other classes of time and savings accounts. Only NOW accounts would have the same rate ceiling at all financial insti tutions. Second, the ABA bill would preserve and support the dual-banking system. The ABA proposes that the Fed set re serve requirements on NOWs and oth er account balances only for federally chartered financial institutions, statechartered Fed members and state-char tered members of the Federal Home Loan Bank System. The Fed would have no authority to set reserves on NOWs held by state-chartered non members. However, under the Administration bill, the Fed would set reserve require ments on NOWs alone for all financial institutions, whether state or federally chartered. Under both bills, the Inter agency Coordinating Committee would set the interest-rate ceiling for the new type of account. Third, the ABA bill would require the Fed to pay a uniform interest rate on required-reserve balances for banks of all sizes. The Administration bill doesn’t spell that out. It leaves it up to the Fed to decide exactly how interest would be paid on required-reserve bal ances. According to the ABA, that MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis J. Rex Duwe, ch.r ABA Governing Council, and former ABA pres., is shown discussing the newly proposed fi nancial legislation at the New Mexico Bank ers Association's an nual convention in San ta Fe last month. Mr. Duwe is ch. & pres., Farmers State, Lucas, Kan. could mean a graduated interest rate for different-size banks. The bill sponsored by the U. S. League of Savings Associations (S. 1666) includes a provision that would extend for 10 years deposit-rate ceilings, with the rate differential favor ing thrift institutions. The bill would make authorization of variable rate mortgages easier by the Federal Home Loan Bank Board and would give S&Ls more authority in the consumer-lending field. The National S&L League bill (S. 1667) is similar to that proposed by the U. S. League. One difference is that the National S&L League rec ommends a 5/2-year extension of de posit-rate ceilings instead of a 10-year extension. It also would permit S&Ls to offer NOW accounts and give them broader investment privileges than does the U. S. League’s bill. As described in the Congressional Record, the Mortgage Bankers Associa tion bill (S. 1669) would void those regulations of the Federal Home Loan Mortgage Corp. that have the effect of preventing mortgages approved by the Secretary of the Department of Hous ing and Urban Development from ser vicing mortgages sold to the corpora tion. For example, the bill would pre clude any seasoning requirement for loans to be serviced by HUD-approved mortgages or any restriction limiting the amount of loans a seller may con tract out for HUD-approved mortgage servicing. Senator McIntyre’s bill (S. 1665) would provide, for the first time, for a federal-charter option for mutual sav ings banks, establish a central-liquidity fund for credit unions and modernize and restructure the National Credit Union Administration. As J. Rex Duwe, chairman of the ABA’s Governing Council and former association president, said at the 1977 31 New Mexico Bankers Association con vention (within 48 hours after Senator McIntyre had introduced the proposed legislation): “Our challenge during Senator McIntyre’s hearings, and dur ing the rest of this Congress, will be to persuade Congress that competitive parity for bank customers must be an integral part of any legislation for NOW accounts.” Mr. Duwe, chairman and president, Farmers State, Lucas, Kan., told his New Mexico audience that the ABA’s recent track record offers some reason for optimism. He pointed out that the association was active in arguing the case with the Fed and FDIC that a new form of account should be created that would result in eliminating the in terest-rate differential on IRA and Keogh accounts; the ABA’s been in volved in a myriad of tax decisions that have saved banks and their customers literally millions of dollars; it backed the successful effort to give bank cus tomers the legal right to challenge gov ernment subpoenas of their records and to require the IRS to reimburse banks for the time spent digging out those records; and, largely as a result of an ABA lawsuit, a nationwide moratorium has been placed on share-draft authori zations for federal credit unions. “Now,” he continued, “it is time to use all our legislative clout to gain equality for bank customers and banks. “Jean Monnet, who was the father of the Common Market, once wrote to other European leaders, ‘We must at tack our problems instead of each oth er.’ I say the same thing to America’s BankAmerica Corp. Quarterly Report bankers: We must attack our problems and not each other. “Our nonbank competitors have re ceived tremendous increases in authori ty. They have used that authority to the disadvantage of bank customers.” Mr. Duwe emphasized that the ABA’s proposed legislative package of fers bankers the opportunity to reverse that trend, but he warned that this package will fail if bankers don’t unite behind it. “We cannot ignore this opportunity for competitive equality,” said the ABA spokesman. “We must respond to this challenge in a way that meets the needs of our customers and our institu tions. To do otherwise would jeop ardize the financial health of our com munities, our industry and, indeed, our entire financial system.” # * Interbank Opens Warning Bulletin To All National Bank Cards NEW YORK—What has been termed by its owner as “the most sophisticated and effective card security system in the bank charge card industry”—Inter The HC notes eight economic var bank Card Association’s regional warn iables that are considered in develop ing system—will be available to the ing a country’s adaptability index: (1) bank card industry regardless of pres real gross domestic product per capita; ent card affiliation, according to the (2) consumer prices; (3) merchandise firm. export earnings; (4) domestic and for “This development is of profound eign savings; (5) export product con significance to the entire bank card in centration; (6) food and fuel imports; dustry,” John J. Reynolds, Interbank (7) exchange-rate adjustments; and (8) president, said, “particularly in its ef International Monetary Fund account fect on the reduction of credit risk at position. the point of sale to the bank and with The second type of risk noted in the added assurance of security to the report is associated with the HC’s ex bank’s card-honoring merchants.” posure in a currency external to a given The regional warning system utilizes country. An external debt-servicing in input from 8,500 participating banks dex is developed, which represents the to develop, print and issue more than relationship between a country’s pro 1.1 million copies of its regional re jected external-debt-service require stricted card bulletin on a regular basis ments and resources available to service to some 800,000 merchants in eight that debt. geographical regions around the world. Four economic variables are consid Merchants are required to check the ered in developing that index: (1) ex bulletins for card validity on all Inter ternal debt-servicing-capacity ratio; (2) bank card sales under a specific trans number of months of imports covered; (3) total external debt divided by GNP; action amount. Participating banks may input on a and (4) a compressibility ratio (a mea weekly basis the numbers of all Master sure of how large a portion of export earnings and net private transfers is Charge and other Interbank cards required to finance vital imports and which, for one reason or another; are deemed by the bank to require au current external debt payments). thorization. The new arrangement will Another section of the discussion looks at major measures of performance allow for the inclusion of other nonthat HC management and the invest Interbank cards in the regional restrict ment community believe are indicative ed card bulletin system. The bulletins are said to have been of BankAmerica Corp.’s overall perform ance. This section includes a dividend- responsible for major across-the-board payout ratio and the price range of reductions in fraud. During 1976, re ported fraud on interchange declined common stock. Also added to the discussion of the 22.4% on a sales gain of 38.6%. statement of income are sections on the corporation’s pretax income and effec tive tax rate. • • Features Average-Balance, Risk Info ANKAMERICA CORP., San Fran cisco, has released its first-quarter B report, which contains new averagebalance-sheet information and a de scription of the HC’s system for mea suring country credit risks. New to BankAmerica quarterly re ports is the inclusion of a table showing consolidated average balances, interest and average rates, which reportedly allow easier comparison of BankAmer ica Corp. with other bank HCs. An introduction to the report’s “Man agement Discussion” section is an over view of what the corporation has identifed as key performance variables, how they are organized and the methods used to derive those indicators. Changes in average balances con tained in the table are covered by the discussion section. In discussing aver age total net loans, for instance, the section notes that “as demand for do mestic wholesale commercial loans re mains weak, the bank continues to pur sue lending opportunities in foreign markets.” As a result, the report says, overseas loans have grown by 14.1%— from a first-quarter average of $12.5 billion in 1976 to $14.3 billion during first-quarter 1977. The HC’s “Country Risk Rating Sys tem” concentrates on two types of risk: The first type of risk noted in the re port is associated with BankAmerica Corp.’s total exposure within a country. An adaptability index is included, based on a country’s economic, political and social stability, quality of its policy management and its record for honor ing internal and external debt. 32 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for July, 1977 Adverse Effects in Store for Banks If Comptroller's Proposed Regulation On Credit-Life Income Goes Through E WELCOME this opportunity to express opposition to the proposed W regulation published last year by the Comptroller of the Currency regarding disposition of income from credit life, health and accident premiums. The headline over the May 15th Mid-Continent Banker article by Ford Barrett, “Credit Life Income Should Go to Banks, Not to Individual Employees, Directors,” should not be construed as the magazine’s endorse ment but, as Managing Editor Rose mary McKelvey explains, it was simply intended to be a title condensing the views of Mr. Barrett, who is assistant chief counsel on the Comptroller’s staff in Washington, D. C. Comes now our detailing of the op position viewpoint: The Independent Bankers Associa tion of America represents more than 7,300 banks, about 2,000 of them na tional banks. The proposed regulation would ad versely affect our member banks in sev eral ways: • It would interfere with the sale of independent national banks to other in dependent owners in the future. • It would make it difficult, if not impossible, to service existing bank stock loans. • If this regulation is promulgated, and followed by the other federal bank regulatory agencies, such a regulation would similarly affect state banks, which number 5,371 in our association membership. • The regulation would decrease banking competition and increase con centration, contrary to our national pol icy to preserve competition as the great regulator of banking. When an insurance agency is truly a bank asset, the proposed regulation is not necessary because there are other statutes and regulatory power ade quate to deal with diversion of capital assets or income of a national bank. There’s an important difference be tween ownership and control of an in surance agency by the bank corpora tion and one owned by individuals holding the controlling shares of a By GENE MOORE Secretary Independent Bankers Assn, of America Sauk Centre, Minn. bank. The former is the bank agency, the latter the private agency. If a private agency traditionally has been owned and controlled by individ uals who also have the controlling shares of the bank, the agency is not an asset of the bank, and the bank is not entitled to income from the agency except for fair reimbursement for over head costs in connection with the op eration of the agency on bank prem ises. The problem with the proposed reg ulation is that no distinction is made between private agencies and bank agencies. It would sweep into the bank’s assets the ownership, control and income of all agencies regardless of prior ownership and without con sidering constitutional due process, state insurance laws, income-tax conse quences and the relative legal rights of majority and minority stockholders of a bank. Alleged Diversion of Agency In come. The proposed regulation prohib its commission income derived from the sale of credit life, health and accident insurance to be paid to any employee, officer, director or principal shareholder of the bank. Further, it states that pay ment of such income to others than the bank is “an unsafe and unsound bank ing practice.” The regulation statement refers throughout to what is called “di versions of insurance income” (theft) from the bank. "No distinction is made be tween a private agency legiti mately owned by officers or directors and a bank agency owned by the bank corporation. It is crucial and necessary that such a distinction be made / 1 MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis No distinction is made between a private agency legitimately owned by officers or directors and a bank agency owned by the bank corporation. It is crucial and necessary that such a dis tinction be made. Many insurance agencies on bank premises are owned and controlled by individuals who are principal share holders of a bank, particularly in small and medium-size banks. A much small er number of insurance agencies are owned and operated by the bank cor poration and carried as an asset of the bank. If state banks were considered in the ratio, an even greater majority would be private agencies. When an agency is owned and con trolled by the bank corporation, and has been considered as a bank asset for a period of years, the agency income admittedly should not be diverted to private hands, but should be kept by the bank as part of its assets and in come. If diversion of such a bank agen cy income into private hands occurs, the bank and its shareholders may be deprived of their property rights. In such case, no regulation as proposed is needed. There are adequate statu tory and regulatory controls to forestall any possible diversion. Recognition of an insurance agency as an asset of the bank corporation as sumes the bank has the legal right to operate the agency. The Comptroller cites 12 U.S.C. §24(7) as legal au thority for this assumption: “To exer cise by its board of directors or duly authorized officers and agents, subject to law, all such incidental powers as shall be necessary to carry on the busi ness of banking. . . .” It may well be questioned whether operation of an insurance agency by the bank corporation is authorized un der the powers clause since it may not be “necessary to carry on the business of banking.” Further, any incidental power may be exercised “subject to law” which involves regulation of the business of insurance exclusively by the states. The argument may be made that where the bank owns, controls and 33 treats the insurance agency as a bank asset, and where the bank regulatory authority has interpreted this activity as a permissible implied power for a long period of time, such interpretation may be weighed under the general rules concerning the construction of statutes. But where the insurance agency is operated by individuals who also are among majority shareholders of the bank, and the bank is reimbursed for all overhead costs attributable to op eration of the agency on bank prem ises, the question of proper exercise of incidental bank powers under the statute is not involved. State supervisors in some states don’t permit banks to operate insurance agencies and don’t permit such opera tions by other financial institutions on the basis that they are not within statu tory powers. In such cases, there is no alternative but to permit private own ership and operation of insurance agen cies on bank premises, so long as the bank is reimbursed for overhead ex penses. If the bank is not so reim bursed, the statutes and regulatory powers referred to above could be ap plied. Constitutional Due Process. The pro posed regulation supports an untenable concept: Simply because an individual ly owned agency operates on bank premises, its assets and income auto matically are the bank’s property. This proposal would take away from private ownership the insurance agency income and force all the income to be owned by the bank. Such a regulation would deprive these private owners of constitutional rights, particularly in taking their assets and income without due process of law in violation of the Fifth Amendment. A federal agency by regulation can not deprive recognized owners of their constitutional rights. The proposal would take from them considerable val ue in the form of assets, goodwill and the right to future income, all without just compensation. This issue of taking property without due process is com pounded by the question of whether the transfer to the bank would be treat ed retroactively. Preemption of State Regulation. An other serious problem this proposal presents is the intrusion of the federal government into insurance regulation, which is exclusively in the states. In 1945, Congress adopted the McCarran Act and made it clear it was not inter ested in regulating the insurance busi ness and had no intention of pre- Comptroller Exceeds His Powers With Credit-Life-Income Proposal By N. J. SCHINDLER Finance Insurance Consultant EDITOR’S NOTE: The Comptroller s proposal that income from credit life insur ance sales should be counted as bank in come and not go to officers, directors or stockholders has drawn much comment since it was announced in July, 1976. Among those against the proposal is the In dependent Bankers Association of America (see article beginning on page 33). Mr. Schindler agrees with the IBAA and gives the following reasons for his opposition to the proposal: w e n t y -f i v e y e a r s of working Twith banks and bankers in many states permit me to speak with authority in total support of Gene Moore’s state ments and questions raised in the ac companying article. Apparently, neither the Comptroller of the Currency nor his staff bothered to check their files concerning a similar situation created in 1963 by then-Comptroller James J. Saxon. Nationally pub licized reaction was summarized in a 34 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis telegram sent to President Lyndon B. Johnson, telling the President to ad vise the Comptroller to “keep his cur rency-picking hands out of the insur ance business” and suggesting that the President give the Comptroller an “of ficial spanking for exceeding his regula tory powers.” To date, the Comptroller’s Office is dealing with a “proposed” regulation. No mention has been made of the de gree of harassment, intimidation and confusion caused by examiners during the past two years. Although labeled “fact-finding,” criticisms were leveled at both state and national banks after routine examinations showed that com mission income was not paid 100% to banks. In spite of state laws to the con trary, numerous bank boards were in structed to respond to the dictates of their district office of the Comptroller stating that their banks would comply and divert all commissions involved di rectly to their banks.* * empting regulation of insurance by the states. Thus, insurance regulation al ways has remained exclusively in the various states. One of the most sensitive and impor tant areas of the regulation of insur ance business is the control through li censing of individual agents by state insurance commissioners. And since long before 1945, only individuals have been licensed on the premise that in this way the public could best be pro tected. Hence the state has the oppor tunity and right to license only trust worthy and competent persons, and the state commissioner can suspend or re voke a license when an agent is un trustworthy or employs false practices in the sale of insurance. The states hold individuals directly accountable for vio lations and thus will not license agency corporations, as such, including finan cial institutions. The Comptroller’s regulation at tempts to prescribe who can be an agent for the sale of credit life, health and accident insurance and who is en titled to the commission income. State laws uniformly prescribe that only a li censed agent may be paid a commis sion, and this requirement is enforced by penalties against the agent and the carrier or both. The proposal attempts to force pay ment of commissions to a corporation, which itself cannot be licensed under most state insurance laws. It also pre sents a dilemma to a bank owner: If he followed the proposal and trans ferred ownership, control and income of the agency to the bank corporation, he would commit a violation of state law in some jurisdictions. On the other hand, if the bank owner were to refuse to make such transfer because it would violate state law, he would find himself afoul of the proposed regulation. The Comptroller’s Office for many years has authorized national banks to write their own credit life coverage in the form of “debt-cancellation con tracts” payable on death of the bor rower. But some states prohibit such contracts as the writing of insurance without a license. Many state laws prohibit purchase of insurance as a prerequisite to ob taining a bank loan. These laws apply to national banks. And Regulation Z under the Consumer Credit Protection Act gives the customer the option of whether to purchase insurance at the lending institution. Further, that act specifically provides against preemp tion of state laws. The proposal does not consider the fact that individually licensed agents are liable personally for payment of premiums to carriers. They cannot es(Continued on page 82) MID-CONTINENT BANKER for July, 1977 m u M tiillliS i Tulsa,, Oklahoma. Land of cowboy s,o i) we IIs and nice, ' friendly people. • You knew thcti Did you know r of the * country's #1 performer in equity funds? -• r' Now you do.lfyour fund didn’t tetum 43.3%, maybe you should give us a call in Tulsa. I know /. ; 'Ti;.*. V-‘*■- i »Wêêêë.lÉlPis\.W& *'"* 0*■?'>**\ I *'• •,*; '*•i >' what you're thinking. Anyone can make money in a good year. Well, the Becker figures show us fo be a top performer in lesser Wears as well. if you want yQur fund professionally managed, start at ^the top — Write or call Richard E. fiMinshall, Sr. Vice President. Fourth & National Bank of Tulsa. 515 South Boulder lUlsa^Oklahoma 74101 1 Si m m 1 ¡iimi i ,, i ? . M' , ^ MÊSmWmi jfi. ' *Jr4f* , WMm,v'I i Becker Funds Evaluation Service: Periods ending Decmeber 31, 1976. ‘'Equity Funds, calendar period cumulative rates of returh.Annualized returns. Median • S&P 500 FOURTH 3JD 4.39 9.6 * 71-76 72-7*f 73-76 74-76 75-76 19; 4~ï 7.49 12.1 * 1^5 5.35 8,4 * -2.5 2.64 7.9 * Î6 7.04 17.8 21.9 25.35 35.5 16? 19. 43, *Tlme weighted for change from fiscal year to calendar year. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 35 Truth-in-Lending Simplification: An Idea Whose Time Is Now simplification is an idea whose time is now. With over 10,000 lawsuits in federal courts alone and comprehensive compliance examinations by federal banking agen cies, bankers have become more vocal in their demand for help—and right fully so. The needless complexity of the R§&1 Estate Settlement Procedures Act (RESPA) came to a head early, and Congress responded by amending that law to make it more realistic for bank ers and consumers. The fact that it took eight years to get to a point of no return for Truth-in-Lending should not diminish the need for change. Now that we are there, we should examine carefully the experiences of those years and come up with something beneficial to the consumer, but of minimal com plexity so that bankers can readily comply. Truth-in-Lending started out simply enough—a proposal to disclose cost in formation so that consumers could compare and shop. As it traveled through the legislative process (a pro cess that itself took eight years), it gained complexity and evolved to re quire disclosure of selective credit terms. By the time the Federal Reserve Board and the courts were done, we had a law that contains 52 sections, a regulation that has 15 sections, 153 subsections requiring 13 specific items of information at the time the account is opened, with an additional 15 items that must be disclosed with each peri odic statement in open-end credit alones Closed-end credit requires 11 items to be disclosed. Of course, bankers are not complete ly absolved from helping to create this complex morass. Taking advantage of a willing Federal Reserve Board staff and a recent change in the law, cred itors, including banks, have added to the confusion by asking for “official” staff interpretations of the law when ever the smallest question arises. To date, there are over 1,200 unofficial staff letters and 71 official staff letters, providing various degrees of protection from lawsuit. Unfortunately, overuse of this “protective device” has resulted in a constant change of forms and proce dures for creditors fortunate (or unfor tunate) enough to keep up with the current letters. By trying to keep up T r u t h -i n -l e n d i n g 36 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By TERRENCE H. KLASKY with this constant stream of letters and attempting to comply, bankers find themselves constantly changing their procedures. The fact is that it’s almost impossible for a banker to be in full compliance with Truth-in-Lending, be cause of this constant change. In the past, bankers could take the position that they were making a goodfaith effort to comply, and where a technical violation did exist, they could take their chances on the possibility of a suit being brought. However, the de tailed compliance examination proce dures of the Comptroller of the Cur rency should have all but ended this philosophy. Recently, the Comptroller has taken the position that he has the authority to order reimbursement for violations of all aspects of the Truthin-Lending Act. Additionally, where in the past it may have been prudent for bankers to readily discuss any problems they might have been having with a particular law or regulation, including Truth-in-Lending, disclosure of such a problem coupled with subsequent ex amination by the examiner could result in a substantial claim for reimburse ment by the Comptroller’s Office. Rest assured, the Fed and FDIC ex aminers will not be too far behind in requiring the same detailed examina tions and, in all probability, take the position that reimbursement can be ordered by those agencies, too. On the other hand, the Comptroller, Terrence H. Klasky formerly was on the FDIC's general counsel staff and a member of its honors program and recently left the American Bankers As sociation, where he was associate federal administrative counsel, to join the Washing ton, D. C., law firm of Milton W . Schober. Mr. Klasky holds a bachelor o f science degree in psychology from Pennsylvania State College and a juris doctor degree from Temple University Law School. He belongs to the American Bar Association and is on its committee on the regulation of con sumer credit. He also is a member of the Pennsylvania and District of Columbia Bar as sociations. in developing his comprehensive com pliance procedures, has developed a separate handbook for use by examin ers that also will provide valuable clues to bankers as to what is important and what should be reviewed before an ex amination. While the Fed and the FDIC are somewhat further behind in such programs, creation of comprehen sive handbooks by these agencies will benefit small banks especially. Even so, a problem does exist and must be corrected. Truth-in-Lending has become too complex—both for the banker and the consumer. It’s an amaz ing fact that not one individual or or ganization has yet determined what the consumer really wants or needs in terms of disclosure. Arguments that consumers are entitled to cost informa tion in order to shop certainly is as valid today as it ever was. At the same time, too much information could be confusing and downright detrimental to a consumer’s understanding of the terms and costs of credit. At this writing, there are at least five legislative efforts and one regula tory effort underway to simplify Truthin-Lending. Of course, what’s simplifi cation to one individual may not be that to another. For instance, some of the legislative efforts focus on improv ing the act while cutting down on some of the liabilities. Such improvement may take the form of beefed-up admin istrative enforcement. Bankers seem to be most concerned about the liabilities, both civil and administrative, for even the slightest, most technical, unintend ed violation. Of course, civil penalties are fairly steep at this point, since there is a minimum recovery of $100 plus attorney’s fees and court costs, even if the consumer has not actually suffered damages. Of course, this has spurred use of the official-staff-letter technique for protecting against liabil ity. Bankers must begin to decide exact ly what their concept of simplification really is. While hearings have been held and undoubtedly will continue, it seems unlikely that they will spur any immediate legislative relief. There will have to be a long drawn-out pro cess of identification of the problem and review of the alternatives. It (Continued on page 80) MID-CONTINENT BANKER for July, 1977 Brandt Electronic Cashier® delivers newfashioned customer service at your bank. Some teller windows are all hardware and no humanity. Most customers would appreciate a personal touch. Brandt helps to make friendlier, more personal service possible. Our 570 electronic cashier is fast, efficient and accurate. The secret is solid-state electronics. Just a light touch on two keys pays any amount from 1$ to 99$. And the large, easy-to-read digital display instantly verifies the amount. The cashier’s trap door attachment delivers coins directly to the teller, who can then hand them to the customer. The personal touch, remember? Coin chutes of various lengths are also available. They can be attached to either side of the unit for direct payment to the customer. On our Model https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Brandt M odel 570 Cashier 504, the keyboard is separated from the dispenser for the ultimate in versatility. A ll B ra n d t ca sh ie rs are a ttra c tiv e as w ell as efficient. Finished in a soft Desert Tan with colorharmonized keyboards, they’ll add strong visual appeal to every transaction. Assure the finest customer service at your bank with Brandt electronic cashiers. you’re |STO2SS t tUtHMT you can find it \j**<*-_ , VVe think shopping at home is miportant. Not just to our , .Before ^ leaving town for letfsask ourselves*1 could I get it here’.»» a rm m ssm l mm ] dWivx<♦ bum**#*ngt*M mymtmta I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T ry Culpeper First w as ndoubtedly the m ost uccessful m arketing effort Ve ever tried. The real onus w as the low cost.” jfjp\ I 111w Burton Stacy, President The New Bank of Culpeper tising. He may include the program logo in all his regular news When Burton Stacy heard about the “Try (Your Town) First” paper ads. And he can have the local radio station record his rogram, he knew it was a natural for Culpeper. Located within regular radio spots on top of the customized, “Try (Your Town) asy driving distance of Richmond and Washington, D.C., CulFirst” jingle. Your merchants will appreciate that kind of effort. eper merchants suffered every year, when local residents did But we want to bring the general public into the act, too. And uch of their Christmas shopping in the nearby large cities. we want them to realize who’s making it all possible—YOU! Things changed last year. The bank sponsored the “Try CulSo we provide you with a press release for your local news -eper First” program, a tested, proven program for keeping local paper. Generally, the newspaper will run a front page article hoppers at home at Christmastime. This copyrighted program about your sponsorship of the program... along with a photo nabled the bank to provide each merchant in Culpeper with of one of your bank officers pinning a button on a local mer he means to promote hometown shopping within his store, in chant’s lapel. We also provide you with newspaper ads that he local newspaper, and on the area radio stations. The bank announce the program, and your reasons for sponsoring it, to rovided everything. It was a marketing masterstroke. The local the general public. And don’t forget the radio spots. Posters for ewspaper commended the bank in an editorial. Letters to the your bank lobby. And a complete operations manual, so that Jditor praised the community spirit of the bank. Both the radio you can take advantage of the many successful ideas for imple tation and the local newspaper provided free press coverage, menting the program that have been generated by participating nd the local merchants loved it. The bank was helping put banks. oney in their pockets. Total coordination. It makes the difference between success Says Burton Stacy, “We not only gained their goodwill, but a and failure. Your program will be a success. Qt of their business.” OW YOU CAN SPONSOR THE “TRY (Your Town) BUT DOES IT REALLY KEEP DOLLARS AT HOME? IRST” PROGRAM Ask Milton Dean about that. Milton bought the program for When you sponsor the “Try (Your Town) First” program, you’ll the Eufaula Bank and Trust Company mainly as a public rela ind that several things will happen: tions effort. Then he saw what it could do in dollars and cents for "You’ll keep needed dollars at home and in your bank. Eufaula and for his bank. The sales tax figures told it all: "Your bank will be a hero to local merchants, and will probably JANUARY 1971..........$17,201.85 pick, up new commercial accounts. JANUARY 1972..........$18,992.10 You’ll have an officer call program that works. JANUARY 1973..........$18,525.28 You’ll receive free publicity in an amount that will surprise you. JANUARY 1974..........$26,565.34 IE SECRET IS TOTAL COORDINATION What did the big jump in Christmas season sales represent? We know, of course, that encouraging people to “shop at Since sales taxes in Eufaula are 1% of sales, that meant that the orne” is nothing new. Your Chamber of Commerce has tried year the “Try Eufaula First” program was introduced, an extra . Or the downtown merchants association. Maybe your bank $800,000 was kept at home. The program was successful in as even made a stab at it. causing Eufaula residents to think about shopping at home. And that’s precisely why we’ve put it all together. In the course Before heading out of town to do their Christmas shopping they 4 working with nearly 300 communities on this program, we’ve tried Eufaula first. arned what makes a shop at home program go. It takes colorful In McHenry, Illinois, the McHenry State Bank reports, “We had uality materials, for one. The kind that every merchant is proud several people comment that they display (and the kind of quality did as much as 90% of their shopping ateríais that only volume buying TIME IS RUNNING SH ORT in town this year. In other years, akes possible). Most important, they had done as little as 20% takes total coordination. That’s CALL CO LLECT NOW to 40%.” hy we provide you with material ( 615 ) Goodwill among merchants. New or all media. You’ll give every mercommercial accounts. Favorable hant a kit which includes posters public reaction. Extra dollars stay or his window, counter cards for ing in town. These are the things lisplay shelves, buttons for his emyou can expect from the “Try (Your loyees, vinyl stickers for his front oor. Town) First” program. Then you make it possible for MADISON AVENUE ASSOCIATES. INC. e merchant to push the “Try (Your And you and your bank will be P.0. Box 12338, NASHVILLE, TENNESSEE 37212 own) First” program in his adver the hero. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 39 Christmas Prom otion Timetable What to do to prepare, starting next month! IRTUALLY any Christmas pro V gram results in extra holiday plea sure for both customers and employees of a bank. All programs can be fun to produce for many people associated with a bank. And they can be even more fun—and resultful—if planned carefully and early enough. August (or even earlier) is not too early to begin. Some of the things that may be needed require long production periods and must be ordered long enough in advance to be ready at the desired delivery date. Unforeseen diffi culties—strikes, transportation tie-ups, etc.—can cause last-minute headaches in getting essential materials to the bank on time. So plan early. Decide what manage ment wants to accomplish this Christ mas. Get the plans approved, and get going! Here are some checklist suggestions —more or less in chronological order— to help start the planning process. Use whatever portion is relevant to your bank. Feel free to add new ideas. The important thing is to get what needs to be accomplished down on paper. It’s the first step to a happier, more resultful and carefree holiday season for your bank. Things to do this summer: • Jot down the exact objectives of the bank’s Christmas program. Be spe cific: How much increase from the Christmas club program is desired; what theme, if any, should be set for the lobby decorations; the amount of advertising support the program will get (print space, air time, direct adver tising material, etc.). • Draw up a rough budget of esti mated expenses and get it approved. • Appoint whatever employee com mittees are necessary to assist in the program. If a dress-a-doll program is planned, appoint a committee to han dle the details; also appoint a toy com mittee if employee donations will be used to purchase toys for needy chil dren. 40 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By ORVILLE GOERGER Special Contributor • Order calendars and budget books to be distributed at Christmas as early as possible. • Call in a display firm (unless dis plays are handled in-house) for ideas, sketches and estimates. Agree early on what is to be done, especially if special construction is necessary. • If an organist will be needed to provide lobby music, get the person under contract early; organists are sometimes in short supply near Christ mas. Also, arrange early for rental of an organ and sound equipment. • Decide what theme or gimmick (if any) will be used to promote Christmas clubs. If a gift or premium will be used, check its availability and arrange for delivery. • Review last year’s Christmas ac tivity. Eliminate any part of the new plan that didn’t work too well the pre vious year. Be sure all the best features from previous years are retained. Things to do in September: • If choruses of school children will be performing in the bank lobby at Christmas, contact the schools and set dates for the appearances. Check avail ability times and what the students might need from the bank when they perform. • If the plan calls for bank staff carolers in the lobby, organize them Editor’s note: This article is based on a chapter of a soon-to-be-published manual entitled “How to Plan a Mer rier Christmas That Increases Busi ness, Builds Goodwill and Boosts Cus tomer Relations for Banks.” Mr. Goerger began his career in public rela tions and advertising in 1940 and served Mercantile Trust, St. Louis, for 16 years as director of public relations and advertising. See page 45 for an announcement about the publication of the manual. and select a leader. Adlow sufficient time for practice sessions. • If the bank’s singing group plans to tour local hospitals, etc., start lining up dates for the holiday season. • Mailing of Christmas club checks usually is done in late October. Pre pare copy for the bank’s transmittal letter and plan the mailing vehicle. Be sure to include invitations to start new club accounts for the coming year. • Check out the Christmas club new-account counter for use in the lobby and make any repairs or altera tions necessary. If a new counter or club display is desired, plan it now so it will be ready when the lobby club promotion begins in early November. • Begin firming up the bank’s holi day advertising program and decide on an advertising schedule for news paper, radio, TV and direct mail. Have Christmas club advertising material ready to go by the end of September. • Run a preliminary story in the bank’s publication featuring details of the Christmas club promotion, the pre mium to be used (if any), the approxi mate amount of money to be distribut ed to last year’s members and the goal for the coming year. • Keep a close eye on the progress of the display firm. Don’t let it get be hind schedule. • Check out all supplies that have been ordered. If anything has been overlooked, order it right away! • Let building operating personnel responsible for the lobby know about the decorating plans. If decorating in volves major work or installations, get early confirmation of the ability of bank personnel to handle the work. If necessary, adjust plans to meet the re quirements of building operating per sonnel. • If a major radio or TV Christmas program is on the agenda, check the station for availability of air time. Re serve the time, if possible. • If bank executives use individual- MID-CONTINENT BANKER for July, 1977 9 ATLANTA, CHICAGO, MILWAUKEE, CLEVELAND, DENVER, AND ST. LOUIS AHM Train Sets have put money in banks all over the country Let us p ut together a program for you— just as w e d id for First National Bank of Atlanta, Banker's Trust, and other banks al I over the country. We'll give you exclusivity in your marketing area. We guarantee both the supply and quality o f merchandise. We can even help you develop dep osit-building premium ads. Prices — for a com plete HO Scale railway including locom otive, cars, track, and p ow er pack :— start at under $15.00. The com plete set w ith GP-18 Lighted Diesel and 6 cars, illustrated below, is under $20.00. Over 30 other A H M sets are avail able. For more information, w rite or call, H obby Marketing, 100 Main Street, Reading, Massachusetts, 01867. Telephone 617/944-7980. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis g p if f w « OJu.Sb.^oì The Firestone Bank 41 ly typed “thank you” form letters to customers at Christmastime, prepare the copy and get it approved so secre taries can start producing the letters in their spare time so they’ll be ready for holiday-season mailing. • Kick off the bank’s doll-and-toy program for employees (if one is used). Check the plans of the various committees involved. Run an advance story in the bank’s publication. If nec essary, circulate a staff memo inviting participants to join. This should be done each year, as there are usually some new employees who are not aware of the program. Things to do in October: • Mail checks to last year’s Christ mas club members. Since these people are the best prospects for a repeat sale, make every effort to get them to renew their memberships and to increase the dollar amount of their clubs. In addi tion to the transmittal letter invitation, consider a premium (or some special inducement) to spur action. • If the pay-out is a substantial amount, get publicity by issuing a press release. Mention the new cam paign and when it starts. • Make sure all Christmas club ad vertising is produced and ready for the start of the campaign. • Set up Christmas club headquar ters in the lobby. Indoctrinate staff members who will work at this counter. Make sure they are well acquainted with all information in the media ads. • Devise some simple survey tech nique that will keep the bank posted week to week on various marketing in formation: size of accounts opened, sex and age group of members, whether old or new customers of the bank, etc. This will help, this year and next, in planning a sales strategy. • Put final touches on all other holi 42 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis day advertising, including November and December statement stuffers. • Consider the practicality of using statement stuffers as additional Christ mas advertising when handed out by tellers. If used, train tellers in suggest ed procedures and give them hints about what to say to customers. • If the bank will sell novel money packages as gifts (pound of money, money by the yard, etc.) start stock piling an inventory by using spare moments of staff members to assemble items. (Some of these gifts take a lot of time to produce in quantity!) • If staff members are preparing toys and dolls for some charitable orga nization, inform the organization early so it can coordinate its plans. Things to do in November: • Start assembling all the ingre dients needed for the lobby decora tions: ornaments, wreaths, holly, dis play racks for toys and dolls, tree lights, Christmas-theme pins for tellers, coffee bar materials, outside decora tions, etc. • Officially open the lobby Christ mas club booth. Make sure a schedule has been worked out so there are al ways enough people on hand to serve customers without undue delay. • For the first few days, check each staff member working at the club booth to make sure he knows the “sales story” and is delivering it properly. Even those who have worked the coun ter before have been away from this work for 10 months and may be a bit rusty. Also, the campaign theme and sales strategy will be new to all em ployees, providing it was changed from last year. • Advise personnel to be alert to cross-selling opportunities at the booth. Tip off all booth workers to these op portunities and suggest ways they can capitalize on them. • Observe the operation of the booth daily during the first week. If additional direct-advertising material (a folder, for instance) will facilitate the service of customers and increase selling opportunities, design and pro duce one as quickly as possible. • If a premium is used as a sales incentive for Christmas club accounts, check out its customer appeal. If it isn’t living up to expectations, there may still be time to make changes for the balance of the campaign. • Check the renewal rate on your old Christmas club accounts. If below par (possibly because of a more at tractive offer by a competitor), use a follow-up mailing offering an additional incentive. • Near the end of the month, gather all display materials and store them where they can be picked up con veniently when the lobby is decorated. • Run an update story on the bank’s Christmas program in the employee publication. Include a report on early activity at the Christmas club counter. • Tie in tellers and other lobby per sonnel to the Christmas club program. Urge them to remind customers to join when they serve them. Give them a folder or memo suggesting ways they can push new accounts. • At the beginning of the month, and if the bank is using an employee sales contest for club business, dis tribute packets and necessary contest materials. Issue weekly reports on em ployee selling efforts. Include tech niques various employees have found effective in selling. • Call in dolls that have been dressed by employees and/or custom ers. Check their number and make sure you have sufficient lobby display facil ities to handle them. • Ask the toy committee to make purchases using funds collected from employees, and get the merchandise into the bank. Shop around and buy where the best prices and discounts are offered. • Make sure all media advertising is prepared and ready to run when the Christmas campaign opens. Things to do in December—before Christmas: • Install lobby decorations and put up external decorations for both main bank and drive-in. Coordinate work done by employees and outside help ers. • Make sure all departments have suitable displays. Most departments prefer to handle their own decorating. Make sure each one is supplied with the materials needed. • Kick off the media advertising program. Make sure everything men- MID-CONTINENT BANKER for July, 1977 Christmas Comes But Once A Year... & "EARLY WINTER” ANOTHER FAMOUS CURRIER & IVES PRINT PERFECTLY SUITING THE CHRISTMAS SEASON, YET HAVING YEAR R O U ND USE IN EVERY HOME CAPITALIZE ON IT FULLY AND “ INEXPENSIVELY” WITH "FINE ARTS” DECORATED METAL TRAYS EVERY H O M E CA N USE EXTRA TRAYS, PARTICULARLY IF UNUSUAL A N D BEAUTIFUL E N O U G H T O BE PROUDLY USED AS TRAY O R WALL D E C O R A TIO N 1; y O U R T R A Y /P L A Q U E S ARE ALL O F T H A T ....E L E G A N T IN T H E IR E XC LUSIVE O V A L SHAPE (cost m o r e b u t w e ll w o rth it) ...E X Q U IS IT E L Y B E A U T IF U L IN T H E IR A U T H E N T IC FULL C O L O R R E P R O D U C T IO N O F D E S IG N ....T H E C U R R IE R & IVES SCENES IN P A R T IC U L A R H A V IN G B R O A D A PPEAL, M A N Y PEOPLE ‘C O L L E C T IN G ” T H E M , O F T E N H A N G IN G T H E M AS “ G R O U P ” D E C O R A T IO N . t | (Typical testimonials) “ W ith th e h e lp o f y o u r trays o u r C h ristm as C lu b a cco u n ts g re w by 5 4 % ” “ U n lik e c a n d le s , re c o rd s , c o o k ie -c u tte r s , e tc ., y o u r trays p ro v id e d n e w a ttra c tio n , y ear ro u n d use. C lu b o p e n in g s in c re a s e d by 30% *’ “ Y o u r trays h e lp e d us e x c e e d 7700 c lu b acco u n ts this y e a r, d o u b le last” “ W e in itia lly o rd e r e d 1500 trays, A ll w e r e sold o u t at $1 in tw o d ays” _ W r i t e fo r e x c lu s iv e in y o u r t r a d i n g a r e a . S e n d $ 1 .0 0 to c o v e r p o s ta g e a n d h a n d l in g f o r f r e e tr a y . FA B CR A FT, I N C F R E N C H T O W N , N E W JERSEY 08825 (201) 996-2113 The “ Fine Arts” Tray People - beautiful exclusive trays for promotional use only https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tioned in the ads (coffee bar, free gifts, etc.) is in place and ready to go. • Make sure all employees are fa miliar with the ads being published. Give them complete information on anything they should know in order to answer questions intelligently. • Make photocopies or blowups of newspaper ads and display them in the bank lobby. • If special radio or TV programs are being sponsored, list and display the dates and times of broadcast. • Early in the month, check with the bank’s chorus members to make sure they are about ready to perform. Schedule noon-hour programs for the lobby the week before Christmas. • Prepare lobby posters to an nounce chorus performances. Include a photo of the group on the posters. • If the bank’s chorus is to perform outside the bank during the Christmas season, reconfirm the dates with the organizations involved and make sure transportation is provided. Issue a press release announcing the chorus’ sched ule. • Reconfirm dates of visiting school singing groups and issue press releases. • Reconfirm arrangements for organ We deliver 67yearsof experience. When you do business with Christmas Club a Corporation, you expect and get successful club and premium promotions. You also get quick, dependable service, from an organization of professionals with more than a half century of service to the financial community. Call us toll free at (800) 523-9440, anytime. c h ra s im a s cP.O.l aBoxb20 a corporation Easton, Pennsylvania 18042 44 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Get an Early Start! “Our records show . . . that banks do not plan ahead for their Christ mas decor, but wait until late Oc tober or November to inquire about displays. In most cases, this is too late for a custom production order.” So says Robert F. Metzger, vice president, Garland Display Corp., one of the nation’s leading display firms. The statement points up the fact that advance planning is a “must” for any bank desiring to show its premises off to best ad vantage during the holidays. Wheth er or not a professional decorator is involved, time is of the essence in planning for the holidays! music in lobby with organist, organ rental firm and personnel to install organ. • If your organist plans to use copyrighted music, get clearance from the American Society of Composers and Publishers (ASCAP). The organist can usually make these arrangements and will bill the bank for the small fee involved. • Remind officers planning to send out individually typed “thank you” let ters to good customers to mail them on time. The best time to send this type of letter is the week after Christmas, when the mails are not as flooded. • Check the lobby daily to make sure special features, such as the coffee bar, letters to Santa counter, unusual money gifts, are operating satisfactorily and that no supplies are in danger of running out. • Keep tabs on the premium inven tory to prevent running out. If supplies run out, be prepared to issue “rain checks” to disappointed customers. When a new supply arrives, arrange for prompt delivery of the item to cus tomers. • Dolls and toys destined for chil dren’s charities usually are picked up from the bank about December 23 so each recipient has his gift by Christmas Eve. To avoid gaping holes in the lob by display after the gifts have been taken, replace the gifts with dummy gift-wrapped packages. • If the bank CEO is planning a personal Christmas message to employ ees via a letter, confirm that the letter is ready to be delivered on the desired date. • Enclose the bank’s calendar card for the new year in December state ments and have copies distributed by tellers in the weeks before Christmas. If appointment calendars are issued, make sure they are ready for distribu tion to VIP customers during Decem ber. • If a live Christmas tree is going to be placed in the lobby, make sure there are no local ordinances prohibit ing a live tree. Take every precaution against the possibility of fire. • Take pictures of the lobby, when decorated, with closeups taken of the special features. Some photos can be used for publicity purposes; others for reminders when installing next year’s display. Things to do in December—after Christmas: • Write a critique of the program while it is still fresh in mind. Note what, if anything, went wrong, what were the most popular features, what should have been done differently. In vite key people in the bank to give their opinions. File away for next year. • Pack Christmas decorations away carefully. Check mechanical and elec trical equipment. If anything needs re pair, do it right away so it’s ready for use next year. • Make an inventory of the various locations around the bank where Christmas decorations are stored. It’ll save a lot of hunting time next year. • If you liked the work of your organist, sign him up for next year. • Publish a final report on Christ mas club results in the January issue of the employee publication. If a con test was involved, announce and con gratulate the winners. • When all the bills are in, check expenditures against the budget. It will help make next year’s budgeting more exact. • Thank all employees—in person or with a letter—who gave their time to the Christmas program. • Finally, relax! It’s all over—until next year! • * Bank Donates Prize Money For Holiday Lighting Contest Citizens State, Carrizozo, N. M., co sponsored a residential Christmas light ing contest last year. The bank con tributed $100 for prize money. “We believe that the joy of the holi days is enhanced by Christmas lights,” said bank President Johnson Stearns. “Lighting homes gives a great deal of pleasure to a lot of people and to us makes the expense and work worth while.” It is traditional in Carrizozo for a couple traveling through town to be asked to judge the lighting contest. MID-CONTINENT BANKER for July, 1977 I H tW LOOKING FOR NEW hbni C H R IS T M A S ID E A S ? To build savings accounts. Put added sizzle in Holiday selling. Create valu able publicity opportunities. Collect public relations dividends for your bank. « • « ■ S ì* Then put this new, profit-building publication to work now. Its 80 pages are packed with tested Holiday ideas used by banks, large and small, coast to coast — PLUS brand new ideas built from sound selling techniques. It even gives a formula for creating your own ideas — custom-fitted to your bank's image and personality. AN INVALUABLE AID FOR THE PERSON IN YOUR BANK RESPONSIBLE FOR CHRISTMAS PROMOTION PLANNING To give your bank the most out of Christmas, start with a sound plan. Use this manual for a complete, step-by-step outline of how to go. Here are a few samples of the many practical topics covered: • How to use lobby decorations most effectively. • The many ways banks promote Christmas savings. • Selling other bank services to Holiday shoppers.. • What your bank can do for children at Christmas. • Most effective ways to remember employees in Christmas planning. • How to cash in with Holiday direct mail. • Using the "good will" season to build bank good will. • Getting the most benefit from Holiday publicity opportunities. • A tested way to create your own Christmas ideas. • Planning — with a step-by-step schedule from midsummer to New Year's. Here is a timely reference you can use right now and for many years to come. It deserves a place in your reference file. Successful Christmas promotions are born early. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Now is the time to start planning. Here is the tool that makes this job easier and more resultful. Send for it today. It is the best "gift" Santa can bring your bank this Christmas! M O NEY BACK G U A R A N TE E — If not completely satis fied in every respect, return within 10 days for full refund. BOOK A V A IL A B L E FOR D E L IV E R Y AUG UST 1 5 ,1 9 7 7 M ID -C O N T IN E N T BANKER 408 Olive St., St. Louis, Mo. 63102 Please send ____ copies @ $ 7 .0 0 of your 80-page manual, P R O FIT -B U IL D IN G IDEAS FOR BANK CHRISTMAS PROMOTIONS. I enclose our check* for $ ______________________ _____ N a m e _______________________________ .Title-------------------B a n k _________________________________________________ Street________________ _______________________________ City, State, Zip ___________________________________ _ * Check must accompany order. We pay postage and handling. Missouri banks: please include 4Vi% sales tax. 45 Banks Help Keep Sales in Own Towns By Backing Shop-at-Home Programs By ROSEMARY McKELVEY M anaging Editor T N THIS DAY of superhighways that link towns and cities across the country, it’s easy for residents of me dium-sized and smaller communities to drive to larger metropolitan areas to shop, especially at Christmastime. Of course, the money they spend in the large cities doesn’t benefit their own towns. Therefore, if these shoppers can be encouraged to shop at home, the hometown merchant—and, indirectly, his bank or banks—will profit. Campaigns to convince local resi dents to patronize their hometown mer chants have been run successfully the past two Christmas seasons by First Midwest Bancorp., a bank HC head quartered in St. Joseph, Mo. This city is located near Kansas City, and St. Joseph residents increasingly were tak ing their business to the KC shopping centers instead of spending their mon ey at home. What did First Midwest Bancorp, do about it? According to Henry Lammers, vice president/marketing, the HC bought the “Try (name of town) First” pro gram that had been developed and is marketed by Madison Avenue Associ ates, Nashville. The package includes packets of material to be used by mer chants and store personnel. There are red and green buttons to be worn by store clerks and that bear the message, “Try St. Joseph First.” The same slogan appears on window posters, counter cards and door stickers. In addition, the HC’s banks—First National, First Trust and First Stock Yards—made available free plastic shopping bags bearing the “Try St. Joseph First” slo gan. Another HC affiliate, Home Bank, Savannah, Mo., also participated on a “mini” scale. The 1975 campaign was so success ful, according to Mr. Lammers, that the HC expanded the program for 1976. The latest program was kicked off last October 12 and 13 with con tinental breakfasts for area merchants. Several hundred attended, including industrial wholesaler and service-type businesses. The latter put “Try St. Joseph First” banners in their plants and put information about the program on their bulletin boards. The HC took advantage of these two breakfast meetings to tell the mer chants and businessmen about the HC’s banks. W. Dale Maudlin, senior vice president and commercial loan officer at First of St. Joseph, described the services available to them through the banks. The 1976 “Try St. Joseph First” pro gram became operational the week af ter Thanksgiving and ran until De- These are samples of "Christmas Shop St. Joseph" logos that were made available to St. Joseph, Mo., merchants from local newspaper through First Midwest Bancorp., St. Joseph-based bank HC. Logos were part of package of material HC obtained from Madison Avenue Associates, Nashville, which developed "Try (name of town) First" program. First Midwest sponsored this program during past two Christmas seasons. Objective was to convince St. Joseph residents to do their Yuletide shop ping at home, rather than in nearby Kansas City. 46 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M. Paul Haynes Jr., v.p. & cash., Farmers & Merchants Bank, Baldwyn, Miss., wears red and green button urging residents to "Try Baldwyn First." Copy is imprinted on Christmas tree background. On desk at Mr. Haynes' right is Santa Claus counter card saying, "Santa Thanks You for Shopping in Baldwyn." Bank provided "Try (name of town) First" program developed by Madison Avenue Associates, Nashville, to its local merchants in effort to get residents to shop in Baldwyn rather than in other cities. Ac cording to Mr. Haynes, his bank is extremely pleased with "Try Baldwyn First" program. In fact, Mr. Haynes hopes to promote trade in Baldwyn not only during Christmas season, but all year round. cember 20, with double the number of merchant participants over 1975. The HC’s banks used 24 St. Joseph-area billboards to urge the public to shop at home. This same message dominated statement stuffers and 30-second TV commercials sponsored by the banks. A radio commercial supplied by Madi son Avenue Associates also was used. Merchants were invited to tie in their messages with these commercials. The banks distributed at no charge to local stores decals, banners, counter cards, logos and slick sheets. The latter con tained newspaper-ad logos available to merchants to push the shop-at-home theme. Mr. Lammers cites the success of the 1975 program as the reason his HC de cided not only to sponsor it again in 1976, but to expand it. To determine whether the 1976 campaign was suc cessful, First Midwest Bancorp, sent questionnaires January 10 to participat ing merchants. They overwhelmingly rated the program either excellent or good; there were few fair ratings and no poor ratings. Because the HC picked up the tab on all promotional materials, the only cost to the mer chants was their own advertising. Mr. Lammers estimates that the HC spent about $15,000 on the 1976 cam paign, but looks on this cost as ex tremely worthwhile. In fact, First Mid west Bancorp, probably will repeat the program in the coming Christmas sea son. As Mr. Lammers puts it, “Hometown MID-CONTINENT BANKER for July, 1977 START AT $19.95 And, our deals can put money in your bank. A com plete Aurora AFX® Jackie Stewart Racemaster Speedway™ Road Racing Set® self liquidates for $19.95. That's the kind o f offer you need to attract new deposits or prom ote car loans. The AFX® Jackie Stewart Racemaster Speedway™ Road Racing Set® is a real value! Designed strictly fo r financial institutions, it w o u ld regularly retail for $49.95 at most stores. It contains over 26 feet o f track for head-to-head racing com petition. Tw o super fast AFX® Magna-Traction™ cars. Two Russkit® Speed Controllers. Safety UL listed Wall-Pak®. Realistic Pit Area, Grandstand, Start and Finish Pylons, and Judges Stand. It's an offer that has accelerated deposits at banks around the country sim ply because the dem ographics are right: Average age o f the potential road racing set purchaser is thirty-one, the average family income is $15,000 and over 73% o f Road Race sales occur from September to January. So if you're looking for the checkered flag on new deposits or auto loans w rite or call H o b b y Marketing, Inc., 100 Main Street, Reading, M A 01867. Telephone 617/944-7980. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 47 shopping benefits all of us. It creates jobs. It improves the standard of living and it makes possible a wider selection of merchandise in our local stores.” Among other banks that are enthusi astic about the “Try (name of town) First” are Iowa State Savings Bank, Knoxville, and Ashuelot National, Keene, N. H. At the latter bank, Senior Vice President Philip C. Dyer says that, while the bank anticipated generating goodwill with merchants, he was sur prised by the amount of favorable com ments received, not only from the mer chants but from area residents. D. Lewis Job, executive vice presi dent of the Knoxville, la., bank, also reported excellent response from local merchants, including comments about how good it was to receive this kind of help from the bank. The Madison Avenue Associates pro gram to get residents to shop locally is not confined to banks. The Newberry County Development Board & Chamber of Commerce, headquartered in New berry, S. C., sponsored a “Shop New berry County First” program last year. It began November 4 and culminated December 22 with the giving away of a 1977 auto and two color TV sets. As- cording to a C. of C. spokesman, this was the first time there was a county wide effort on such a campaign. He adds that the enthusiasm displayed by both merchants and shoppers was ter rific. The development board/C. of C. co ordinated the program with a commit tee consisting of representatives of all the merchants’ associations throughout the county. Each merchant paid a fee into the “Shop Newberry County First Committee,” and this fee went toward purchases of the car and two TV sets. The money also helped pay for about 100 radio spots per week on each radio station in the county and full- and half page ads in the local paper twice week ly. In addition, each merchant used the “Shop Newberry County First” logo in his own ads, and the newspaper had a special advertising section for partici pating merchants. The development board/C. of C. en listed the services of the senior seminar students in business administration at Newberry College, who conducted a shopping survey. This survey was com pleted prior to the beginning of the campaign, and a copy of the results was sent to merchants, who then could learn their strong and weak points. * * Collectors' Plates Offered As Christmas Premium For the fifth consecutive year, Con tinental Bank, Chicago, offered custom ers original collectors’ plates as a holi day premium last December. The plates were available free to customers depositing $300 into new or existing savings accounts. The 1976 plates featured reproduc tions of Chicago artist Franklin Mc Mahon’s water color drawings of the Art Institute of Chicago and its Michi gan Avenue surroundings and the farm at Lincoln Park Zoo. Christmas Poster Contest Held for Elementary Students “What Christmas Means to Me” was the theme of a poster contest sponsored by Bank of House Springs, Mo., last December. Participating were students at elementary schools in three commu nities in the bank’s trade area. Winning entries in each grade cate gory (one through eight) received $15 savings accounts and posters were dis played in the bank’s lobbies during the Christmas season. CHRISTMAS CLUB SPECIALLY SELECTED TO ENTICE EVERYONE TO YOUR INSTITUTION . . . at low, low cost to you. “ CRYSTALLENE GREETING CARD” with stained glass effect in self-mailer. ($2.00 Retail) 85<# Ea. case pack 144 your cost “ANGEL MUSICIAN” “ ELF" Candlestand Candles with golden holders with 6" tapered candle ($3.00 Retail) $1.00 Ea. ($2.50 Retail) 90tf Ea. case pack 72 your cost case pack 144 your cost “ CHRISTMAS TRIVET” Cast iron frame with ceramic tile ($2.50 Retail) 901 Ea. case pack 48 your cost Minimum Order— 144 Each Item . . . 10% R /P “ANGEL TREE” All metal wind chimes Retail) $1.00 Ea. pack 144 your cost i P re m iu m s fo r F in a n cia l In stitu tio n s, Inc. \ Serving Over 5000 Financial Institutions i E 5019 West Belmont Avenue Chicago, Illinois 60641 Phone: 312/889-4210 E Send for our fall catalog full of exciting new ideas. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SPECIAL PURCHASE (Not illustrated) Christmas decorated self-mail ing NOTES. Perfect for that personalized greeting, short notes and invitations and for that special “Thank You” note. Packet of 16 ($1.50 Retail) 60<f Ea. case pack 144 your cost MID-CONTINENT BANKER for July, 1977 Now! A new C LIC program to help you minimize apartment and commercial mortgage risk. “ Even on a dear day no one can see icHrever” . .. thafs CUCs new back-to-basics approach to Commercial Mortgage Insurance. Four centuries ago, William Shakespeare said, “ What’s past is prologue.” In modern terms, this means that experience of the past usually leads to the beginning of something new. At CLIC, we feel that phrase aptly describes what is now occurring in the apartment and commercial lending industry. The experiences of 1974 and 1975 clearly indicate that no commercial mortgage loan is insulated from the cyclical aberrations of the nation’s economy and their effect on local markets, no matter how prudent the lender and sound his underwriting may be. At CLIC, we have spent a full year studying and re-evaluating the role of commercial loan insurance and the benefits it brings to the lending industry. The result is a new program that allows lenders to capitalize on CLIC’s experience—to enjoy the higher yield of commercial mortgage loan lending while minimizing risk. Full details are available in a simple booklet that is yours free. Simply use the coupon below or call 800-558-9900, Extension 6815. In Wisconsin 800-242-9275. cue Writter AMetr M randy Send for free boo klet explaining the new CLIC program . Use the coupon below : Please send me a copy of your brochure describing the new CLIC program. Name___________________________________________________________ CLIC Title_____________________________________________________________ Commercial Loan Insurance Corporation Firm____________________________________________________________ Address___________ ______________________________________________ City_______________ ______ ______State____________ Zip_____________ A mem ber o f the M G IC Investment Corporation Family M G IC Plaza M ilw aukee, Wisconsin 53201 Telephone_______________________________________________________ MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 49 Bank Devises Christmas ‘Cash’ Program To Benefit Merchants, Boost its Image What can you do to keep money in town? HAT CAN a local bank do to help merchants compete with metropol W itan retail shopping centers at Christ mastime? How can a bank help mer chants grant credit to their customers at a minimum cost? How can a bank promote itself among non-customer merchants and give these merchants opportunities to do some business with the bank without jeopardizing their existing banking relationships with competitors? Answers to these questions would make a significant contribution to a community, thought Lester W. “Bill” Souba, president, David City (Neb.) Bank. So he set about to come up with the answers. The following situations promoted Mr. Souba to think hard about new bank services to help out the local com munity: • There had been a lack of any general promotion of community mer chants at Christmas or any other time. • Local merchants were feeling in creased competition from large retail chain stores in nearby cities. These stores offered “free” charge accounts, where the customer could charge a purchase in October, November, De cember and January and not make the first payment until February, with no finance charge applied until March. • Local merchants didn’t have ade quate working capital to offer similar “free” charge accounts. • Local merchants felt that the bank’s only interest was in bank growth, not merchant success. Mr. Souba realized that large amounts of local funds were leaving David City to be spent in metropolitan stores for the same goods and services that were available locally. Visits with merchants assured Mr. Souba that a promotion program to encourage shopping in David City was past due and would be welcomed. Advertising costs were studied in connection with a promotion and ex penditures were determined for getting a promotion started. Mr. Souba’s plan of action was to initiate the David City Holiday Cash 50 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Program. The program permitted par ticipating merchants to offer their cus tomers “free” charge accounts similar to those being offered by competing chain stores. Customers could apply for Holiday Cash coupons at the bank and, if a credit investigation was positive, the requested amount of holiday cash would be granted. The customer could spend the holiday cash at participating merchants as though it were real cash. Customers using holiday cash didn’t have to pay the bank back until Feb ruary and, if the account was paid in full by March 1, there was no interest charge. If the customer didn’t pay in full by March 1, his loan began accru ing interest and a payment schedule was set up. Holiday cash enabled customers of local stores to make cash sales that were really charge transactions. Mer chants didn’t have to set up costly charge programs of their own and then try to collect after Christmas. If any cash coupon loans were not paid by C h r is t m a s In O c t o b e r ? ! ? ! Su re, w h y n o t ? ? W ith D A V ID C ITY $ H O L ID A Y CA SH ~ It's Easy!!! You Can Shop Now and Not Pay Until February A vailable Exclusively at D A V ID C I T Y ut NO COST TO YOL Check the list of participating merchants in this ad and you'll find the merchants making David City your Christmas shopping center. H urrv on down to tlu* David City Bunk for details D A V ID C I T Y Q rrrfa 4% Newspaper ad informed public of holiday promotion that permitted credit-worthy tomers to apply for coupons good at merchants for holiday spending, with no ment necessary until February. cash cus local pay customers, the loss was the bank’s, not the merchants’. Merchants could redeem their cou pons at any time by bringing them to the bank. The amount of funds re ceived from the redemption was on a graduated basis ranging from 95% to 99% of face value. The longer the mer chant held the coupons on his prem ises, the lower the discount he had to pay. The program cost the merchant nothing except the cost of a poster for his window announcing the plan. Of course, he incurred a slight cost when redeeming the coupons, but this was done only after a sale had been made, at which time merchants were happy to pay a percentage to the bank. The program was announced by statement stuffers, point-of-sale adver tising materials, display cards, radio commercials, newspaper advertising and through holiday cash certificates. A variety of techniques was used to implement the program, including the following: • A bank officer called on each mer chant to explain the program. He uti lized a display notebook that contained all program materials to enable the merchant to see everything at first hand and make his own judgment as to the merits of the program. • The bank offered a cost-share contract for radio advertising with par ticipating merchants. This enabled the merchants to benefit from the discount the bank earned by purchasing a large block of advertising time from the sta tion. A musical jingle was written and recorded at the radio studio and it was played in each commercial promoting the holiday cash program. A four-hour live radio broadcast from the bank lobby launched the pro motion on “kickoff day” for the Christ mas shopping season. Each participat ing merchant was given five minutes of the program’s time to tell potential customers about his wares and services. Local high school bands and carolers made recordings of Christmas music that were played during the four-hour broadcast. Parents of friends of the participants made an effort to listen to MID-CONTINENT BANKER for July, 1977 Great craftsmen are infinitely patient and skillful with the tools of their trade and their lives are animated by a spirit that dares to be different. Good banking is a craft that must be practiced and developed by men and women who, like artisans of great skill, care about the the lasting quality of their work. w First National Bank O f Commerce CORRESPONDENT BANKING DEPARTMENT Membér FDIC 210 Baronne Street / New Orléans, Louisiana 70112 / 504-561-1473 MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 51 their children; thus they heard the commercials, too. The whole purpose of the promotion was to show merchants how they could cooperate to help keep local funds at home rather than seeing the money flow into the coffers of distant stores. The bank funded the entire pro gram. A portion of the cost was recov ered by selling air time to merchants at cost. The program has been used for two years and is considered to be a great success by merchants. Mr. Souba said skeptical merchants have been con vinced that the program resulted in a turnaround of the flow of funds out of the city. While there was no rush for holiday cash, merchants reported several bigticket items being sold to people who used the coupons, and several mer chants attributed greater traffic flow through their stores to the promotion. Merchants said they had customers new to the store during the holiday season and attributed this development to the radio commercials. Plusses for the promotion, according to Mr. Souba, included the fact that new faces showed up in local stores, that it became known that a small town TRI>STATE of 2,400 residents could offer Christmas bargains comparable to those offered in larger communities, that the mer chant community achieved a new soli darity, that the cost of the promotion was minimal. Perhaps the greatest benefit to come from the promotion, Mr. Souba said, was the fact that merchants became convinced that the local bank was in terested in their welfare as well as its own! • • 'Biggest Yule Party in Town' Hosted in Bank High Rise Christmas came to the 42-story First Wisconsin Center, Milwaukee, in a big way last year. A building-wide Christ mas party, billed as the biggest in town, drew almost 1,500' people to the home of the Main Office of First Wis consin National. The people who manage the center regularly schedule a variety of events throughout the year, but they wanted to do something special for Christmas. The party, complete with Christmas carols by the bank’s chorus, and re freshments, was the answer. The chorus, which has become a yuletide institution in the Milwaukee presents.. Fabulous ANIMATED DISPLAYS For Christmas and Other Holidays! Magnificent displays made to give long life . . . real eye-stoppers. Great as attention getters. Tremendous public relations. All displays operate on 1 1 0 volt. Ch r is t m a s V A LEN T IN E’S DAY Write on company letterhead for our elaborate catalog showing prices and description TRI>6TATE IN D U S T R IE S , L T D . 52 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis HALLOW EEN 1436 Witliamsbridge Road Bronx, N ew York 10461 Tel.: (212) 597-7900 area, was a natural choice for enter tainment. Their carols echoed through out the galleria level of the center, putting many guests in the Christmas spirit. Refreshments posed a problem. The center’s management extended an open invitation to the nearly 5,000 people working in the building and there was no telling how many would attend the party. Planners ordered enough food for 1,500, and they guessed correctly. The Christmas events are a part of a variety of weekly programs presented throughout the year at the center. “What we’re trying to do is show people that downtown is alive and well, and that there is plenty to do down here,” said Chester Stevens, vice president, First Wisconsin Develop ment Corp. Christmas Club Promo Offer: Two Books That Can Help What’s a bank to do when it wants to promote Christmas clubs but doesn’t want to meet the competition in offer ing interest or other costly induce ments? Bank of New Orleans sweetens its Christmas club advertising promotion with an offer of a free copy of the “Farmers’ Almanac,” a collection of anecdotes and useful information, in cluding weather predictions, planting and garden calendar and holiday dates. Actually, the Almanacs are free to anyone, not just those signing up for Christmas clubs, but the timing of the publication date of the Almanac en ables the bank to offer new copies at the same time Christmas clubs are be ing solicited. Last year, the bank’s Christmas club newspaper advertising called attention to two books—the Christmas club coupon book, which, the ad copy said, “predicts your good Christmas ’77,” and the Almanac, which “predicts the weather and gives helpful hints.” The advertising implied that bank custom ers could benefit from obtaining both books. According to Paul F. Steen, director of advertising and public relations for Bank of New Orleans, the first year the almanacs were offered (1967) 10,000 were distributed. Last year, it took 60,000 copies to satisfy demand! “The popularity of the little publica tion never ceases to amaze me!” Mr. Steen said. MID-CONTINENT BANKER for July, 1977 When you need emergency service you need it now More and more attention is being directed to emergency ser vices. Specialists like paramedics get to an accident quickly where their expert training becomes invaluable. Emergencies occur in finan cial institutions, too. They usually stem from equipment breakdown or malfunction. This is when Mosler nationwide service takes on : i additional value. Any time day or night, 7 days a week, there’s a Mosler Service Technician ready to help you. H e’s backed up with the largest, best equipped, most knowl edgeable organization in the industry. Mosler offers a way to pre vent most emergencies, too: The Mosler Service Contract. It’s a periodic checkup on your equip ment that nips potential emer gencies in the bud. Call Mosler today and ask about our service before an emer gency arises. Or, write Dept. S-2. m Mosler An American-Standard Company Hamilton, Ohio 45012 MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 53 ■ B B S I TELEPHONE ■_ / > ^ \ ; v ^ 1 '■> - \, " _ .S_1 ftfl pp f l ■ “JSj **** t e l S s.;Mw< -: ?:ik I p | f s a B § m m https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .i-aS-i:' *f£ ¡§ ¡¡1 i p m s f s is iiit ■m§, ^S S a i a f / . S B B HP z*l/t iff rafc 011 rour custom ers are never very tar from an American Express refund center. T he way your customers are traveling these days, there’s no telling where they’ll end u p - th e country’s most bus" tling cities, or its most scenic rural areas. N o m atter where they travel, we want to make sure they’re protected. T h at’s why we’ve made our refund system more sophisticated. If Am erican Express®Travelers Cheques are ever lost or stolen, your customers can arrange for a refund anywhere in the U.S. just by finding the nearest telephone. Seven days a week, no m atter where he is. A ll he has to do is call one toll" free number, 800"221"7282. (In New York, he can call collect, (212) 248" 4584.) O n a business day, we can arrange for a full refund at the nearest https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis refund location, usually on the very same day. A ny time of night, or on a week" end or holiday, we can arrange for an Emergency Refund of up to $100. It’s that simple. N o wonder more and more people prefer to travel with Am erican Express Travelers Cheques. W hen they do, it’s always with the reassuring thought that help from our refund centers is only a phone call away. No m atter where they travel. Make sure you sell your customers Am erican Express Travelers Cheques. T he travelers cheques with the refund system th at’s always open and is never very far away. American Express Travelers Cheques Christmas Club Membership to Hit 10.6 Million; Payout Expected to Reach $2.3 Billion S u rv e y ta rg e ts p ro je c te d fig u re s fo r 7 9 7 7 clubs HRISTMAS club membership fig ures among 2,500 surveyed finan C cial institutions will reach 10.6 million this year. This was one of the findings made by the Unidex Corp. during two recently completed surveys of Christ mas club consumers and financial insti tutions. The studies also revealed that among the 2,500 financial institutions sur veyed, projected payout for 1977 is $2.3 billion. In addition, three out of every four surveyed institutions offer Christmas clubs to their customers. To obtain consumer information, telephone interviews were conducted with 2,051 individuals aged 18 and over in 34 scientifically selected loca tions. For the industry survey, 2,500 of the country’s largest financial institutions were targeted. They included 1,000 commercial banks, 1,000 S&Ls and 500 mutual savings banks. Survey findings were based on a response of 869 ques tionnaires, or 36%. One of the most significant findings was that Christmas clubs are more widespread than was generally recog nized. Of the 869 responding institu tions, 652 offer Christmas clubs to their customers. Who are these customers? Christmas club depositors tend to be middleaged, middle-income, of blue collar oc cupation and female. Potential cus tomers appear to have the same demo graphic makeup. up to 31% of those with incomes over $20,000. In lower-income households, the accounts more often are in the male’s name. City size also has an effect on male versus female membership in Christmas clubs. In larger cities, the female is more likely to hold the account. Con versely, in smaller communities, the male holds the account more frequent lyAge is a determining factor in ac count ownership as well as length of time the account is maintained. Re search has found that with increasing age, the female is more apt to carry the account, and if she is over 51 years, she probably maintains that account five Santa Claus, whose domicile is "Santa's Work years or longer. Joint holding is more shop" in North Pole, N. Y., has become a spokesman for Christmas Club a Corp., said to common among younger households, be the nation's oldest and largest producer and 40% of the respondents between the of holiday gift savings programs. In the photo, ages of 26 and 45 years hold their Santa signs up for a Christmas Club account accounts between three and 10 years. "sold" by John H. Guinan (r.), pres., Christmas Club a Corp. Of the total number of respondents, 61.3% were more likely to hold their Female heads of households hold the accounts three or more years. These greatest number of Christmas club ac figures indicate that Christmas clubs counts. However, as income increases, are habit-forming—that once someone there is a marked trend for the account opens a club account, she is likely to to be held jointly—ranging from 16% hold it for a minimum of three years. What incentives are used to start the of those with incomes under $11,000 By JOHN H. GUINAN President Christmas Club a Corp. Easton, Pa. TABLE I Industry Survey Comparison of Commercial Banks in Survey With All Institutions Surveyed (2500) 1977 1975 Diff. % Change 1000 Commercial Banks Surveyed On the Cover Santa Claus was the center of attention when he visited the Children's Seashore House in Atlantic City in May. The hos pital houses about 70 children. The visit coincided with the New Jersey Bankers Associa tion convention, at which Santa appeared as a spokesman for Christmas Club a Corp. 56 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Christmas Club Memberships Payout in Millions $ 6,787,616 5,846,893 940,723 16.09 1,202.9 1,059.2 143.7 13.57 177.21 181.18 10,624,155 9,498,561 Average Account $ -3.97 -2.19 1,125,594 11.85 2500 Institutions Surveyed Christmas Club Memberships Payouts in Millions $ 2,263.7 Average Account $ 213.07 1,912.3 201.32 351.4 11.75 18.38 5.84 Commercial Banks as % of Total Survey Christmas Club Members 63.9 61.6 Payout in Millions 53.1 61.9 Average Account 16.8 smaller 10.0 sma11er MID-CONTINENT BANKER for July, 1977 TABLE II Consumer Survey Service Usage of Christmas Club Users and Non-Users by % Service User Non-Us er Checking Accoung 92.4 92.9 Regular Passbook Savings Account 85.7* 79.9 Certificate of Deposit 29.9* 22.6 Installment Loan 39.3* 34.4 Overdraft Checking 18.6 18.2 Any Other Type of Savings Club 11.0* 2.9 Bank Credit Card 57.9* 50.0 Any Other Type of Credit Card 40.2* 35.8 Significantly high percentage* Christmas club habit? According to the survey’s findings, interest and pre miums are offered frequently. Over 81% of the financial institutions replied that interest was paid on Christmas club accounts and 31.3% offered premiums to new members. Over one-fourth pro vided premiums and interest as incen tives. Where can most Christmas club de positors be found? 21.2% of the public in the Northeast are Christmas club bers. Based on the South’s lower per centage of current users—8.5%—it is clear that the southern region provides good opportunity for Christmas club expansion. Current club membership in the sur veyed 1,000 largest commercial banks is projected to be 6,787,616, with pay out totaling $1.2 billion. Table I shows a 16% increase in membership and a 13.5% increase in payout for these 1,000 commercial banks between 1975-1977. When comparing these figures with all institutions surveyed, an interesting pattern can be noted. Although the in- crease in membership for commercial banks was greater than for all institu tions surveyed, the increase in payout for commercial banks was less. The lower payout can be attributed to smaller average club accounts. In fact, during the two-year period, the average account size decreased by 2%, whereas the average account size for all institutions increased by 6%. Ob viously, other types of institutions sur veyed appear to be doing a better job of selling larger clubs. It is obvious from these statistics that, while membership size is growing at a rate well above the average for the surveyed institutions, payout has not increased commensurately. Since the potential exists for larger payout and thus greater profitability, we believe banks generally should make a concert ed effort to “sell up” existing and new accounts; i.e., to sell more strongly the $5, $10 and $20 club accounts. How profitable are Christmas clubs? In an effort to answer this question, we would like to highlight some of the TABLE III Consumer Survey Loyalty of Christmas Club Users Versus Non-Us ers by % U«;er Non--User Le:ss than 1 year 1..5 4 .3 i year but less than 3 years 7..0 14,,1 3 years bu t less than 6 years 18 .0 19.,3 6 years or more 72.,2 61..3 No t sure 1.,0 0.,3 No answer 0. 0 0. 6 MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis surveys findings: Fact #1: Three out of every four institutions surveyed offer Christmas clubs. Fact #2: Christmas club customers are more likely to avail themselves of other banking services than nonusers (see Table II). It is reasonable to assume from Ta ble II that Christmas clubs are remark ably effective cross-selling tools, and, as such, they obviously are profitable. Fact #3: In addition, Christmas club depositors are more loyal to their indi vidual institutions, as shown in Table III. And the more stable the customer universe, the greater the opportunity to cross-sell. Fact #4: Contrary to popular think ing, officers of smaller institutions (un der $100 million in size) in selfcontained communities viewed their Christmas club service as being more profitable than did officers in larger institutions. This may be attributed to the fact these institutions can make more efficient use of media (primarily television) for club promotions. Copies of the surveys referred to in the accompanying article are available at no charge by sending a request on a bank letterhead to John H. Guinan, president, Christ mas Club a Corp., P. O. Box 20, Easton, PA 18042. It is our feeling that Christmas club’s profitability cannot be measured as an isolated service, but rather that the number of services used by Christmas club depositors be compared to the ser vices used by the average nonChristmas club depositor. Only in this way can the true value of Christmas club be accurately gauged. Another significant but often over looked fact is that Christmas clubs are valuable public relations tools. Studies have shown that the majority of con sumers (79.5%) use their club savings directly for Christmas spending. And when these dollars are poured into the business community each year, the en tire community receives an economic shot of adrenaline. This point should be stressed in all promotional cam paigns for Christmas clubs. Based on the Unidex studies, we feel that Christmas clubs are indeed profit able when properly viewed as cross selling tools. And those in the industry are well aware of the fact that cross selling is the key to successful financial marketing. • • 57 M ost buildings begin w ith a foundation. Ours begin at your bottom line. ¿««BISS: We plan and build from data which indicate that new or remodeled financial facilities can contribute significantly to earnings. You get a better bottom line because we plan, design, and build financial buildings like businesses...not buildings. Actually, the last thing we do is design and build a building. There’s not another firm in your city, or in the country that can o ffer our up-front consultation services...and back them up w ith a building guarantee like ours. Simply stated: w e ’l l b u ild i t r ig h t . . . o n t im e . .. a n d w ith in b u d g e t. Since 1913, we have planned, designed, and b u ilt o r remodeled more than 6,000 buildings. Call us at (314) 647-3800. We have a man in your area. Bank Building Corporation 1130 Hampton Ave. St. Louis, MO. 63139 MC-777 Please send information about how you can help build my business. NameTitle— Firm — Address. C ity----- State. OFFICES: St. Louis, Washington, D.C.; Hartford, Conn.; Chicago, Atlanta, Dallas, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A f# ÌÌ Variety of Premiums Are Available to Banks To Use for Pre-Christmas Promotions ANKERS throughout the Mid-Continent area are getting ready to B launch the 1977 Christmas season by offering incentives to motivate custom ers to sign up for Christmas clubs, new savings and checking accounts and new installment loans. Some incentives will serve to attract customers to newly opened or remodeled offices. Whatever the objective, experience indicates that banks can expect con sumers to respond to their merchandise offers in gratifying numbers, producing significant volume at attractive acquisi tion costs. Consumers aren’t the only targets of promotion-minded bankers. Staff em ployees, including officers and direc tors, are frequently offered merchan dise rewards for introducing relatives, friends and acquaintances to the bank for the purpose of opening new ac counts. Employee-motivation programs pro vide a choice for bank marketing offi cers, giving them the option of “pull ing” consumers to the bank with a premium offer, or “pushing” their ser vices to consumers by making sales persons of staff members. Premium promotions are most com monly available either directly from the manufacturer of the merchandise or in directly from a premium jobber. In either case, the choice of merchandise is limited to those made or carried by the supplier. All-employee motivation programs, which offer a catalog of sev eral hundred items, are available from a few incentive firms that specialize in this field and offer their services to na tional and regional manufacturers, ma jor distributors and others. Premium operators and incentive firms compete for the same dollars. One firm, S&H Financial Promotions of Cincinnati, bridges the gap between the two by offering all types of mer chandise promotions, thus providing bankers an opportunity to choose the type of offer best suited to current local conditions while still doing business with a well-known, financially stable concern. A glance at the sales records indi cates the truth of this statement. Re cent and current promotions include a variety of one-shot premium offers; Continuity programs, which motivate repeated deposits; loan promotions; branch openings; and staff training and business development programs. Typical one-shot premium programs offer consumers well-known name brand merchandise free or at extreme ly attractive prices when a specified amount is deposited in a new or exist ing account. Frequently such offers are timed to coincide with a branch open ing or other special occasion. When Akron (O .) National wanted increased awareness of its statewide affiliation as part of the BancOhio sys tem, it used a premium offer of wristwatches augmented with clocks for kitchen, bedside or travel. As in most such promotions, the premium was free, provided the accompanying de posit met a fairly sizable minimum re quirement. With smaller deposits, con sumers paid a price substantially below normal retail, but sufficient to liquidate the bank’s cost. First National, East Chicago, Ind., also offered depositors watches on the same free-or-purchase basis, while LaSalle National, Chicago, offered an assortment of what it called “beautiful bargains,” several different items ap pealing to a variety of tastes, all on a purchase basis with a required deposit to qualify for each item. Cincinnati’s Fifth/Third Bank cap- Free Coming Ware. F rst come,first serve. Ad for continuity premium promotion spon sored by First Nat'l, Chicago, featuring cook w are items. Consumer can select as many items as he chooses, depending on amount of money he wishes to deposit. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis italized on the growing popularity of tennis by offering a name-brand racket autographed by professional star John Newcombe. This offer gave tennis fans an opportunity to acquire a quality racket at a price well below retail while the liquidation feature held the bank’s acquisition cost to a minimum. Deposits are not the only objective of premium promotions. Both Banc Ohio and City National, Detroit, used an assortment of power tools augment ed by a home coffee maker to attract installment loan business. The choice of items in these offers is indicative of the pinpoint accuracy with which pre mium promotions can be aimed at tar get markets. Power tools appeal almost exclusively to men, who are apt to make major financial decisions like car, boat and home improvement loans, while the coffee brewer is one of the hottest home appliances to hit the mar ket in recent years. To let its customers and prospects know about its new branch office, and to attract as many visitors as possible, Harbor Springs (Mich.) State offered an assortment of premiums, a treasure chest prize giveaway, plus souvenirs for all. The full-color Hmailing piece that spelled out the details was a shelf item, available from S&H for imprint ing by sponsoring banks. Cleveland’s National City Bank of fered an assortment of premiums free with deposits in new or existing savings accounts to celebrate the remodeling and expansion of one of its suburban offices. As banking becomes more retailoriented, many bankers have taken les sons from retailers with good results. Continuity promotions, based on sets of merchandise acquired qyer a period of weeks or months duririg a number of periodic visits, have long been a sta ple in supermarkets. Dishes, flatware, books and other items have been used successfully, especially by multipleoutlet national and regional chains. This concept has been accepted and adapted by many banks with excellent results. Most commonly these programs offer the first item free when the re quired deposit is made in a new or ex isting account with the succeeding items in the set purchased at liquidat ing prices with subsequent deposits. There are two basic types of conti59 nuity programs. One, offering merchan dise that lends itself to the accumula tion of a full set but each piece of which is useful and valuable to the consumer by itself, is in effect a series of related one-shot promotions. The consumer gets a free gift or a “good buy” on each transaction, but is under no pressure to build the complete set by making subsequent deposits. Typical of this type of promotion are a pewterware offer by Jefferson Bank, Peoria, 111.; a cookware promotion by Michigan National, Detroit; and a cookware offer at First National, Chi cago. Each offered the first item free with an opening deposit of sufficient size, or for sale with a smaller deposit, and additional pieces at attractive prices with subsequent deposits. Ideally, continuity programs are based on merchandise that is only fully useful in complete set form, such as dinnerware or flatware. Depending on individual circumstances, a full set may be four, six, eight or more place set tings, plus a number of accessory and serving pieces. S&H’s china continuity program is typical of this type of promotion. Banks choose one or two patterns of porcelain china or stoneware, or one pattern of each, and offer the first basic fourpiece place setting free with an initial deposit of from $50 to $250. Additional place settings, add-on settings and completer pieces are purchased at a fraction of the price of comparable merchandise with subsequent deposits of as little as $25. Selling prices range from less than $5 for a three-piece add on setting to as much as $16 for a cov ered casserole, and are usually de signed to liquidate all or most of the cost of the free premiums as well as the sold items. Promotional support provided by S&H includes newspaper ad layouts and copy; radio commercials; return able displays for each office; all neces sary administrative and record keeping forms; and full-color brochures, which are imprinted with each bank’s offer and terms. The final facet of S&H Financial Pro motions’ program is staff training and business development, which, in effect, makes salespersons of all bank employ ees. For these activities, S&H execu tives with backgrounds in marketing and staff training conduct seminars for selected leaders who are then provided with a series of structured training ses sions that they put on for small groups of employees back at the bank. Simul taneously, employees are offered re deemable prize points for their success ful referrals of new customers to the sponsoring bank. A packaged “prize bank” program, complete with all administrative forms and operation manual, makes all-em ployee motivation programs readily available to small-market banks, such as Bank of Maryville, Tenn. Larger in stitutions like state-wide Fidelity Amer ican Bankshares in Virginia take ad vantage of S&H’s capability to person alize and promote its program and its EDP administrative services. * * Staffers Aid Fund Drives; Bank Offers Action Banks Several staff members of National Bank of Commerce, Memphis, got the Christmas spirit last year by participat ing in the fund-raising activities of their own civic organizations. Three branch managers took part in the annual newspaper sale drive by the Exchange Clubs of Memphis; another helped with the annual Christmas card selling project of the Phoenix Club in support of the Boys’ Clubs of Memphis. The bank observed Christmas by of fering five styles of old time mechanical banks for sale to customers. Each bank has moving parts. One bank features an elephant that flips a coin into its body with its trunk; another features a caricature of Teddy Roosevelt shoot ing a coin into a tree which prompts a bear to pop up; another features a clown eating a coin and blinking. 60 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for July, 1977 With a network of 450 international correspon dents, Commerce offers the largest and best equipped International Department in the area. This means that Commerce can perform any inter national banking service you may need, right here from the geographical heart of America. Our full-time foreign exchange trading staff will handle exchange of coins, currency, drafts, transfers and foreign exchange travelers checks in any amount. We can write letters of credit for your import cus tomers, and handle documentation on export letters of credit. Our foreign cash letter service can provide imme diate credit on foreign items. International Banking. It’s not foreign to us. Call your correspondent banker or the International Depart ment of Commerce Bank of Kansas City. Commerce Bank of K ansas City™ 9th & M ain 234-2000 MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 10th & W alnut MEMBER FDIC « & *> 12th & C harlotte 61 Professional Decorators ‘Deck the Halls’ Of Banks to Gain Public’s Goodwill OW DOES today’s financial mer chant differ from the retail mer H chant? For one thing, the quality of his ba sic product (spelled m-o-n-e-y) is identical to that of his competition, since the U. S. Government Printing Office has exclusive rights as manufac turer. And that’s about where the similar ities begin and the differences end. For example, your friendly retailer is telling Mr. and Mrs. America to shop at his place of business because it offers all the advantages—the best prices in town, convenience, excellent service and cheerful, courteous and competent sales people. In a word, these elements evolve into an “image.” If that sounds familiar, it should, since banks and S&Ls have stressed the same advantages in their own messages to the public. Competition, after all, is still compe tition, whether it’s among your friend ly bankers or your friendly merchants. It may not be an historical fact, but it’s safe to say the financier learned the value of promotion and advertising from his retail associates. The end re sult has been a welcome new image, away from the traditional formalities of past generations. Not everything is up-to-date-inKansas City, however. Or, for that matter, San Francisco, Boston, Miami or Dallas. Retailers also learned at a very early age that there was another element to selling. No doubt some enterprising merchant discovered he could grab some business from his competition 62 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By CY McBRIDE Special Contributor down the street by displaying a suit, dress or pair of shoes in a manner to attract more attention than the other store owner. At the same time, he may have be gun to learn that display could be translated into other areas, such as store interiors, color schemes, arrange ment of merchandise and seasonal de cor. It was at that particular time that “window dressing” left the ranks of the amateur and turned professional. Not the least important in this new art form was the introduction of sea sonal displays and retailers almost in stantly discovered that there was no better time than Christmas to press the “image button.” Christmas trees, garland and holly wreaths eventually were accompanied by colorful lights and animated char acters to attract the public’s eye. And the Christmas season exploded from a routine buying period to the peak of the retail year. Could financial institutions work the same miracle by giving more consid eration to Christmas decorations? To a lesser degree, yes, if properly done and properly promoted. At least that’s the opinion of one person prominent in the Christmas and seasonal display business. Joe Botkin believes financial busi nesses could do much more to build a warm and friendly image in their com munities by the tasteful use of Christ mas decorations. As vice president of National Decorators Supply Co., In dianapolis, he’s well qualified to discuss the subject. His family owned company has been designing and building seasonal dec orations for retail stores for 47 years. Since World War II, they’ve expanded into the design of retail stores and 17 years ago began designing Christmas decor for financial firms. Since the late 1960s, National Decorators has moved into the shopping center arena where its people have designed and manu factured complete Christmas programs for more than 30 enclosed malls. “Certainly a bank is not that much different from a retail business” in Mr. Botkin’s opinion. “They are selling mer chandise and people want the best price. But there are the same intan gibles as in retail—courteous service and atmosphere. And display is part of atmosphere. “The financial institution is a corner stone of any community, large or small. Fortunately, the old ‘stuffiness’ is being replaced with a warmer look and a friendlier attitude and their customers no longer feel uncomfortable when they enter,” said Mr. Botkin. But many of them aren’t taking ad vantage of display potential, particular ly in the use of Christmas decorations. “Why wouldn’t decorations be just as valuable to a bank as to a shopping center or retail merchant? It’s the per fect time to generate the spirit of good will and it seems to me a financial in stitution should be a leader in portray ing the Christmas spirit,” Mr. Botkin said. “If decorating is done professionally MID-CONTINENT BANKER for July, 1977 CORNERSTONE M em phis Bank & Trust is becoming the cornerstone of area banking. M ore and more banks, over 100 now all over the Mid-South, are banking w ith M emphis Bank & Trust. We have the fastest grow ing C orrespondent Bank Departm ent in Dixie. W e’re in th a t position not just because w e o ffe r the fu ll range of banking services, other banks also o ffe r im pressive shopping lists. Nor are w e m aking it just because w e ’re big, some banks are bigger. Banks are banking on us fo r the same reason our other customers d o . . . w e ’re dependable. W e’re the most solid bank in town, stonesolid, and w e back our services w ith personal attention and unbeatable experience. We th ro w in some extras, too, that bankers appreciate, like exp e rt insurance capability, guidance in the construction and design of bank fa c ilitie s . .. even selection of furnishings. Solidarity plus the personal touch and the w illingness to take the e xtra step have made M em phis Bank & Trust the fastest grow ing m ajor bank in M e m p h is. . . in all departm ents. gl&’.'ii'ä; Mwà. >1 That same philosophy is m aking us the bank w here bankers bank in the Mid-South. That’s the biggest comm m âtm plim ent ■f^t»'t'i.V ¿^uV V >** i.y ,f.v,.'' «/JSSeaaKraHft&tf Ä Member FDIC MEMPHIS BANK © ’TRUST C orrespondent Bank D e p a rtm e n t/ln Tennessee, 1 -800-582-6277/1 n o th e r states, 1 -8 0 0 -23 8 -7 4 7 7 THE B A N K E R 'S B A N K MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis and in good taste, children and adults alike will respond to it. And there just isn’t any better way of creating the image banks seek.” It’s Mr. Botkin’s view that Christmas decorations in an advertising sense rep resent a much better value than similar expenditures for newspaper, television or radio advertising. The public is ex posed to decorations for some 30 days each season. Though the initial invest ment may run as high as $5,000, pro fessional decorations will last at least 10 years if properly handled and stored. By comparison, a full-page newspaper ad, depending on the size of the market, may cost anywhere from $500 to $5,000 for one printing. And a single one-minute television commer cial may range from $100 to $1,000. “Considering the investment in time and money that goes into designing and building a bank to blend in with the community, I would think bankers would want to create the same feeling for the holidays,” Mr. Botkin added. Naturally, he thinks a professionally done package is far better than asking your local florist to supply or provide stock decorations, usually good for a single season. “A good display com pany will custom design your decora tions, provide color renderings and blueprints and installation instructions. Let our billion dollar organization help your bank profit. Call W ilbur Hufham (205/832-8450), a member of our correspondent banking team. First Alabama Bancshares, Inc. A ffilia te Banks First First First First First First First First First First First First First Alabama Alabama Alabama Alabama Alabama Alabama Alabama Alabama Alabama Alabama Alabama Alabama Alabama 64 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank of Montgom ery, N.A. Bank of Birmingham Bank of Huntsville, N.A. Bank of Tuscaloosa, N.A. Bank of Dothan Bank of Selma, N.A. Bank of Gadsden, N.A. Bank of Athens, N.A. Bank of Baldwin County, N.A. Bank of Guntersville Bank of Hartselle Bank of Phénix City, N.A. Bank of M obile County Any maintenance person can install them and take them down,” Mr. Botkin said. What does Mr. Botkin recommend in the way of decorations? “That depends on the size of the building, the architectural design, the interior look, even the size and type of community where the bank is located. A religious theme might be appropri ate, as well as the traditional reds and greens. But it’s best to make a study of the project before developing the theme and color scheme.” An ultra-modern building might re quire silvers and golds, even pinks and lavenders, according to Mr. Botkin. Dark areas, naturally, would require lighter colors, or vice-versa. Areas to be trimmed may include walls, ceilings, lighting fixtures, bal cony railings, stair wells, columns or posts and teller cages. Even the vault could be decorated. And in the case of large metropolitan banks, considera tion should be given to decorating the executive offices and dining rooms and the employee dining rooms. Decorations may include garland swags, ribbon, holly berries and one or more trees. He emphasizes that an ar tificial tree, rather than natural, should be used. “It can be made fire-resistant and will pass all the local fire codes.” Animated scenes can become a very important feature area of the total de cor. They can be enclosed with a decorative fence and become the focal point. Such animated settings could be used as selling features for Christmas club accounts and other services. There are many ways to go with ex terior decorations, again depending on the building features and the landscap ing. An entrance canopy may require a simple garland drape or the outside could be enhanced with trees, candles or animated carolers featuring taped music. Santa Claus and his sleigh and reindeer could be featured inside or outside. Similar window treatment could eliminate the need for outside decora tions. “There really are no limitations, ex cept your imagination, on what can be contained in a Christmas decor pack age. It’s simply a matter of taste and what you want your customers to feel when they come in your front door,” Mr. Botkin said. “But I believe they have a very defi nite place in a financial institution’s promotional plan. We talk about images and there’s no reflection so uni versally understood and received as the Christmas season,” Mr. Botkin said. • • MID-CONTINENT BANKER for July, 1977 FIXED INCOME PORTFOLIO SERVICE FROM THE HARRIS BANK. IT’S THE SO URCE OF CORPORATE BOND INVESTMENT INFORMATION YOU’VE BEEN WANTING. The management of corporate bond investments is no longer the buy-andhold affair it used to be. It’s a complex business. That’s why the Harris Bank created FIPS. A Fixed Income Portfolio Ser vice that will become an indispensable tool for managers of corporate bond investments. FIPS provides regular reports in three main categories: 1. Portfolio strategy. 2. Quality review analyses of working list issuers. 3. Weekly data on yields and spread relationships. With FIPS, you get the full fruits of the research conducted by the Harris Bank on its own behalf. In this respect, FIPS is a companion to our very popular Institutional Investment Service for equity investments. The fee for FIPS is $1500 per year, payable in cash or through charges to a deposit account analysis. For complete information and sample copies of our reports, write or call John Alexander, (312) 461-7515; Jerry Jurs, (312) 461-7612; or Fred Young, (312) 461-7525. E 'S * HARRIS (It e i B A N K . Harris Trust and Savings Bank, 111 West Monroe Street, Chicago, Illinois 60690. Organized as N.W. Harris & Co., 1882. Member F.D.I.C., Federal Reserve System. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 65 Christmas Club Customers Asked to Forego Premiums To Help Underprivileged Bank spends budget On gifts party for kids , ESULTS—when a five-year-old kid, R who has never seen Santa before, has never had a Christmas present or a Christmas tree before, reaches out a shy, solemn hand to a bank vice presi dent to shake and say “thank you,” but instead falls into sobs in his arms. Or where a needy child takes half his money and asks the bank vice presi dent to put it in the Salvation Army pot for needy children. When a nine-year-old, underprivi leged ¡child yells out, “Hi, Linda, re member me,” to a bank officer’s daugh ter and they hug each other on the street! And when Christmas clubs go up from 1,846 one year to 2,027 the next year—that’s results, and the acceptance and response of a community to a bank’s effort to do something neighborly. The “something neighborly” referred to by Reed Kammerer, marketing of ficer, Beloit (Wis.) State, is a unique Christmas event, begun in 1975, that has become a tradition in Beloit. According to Mr. Kammerer, Beloit State launched a full scale Christmas club campaign in 1975 that was de signed not to promote Christmas clubs but to promote the spirit of Christmas by providing the thrill of a happy child’s Christmas for 100 underpriv ileged children in the community. Bank management had been seeking a way of offsetting the bank’s image of big-business-banking and out-of-town ownership. It desired to become more involved with the private community and to offer something beyond com mercial/ consumer conveniences. The bank wanted to do something neigh borly for its community. So, Mr. Kammerer came up with the 66 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis idea that, instead of spending money for premiums to induce customers to open Christmas club accounts, the money budgeted for the premiums should be spent on Christmas gifts for underprivileged kids. The idea was approved by bank, management and the cooperation of the Salvation Army was obtained. The Army had drawers full of files on chil dren who had never known the experi ence of a Christmas gift or tree. The Army’s staff helped the bank choose 100 local kids to be the first beneficiaries of the “Beloit State Bank Christmas Premium Budget.” The bank decided to base its Christ mas club promotion advertising cam paign on an appeal to customer com passion rather than commercialism. A negative sell technique was used, ask ing people to be glad they weren’t get ting a premium from the bank because that money was being spent on kids who otherwise wouldn’t be getting any Christmas presents. Newspaper ads featured a stark, black and white photo of a small, vul nerable looking child in worn sleepers, kneeling at bedtime prayers. The head line read, “and please let Santa come this time.” Object of the ad was to re mind the affluent that there were those who repeated this prayer year after year. The newspaper ads in the multimedia campaign were supported by larger-than-life posters of the child at point of purchase. Posters were hung behind each teller window at each branch. Direct mail stuffers repeated the graphics and copy and included a return reply to enable recipients to open Christmas club accounts by mail. This card was given to customers of Beloit (Wis.) State when they opened Christmas club accounts. It asks customers to be happy about not getting a gift, a coupon or premium so the money normally spent on such things can be used to bring Christmas to 100 needy chil dren in the community. Customers responded by opening almost 200 more accounts than had been opened previous year. Radio ads also were used to spread the word of the campaign. Everyone on the bank’s staff was in volved in the event. The bank’s presi dent and 20 officers volunteered to take the kids (in groups of five) on shop ping sprees. The children were allowed to purchase gifts for themselves and for their families. Bank staffers and spouses volunteered to help the kids wrap the gifts. After the shopping was done, the bank threw a big Christmas party for all 100 kids, complete with a visit from Santa. Of the $2,500 Christmas premium budget, $1,000' was spent on advertis ing and promotion. The balance was spent on the kids, each of whom re ceived $10 for gift purchasing. The balance of the budget was spent on gift wrap, a Christmas tree, decorations and refreshments for the party. According to Mr. Kammerer, the event was so popular and generated so much goodwill for the bank, it is ex pected to become an annual event. Typical of the letters received at the bank is the following, from a customer: “I have never written a letter like this before, but I had to tell you how much I admire and respect the project you are sponsoring with Beloit’s under privileged children. “Today everyone seems to be look ing out only for themselves. There’s a catch to everything. To see a big bank like you doing something like this with no strings—it makes me want to cry. “God bless you, and Merry Christ mas. I know you know what it means.” MID-CONTINENT BANKER for July, 1977 It takes a back seat driver like u s to get you where you want to gp. *1 ** ■ ■ H r: ? ^ < ... mil Z T V ? ¿H*?"**" i t t I ;? ■; r f ■ y . ‘ I i n 1- ; ' ; i L - .. i; ' 1 r r ^ f f n lf * - m ' m i • i . - : W : ; ■ - ■ - '- m p m m r P lR K H H ^ H = \-~J” .. la iiE W fc * l , ■■■ ¡¡§¡¡¡1 ipl - m W m 1 1 i I I t 'J B 111 I I :I I W I ¡ ¡ ¡ S ill f fesak mm « fti V liilB — I HIBBARD & O'CONNOR GOVERNMENT SECURITIES, INC. 1300 Main Street Houston, Texas 77002 (713)651-1111 ¡ llll Associate Member: GNMA Mortgage Backed Securities Dealers Assn. Mortgage Bankers Assn. I - _ :- ; I H H B j W h e n it c o m e s to SB A s a n d F m H A s, w e 're all b a c k se a t d riv e rs a t H ib b a rd a n d O 'C o n n o r G o v e rn m e n t S ecu rities. B ecau se a lo t o f o u r c lien ts k n o w w h a t th e y w a n t b u t a r e n 't su re h o w to g e t th e re . W e k n o w th e ro u te w ell. A n d w e c a n s h o w y o u th e way. O v e r th e y e a rs, w e 'v e d e v e lo p e d a p ro fe ssio n a l b ack office staff th a t k n o w s th e g o v e r n m e n t- g u a r a n te e d traffic s itu a tio n a n d h o w to n a v ig ate th ro u g h r u s h h o u r m a rk e t ja m s. O u r sa le s staff is o n o u r tra d in g flo o r e ig h t a n d a h alf h o u rs a day, five d a y s a w e e k , to a n s w e r y o u r calls. A t th e sa m e tim e , w e 're c o n s ta n tly o n th e ro a d b rin g in g o u r se rv ic es to y o u r office. A t H ib b a rd a n d O 'C o n n o r, w e b e liev e g o v e r n m e n t-g u a ra n te e d SB A s a n d F m H A s a re like G in n ie M a e s w e re a few y e a rs ago: g ro w in g in p o p u la rity . To d a y w e 're so ld o n th e m . In fact, la s t y e a r w e h a d a m a jo r sh a re o f th e SB A m a rk e t. S o if y o u 're stu c k in th e traffic sn a rl o f g o v e rn m e n t s e cu rities, call u s . W e've g o t th e g re e n lig h t for SB A s a n d F m H A s. ■ H ta ^ la s 1 ' s 3i ; '■ :.= i" -= Sil ■ ¡III IB ■ mm ■■I MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B B B iB i 67 Financial Institutions O ffer Metal Trays As Gifts to Promote Christmas Clubs W H A T W A S resp o n sib le fo r m o re th a n 2 ,5 0 0 n e w C h ristm as clu b acco u n ts b e in g o p e n e d a t T ri-C ity B ank, B ristol, T en n ., la st y ea r, re su lt in g in alm o st $ 200,000 in n e w m o n ey ? W h a t w as resp o n sib le fo r b rin g in g 9 0 0 n e w C h ristm as clu b ac co u n ts to Jefferson-G ravois B ank, St. L ouis, r e su ltin g in m o re th a n $ 5 6 ,0 0 0 in n e w m oney ? W h a t w as resp o n sib le fo r a 21% in crease in C h ristm as clu b ac co u n ts a t D e c a tu r C o u n ty B ank, G re e n sb u rg , In d .? T h e an sw e r is th e sam e in all th re e in stan ces— colorful m e ta l serv in g tray s fe a tu rin g n o stalg ic C u rrie r & Ives p a in tin g rep ro d u ctio n s. T ri-C ity B ank offered one tra y fre e to e a c h p erso n o p e n in g a $1 o r h ig h e r C h ristm as clu b ac c o u n t la st y ear. T h e p ro m o tio n ra n a t th e b a n k ’s six offices fo r alm ost tw o m onths. “T his w as a v e ry successfu l p ro m o tion, n o t only from th e sta n d p o in t of OVER 200 BA N K S HAVE ASKED US T O H ELP RED U C E T H E IR O P E R A T IN G CO STS* clu b savings, b u t fro m th e ex cellen t goodw ill g a rn e re d fro m sh o w in g o u r cu sto m e rs h o w to save sy stem atically th ro u g h th e u se of C h ristm as c lu b s,” sa id B ru ce D . M a rtin , vice p resid e n t. A to ta l of 2 ,0 0 0 tra y s w as d istrib u te d . D e c a tu r C o u n ty B ank g av e a tra y fre e to a n y o n e o p e n in g a $3 or h ig h e r C h ristm as clu b a c c o u n t d u rin g a sixw eek p e rio d p rio r to la st C h ristm as. “T h e p u b lic resp o n se to th e tray s c re a te d a lo t of e x c ite m e n t in o u r b a n k lo b b y a n d p ro v e d to b e a w elc o m e fe a tu re of o u r C h ristm as clu b (p ro m o tio n ) ,” said B ob B ostick, m a rk e tin g re p fo r th e b an k . H u m b o ld t (K a n .) N a tio n a l d istrib u te d m o re th a n 8 0 0 tra y s as gifts (o n e to a fam ily ) d u rin g its a n n u a l w eek lo n g p re -C h ristm a s o p e n h o u se c e le b ra tio n la st D ec em b e r. V ice P re sid e n t M a rg a re t L. B rinkm a n sa id th a t som e p e o p le w h o h a d n o t g one to th e b a n k d u rin g th e p ro m o tio n h a v e b e e n ask in g for th e tray s since th e n . “O u r cu sto m ers w e re v ery p le a se d w ith th e tra y s,” sh e a d d e d . T h e tray s a re d is trib u te d b y F a b cra ft, In c ., F re n c h to w n , N . J. Miss B rin k m a n re p o rte d th a t th e b a n k h a d n ’t o rd e re d n e a rly e n o u g h of th e tra y s a n d fo u n d it n ecessary to o rd e r m o re on D e c e m b e r 20. “W e re c e iv e d th e m w ith in a co u p le of d ay s,” she said. S o u th C h ica g o Savings B an k offered th e tray s as p a r t of its C h ristm as clu b p ro m o tio n la st y ear. In tw o m o n th s, 3 ,0 0 0 tray s w e re d istrib u te d , re su ltin g in 2 ,8 4 6 n e w ac co u n ts, re p re se n tin g m o re th a n $ 1 1 4 ,0 0 0 in n e w m oney. B anks h a v e b e e n u sin g th e trays, W E D ID IT. (and saved them 18% to 31% the first year) *D etails o n request. C all 2 1 4 /2 4 1 -9 4 4 4 o r w rite h jb H o w a rd J. B len d e r C o m p an y 2695 V illa C ree k D rive S uite 240 D allas, Texas 75234 68 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Custom-designed tray features painting hang ing in lobby of Fidelity Trust, Stamford, Conn. Trays were offered to bank customers signing up for Christmas club accounts. w h ic h co m e in a v a rie ty of sh ap es a n d illu stratio n s, fo r o th e r ev e n ts, too. Jefferson B ank, Jefferson C ity, M o., first u se d tray s in ea rly 1976 to com m e m o ra te th e b ic e n te n n ia l. F o u r differ e n t styles w e re offered as a b ic e n te n n ia l series. “W e sim p ly d isp la y e d th e m in o u r b a n k lo b b y a n d th e resp o n se . . . w as g re a t,” sa id A n g ie M oody, assistan t cash ier. “W e h a d n o tro u b le selling th e m a n d o u r cu sto m ers lo v ed th e m . W e sold th e m fo r $ 1 .5 0 e a c h .” In O cto b e r, th e b a n k o ffered a differ e n t series of tray s, d isp la y in g th e m n e a r te lle r w in d o w s. “A g ain , th e r e sp o n se . . . w as tre m e n d o u s,” M iss M o o d y said. “O u r cu sto m e rs’ re q u e sts fo r th e se tra y s p ro m p te d us to re o rd e r,” she said. F irs t N a tio n a l, St. P e te rs, M o., of fe re d a fre e tra y to a n y o n e o p en in g a re g u la r c h e c k in g a c c o u n t o r d ep o sitin g $50 or m o re in a sav in g s ac co u n t. A series of fo u r tra y s also w as g iven to a n y o n e o p e n in g an “A m b assad o r” a c c o u n t, a c o m b in atio n ch eck in g-savings ac co u n t. As of M a rc h , th e b a n k h a d d istrib u te d m o re th a n 2 ,3 0 0 tray s, resu ltin g in a b o u t 2 5 0 n e w A m b assad o r acco u n ts re p re se n tin g a b o u t h a lf a m illion d o l lars in n e w dep o sits. A sp ecial b ic e n te n n ia l tra y w as of fe re d to an y o n e d e p o sitin g $100 o r m o re in a n e w savings or ch e ck in g a c c o u n t a t A m eric an B ank, N orco, L a. A b o u t 4 0 0 tray s w e re d istrib u te d d u r in g a 3 0 -d ay p e rio d . A cc o rd in g to J e a n e tte Jaco b , v ic e p re sid e n t, th e tray s re p re se n te d a to k e n of a p p re c ia tio n to th e b a n k ’s cu sto m ers d u rin g th e b ic e n te n n ia l y ear. C lay to n B an csh ares, St. L ouis, of fe re d tray s a t n o co st to cu stom ers of m e m b e r b a n k s a g re e in g to a m o n th ly a u to m a tic tra n sfe r of fu n d s fro m ch e ck in g to savings in th e a m o u n t of $25 or m ore. T ra y s also w e re o ffered to custom ers a g re e in g to m o n th ly a u to m a tic d eb its of th e m o n th ly p a y m e n ts fo r th e ir in sta llm e n t o r m o rtg a g e loans. T h e p ro g ra m w as s ta rte d in D ec em b e r, a c c o rd in g to A. Jo se p h W illiam son, vice p re sid e n t-m a rk e tin g , an d , in less th a n tw o m o n th s, a b o u t 6 5 0 cus to m ers h a d q u alified fo r th e tray s b y sig n in g u p fo r o n e of th e plans. N e w to th e F a b c r a ft lin e th is y e a r are tray s fe a tu rin g a lo cal scene, th e b a n k ’s in sig n ia o r o th e r re p ro d u c tio n . A tra y w as re c e n tly c re a te d for F id e li ty T ru st, S tam fo rd , C o n n ., fe a tu rin g a re p ro d u c tio n of th e p a in tin g “F irs t T ra in to S tam fo rd — C h ristm as 18 48,” b y a rtist S tan le y J. R o w lan d . T h e original h a n g s in th e b a n k ’s lo b b y . T h e b a n k u se d th e tra y s as a C h ristm as club in cen tiv e . * * PIS . MID-CONTINENT BANKER for July, 1977 Within Bank of Oklahoma Tower... Seated left to right: Charles Rice, Marvin Bray Back Row: Phillip Hoot, Bill Hellen, Lee Daniel financial capabilities you can convert to profits. C on sid er this an open invitation to call one of our five C orresp on d ent B ankers. And start applying B ank of O k la h o m a ’s resources to your own needs and opportunities. Perhaps you can profit from o u r advanced cash m an ag em en t services. O r o u r co m p lete co rp orate and personal trust services. Perhaps o ur h ig h -p erfo rm an ce Investm ent Division can help you strengthen your portfolio. O r our w orld -sp ann ing internatio n al services can help you serve a m ultin ation al clien t better. Let us know how w e can help you. C all our C orresp on d ent B anking D epartm en t. It makes good business sense! Correspondent Bankers Charles Rice, Department Manager 588-6254 Marvin Bray 588-6619 Lee Daniel 588-6334 Bill Hellen 588-6620 Phillip Hoot 588-6617 BANK OF OKLAHOMA P.O. Box 2300 / Tulsa, Oklahoma 74192 Member F.D.I.C. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 69 I A Potpourri of Christmas Ideas for Your Bank Trains Generate 2 5 0 New Accounts As Christmas Incentive in Okla. City H E N IT C O M E S to a p re m iu m to b e offered a t C h ristm astim e , it’s difficult to b e a t a n elec tric tra in set! T his p o in t w as m a d e la st C h ristm as in O k lah o m a C ity, w h e re L ib e rty N a tio n al offered a n A H M H O scale m o d el tra in se t fo r $19.76, alo n g w ith a $10 0 d e p o sit in to a savings acco u n t. T h e train s a re p ro v id e d b y H o b b y M a rk e t ing, R ead in g , M ass. F u ll-p a g e n e w sp a p e r ad s a n d T V com m ercials a le rte d th e p u b lic to th e offer. A p o rtio n of th e n e w sp a p e r a d copy re a d as follow s: “P u t th is A H M H O g a u g e C h ristm as tra in u n d e r y o u r tre e fo r o nly $ 1 9 .7 6 w h e n y o u d e p o sit $100 o r m o re to a n e w or existing re g u la r savings ac c o u n t a t y o u r L ib e rty . “T his b e a u tifu lly d e ta ile d electric tra in is th e p e rfe c t g ift fo r c h ild re n of all ages. O v er 100 p ie ce s a re in c lu d e d . A ‘F risco ’ en g in e a n d cab o o se . . . five cars . . . b o th c u rv e d a n d stra ig h t tra c k . . . tre stle a n d b rid g e se t . . . ca rd stock tra in sta tio n a n d v illag e . . . p lu g in elec tric p o w e r p a c k tra n sfo rm er.” T h e p ro m o tio n ra n fro m N o v em b e r 2 9 to D e c e m b e r 23, ac c o rd in g to M rs. L in d a M oore of th e p u b lic rela tio n s d e p a rtm e n t. In less th a n a m o n th , m o re th a n 7001sets w e re sold. M o re th a n 2 5 0 n e w acco u n ts w ere o p e n e d w ith d e posits to ta lin g $1 0 3 ,0 0 0 a n d a b o u t 350 a d d -o n d ep o sits w e re m a d e , b rin g in g th e to ta l to m o re th a n $ 1 8 0 ,0 0 0 . T h e train s w ere sold fo r $ 1 9 .7 6 to tie in w ith th e b ic e n te n n ia l cele b ra tio n . W Students and staff at Dale Rogers Training Center for mentally retarded children admire one of two model train sets donated to special schools in Oklahoma City last Christmas by Liberty Nat'l. 70 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T h e p e o p le a t L ib e rty N a tio n a l w e re w ell a w a re th a t m o d e l tra in s h a v e a p p e a l fo r p e o p le of all ages a n d ec o n o m ic situ atio n s. T h a t’s w h y th e y p e rm itte d em p lo y ees to p u rc h a se tra in sets a n d th a t’s w h y th e tw o ta b le -m o u n te d d is p la y sets fro m th e b a n k ’s lo b b y w e re d o n a te d to sp e cia l c h ild re n ’s schools ju st in tim e for C h ristm as. O n e school w as fo r d e a f c h ild re n , th e o th e r fo r m e n ta lly re ta rd e d ch ild ren . T h e d ire c to r of th e O k lah o m a C o u n ty C o u n cil for M e n tally R e ta rd e d C h il d re n w ro te th e fo llo w in g th a n k -y o u le tte r to th e b a n k : “P lea se k n o w h o w d e e p ly a p p re c ia tiv e w e a re fo r th e ele c tric tra in y o u d o n a te d to th e D a le R ogers T ra in in g C e n te r re c e n tly . I t h as b e e n a source of re a l p le a su re to o u r stu d e n ts, m a n y of w h o m w o u ld n o t h a v e an o p p o rtu n i ty like th is in th e ir hom es. “I t is g ratify in g to k n o w th a t p eo p le in o u r c o m m u n ity rec o g n ize th e n e e d s a t D a le R ogers T ra in in g C e n te r a n d a re so w illin g to m e e t th e m . B ecause of p eo p le like yo u , w e are ab le to e n ric h a n d e x p a n d o u r p ro g ra m fo r th e m e n ta lly r e ta rd e d c h ild re n a n d a d u lts in th e g re a te r O k lah o m a C ity area. “T h a n k y o u fo r y o u r g en e ro sity a n d in te re st to w a rd o u r ‘sp ecial p e o p le .’ You h a v e b ro u g h t us m u c h joy!” • • Christmas Club Incentives Offered by Rand McNally N in e w ell-k n o w n R a n d M c N a lly p r e m iu m s a re b e in g o ffered to cu sto m ers of b a n k s u sin g R a n d M c N a lly C h rist m as clubs th is c o m in g season. T h e m e of th e p ro m o tio n m ig h t b e, “You save tw ic e w h e n y o u o p e n y o u r C h ristm as clu b ac c o u n t.” T h e th e m e r e fers to th e fa c t th a t th e a c c o u n t in it self is a m ean s of sa v in g in a d d itio n to th e fa c t th a t th e p re m iu m s are offered a t re d u c e d p rice s fro m re ta il— th u s, a se co n d savings. W h e n a c u sto m e r o p en s a C h rist m as clu b a c co u n t, h e is g iv e n a co u p o n listin g th e n in e in cen tiv es. T h e c o u p o n is u se d to o rd e r th e p re m iu m s d e sire d d ire c t fro m R a n d M cN ally. T h e sp o n so rin g b a n k does n o t h a n d le th e in c e n tiv es; th u s, th e re is no p u rc h a se , sto rag e o r cost to th e b an k . A m o n g th e in c en tiv es o ffered are at- | lases, globes, c h ild re n ’s books a n d tra v e l books. P ric e re d u c tio n s ra n g e fro m 50% to a b o u t 66 % u n d e r retail. B anks offerin g th e R a n d M cN ally C h ristm as clubs a re p ro v id e d w ith in i tia l p ro m o tio n m a te ria l a t no cost. Som e p ro d u c ts a re ev e n a v a ila b le a t n o cost to th e b a n k , d e p e n d in g on th e size of its C h ristm as clu b o rd e r as fu rth e r p ro m o tio n assistance. Greeting Cards Include Checks For Holiday Gift Giving A re la tiv e ly n e w c o n c e p t in b a n k in g services fo r C h ristm as is av a ila b le from C h e ck M ates. T h e serv ice offers cu s to m ers th e c o m b in atio n of a g ree tin g c a rd a n d a n e g o tia b le ch e c k in one p ro d u c t, p e rm ittin g th e safe a n d con v e n ie n t tra n sm itta l of a m o n e ta ry g ift in a ta ste fu l m a n n e r. T h e ca rd s com e in tw o ty p e s a n d are a v a ila b le in sev eral d esigns. T y p e “A ” is d e sig n e d fo r th e c h e c k in g ac co u n t c u sto m e r w h o m a in ta in s a d e m a n d d e p o sit a c c o u n t a t th e b a n k . T h e card s a re p re -p rin te d w ith th e issu in g b a n k ’s logo a n d A BA tra n s it a n d ro u tin g sym bols a n d are th e n M IC R e n c o d e d w ith th e c u sto m e r’s a c c o u n t n u m b e rs a t th e p o in t of sale. T h e c u sto m e r co m pletes th e c h e ck p o rtio n , m ails th e c a rd to th e re c ip ie n t, w h o sim p ly d e ta c h e s th e c h e ck p o rtio n a n d n e g o tia te s it. T y p e “B ” is sim ilar to a m o n ey o rd er o r tra v e le r’s check. T h e ca rd s in c lu d e p re -p rin te d logo, tra n s it a n d ro u tin g sym bols a n d in c lu d e c a rb o n iz e d copies fo r c u sto m e r a n d b a n k reco rd s. T h e g re e tin g c a rd checks ca n b e u se d as a co m p lim e n ta ry b a n k in g ser vice, an im a g e b u ild in g sales tool or as a p rem iu m . 100 Basketballs Donated To Needy by Bankers Staff m e m b ers of F irs t N atio n al, L it tle R ock, d o n a te d 100 b a sk e tb a lls to th e c h ild re n of n e e d y fam ilies last C h ristm as as th e ir p a rtic ip a tio n in th e C h ristm as p ro je c t of th e S alvation A rm y. In m a k in g th e p re se n ta tio n , staff m e m b ers h e ld an e lim in a tio n b ask etb a ll fre e th ro w co n te st in th e b a n k ’s lo b b y for th re e p rizes of g ift certificates to d o w n to w n m e rc h an ts. R e fe re e fo r th e “shoot-off” w as fo r m e r R a z o rb a c k b a sk e tb a ll sta r A im er L ee. MID-CONTINENT BANKER for July, 1977 Som ebody has to set th e standards P e b b le B each. Few o th e r c o u rse s in th e w o r ld d e m a n d so m u c h fro m th e p lay e r. Skill. A c c u ra c y . C o n c e n tra tio n . E x ecu tio n . For th e g re a ts o f the g am e, it h a s b e c o m e a fittin g test w h e re c h a m p io n s reig n . It's th e s ta n d a rd . A t D elu x e, th e test is to m ee t th e s ta n d a r d th a t w e've set fo r o u rse lv e s. A c c u ra c y a n d c o n s is te n t e x e c u tio n . A n d , th a t ta k e s all th e skill a n d c o n c e n tra tio n at h a n d . B ut th e n , th o se a re o u r d e m a n d s . T h e c h a llen g e s w e m eet. A t D elu x e, it's p a r fo r th e c o u rse . C H E C K P R IN T E R S , IN C SALES HDQTRS. • PO BOX 3399. ST PAUL. MN 55165 • STRATEGICALLY LOCATED PLANTS FROM COAST TO COAST https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1977 B LU E BO O K The completely revised 1977 edition of the Western Bank Directory is ready. The leatherette - bound, pocket-size book with spiral wire binding is indexed for quick ref erence. It lists every bank and branch in ALASKA, ARIZONA, CALIFORNIA, HAWAII, IDAHO, MONTANA, NEVADA, NEW MEXICO, OREGON, UTAH and WASHINGTON. The Directory contains the names of banks, branches, officers, statement figures, phone numbers, zip codes, industries, population, city, county, date organized, transit numbers and correspondent banks. IF YOU ARE IN A BANK OR DOING BUSINESS WITH BANKS IN THIS AREA, THE BLUE BOOK SHOULD BE ON YOUR DESK. WE HAVE A LIMITED NUMBER AVAILABLE. O zdez T ^ O U Z ò f MAIL TO: Please enter our order for W estern Banker Publications, Inc. ________copies of the 1977 111 Sutter Street, Suite 1330 Western Bank Directory. San Francisco, CA 94104 Invoice will be enclosed with your Directory or you may pay in advance. Price: $10.00 one copy, Bank/Com pany_________________________________________ $9.00 each for two or more Street Address__________________________________________ copies; 75 cents postage and C ity __________________________ State___________Zip Code handling will be added for each Directory. Applicable California tax. 72 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By-----------------------------------------------------------T itle __________________________________ MID-CONTINENT BANKER for July, 1977 Benefits From Christmas Incentive Offer Continue Well Into New Year for S& L E P O S IT S g e n e ra te d b y a p reC h ristm as in c en tiv e p ro m o tio n m a y b ec o m e a N ew Y ear’s b le ssin g to th e sp o n so rin g financial in stitu tio n as w ell! T a k e th e case of F irs t F e d e ra l S&L, H an o v e r, P a., w h ic h o ffered a ch in aw a re p ro m o tio n ju st p rio r to a C h rist m as season. T h e $20-m illio n -d e p o sit in stitu tio n re c e n tly re p o rte d th a t it h a d a d d e d no less th a n 60 acco u n ts p e r m o n th d u r in g th e p rev io u s 3 0 m o n th s. T h u s, som e 1,800 n e w acco u n ts w e re a d d e d to th e 3 ,0 0 0 acco u n ts on th e books a t th e tim e th e p ro m o tio n b e g a n . T h is S&L h as a h a rd ro w to h o e, in th a t it is flanked b y offices of five o th e r financial in stitu tio n s, all b id d in g for th e sam e deposits. P rio r to th e in c en tiv e p ro m o tio n , th e S&L h a d n e v e r o p e n e d m o re th a n 30 acco u n ts in an y single m o n th . T h e im p ro v e m e n t d u rin g th e first h a lf of th e seco n d 3 0 -m o n th p e rio d a fte r in c e n tives w e re offered w as n o t su rp risin g to m a n ag e m en t, w h ic h h a d co m e to e x p e c t it as a re su lt of th e S&L’s first p rem iu m offer, a self-liq u id a tin g c o n ti n u ity p ro g ra m fe a tu rin g C h a d d s F o rd c h in a from P ro g ra m m e d M a rk e tin g S ervices, C h a d d s F o rd , P a. A ctu ally , th e p ro g ra m g e n e ra te d as m a n y as 110 n e w acco u n ts d u rin g one o f its p e a k m o n th s. T h is w as th e h ig h e s t n e w -a c c o u n t ac tiv ity in th e associa tio n ’s history. T h e c o n tin u in g h ig h e r level of n e w -a c c o u n t a c tiv ity w as m a in ta in e d a fte r th e ch in a offer w as co m p le te d . D T h e in stitu tio n n o w re g u la rly op en s m o re th a n 60 n e w ac co u n ts m o n th ly . T h is h ig h e r lev el of ac tiv ity w as in d u c e d in itially b y th e in c e n tiv e p ro m o tio n , S&L m a n a g e m e n t states. T h is case h isto ry p o in ts u p o n e as p e c t of p re m iu m offerings fre q u e n tly o v erlo o k ed — th e su sta in in g p o w e r of a w e ll-stru c tu re d c o n tin u ity p ro g ra m . In a d d itio n to g e n e ra tin g a b o u t $1 m illion in p assb o o k savings a t a p re m iu m cost of only o n e -q u a rte r of 1%, F irs t F e d e ra l successfully c re a te d a n in c re a se d aw a re n ess of th e in stitu tio n b y th e co m m u n ity , a n d th is in c re a se d a w a re ness re su lte d in n e w b u sin e ss w ell p a st th e co n clusion of th e p re m iu m p ro g ra m th a t c o n c lu d e d ju st p rio r to C h ristm as. A p o rtio n of th e in c re a se d n e w -a c c o u n t a c tiv ity c a n b e a ttrib u te d to a m o re sa les-m in d ed staff a t th e S&L. W h e n a p o p u la r p re m iu m is offered, staff p e o p le te n d to ov erco m e a n y sense o f shyness th e y m ig h t h a v e h a d to p ro m o tin g th e p re m iu m a n d asking fo r th e n e w acco u n t. A fter en c o u ra g in g p eo p le fo r several m o n th s to ta k e a d v a n ta g e of a fre e g ift offer b y o p e n in g a savings a c co u n t, c o n ta c t p erso n n e l o ften find it easier to sell an a c c o u n t on its o w n m erits, ev e n a fte r th e fre e g ift offer h as b e e n c o n c lu d e d , in stitu tio n officials state. P re m iu m su p p liers re c o m m e n d th e se ttin g of sales goals a t th e b e g in n in g of a n in c e n tiv e c a m p a ig n . If th e s e goals are p ro p e rly re w a rd e d o n ce a tta in e d , p erso n n e l w ill b e e n c o u ra g e d to “p u sh th e p ro d u c t” ! • • Employees of Exchange Bank, Dallas, exhibit some of 100 new toys purchased by employees and donated to needy children through ser vices of Salvation Army. Employees Give Toys to Needy Through Salvation Army E m p lo y e es of E x c h a n g e B ank, D a l las, h e lp e d m a n y u n d e rp riv ile g e d chil d re n en jo y C h ristm as la st y ear. M ore th a n 100 n e w to y s w e re d o n a te d to th e S alv atio n A rm y C h ristm as C h e e r P ro g ram b y th e em ployees. T h e p ro g ra m w as in itia te d w ith in th e b a n k a n d th e toys p u rc h a s e d b y a c o m m itte e of em ployees. T h e toys w ere d isp la y e d in th e b a n k lo b b y fo r a few d a y s p rio r to b e in g d e liv e re d to th e S alv a tio n A rm y. This is no ordinary bank directory. Dinnerware continues to be popular incentive to generate new accounts for financial institu tions. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis $35 sta n d in g o rd e r $45 ^single issue AMERICAN Bank Directory 6364 W a rre n D rive N o rcro ss, G a. 30093 (404) 448-1011 W h a t’s so special a b o u t th e A m e ric a n B an k D irec to ry ? I t’s th e o n ly desk-top n atio n al b a n k d irec to ry , so c o m p a c t y o u c a n h o ld it in o n e h an d . A B D ’s co n v e n ie n t th u m b -in d e x ed , tw o -v o lu m e fo rm a t m ak es it easy to lo c ate co m p lete, essential fa c ts a n d figures o n every b a n k a n d m u lti-b an k h o ld in g c o m p a n y in th e n atio n . B u t th a t’s n o t all. T h e A m e ric a n B an k D ire c to ry is still A m e ric a ’s lo w est-p riced co m p lete b a n k d irec to ry . T h a t’s w h a t’s so special. C all o r w rite to d ay to o rd e r T h e Extraordinary B a n k D irec to ry . “Plus shipping and handling 73 How It Was Done HCs Statewide Incentive Promotion Pulls in $14 Million in New Deposits T T A K E S a g re a t d e a l of p la n n in g to m o u n t a successfu l p re m iu m p ro m otion. A sk Je rry Jackson, m a rk e tin g officer a t B an cO h io C o rp ., C o lu m b u s, w h o re c e n tly h e lp e d p la n a n d coor d in a te a p ro m o tio n th a t re su lte d in $14 m illion in n e w d ep o sits fo r th e 4 0 b an k s p a rtic ip a tin g in th e H C -w id e p ro m o tion. Successes like th is d o n ’t ju st h a p p en , M r. Jackson says. A n d h e ’s b a c k e d u p b y D ale Jo hnson, d ire c to r of m a r k e tin g re se arch a t B ancO hio. T h e p ro m o tio n cam e a b o u t b e c a u se of a critica l lo an -to -d e p o sit ra tio th a t existed in m a n y affiliates of B an cO h io . T h erefo re, M essrs. Jack so n a n d Jo h n so n w e re assig n ed th e ta sk of co m in g u p w ith a p ro g ra m th a t c o u ld b e h a n d le d successfully b y all affiliates, w h e re v e r th e y w ere lo c a te d in O hio. I t w as to b e th e first c o rp o ra te -w id e p ro g ra m fo r B ancO hio. M a n y of th e affiliate b an k s h a d n o ex p e rien c e w ith in cen tiv es a n d w e re e x p e c te d to b e sk ep tical of a p ro g ra m d e sig n e d to “fly” in C o lu m b u s/C le v e la n d , y e t also b e in g ab le to leav e th e g ro u n d in th e sm all tow ns serv ed b y som e H C affiliates. M r. Jack so n said a ch e ck list of th e item s th o u g h t to b e critica l fo r a su c cessful p ro m o tio n w as d ev e lo p e d , as follow s: • A p rem iu m w o u ld b e n ec essary th a t w o u ld give n e w a n d ex istin g cu s tom ers o f all p a rtic ip a tin g b an k s a g e n u in e b arg a in . • T h e p re m iu m w o u ld h a v e to h a v e a p ro v ed tra c k rec o rd in o th e r financial in stitu tio n s. • T h e p ro g ra m w o u ld h a v e to b e sim ple to ad m in ister. • T h e p rem iu m m u st com e from a re p u ta b le su p p lier. • F u ll r e tu rn p riv ileg es fro m th e su p p lier w o u ld b e necessary. • T h e p re m iu m sh o u ld b e su p p o rte d b y n atio n al a d v e rtisin g on th e p a r t of th e su p p lier. By JIM FABIAN Associate Editor I 74 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • P ro p e r tim in g in th e m a rk e t p la c e w as essential. T h e p re m iu m se le c te d w as a K odak H a w k e y e P o c k e t In sta m a tic cam era. T h e p re m iu m w as av a ila b le a t $10 to th e H C , w h ic h p la n n e d to self-liquid a te it fo r $9.95. T h e ca m e ra s w ere selling locally fo r fro m $18 to $ 20 , so it w as a re a l b a rg a in a t $9.95. In v e n to ry w as n o t m u c h of a p ro b lem , since th e ca m e ras w e re lig h t in w e ig h t, w ell p a c k e d , easy to sto re a n d in v e n to ry . In a d d itio n , M r. Jack so n said, th e K odak n a m e w as ex tre m ely w ell k n o w n in th e m a rk e t p la ce , a fa c t th a t w o u ld p u t th e m in d s of m a n y p a rtic ip a tin g b an k e rs a t ease. I t w as d e c id e d to ru n th e p ro g ra m in N o v e m b e r a n d D e c e m b e r to ta k e a d v a n ta g e of th e h e a v y C h ristm as ad v e r- HAW KEYE p o ck et INSTAMATIC C ciltlG K cl dil l i ff lOnly plus tax when you deposit $100 or more in a new or existing savings account or new checking account O hio N ational Bank Typical newspaper ad for BancOhio HC's cam era promotion. HC designed ads and supplied affiliates with kits of advertising materials. tisin g th e c a m e ra m a k e r d oes a t th a t tim e. N o t o n ly w o u ld cu sto m ers b e ex p o sed to th e b a n k ’s ad v e rtisin g b u t also to m e d ia a d v e rtisin g fro m K odak. M r. Jack so n sa id m e rc h a n t o bjections a b o u t th e b an k s o ffering ca m e ras w ere m in im iz ed w h e n m e rc h a n ts w ere a d v ise d th a t th e p ro m o tio n w o u ld re su lt in m o re ca m e ra s b e in g b ro u g h t in to th e m a rk e t, w h ic h w o u ld m e a n m ore b u si ness fo r m e rc h a n ts w h o sell a n d process film. I t w as p o ssib le th a t th e m e re ex isten c e of a sim p le w a y to o p e ra te a c a m e ra in th e m a rk e t m ig h t g e n e ra te m o re in te re st in p h o to g ra p h y an d , th e re fo re, c re a te f u tu re sales fo r m o re a d v a n c e d e q u ip m e n t, M r. Jackson th e orized. R eg io n a l m e etin g s w e re h e ld to gain affiliate b a n k s u p p o rt fo r th e p ro m o tion. A co o rd in a to r in e a c h b a n k w as assig n ed a n d e a c h b a n k ’s q u o ta w as d e te rm in e d a fte r d isc u ssin g th e situ a tio n w ith a m a rk e tin g officer a n d th e co o rd in a to r. B ased u p o n th e q u o tas, th e co o rd in a to rs co u ld w in p rizes w h e n re a c h in g 25%, 50%, 75% a n d 100% of th e ir q u o ta s. S ince th e c o o rd in ato rs h a d h e lp e d estab lish th e goals for th e ir b an k s, it w as fe lt th e y w o u ld rea lly b e c o m p e tin g w ith th e m se lv es, n o t w ith e a c h o th er. T o b u ild m o re e x c ite m e n t into th e p ro m o tio n , M r. Jack so n said, a p a c k ag e w as se n t to e a c h c o o rd in a to r w ith th e w o rd s “M ission Im p o ssib le” ste n ciled on th e en v e lo p e . In sid e w as a m em o, a c a sse tte ta p e , cookies a n d an e n v e lo p e of coffee. T h e m em o d ire c te d th e co o rd in a to rs to ta k e th e p ack ag es hom e, relax a n d en jo y th e cookies a n d coffee a n d p la y th e ta p e , w h ich co n ta in e d a d e ta ile d e x p la n a tio n of th e p ro g ra m . P a r t of th e ta p e d m e ssag e a d v ised co o rd in a to rs to su b m it o ne of th e ir b u sin ess ca rd s to H C h e a d q u a rte rs fo r p a rtic ip a tio n in a d ra w in g fo r a fre e ca m e ra a n d a y e a r’s su p p ly of film. It w as soon obv io u s w h ic h co o rd in ato rs MID-CONTINENT BANKER for July, 1977 Every venture needs a lifeline to minimize the risk. W ith G lobe L ife ’s com plete set o f cre d it life program s, y o u ’ve g o t a line o f insurance you can depend on. G lobe provides s u p p o rt w ith program s in CREDIT DISABILITY INSURANCE . . . CREDIT LINE INSURANCE . . . LOAN PROTECTOR . . . I.R.A. PROTECTOR . . . KEY-MAN INSURANCE. And . . . G lobe backs its program s w ith a capital stru ctu re o f over $50 m illio n and over $2.5 b illio n o f life insurance fo r responsible people across the nation. <m ü AND ACCIDENT INSURANCE COMPANY Oklahoma City, Oklahoma ASSETS IN EXCESS OF $120 MILLION MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 75 h a d ta k en th e tim e to liste n to th e ta p e , M r. Jack so n said. A d v ertisin g w as d e v e lo p e d fo r ra d io , n e w sp a p e r, stuffers, b illb o a rd , T V , c o u n te r card s a n d p o in t of sale d is plays. T h e m ajo r th e m e w as “m o n ey in th e b a n k c a n p u t a c a m e ra in y o u r p o ck e t.” A ffiliates co n tro lle d th e v o lu m e of ad v e rtisin g in th e ir m a rk e ts, co o rd in a te d w ith th e ir ad v e rtisin g b u d gets. T o q u alify fo r a ca m e ra a t $9 .9 5 , a cu sto m e r w as re q u ire d to d e p o s it $100 in a n e w o r existin g savings a c c o u n t or n e w ch eck in g acco u n t. A n extensive in d o c trin a tio n p ro g ra m w as se t u p b y th e H C fo r all em ployees. I t w as o ffered to affiliates. P ro d u c t k n o w le d g e w as stressed in o rd e r th a t p erso n n e l co u ld fu lly ex p lain th e m e rits of th e p re m iu m a n d h a v e a k n o w le d g e of w h a t a fine v a lu e th e c u sto m e r w as g ettin g , M r. Jack so n said. G o al of th e p ro m o tio n w as 4 0 ,0 0 0 ca m e ra s a n d $20 m illion in n e w d e posits. S ince th e H C h a d n e v e r co n d u c te d a sta te -w id e p ro m o tio n , it w as difficult to d e te rm in e a goal. M o re th a n 2 5 ,0 0 0 ca m e ra s w e re m o v e d a n d M r. Jack so n sa id e v e ry o n e w as ex trem ely p le a se d w ith th e $ 1 4 m illio n in d e posits. Conference on Business Conditions in 1978 HOUSTON OAKS HOUSTON, TEXAS OCTOBER 24, 1977 Sponsored by THE FOUNDATION OF THE SOUTHWESTERN GRADUATE SCHOOL OF BANKING • Essential information to prepare your bank's budget for 1978. • Impact of business conditions in 1978 on your bank’s asset and liability management. • Topics will include: “Why Bank Management Should Be Inter ested in the Business Conditions Outlook,” “The Business Conditions Outlook in 1978,” “The Outlook for Bank Deposits and Other Fund Sources in 1978,” “The Securities Markets in 1978: Implications for Your Bank’s Investment Portfolio,” “Planning Your Bank’s Loan Portfolio in 1978: Expected De mand for Bank Loans,” “Analyzing Your Bank's Performance.” A b re a k d o w n of th e resu lts rev eals th e fo llo w in g fo r th e 4 0 p a rtic ip a tin g b an k s: • N u m b e r of n e w ch e ck in g ac co u n ts: 1,766. • T o ta l n u m b e r of n e w ch eck in g ac c o u n t d o llars: $1 .5 m illion. • A v erag e d e p o sit to n e w ch eck in g a c c o u n t: $824. • N u m b e r of n e w savings acco u n ts: 4 ,0 8 8 . • T o ta l a m o u n t of n e w savings ac c o u n t d o llars: $3.1 m illion. • A v erag e d e p o s it to n e w savings a c c o u n ts: $751. • N u m b e r of n e w C D s g e n e ra te d b y p ro m o tio n : 198. • T o ta l n e w C D d o llars: $ 1.3 m il lion. • A v erag e n e w C D d e p o sit: $6,635. • N u m b e r of ex istin g acco u n ts: 18,222. • T o ta l a d d -o n dollars to existing ac co u n ts: $ 8.2 m illion. • A v erag e d e p o s it to ex isting ac co u n ts: $447. • N u m b e r of ca m e ra s sold: 2 5 ,4 4 7 . • T o ta l d o llars g e n e ra te d : $13.9 m illion. • A v erag e d o lla r d e p o s it fo r all ty p e s of a c c o u n ts : $543. • N e w ac co u n ts as p e rc e n t of to ta l: 23.7%. • N e w d o llars as p e rc e n t of to ta l: 41%. Ja m es W e n tlin g , d ire c to r of m a rk e t in g fo r B an cO h io , h a d th is to say a b o u t th e p ro m o tio n : “I ’v e n e v e r b e e n p a r t o f a p ro je c t I w as m o re p ro u d of. W e m a d e b eliev e rs o u t of m a n y b an k s th a t h a d n e v e r r u n a p rem iu m . H a d w e failed , it w o u ld h a v e b e e n tre m e n d o u s ly difficult to re g a in th e ir confidence. M a n y p ro g ra m s te n d to b e c o m e to o co m p lex a n d c o m p lic a te d , b o th to th e c u sto m e r a n d th e b a n k . W e k e p t it sim p le a n d c o n se q u e n tly ( it w as) suc cessfu l.” • • Candy Cane Pen Offered • Registration limited to 150. For information, write Dr. William S. Townsend, Administrative Director THE SOUTHWESTERN GRADUATE SCHOOL OF BANKING SMU Box 214 Dallas, Texas 75275 or call A/C 214/692-2991 76 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis This red and white striped candy cane ball point pen is available from John P. Anderson Premiums, Deerfield, III. It comes with a bright green cap and is filled with peppermint-scented ink. MID-CONTINENT BANKER for July, 1977 Look for our name behind the best in correspondent banking service. First City National Bank of Houston is the largest bank in the nation’s 5th largest city. To correspondent customers, our name and position assure the finest in complete banking services. The First City National Bank name also stands for vast experience and professional under standing of the businesses and industries that have shaped the economic character of the great South west. Agribusiness. Oil and gas. Petrochemicals. Import/export. Over the last 100 years our finan cial participation has earned us a reputation of banking expertise in these and other specialized industries. While the strength of First City National Bank of Houston is computed in billions of dol lars, it is best measured by our ability to serve you and your customers. At every opportunity. Which is why correspondents need a bank that is in a posi tion to provide more service. We’re in that position. The Regional/Correspondent Department, First City National Bank, P.O. Box 2557, Houston, Texas 77001. a F IR S T W - i ■ c it y 1 N A T IO N A L III ■ BANK OFHOUSTON i We can do it all. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 77 Eliot Janeway Defuses False Alarms At Merc Trust Correspondent Party P E O P L E w ho h a v e b e e n selling th e ir stocks b ec au se th e y fe a r a re tu rn of tig h t-m o n ey co n ditions sp a w n e d b y d o u b le -d ig it inflation a n d risin g in te re st rate s “are g o in g to w a k e u p soon an d realize th e y h av e b e e n frig h te n e d b y a false a larm ,” sa id eco n o m ist E lio t Ja n ew ay a t th e S p rin g C o rre sp o n d e n t C o n feren ce sp o n so red b y M e rc a n tile T ru st, St. L ouis, la st m o n th . “T h e p re s e n t fea r a b o u t inflation a n d h ig h e r in te re st rate s is d u e sim p ly to a m isre ad in g of m o n ey su p p ly statistics b y F e d e ra l R eserv e B ank officials w h o p u sh e d u p fed fu n d rate s, w h ich , in tu rn , p a n ic k e d th e pro fessio n al stock m a rk e t cro w d an d , in tu rn , som e m o n ey b an k s b e g a n h ik in g th e p rim e in te r est ra te to co m p o u n d th e fea rs,” h e said. “H o w ev er, th e b e s t p ro o f th a t this w as a false alarm is th a t th e b o n d m ark ets h a v e h e ld re m a rk a b ly ste ad y ; u tility stocks h av e h e ld firm ; th e re ’s b e e n n o r u n u p in gold; th e S au d is are p u ttin g th e ir m o n ey in U. S. th re e - to five-year g o v ern m en ts a n d n e ith e r co p p e r n o r steel has b e e n ab le to raise p rice s,” M r. Ja n e w a y said. H e ad v ised his a u d ie n c e n o t to w o r ry a b o u t P re sid e n t Jim m y C a rte r as b e in g a fre e sp e n d er. “T h e y d o n ’t kn o w th e y h a v e a n e w C alv in C o o lid g e in th e W h ite H o u se ,” h e rem a rk e d . “T h e situs p ic k e tin g b ill w as d e fe a t e d in th is C a rte r-d o m in a te d C ongress; so w as th e $50 re b a te ; fe d e ra l b o rro w in g h as b e e n c u t b a c k sh a rp ly a n d d o u b le ta x atio n on d iv id e n d s w ill b e e n d e d b y n e x t y e a r,” h e co n tin u ed . “B e rt L an c e, C a rte r’s b u d g e t d ire c tor, re c e n tly ask ed a g ro u p of b u sin e ss m e n a t m y ho u se, ‘W h a t else do you w a n t? ’ ” M r. Ja n e w a y sa id th e re ’s n o en e rg y crisis, m e a n in g th a t “to o m a n y co n fu se p e tro le u m a v a ila b ility w ith su p p ly . “T h e S aud is a re n o t goin g to c re a te an oil sh o rta g e ,” h e said, “so lo n g as w e co n tro l th e S h ah of Ira n . O n ce gov e rn m e n t a n d b u sin ess se t to w o rk on d e v e lo p in g a lte rn a te sources of en e rg y , such as alcohol m a d e fro m g rain s, fro m coal a n d e v e n g arb a g e, w e w ill kick off an in v e stm e n t b o o m n o t seen in m a n y y e a rs,” h e d e c la re d . H e a d v ised a g b an k s to s u p p o rt farm ers b e c a u se R ussia a n d C h in a w ill Socializing at con ference were (from I.) Zalie Leven, ch. & pres., Normandy Bank, St. Louis; D. E. Rieff, pres., Farmers & Merchants, Prairie Grove, Ark.; James E. Brown, pres., Mercantile Bancorp.; and Eugene Leonard, s.v.p.. M e r c a n t i le Trust. Participants at Mercantile pen sessions included (I. Bancorp.; Lynn H. Miller, v.p. & corres. dept, head, 78 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Trust Spring Correspondent Conference bull photo) James E. Brown, pres., Mercantile pres., Mercantile Trust; David T. Stoecker, Mercantile Trust; (c. photo) R. Hal Dean, ch. b e in th e g ra in m a rk e t fo r a lo ng tim e. “W h a t w e m u st re m e m b e r,” h e said, “is n o t to g ive o u r b ig food assets aw a y sim p ly b e c a u se of th e d a n g e r of an e v e n g re a te r su rp lu s.” H e rec o m m en d s “in v e stin g in h ighy ie ld in g u tilitie s a n d o th e r m oney stocks offering yield s of 6% o r b e tte r. T h e se stocks w ill sp a rk th e n ex t m a rk e t rec o v ery ,” h e said. R. H a l D e a n , c h a irm a n a n d C E O , R alsto n P u rin a C o., St. L ouis, a n d a d ire c to r of M e rc a n tile T ru st, ad v ised b a n k e rs to sp eak o u t ag a in st la w b re a k ers in th e U n ite d S tate s b y e stab lish in g a co d e of c o n d u c t th a t recognizes b u sin e ss’ o b lig atio n s to society. “R ules a n d re g u la tio n s com e from c o rp o ra te in d ifferen c e,” h e said, a d d in g th a t th e b ig g e st p ro b lem s of business to d a y a re th o se g e n e ra te d b y g o v ern m e n t ag e n cies w h o se p e rso n n e l are fu e le d b y excessive zeal. H e ad v ised b a n k e rs to see th a t re fu ta tio n s of false accu satio n s ag a in st b u sin ess m a d e b y g o v e rn m e n t agencies a re w ell c irc u lated . “G o v ern m en tag e n cy alleg atio n s are n o t alw ays to ta l ly v a lid ,” h e said. H e said th a t a g ric u ltu re is th e n a tio n ’s la rg e st busin ess, in v o lv in g som e $9 5 .5 b illio n in 1976. A g ric u ltu re ac co u n ts fo r a p ro m in e n t p a r t o f th e G N P , since 20% of th e n a tio n a l incom e goes for food. A g ric u ltu re h as an u n m a tc h e d level of p e rfo rm a n c e , h e said. A g p ro d u c tiv i ty h as e n a b le d th e U . S. to en joy p ro s p e rity , a n d a k ey rea so n fo r fa rm e r ex p e rtise is th e re la tio n sh ip b e tw e e n local a n d b ig -c ity b a n k s th ro u g h th e co rre sp o n d e n t system . B ecau se farm d e b t is soaring, h e said, it’s in c re a sin g ly im p o rta n t th a t b a n k s see to it th a t fa rm e rs g e t th e fin an c in g th e y n eed . “A m eric an a g ric u ltu re is th e w o rld le a d e r in p ro d u c tiv ity a n d efficiency a n d th e b e s t ex am p le of th e success of th e U . S. fre e -e n te rp rise sy stem a t w o rk ,” M r. D e a n said. H e a d d e d th a t & CEO, Ralston Purina Co., & dir.. Mercantile Trust; (r. photo) Eliot Janeway, political economist; Donald B. Wehrmann, s.v.p.. Mercantile Trust. MID-CONTINENT BANKER for July, 1977 Protected Species Our extended single interest insurance stretches to guard customers as well as the bank This coverage reaches out to protect your auto loan customers from being grounded by uninsured physical damage. It protects the bank through a com puter report that keeps on top of all your auto loans, Every vehicle is automatically insured at all times. Appropriate costs are allocated to customers who for some rea son do not obtain private insurance. You’ll never have to repossess veh icles because uninsured accidents put the owners in default. With insurance money available to repair damage, you’ll keep customers in their cars making their loan payments without a peep. Write or phone today for our new free folder about extended single interest insurance. FINANCIAL INSURANCE! SERVICE, INC. 2200 E A S T D E V O N A V E N U E • O E S MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis P L A IN E S . IL L IN O IS 6 0 0 1 0 » 312 / 2 9 7 - ^ 6 6 0 U . S. ag ex p ertise c o n stitu te s a firm re b u tta l to th o se w h o p re a c h m o re g o v e rn m e n t co n tro l of business. M e rc P re sid e n t L y n n H . M iller r e p o rte d on th e b a n k ’s g ro w th in th e in te rn a tio n a l area. M e rc a n tile ’s in te rn a tio n a l b u sin ess d e p a rtm e n t h as g ro w n fro m 17 to 80 p e o p le in th e p a s t 10 y ears, h e said. T h e b a n k n o w h as co r re sp o n d e n t relatio n s w ith 117 overseas b an k s a n d m o re th a n $100 m illion in fo reig n loans o u tsta n d in g , all tra d e re la te d . E x p o rt of p ro d u c ts m a n u fa c tu re d in th e b a n k ’s th re e -s ta te tra d e a re a re a c h e d $1.3 b illio n in 1976, M r. M il le r said, a n d th a t figure d o esn ’t in c lu d e m o re th a n $ 700 m illion in a g ric u ltu ra l p ro d u cts. T his d e v e lo p m e n t of a fo re ig n c o rre sp o n d e n t-b a n k system h as e n a b le d M ercan tile to sell its in te re st in th e L o n d o n In te rs ta te B ank, w h ic h it h e lp e d fo rm a n u m b e r of y ears ag o to o p en L o n d o n m ark ets, M r. M iller said. M r. M iller re c e n tly r e tu rn e d fro m th e S oviet U nion, w h e re h e stu d ie d th e S oviet financial system . Jam es E . B row n, p re sid e n t, M e rc a n tile B an co rp ., p a r e n t of M e rc an tile T ru st, said th e re a p p e a rs to b e no es c a p e from th e m a n d a te to a u to m a te a n d sim plify financial tra n sa c tio n s a t all levels. “W h ile w e are fa c e d w ith m a n y rea l o bstacles in th is v e n tu re ,” h e said, “th e elec tro n ic-tran sfer sy n d ro m e is h a rd u p o n u s.” H e w a rn e d th a t th rifts “w ill h a v e ta k e n th e w h o le b a ll g am e u n less w e co m p ete on com m on g ro u n d .” T h rifts soon w ill h a v e a fo rm of check in g a c c o u n t service as w ell as o th e r n e w co n su m er b a n k in g p ro d u c ts to d eliv er, h e said. “A d d to th a t im p ressiv e w e a p o n ry th e off-prem ise su p e rm a rk e t te rm in a l a n d co n v e n ie n ce th a t b o rd e rs on u b iq u ity a n d y o u h a v e a scen ario w h ic h c o u ld sp ell do o m fo r tra d itio n a l co m m e rc ial b a n k in g ,” h e said. “T h e p riv ileges e x te n d e d to th e th rift in d u stry alm o st m a k e a joke o u t of o u r so-called ‘fre e -e n te rp rise ’ sy stem ,” h e a d d e d . H e re c o m m e n d e d sh a rin g of E F T te rm in als so b a n k s c a n sp re a d th e cost b u rd e n . H e a d m o n ish e d b a n k e rs to k n o w th e ir costs of offering services, sta tin g th a t “o u r p ric in g policies o b viously a re o u t of d a te .” H e sa id th a t co m p etitio n , n o t cost, p ro b a b ly w ill d e te rm in e w h e th e r b an k s a d o p t E F T system s. “W e, in d e e d , h a v e a v e ste d in te re st in o u r b a n k s a n d w e rec o g n ize th a t o u r g am e p la n w ill n o t re m a in sta tic ,” M r. B row n said. “T h e f u tu re te c h n iq u e s of b a n k in g m a y b e as difficult to sell to o u r associates as it is to o u r p u b lic , b u t as w e m o v e a h e a d , I tru s t w e all re m e m b e r th a t a h ig h -p e rfo rm a n c e b a n k is a p ro fitab le b a n k a n d th a t b a n k in g is, in d e e d , a tra d e .” F o llo w in g th e b u ll-p e n session, b a n k ers w e re tr e a te d to cocktails, a b u ffe t d in n e r a n d th e C h icag o C ubs-S t. L o u is C a rd in als b a ll gam e, w h ic h th e C u b s w on. * * PERSO NN EL PRO BLEM S? WHETHER YOU ARE A PERSONNEL MANAGER LOOKING FOR AN O FFICER. . . OR A BANKER WISHING TO RELOCATE WE CAN HELP Put this confidential and guaranteed service to your use today. FINANCIAL PLACEM ENTS a division of Bank News, Inc. 912 Baltimore, Kansas City, Mo. 64105 816-421-7941 TOM CHENOWETH, Manager 80 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T ruth-in-Lending (C ontinued fro m page 36) sh o u ld b e clea r th a t th e re are a n u m b e r of sta n d a rd givens th a t b a n k e rs sh o u ld co n sid er: First, som e b a n k s h a v e sp e n t tre m e n d o u s sum s of m o n e y try in g to co m p ly w ith th e p re s e n t T ru th -in L e n d in g A ct a n d h a v e d e v e lo p e d com p re h e n siv e p ro c e d u re s fo r th e ir p e rso n nel, sto c k p ile d form s a n d g en erally w o u ld ta k e th e p o sitio n th e y a re in co m p lia n c e w ith th e law . Second, sm all b an k s w ith lim ite d staff reso u rces w o n ’t b e a b le to q u ic k ly rev ise th e ir p ro c e d u re s to ta k e a c c o u n t of m a jo r sim plifi catio n s of T ru th -in -L e n d in g . Third, a t th is p o in t, no o n e know s ex actly w h a t in fo rm atio n is essen tial to co n su m ers o r w h a t in fo rm a tio n th e co n su m er n e e d s— w h e th e r it b e cost in fo rm atio n o r te rm in fo rm atio n . Fourth, n o sim pli fication a t all w ill e v e r b e p a s se d u n less b o th b a n k e rs a n d co n su m ers a g re e on som e b asic co n cep ts. A ll th is m a y so u n d r a th e r n e g a tiv e ; a t le a st o n e im m e d ia te leg isla tiv e effort sh o u ld b e co n sid ered . R a th e r th a n w a it fo r th e e n tire pro cess of sim p lification to re a c h its b itte r en d , a re su lt th a t’s n o t g u a ra n te e d in th is session, w h y n o t p u t a m o ra to riu m o n civil litig atio n u n til C ongress h as th o ro u g h ly ex am in e d th e issue? A lm o st e v e ry o n e ag rees so m e th in g n e e d s to b e do n e; th e o nly q u e stio n is h o w a n d h o w m u c h ? A gain, th e k ey th in g b a n k e rs sh o u ld c o n c e n tra te on is o rg a n iz in g th e ir th o u g h ts a n d b e g in n in g a d ia lo g u e th a t u ltim a te ly co u ld re s u lt in a m ore liv ab le situ a tio n th a n w e fa c e to d a y . W ith o u t a n in d u stry p o sitio n o n b a sic issues, b a n k e rs w ill h a v e to d e p e n d on leg isla tiv e efforts n o w u n d e rw a y . As m e n tio n e d ab o v e, th e five le g islativ e efforts a n d o n e re g u la to ry effo rt e n ta il v ario u s ex trem es of “sim plification.” A t o n e e x tre m e is a b ill (H .R . 6 8 7 5 ) in tro d u c e d in th e H o u se b y R e p re se n ta tiv e R o b e rt D rin a n , w h ic h c o n c en tra tes on b ee fin g u p a d m in istra tiv e en fo rce m e n t w h ile only to u c h in g on th e dis clo su re p ro b le m b y lim itin g civil lia b il ity to a specified list of m a te ria l disclosures. A n o th e r H o u se effo rt b y R e p re se n ta tiv e B e n ja m in R o sen th al’s G o v e rn m e n t O p e ra tio n s S u b c o m m itte e, w h ile n o t y e t in b ill fo rm , a g a in fo cu ses on la c k of a d m in istra tiv e en fo rce m e n t, r a th e r th a n th e u n d e rly in g p ro b lem . O n th e S e n a te side, S e n a to r W illiam P ro x m ire (S. 1312) and S en ato r Ja k e G a m (S . 1 5 0 1 ) h a v e s u b m itte d bills. S e n a to r D o n a ld W . R ieg le Jr. p u r p o rte d ly is w o rk in g o n an o th e r. S ena- MID-CONTINENT BANKER for July, 1977 to r P ro x m ire’s b ill d eals w ith som e of th e b a s ic issues, in c lu d in g a g ric u ltu ra l ex em p tio n , civil liab ility , m o d e l form s a n d ad m in istra tiv e en fo rce m en t. S en a to r G arn ’s b ill goes fu rth e r b y p ro v id in g relief fro m c o n sta n t form s ch a n g es b y lim itin g effective d a te s of an y law , re g u la tio n or in te rp re ta tio n to O c to b e r 1, lim itin g th e d e g re e of ite m iz a tio n of fin an ce ch arg es, rev isin g m a n y re g u la to ry b u rd e n s in v o lv ed in o p e n -e n d c re d it a n d d rastica lly lim itin g civil li ab ility to violations th a t “w e re m a te ria l to th e ob lig o r’s aw a re n e ss of th e cost of c re d it.” Y et th e se efforts, as c o m p re h en siv e as th e y m a y seem a t first b lu sh , fa il to re a c h som e of th e m ost k n o tty issues. R eco g n izin g th is as a serious p ro b lem , th e F e d e ra l R eserv e B o ard staff h as p u t to g e th e r a co m p lete a n d fu n d a m e n ta l re w rite of th o se asp ec ts of T ru th -in L e n d in g d ea lin g w ith clo sed -en d c re d it. A su b se q u e n t p ro je c t w ill e n ta il a co m p lete re w rite of o p en -e n d cre d it. W h ile th e staff d r a f t h as a w a y to go b e fo re it b eco m es a le g isla tiv e p ro posal, it does sh ift th e focus fro m a b stra c t n o tio n s of sim plificatio n to co n c re te proposals. B asic ch a n g es w o u ld in c lu d e: 1 ) lim itin g m a n d a to ry d is closures to id e n tity of c re d ito r, a m o u n t fin an ced , finance ch a rg e , sc h e d u le a n d to ta l p ay m en ts, A P R a n d d e fe rre d p a y m e n t p ric e ( c re d it sa le s); 2 ) r e q u irin g m o d e l form s; 3 ) p ro h ib itin g ite m iz atio n of th e finan ce ch a rg e; 4 ) in c lu d in g cred it-life p re m iu m s in th e finance ch a rg e ( a n a lte rn a tiv e w o u ld allow exclusion if v o lu n ta ry a n d rev o ca tio n p e r m itte d ) ; 5 ) cle a rin g specifi ca tio n of w h o is resp o n sib le for d is closure in a m u ltip le -c re d ito r situ a tio n ; 6 ) rev isin g civ il-liability provisions. T h is sh o rt su m m ary d o esn ’t b e g in to do ju stice to w h a t th e staff h as a t te m p te d — a n u ts-an d -b o lts re w rite — b u t it does re p re s e n t th e m o st d ra m a tic a t te m p t to d e a l w ith th e T ru th -in -L e n d in g pro b lem . Since th e only w a y le g isla tio n ca n m ove fo rw a rd q u ick ly is fo r e v e ry o n e to p a rtic ip a te in th e process of ch a n g e , b an k e rs sh o u ld id e n tify th o se asp ects of th e vario u s p ro p o sals d e e m e d b e n e ficial to ev ery o n e— b a n k e rs a n d c o n sum ers. I f o ne e n d of th e p ro p o sals does n o t do th e job, b a n k e rs sh o u ld b e p r e p a re d to offer th e ir o w n p ro p o s a l s ) . B u t w h a te v e r th e y do o r do n o t do, th e y sh o u ld rec o g n iz e th a t th e o p p o rtu n ity to c h a n g e T ru th -in -L e n d in g co n stru c tiv e ly is no w , a n d th e tim e to e v a lu a te a n d re v ie w th e p ro b le m is al m o st p ast. • • Sometimes Newark doesn’t know when to stop. New York can be Tomato Mornay for breakfast, Central Park for lunch, eighty-seven stories up for dinner and the Joffrey Ballet for dessert. It can also be too much. That's why there’s a Barclay. The Barclay is a small hotel on the east side. (The lobby is fifty feet across. The Big Conference Room holds twenty people.) The Barclay is quiet, calm. It’s elegant without being stuffy, expensive without being ridiculous. Next time you’d like New York to go on without you for a while, remember The Barclay. W h en e n o u g h N ew York’s en o u g h . 48th just off Park. (800) 221-2690. In New York State, (800) 522-6449. In the city, 755-5900. Or call your corporate travel office or travel agent. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 81 Credit-Life Income (C ontinued from page 34) c a p e this liab ility b y assig n in g com m is sions to th e b an k . I t sh o u ld b e o b serv e d th a t a sta te is b e tte r ab le to re g u la te ac tiv ities of lo cal ag e n ts th a n a fe d e ra l ag en cy , ev e n if th e la tte r co u ld exercise th e rig h t to reg u la te. Som e sta te s p e rm it in d iv id u a lly li cen sed ag e n ts to o p e ra te w ith in a co r p o ra tio n (fo rm e d fo r p erso n a l or tax reaso n s) so lo n g as th e ag e n ts rem a in p erso n ally responsible. H o ra c e R. H an se n of St. P au l, g e n era l counsel of th e In d e p e n d e n t B an k ers A ssociation of A m erica, d ec la re s th a t th e p ro b lem w ith th e p ro p o sal in th is co n tex t is: “I t d estro y s fre e choice, seizes p erso n a l p ro p e rty w ith o u t d u e process an d creates u n n e c e ssa ry fe d e r al-state re g u la to ry conflicts.” Incom e-Tax Problem. A n o th e r p ro b lem concerns in co m e ta x atio n of in su r an c e com m issions. G iv e n th e fa c t th a t ev ery a g e n t selling c re d it life, h e a lth a n d a c c id e n t in su ran c e m u st b e li c e n se d in th a t field b y th e sta te in w h ic h h e o p era tes, a n d th a t only li c e n se d ag e n ts m a y b e p a id com m is sion incom e, th e q u e stio n arises w h e th e r th e in d iv id u ally lic en sed a g e n t is su b je ct to fe d e ra l incom e tax ( a n d p o s sibly sta te in c o m e ta x ). I f th e in d iv id u al a g e n t v o lu n ta rily assigns his co m m ission incom e to th e b a n k w h e re h e is a n em ployee, h e c a n n o t th e re b y re lieve h im self of in co m e-tax liability. H o w can th e fe d e ra l b a n k ag e n c y b y re g u la tio n force a n in d iv id u a l a g e n t to m a k e su ch a n assig n m e n t th e re b y a n d reliev e h im from in com e-tax liab ility ? Stockholders’ R ights. T h e p ro p o se d reg u la tio n a n d th e sta te m e n t acco m p a n y in g it d ec la re th a t all sto ck h o ld ers of th e b a n k m u st b e tr e a te d e q u a lly a n d th a t m a n ag in g o r co n tro llin g sto ck h o ld e rs do n o t h a v e an y g re a te r rig h ts th a n m in o rity stockhold ers. U n d e r th e h e a d in g “U n safe o r U n so u n d P ra c tices,” th e C o m p tro ller sta te s th a t if m i n o rity sh areh o ld ers a re n o t tre a te d e q u a lly w ith m ajo rity sto ck h o ld ers in re g a rd to in su ran c e inco m e, th e re a u to m a tic ally is a div ersio n ( th e f t) of b a n k incom e. T h ese a re conclusory sta te m e n ts u n s u p p o rte d b y law . F u rth e r, th e y as sum e th a t in su ran c e-ag e n c y incom e, r e gardless of rea l o w n ersh ip , is th e in co m e of th e b an k . T h is is an assum tion u n s u p p o rte d b y la w o r b y a n y ev i d en c e m e n tio n e d in th e p roposal. T h e re ’s no q u estio n th a t in d iv id u als m ay o p e ra te a n in su ra n c e ag e n c y on b a n k prem ises, p ro v id e d th e re ’s d is 82 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis clo su re a n d p ro p e r allo catio n of costs. T h e fa c t th a t in d iv id u a ls o p e ra tin g th e a g e n cy h a p p e n to b e a m o n g th e m a jo r ity or co n tro llin g sto ck h o ld ers is of no le g al c o n seq u e n ce u n less th e re are se crecy, b a d fa ith , fra u d or o th e r o p p re s sion a g a in st th e rig h ts of m in o rity sto ck h o ld ers of th e b an k . L eg a l rig h ts o f m in o rity sto ck h o ld ers are d istin ctly lim ited . In a d d itio n to re g u la to ry re m edies u n d e r sta tu te s, th e re ’s alw ays a re m e d y b y civil action. R ig h ts to c o n tro l a n d m a n a g e a co r p o ra tio n are leg ally p ro te c te d a d v a n ta g es of m a jo rity sh areh o ld ers. C o n gress a n d th e co u rts h a v e sta te d r e p e a te d ly th a t c o m p e titio n is th e g re a t re g u la to r in b a n k in g . F e d e ra l a n d sta te re g u la to ry b a n k in g sta tu te s are d e sig n e d to assu re b a n k sa fe ty in th e p u b lic in te re st; th e y a re n o t d e sig n e d to te ll b a n k e rs h o w to co m p ete . In c e n tiv es fo r o b ta in in g co n tro llin g shares of a b a n k are c o n so n an t w ith th is n a tio n a l policy. Transfer of B ank O wnership. T h e p ro p o se d re g u la tio n , if a d o p te d , w o u ld p ro d u c e sev ere c o n seq u e n ces to th e v ia b ility of sm all a n d m e d iu m -siz ed b an k s, esp ecially th o se in sm aller co m m u n ities a n d s u b u rb a n areas. T ra n sfe r of sm aller b a n k s involves u n iq u e p ro b lem s. S ale of a sm aller b a n k is g en e rally m a d e to one of tw o ty p e s of b u y e rs: ( a ) a m u ltib a n k h o ld in g co m p an y , or a la rg e b a n k w h ic h m a y co n v e rt th e a c q u ire d b a n k in to a b ra n c h , d e p e n d in g on sta te law ; o r ( b ) lo cal b u y e rs in th e co m m u n ity , w h o m a y in c lu d e officer p e rso n n e l of th e bank. L o ca l b u y e rs u su a lly n e e d a b a n k stock lo a n to h e lp fin an ce th e p u rc h a se , in w h ic h case th e role of a n in su ran c e ag e n c y in th e tra n sa c tio n is ex tre m ely im p o rta n t. A lte rn a tiv e “a” fru stra te s n a tio n a l p o licy of p re se rv in g c o m p e titio n a n d p re v e n tin g c o n c e n tra tio n in th e field of b a n k in g . Christmas Tray A vailable This Christmas tray features five red and white Santas on a green background with white snowflake border. It measures 12V2"xl7" and is constructed of steel. Available from John P. Anderson premiums, Deerfield, III. U n fo rtu n a te ly , o u r tax law s fu el th e p ro cess of a c q u isitio n of sm all b an k s b y la rg e b a n k s or h o ld in g com panies. U sually, th e p u rc h a se is m a d e b y a taxfre e ex c h an g e of stock. A lte rn a tiv e “b ” d oes n o t offer such a d v a n ta g e s. T h e selling b a n k e r sells b o th co n tro llin g sh ares in th e b a n k an d th e in su ra n c e ag e n c y to g e th er. T h e b u y e rs a re a ttra c te d b y th e c o m b in ed ea rn in g s of th e b a n k a n d in su ran ce ag en cy . W ith o u t th e ag e n cy , th e p ac k ag e w o u ld b e less attra c tiv e . B uyers of a sm all b a n k u su a lly n ee d a b an k -sto c k loan fro m a la rg e r b a n k to h e lp fin an ce th e p u rc h a se . In m an y cases, th e b an k -sto c k lo a n w o u ld b e im p o ssib le to n e g o tia te or re p a y w ith th e m o d e st e a rn in g s of th e b a n k alone, so th e ea rn in g s of th e in su ra n c e ag en cy b ec o m e a critica l in g re d ie n t fo r b o th p a rtie s. F u rth e r, ag e n c y in c o m e is an in c e n tiv e th a t e n a b le s sm all b an k s to a ttra c t a n d re ta in c o m p e te n t officer p erso n n el. T h e re su lt is d iffe ren t w h e re th e in su ran c e b u sin ess is o w n e d a n d con tro lle d b y th e b a n k c o rp o ratio n . If only th e m a jo rity sh ares a re p le d g e d to re p a y m e n t of th e b an k -sto c k loan, th ese sh ares do n o t ca rry w ith th e m th e to ta l p ro fit of th e in su ra n c e ag e n cy , a n d div id e n d s p a y a b le to th e m a jo rity stock h o ld e rs are c o n sid erab ly less. In th e case of th e b a n k ag ency, th e local b u y e rs a re le ft w ith fe w e r a fte r tax dollars w ith w h ic h to re p a y th e b an k -sto c k loan. T h is c o n sid erab ly re d u ce s th e p o ssib ility of selling a sm all b a n k to o th e r local ow ners. W h ile th e p ro p o se d re g u la tio n is lim ite d to c re d it life, h e a lth a n d acci d e n t in su ran c e, its ad o p tio n m ig h t in v ite ex ten sio n to o th e r lines of in su r an ce, n o w n o rm ally h a n d le d b y p riv a te ag en cies in b an k s, b e c a u se th e sam e re a so n in g s u p p o rtin g th e pro p o sal co u ld b e a p p lied . C re d it life, h e a lth a n d a c c id e n t in su ra n c e is p a rtia lly for th e b en e fit of th e b a n k in th e sen se th a t it p ro tec ts th e co llateral, n am ely , th e in d iv id u al b o rro w er. If h e or sh e dies o r becom es d isa b le d , th e b a n k h as in su ra n c e p ro ceed s to a p p ly on th e b a la n c e of th e loan. A t th e sam e tim e, th is lin e of in su ran c e is fo r th e p ro te c tio n of th e fam ily of th e in d iv id u a l b o rro w er. If h e dies o r is d isa b le d , th e fam ily is re lie v e d of th e d e b t to th e e x te n t of th e in su ra n c e p ro ce ed s. T h e sam e ap p lies to fire a n d au to in su ran c e, a n d th e se lines are, in m an y cases, th e m a jo r p a r t of th e ag en cy ’s b u siness. F ire in su ra n c e p ro tec ts th e lo a n ’s co llateral, n a m e ly th e m o rtg a g ed b u ild in g . I t b en efits th e b o rro w e r an d his fam ily b e c a u se th e y are re liev ed of d e b t. In a u to in su ran c e, p h y sical-d am a g e c o v e rag e p ro te c ts th e m o rtg a g ed MID-CONTINENT BANKER for July, 1977 Our idea of correspondent banking: THE COMMITTEE OF ONE. Our people are real, live, experienced correspondent professionals, w ith years of correspondent banking behind them . They aren ’t m anagem ent trainees or ju s t goodwill ambassadors, so they can okay loans or services—like our new EFT S services—on the spot. W ithout going through unwieldy, tim e-w asting committees. WE CALL YOU BY NAME. NOT BY PHONE. You see, N ational Boulevard believes in person-to-person, eye-to-eye contact w ith the m anagem ent of every correspondent bank. R ight th ere a t th e correspondent bank. So things get done faster, friendlier. THE FUTURE STARTS TODAY. And now our individualized services will be b etter th a n ever, because N ational Boulevard is ready for EFTS. Electronic Funds Transfer Systems. For instance, our C entral Inform ation File is capable of tran sm ittin g inform ation to correspondent banks. Soon, checking and savings accounts will be on line. Then, step-by-step, every correspondent service will be fully integrated into the system for more convenient, better banking. The bank for the New Downtown NATIONAL BOULEVARD BANK OF CHICAGO 400-410 North Michigan Ave., Chicago, 111. 60611 Phone (312) 467-4100 Member FDIC MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 83 v eh icle a n d also p ro te c ts th e b o rro w e r a n d his fam ily. A ny lin e of in su ra n c e th a t p ro te c ts th e b a n k b asica lly p ro tects its borro w ers. In su re d s in th e p o l icies a re th e borrow ers. I t c a n n o t b e co n c lu d e d th a t p riv a te ag en cy b u sin ess a n d its com m ission in com e b e lo n g to th e b a n k sim p ly b e cau se of its p a rtia l in te re st in p ro ce ed s of th e in su ran ce. Conclusion. T h e re ’s a n e e d to ex am in e b a n k -in su ra n ce rela tio n sh ip s on a case-by-case basis, u sin g existing sta tu te s fo r n e e d e d rem e d ies. T h e C o m p tro ller h as no g ra n t of p o w er w h a te v e r to leg islate n e w la w in th is & 0 4 4 O U e tl to - field. If his p ro p o sal w e re p ro m u lg a te d , it w o u ld b e in v a lid , a n d , in som e areas, to ta lly in effectiv e. A u n ifo rm ru le for th e n a tio n is a le g al im p o ssib ility . F o r m a n y le g al a n d p ra c tic a l r e a sons, as w ell as th e in a d e q u a te fa c tu a l a n d le g a l fo u n d a tio n fo r th e p ro p o sed re g u la tio n , it sh o u ld b e w ith d ra w n . * * Beau Snow Coin Banks Offered as Premiums A n e w coin b a n k is b e in g o ffered as a n in c e n tiv e b y C h ristm as C lu b a C orp., b a s e d on th e firm ’s B e au S now c h a ra c te r. T h e b a n k sta n d s a b o u t se v en inches in h e ig h t a n d in c lu d es a tw ist k nob in th e b a se to p e rm it access to c o n ten ts. T h e b an k s a re m a d e of n o n to x ic m a te ria l th a t is soft a n d stu rd y . Jo h n H . G u in an , p re s id e n t of C h rist m as C lu b a C o rp ., said, “W e h a v e e n jo y e d success u sin g th e B e au Snow c h a ra c te r in p ro m o tio n s a n d as p re m i u m s in th e fo rm of tra y s a n d candles. W e fee l th a t ‘B e au ’ w ill h a v e ev e n g re a te r success as a coin b a n k offered as a p a r t of in -b a n k p ro m o tio n s. T h ey m a k e an ex c ellen t h o lid a y g ift.” 'o u u o u b tJ la p fU i A tte + id e & i. Make your group function a spectacular success! Whatever the size, 10 rooms or 300. All you’d want right under our roof. Per sonal attention from contact thru check out. Changes? Don’t fret — no penalties added to your costs. Magnificent meeting, ban quet, entertain ment facilities. Only five blocks to new Convention Center. 10 exciting restaurants, lounges. Just steps from G a te w a y Arch E a c h C h ristm as, D e tro it B ank asks th e y o u n g rela tiv e s of its em p loyees to d esig n th e co v e r fo r th e D e c e m b e r is su e of th e b a n k ’s m a g az in e, “T h e T e lle r.” T h e co n te st h as b e c o m e a tra d itio n a t th e b a n k , a n d la st y e a r m o re th a n 135 y o u n g ste rs se n t in th e ir im p re s sions of th e y u le tid e season. C o n te sta n ts e n te r d ra w in g s in one o f th re e ca te g o rie s ac c o rd in g to th e ir g ra d e in school: n u rse ry th ro u g h th ird g ra d e , fo u rth th ro u g h sixth g ra d e an d g rad e s sev en th ro u g h nin e. P rizes a re g ift certificates a n d e n trie s a re d isp la y e d a t th e b an k . ^ P 1 â w v C l \ Magazine Cover Contest Stresses Yule Spirit RIVERFRONT » I R E S OR T 4th & Pine. St. Louis, MO 63102 Sales Dept. 103 . I I E Please send free brochures, rates: Business Trips □ Pleasure Trips □ Weekends □ Meetings □ Honeymoon □ ADDRESS S TA TE , Z IP ST. LOUIS, MISSOURI 84 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I Rodkey Craighead, pres., Detroit Bank, and Sheryl Young, editor of bank's employee pub lication, review some of drawings submitted In yuletide contest by children of bank staffers. MID-CONTINENT BANKER for July, 1977 Proposed Kentucky Merger Blocked by Justice Dept.; Court Action to Be Sought L E X IN G T O N , KY—A p ro p o se d m e rg e r a g re e m e n t b e tw e e n S eco n d N a tio n a l a n d B ank of L ex in g to n h as b e e n e x te n d e d to J u n e 30, 1978, b y th e b o a rd s of th e tw o b an k s. T h e m e rg e r w as a p p ro v e d A pril 2 7 b y th e C o m p tro lle r of th e C u rren c y , b u t w as o p p o se d b y th e Ju stic e D e p a rtm e n t, w h ic h filed a co m p la in t M a y 2 6 in th e F e d e ra l D istric t C o u rt fo r E a s te rn K en tu c k y alleg in g p o ssib le vio la tio n of S ec tio n 7 of th e C lay to n A n titru st A ct. T h e c o m p lain t filed b y Ju stice al leg es th a t th e m e rg e r w o u ld e lim in a te ex istin g co m p etitio n b e tw e e n th e m e rg in g b an k s a n d m ig h t “c re a te a m o n o p oly or te n d su b sta n tia lly to lessen co m p e titio n .” U n d e r th e B ank M e rg e r A ct, th e filing of a c o m p la in t b y Ju stic e a u to m a tic ally b a rs c o n su m m a tio n of a b a n k m e rg e r u n til th e issu e is reso lv ed th ro u g h c o u rt actio n . T h u s, th e b o ard s of th e tw o b an k s v o te d ex ten sio n of th e m e rg e r so th e b an k s co u ld seek reso lu tio n of th e issue th ro u g h th e co u rts, ac c o rd in g to J. H . G raves, p re sid e n t, Sec o n d N atio n al. M r. G rav es says th e b a n k s’ p o sitio n essen tially is as follow s: “ 1. W e c o n c e d e th a t th e m e rg e r w ill e lim in a te som e ex istin g c o m p e titio n b e tw e e n th e tw o b an k s, b u t th e e x te n t of su c h c o m p e titio n is n o t su b stan tia l. “2. T h e local b a n k in g m a rk e t is d o m in a te d b y th e a re a ’s tw o la rg e st b a n k in g o rg an iz atio n s, w h ic h h o ld 43% of th e d ep o sits in th e six-county SM SA. S eco n d N a tio n a l is th e fifth -larg est b a n k , w ith 7% of th e d ep o sits in th e SM SA, a n d B a n k of L e x in g to n is se v e n th la rg e st, w ith 4.2%. T h e m e rg e r of S eco n d N a tio n a l a n d B an k of L ex in g to n w ill re su lt in a b a n k w ith b e tte r c a p a c ity to c o m p e te w ith th e tw o le a d in g b a n k in g o rg an izatio n s. “3. T h e m e rg e r w ill re su lt in signifi c a n t econom ies of o p era tio n s, fa c ilita te a stre n g th e n in g in c a p ita l p o sitio n a n d p e rm it m o re effective u se of m a n a g e ria l reso u rces. “4. T h e m e rg e r w ill h a v e su b sta n tia l b en efits fo r th e p u b lic th ro u g h ex p a n sio n of services, esp ec ially in su c h lines of ac tiv ity as tr u s t services, p la s tic -c a rd b a n k in g , co n stru c tio n loans, loans to a g ric u ltu re a n d sm all bu sin ess lo an s.” In su m m ary , M r. G ra v es b eliev e s th e m e rg e r w ill, on b a la n c e , in c re ase com - Santcf Takes to Air A collection of radio-controlled model air planes filled a portion of the lobby of South ern Ohio Bank, Cincinnati, last December. The collection was the bank's Christmas gift to the community. Models on display ranged from a "peanut size" Piper Cub to a large B-24 bomber. Some models were suspended from the ceiling, others were displayed on the floor. Two model planes were awarded to visitors by a drawing. Kneeling at left is Thomas Dix, bank president. p e titio n a n d su b sta n tia lly b e n e fit th e p u b lic co n v e n ie n ce a n d n ee d . How well do your present savings passbooks, or statement savings registers, promote your image ? H a v e you e v e r sto p p e d to th in k w h a t y o u r s ta te m e n t or re g u la r s a vin g s p a s s b o o k s a re doing fo r y o u r im a g e ? O r, h o w m uch m o re a ttra c tiv e ly d e s ig n e d p a s s b o o k s co uld d o? W e ll, th e p e o p le a t R a n d M c N a lly h a v e , and a s a resu lt, h a v e c o m e up w ith s o m e g re a t id e a s in color, style an d d esig n th a t ca n w o rk fo r yo u . Or, if you p refer, th e y h a v e a staff of ta le n te d artists th a t will h elp you c re a te an im a g e all y o u r ow n . A name you know, a company you should know more about Rand M?Nally Financial Systems Division P.O. B o x 7600 / Chicago, Illinois60680 / (312) 2 6 7 -6 8 6 8 10 East 53rd Street / New York, New York 10022 / (212) 7 5 1 -6 3 0 0 2 06 Sansome Street / San Francisco, California94104 / (415) 3 6 2 -4 8 3 4 MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 85 Swedish Bankers Association Studies Bank's ATM Operation N A S H V IL L E — T h e S w ed ish B a n k ers A ssociation h as jo in e d th e ran k s of w h a t has b e e n ca lle d a “g ro w in g n u m b e r of financial g ro u p s” th a t h as s tu d ie d th e A n y tim e T elle r M a ch in e o p e ra tio n of F irs t A m erican N atio n al. T w e n ty -e ig h t re p re se n ta tiv e s of th e S w edish B ankers A ssociation w e re on h a n d to stu d y th e F irs t A m eric an N a tio n al A T M o p era tio n , w h ic h re p o rte d ly lead s th e n a tio n in usag e. S in ce in stallin g 10 of th e IB M m ach in es, F irs t A m erican N atio n al h as e n te rta in e d r e p rese n tativ es fro m 80 fin an cial in s titu tions in 2 7 states, W a sh in g to n , D . C., a n d sev en fo reig n co u n tries w h o v isited Richard L. Goodwin (I.) v.p.. First American Nat'l, Nashville, explains operation of bank's Anytime ATM to Bo Gunnarsson, deputy mgr., Swedish Bankers Assn., Stockholm. Mr. Gun narsson and 27 other Swedish bankers visited First American Nat'l to attend briefing on operation, maintenance of ATM system, which is said to lead nation in usage. You want good, legit commercial loans. Some times collateral problems are hard to overcome, especially if they are inventory-based. Douglas Guardian can help uncomplicate inven tory collateral problems by bringing its Traveling Credit to the situation in the form of Bonded Field Warehousing. Call in Douglas. It’s a start to a “ no problem” finish. Douglas Guardian Warehouse Corporation with Offices in 15 principal cities. Please direct inquiry to Executive Office, P.O. Box 52978, New Orleans, La., 70152 (phone (504) 523-5353), and we’ll get a Douglas man to you. 86 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis N ash v ille to g ain firsth a n d k n o w led g e of th e o p era tio n . In a d d itio n , a n u m b e r of b a n k in g schools a n d b a n k in g associ atio n s h a v e re q u e s te d th a t F irs t A m eri ca n N a tio n a l re p re se n ta tiv e s le c tu re on th e setu p . A cco rd in g to a b a n k spokesm an, “W h e n F irs t A m eric an N a tio n al b e g a n its A T M o p era tio n , in d u stry ex p erts to ld us w e co u ld e x p e c t a b o u t 10,000 tran sa ctio n s in th e first m o n th . B u t th e A T M s h a n d le d 8 8 ,0 0 0 tra n sa ctio n s in th a t first m o n th , a n d w e h a v e p ro cessed o v er 1 ,2 4 3 ,0 0 0 tra n sa ctio n s on 10 m a ch in e s in th e p a s t y e a r.” EFT Cost/Benefit Package Prepared by School, CPA Firm T h e G ra d u a te S chool of B an k in g a t th e U n iv ersity of W isco n sin -M adison, in c o n ju n ctio n w ith P e a t, M arw ick, M itch ell & C o., C P A firm , is offering an e d u c a tio n a l p a c k a g e to h e lp b an k e rs m ak e th e to u g h d ecisio n of w h e th e r an E F T sy stem is cost-justified fo r th e ir in stitu tio n . T h e p a c k a g e “re p re se n ts th e first specific te c h n iq u e w e k n o w of to h e lp in d iv id u a l b a n k s e v a lu a te th e financial im p licatio n s of an E F T sy stem ,” ac c o rd in g to W illiam J. D a n e r, ch a irm an of th e tru ste e s of th e school. T h e c o s t/b e n e fit analysis p ac k ag e w ill b e o ffered th is m o n th in M in n e apolis, K ansas C ity a n d C h icago. I t is d e sig n e d to a c q u a in t b a n k e rs w ith th e te c h n iq u e a n d to h e lp th e m e v a lu a te w h e th e r to se n d a re p re se n ta tiv e to la te r, th re e -d a y im p le m e n ta tio n sem i n a rs sc h e d u le d fo r fall. T h e c o s t/b e n e fit analysis p ack ag e, w h ic h to o k e ig h t m o n th s to d ev elo p a n d in v o lv ed m o re th a n 3 ,0 0 0 m a n h o u rs, co n tain s n u m e ro u s w orksheets, case m a teria ls, sc h ed u le s a n d in stru c tio n s fo r ta ilo rin g th e a p p ro a c h to th e in d iv id u a l’s ow n b a n k a n d o p e ra tin g en v iro n m en t. I t co n c e n tra te s on p o in t of sale (P O S ) a n d a u to m a te d te lle r m a c h in e (A T M ) analysis. T h e p a c k a g e also in c lu d es a co m p u t e r-b a se d c o s t/b e n e fit m o d e l fo r p re p a rin g p ro jectio n s re la te d to a specific b a n k ’s E F T efforts. T h e se p rojections sh o u ld e n a b le a b a n k to u n d e rsta n d E F T ’s im p a c t on p ric in g decisions, m a rk e tin g p la n s a n d profits. A cco rd in g to P e te r D . L o u d e rb a c k of P e a t, M a rw ic k & M itch ell, “p rio r p la n n in g is essen tial if E F T is to u lti m a te ly su c c e e d a t a b a n k . T his p ra c tic al c o s t/b e n e fit p a c k a g e w ill p ro v id e a m e th o d of analysis, ra th e r th a n sp e cific 'g o -n o go’ an sw e rs.” A m o n g th o se g u id in g th e p ro je c t w as R o b e rt C. N elson, e x e cu tiv e v ice p re si d e n t, In d ia n a B an k ers A ssociation. MID-CONTINENT BANKER for July, 1977 Now, at a Special LOW Price . . . This 3-Volume Marketing Library All Three Manuals ONLY $25.95 It How to Plan, Organize & Conduct Bank Anniver saries. . . . The complete guide to procedure when holding a formal opening, an open house, any kind of bank celebration; 166 pages, many illus trations; 12 chapters starting with “First Things First,” ranging through “Add a Little Pizazz and Oom-pah,” concluding with “Expect the Unexpect ed”; eight appendices containing actual plans, budgets, programs used by banks in actual cele brations; a completely factual, step-by-step howto-do-it book now in its second printing. Regular Price: $16.00 2. How to W rite Bank Publicity and Get It Pub lished. . . . The complete guide to procedure in writing publicity releases and how to prepare them so that newspaper and magazine editors will use them; 61 pages; 12 chapters with titles such as “Constructing the News Story,” “Placing the News Story,” “Handling ‘Sticky’ Situations,” “Dealing with News Media”; another completely factual, step-by-step how-to-do-it manual. Regular Price : $5.25 3. How to Plan, Organize and Conduct an Incentive Campaign. . . . Mid-Continent Banker’s newest how-to-do-it manual; a complete guide to proce dure in evolving an effective incentive campaign to sell bank services and/or increase bank deposits; MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 96 pages, 16 illustrations; starts by telling you premium terms and the history of incentives, roams through such topics as trade area studies, tying in with current events, getting new business from old customers, motivating staff members and conclud ing with a series of six case histories of actual bank promotions that obtained exceptional results. Regular Price: $10.95 MONEY BACK GUARANTEE—If not com pletely satisfied, return within 10 days for full refund. MID-CONTINENT BANKER 408 Olive St., St. Louis, Mo. 63102 Please send us by return mail: —copies, Bank Celebration Book @ $16 each — copies, Bank Publicity Book @ $5.25 each — copies, How to Plan an Incentive Campaign @ $10.95 each — SEND ALL THREE BOOKS AT THE LOW PRICE OF $25.95 | \ □ Check enclosed......................... Name .................................................... Title ......................... Bank ............................................................................................. Street ........................................................................................... City, State, Zip .......................................................................... (Please send check with order. In Missouri, add 4*/»% tax.) * .......................................................... . . . J 87 Expanding Powers of Competitors O f Banks Cited by J. Rex Duwe At New Mexico Convention By ROSEMARY McKELVEY M anaging Editor J U S T as th e 1977 N e w M exico B an k ers A ssociation co n v e n tio n w as g e t tin g u n d e rw a y in S an ta F e la st m o n th , S en ato r T h o m as M c In ty re (D .,N .H .) in tro d u c e d legislatio n th a t p ro p o ses m ajo r ch an g es fo r finan cial in stitu tio n s. F o rtu n a te ly , one of th e c o n v e n tio n sp eak ers w as J. R ex D u w e , c h a irm a n of th e A BA ’s G o v ern in g C o u n cil a n d fo rm e r association p re sid e n t. M r. D u w e, ch a irm a n a n d p re sid e n t, F a rm ers S tate, L u cas, K an., o u tlin e d th e six bills— in c lu d in g th e one sp o n so red b y th e ABA— th a t m a k e u p th e M c In ty re p ac k ag e a n d an n o u n c e d th a t h ea rin g s w o u ld b e h e ld o n th e m in W a sh in g to n , D . C., b e g in n in g J u n e 20. B ecause of th e im p o rta n c e of th is p ro p o sed legislation, a fe a tu re article on it, in c lu d in g som e q u o ta tio n s fro m M r. D u w e ’s N ew M exico sp e ec h , a p p ea rs on p a g e 31. B esides d iscussing th e p ro p o se d n e w legislation, M r. D u w e ta lk e d a b o u t th e a d v a n ta g e s n o n b a n k in g co m p etito rs h a v e o v er co m m ercial ban k s. H e p o in t e d o u t th a t “o u r n o n b a n k co m p etito rs h a v e b e e n g a in in g n e w p o w ers b it b y b it th ro u g h a w h o le strin g of in d iv id u a l actio n s ta k e n o u tsid e th e halls of C ongress. T h e se actio n s o c c u rre d — a n d still a re o c c u rrin g — in th e fe d e ra l re g u la to ry ag en cies, in som e sta te re g u la to ry b o d ie s a n d in som e sta te le g isla tu res. A n d w h ile e a c h in d iv id u a l ac tio n d o esn ’t seem p a rtic u la rly im p o rta n t for th e e n tire b a n k in g in d u stry , th e c u m u la tiv e effect is to g ra n t o u r n o n b a n k co m p etito rs a w h o le n e w ra n g e of p o w ers— w ith o u t a n y c o rre sp o n d in g ch a n g e in th e ir ta x a tio n o r re g u la tio n . T h e m o st im p o rta n t of th e se n e w p o w ers involves th ird -p a rty p a y m e n ts .” M r. D u w e th e n liste d th e follow ing facts: • A ll fe d e ra lly c h a rte re d S&Ls ca n offer p re -a u th o riz e d b ill-p a y in g se r vices. Two representatives of Washington, D. C., groups are shown talking at NMBA conven tion in Santa Fe last month. At I. is J. Rex Duwe, ch., ABA Governing Council, and former ABA pres. At r. is FDIC's new ch., George A. LeMaistre. NMBA was first banking group Mr. LeMaistre addressed since being named to his new post. Mr. Duwe, who also talked at con vention, is ch. & pres., Farmers State, Lucas, Kan. • All m u tu a l savings b a n k s a n d all fe d e ra lly c h a rte re d S&Ls c a n offer te le p h o n e tra n sfe rs of fu n d s fro m savings to ch e ck in g ac co u n ts. • A ll fe d e ra lly c h a rte re d S&Ls a n d all fe d e ra lly c h a rte re d c re d it u n ions are a u th o riz e d to o p e ra te m a n n e d rem o teserv ice u n its. T h is service also is leg al fo r sta te -c h a rte re d C U s in 10 states a n d sta te -c h a rte re d S&Ls in 19 states. • S om e fo rm of th ird -p a rty -p a y m e n t a c c o u n t is a u th o riz e d fo r one ty p e or a n o th e r of n o n b a n k co m p etito rs in 35 sta te s. S&Ls in 10 sta te s a n d m u tu a ls in 14 sta te s c a n offer c h e ck in g ac co u n ts, N O W s or n o n -in te re st-b ea rin g N O W s. S ta te -c h a rte re d C U s ca n offer e ith e r ch e ck in g ac co u n ts or sh are d rafts in 2 7 sta te s, in c lu d in g T exas, C olorado a n d U tah . M r. D u w e a d d e d th a t all th is d o esn ’t ta k e in to a c c o u n t th e re g u la tio n n o w p ro p o se d b y th e N a tio n a l C re d it U n ion A d m in istra tio n th a t w o u ld a u th o riz e all fe d e ra lly c h a rte re d C U s in ev e ry sta te to offer sh a re d rafts. H e e m p h asized th a t th e A BA h as stro n g ly o p p o se d this p ro p o sa l a n d , if it’s a d o p te d , w ill co n tin u e its o p p o sitio n in th e co urts. T h e association, said M r. D u w e , d o esn ’t b e liev e th e N C U A h as th e a u th o rity to p ro m u lg a te su c h a reg u la tio n . R e g ard le ss of w h a t h a p p e n s in this p a rtic u la r case, th e K an sa n w a rn e d , th e re ’s no d e n y in g th a t n o n b a n k com p e tito rs in 3 5 sta te s a lre a d y h a v e th e Newly elected NMBA officers are pictured in front of association's official banner at close of 1977 convention in Santa Fe. L. to r., they are: Leon G. Harmon, pres.-elect; Charles Jop lin, pres., and Ike Kalangis, treas. 88 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for July, 1977 a u th o rity to offer som e fo rm of th ird p a rty -p a y m e n t acco u n t. T h u s, h e said, th e re ’s rea lly v e ry lit-, tie p o in t in b an k e rs a rg u in g a b o u t w h e th e r th e y w a n t th e ir n o n b a n k co m p e tito rs to h a v e th ird -p a rty -p a y m e n t p o w ers, b ec au se th e y a lre a d y h a v e th em . T h e q u estio n , ask ed M r. D u w e , is w h e re d o w e go fro m h e re ? S p eak in g specifically to N e w M exico b an k ers, M r. D u w e said th a t th e y m a y n o t y e t feel th e fo rce of th e ir n o n b a n k c o m p etito rs’ e x p a n d in g p o w ers as stro n g ly as b an k e rs in o th e r p a rts of th e n a tio n b e c a u se th e y h a v e m a n a g e d to p o stp o n e m o st of th e se c h a n g es a t th e sta te level. F o r in stan c e, d u rin g th is p a s t session of th e N e w M exico le g isla tu re , h e said, a bill th a t w o u ld h a v e a u th o riz e d sh a re d rafts fo r s ta te -c h a r te re d C U s w as d e fe a te d , as w as a bill th a t w o u ld h a v e g iven sta te -c h a rte re d S&Ls th e a u th o rity to offer N O W s. T h u s, rig h t now , h e said, th e p o ssib ility of b a n k co m p etito rs g a in in g th ird p a rty -p a y m e n t p o w ers in N e w M exico m u st seem re m o te in d e e d . H o w ev er, h e u rg e d th e s ta te ’s b a n k ers to look d o w n th e ro a d a b it, saying, O n e of th e a d v a n ta g e s of o u r d u a l sys te m o f re g u la tin g financial in stitu tio n s is th e o p p o rtu n ity fo r in n o v a tio n a n d e x p e rim en tatio n . B u t on ce sta te -c h a r te re d financial in stitu tio n s in a p a rtic u la r sta te g ain n e w p o w ers, th e ir fe d erally c h a rte re d co m p etito rs in th a t s ta te also b e g in d e m a n d in g th o se sam e p o w ers in th e n am e of c o m p e titiv e eq u ity . As m ore a n d m o re sta te s g ra n t n e w p o w ers, th e p ressu re in cre asin g ly m o u n ts a t th e fe d e ra l level, u n til it b e com es p ro g ressiv ely irre sistib le .” As exam ples, M r. D u w e p o in te d to th e sp re a d of C U sh a re d ra fts an d N O W acco u n ts in N ew York, w h e re sta te -c h a rte re d S&Ls are a u th o riz e d to offer ch eck in g accoun ts. F e d e ra lly c h a rte re d S&Ls arg u e th a t th e y n e e d th e sam e p o w e r if th e y are to c o m p ete effectively, h e c o n tin u ed . As a resu lt, ea rlier th is sp rin g , C o n g ress alm ost p assed leg islatio n th a t w o u ld h a v e -g ra n te d th e m this p o w er. H e a ttrib u te d th e d e fe a t to F e d G o v ern o r A rth u r B u rn s’ op p o sitio n to th e p ro p o sal. G o v e rn o r B u rn s a rg u e d th a t N O W -a c c o u n t p o w ers sh o u ld b e e x te n d e d n a tio n w id e to all financial in stitu tio n s in ev ery sta te . M r. D u w e p o in te d o u t th a t this p ro p o sal is in th e A d m in istra tio n b a c k e d b ill in th e fin an c ial-reo rg an iza tio n p ro p o sal in tro d u c e d b y S en ato r M c In ty re . M r. D u w e said th e re are th re e al te rn a tiv e s for b an k e rs to follow o n th e issue of n o n b a n k c o m p e titio n : 1. D o n o th in g ; sit o n th e sidelines w h ile o th ers d e te rm in e th e sh a p e of th e c o m p e ti tiv e e n v iro n m e n t in w h ic h b an k s try to serv e th e ir custom ers effectively. 2 . A B A -backed b ill th a t is p a r t of th e fi n an c ia l-re o rg a n iz a tio n p ro p o sal in tro d u c e d b y S e n a to r M c In ty re . N e w Officers. C h a rles A. Jo p lin w as e le c te d N M B A p re sid e n t, su c ceed in g W . R. “B ob” N icks, p re sid e n t, C itizens S tate, S p rin g e r. M r. Jo p lin is p re sid e n t, S ecu rity N atio n al, R osw ell. N am e d p re sid e n t-e le c t w as L e o n G. H a rm o n , p re s id e n t a n d C E O , N e w M exico B ank, H o b b s. T h e n e w tre a s u re r is Ik e K alangis, p re s id e n t a n d C E O , C a p ita l B ank, S an ta F e. E le c te d to th e N M B A ex e cu tiv e co u n cil w e re : Ja ck T . C arg ill, ex e cu tiv e v ice p re sid e n t, R osw ell S tate; G ary C. L a w re n c e , p re sid e n t, B an k of L as V e gas; a n d M ilo L . M cG o n ag le, p resi d e n t a n d C E O , F irs t N atio n al, S anta F e. W a y n e S tew art, p re sid e n t, F irs t N a tional, A lam o g o rd o , w as e le c te d to th e ABA G o v e rn in g C o u n cil fo r a tw o -y ea r te rm b e g in n in g n e x t fall. 50-Year Club. T h re e N e w M exico b a n k e rs w e re a w a rd e d 5 0 -y ea r p la q u es in a b s e n tia since n o n e w as p rese n t. T h e y are: E d n a B. H u tto n , sen io r vice p re sid e n t, F a rm e rs & S to ck m en ’s B ank, C lay to n ; E a rlin g A. A n d erso n , M im b res V alley B ank, D em in g ; a n d W il liam B. B u n ch , v ice c h a irm an , F irs t N atio n al, P o rtales. 1978 Convention. I t w as a n n o u n c ed th a t th e 197 8 c o n v e n tio n w o u ld b e h e ld Ju n e 8 -1 0 in A lb u q u e rq u e . * * W. R. "Bob" Nicks, 1976-77 NMBA pres., is pictured during association convention last month. TOP: He gives his report to conven tioneers. CENTER: Mr. Nicks (r.) pins badge of office on incoming Pres. Charles Joplin. BOT TOM: Mr. Nicks (I.) is shown with convention speaker, J. Rex Duwe, ch., ABA Governing Council. C o m e o u t w ith u n a lte ra b le o p p o sitio n to all p ro p o sals n o w b e in g co n sid ered for allo w in g co n su m ers to e a rn som e fo rm of in te re st on th e ir tra n sa c tio n b alan c es. 3. R e co g n ize th e se p ro p o sals for in te re st-b e a rin g tra n sa c tio n ac co u n ts fo r w h a t th e y rea lly c a n b e — an o p p o rtu n ity to g a in c o m p e titiv e e q u ity fo r b a n k custom ers. M r. D u w e said th e th ird a lte rn a tiv e w as ch o sen b y b a n k in g le a d e rs w h o m e t a t T h e G re e n b rie r in W h ite S u l p h u r S prings, W . V a., in A pril. T h e se 4 0 0 b a n k e rs fro m all 50 sta te b a n k e rs associations h a m m e re d o u t a b asic s tra te g y d e sig n e d to g ain fu ll c o m p e ti tiv e e q u a lity fo r b a n k cu sto m ers an d b an k s. T h e goals d e c id e d on a t th is A p ril m e e tin g fq rm th e b asis of th e MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ■ J O H N E . D A N Z E IS E R h a s b e e n e le c te d tre a su re r, N e w M exico B an co rp ., In c ., S a n ta F e. A C PA , M r. D a n z e ise r goes to th e H C fro m P eat, M arw ick , M itch e ll & C o., S a n ta F e. A t th e H C h e w ill b e resp o n sib le for co o rd in a tin g ac c o u n tin g a n d a u d it fu n c tio n s of H C affiliates. F o rm e r H C T re a s u re r Jo se p h M azu rk iew ic z con tin u e s as co m p tro ller, F irs t N atio n al, S a n ta F e, an H C affiliate. HI G E O R G E L. C L A R K h as resig n ed as p re sid e n t, F irs t N atio n al, A lb u q u e r q u e , a n d h as jo in e d P la z a d e l Sol N a tio n al, A lb u q u e rq u e , as p re s id e n t an d C E O . R ao u l J. C o rd o v a, w h o h a d b e e n P la z a d e l Sol’s a c tin g p re sid e n t since la st Ja n u a ry , w ill re m a in as v ice p re si d en t. ■ J. LA R R Y C A R T E R h as b ee n n a m e d p re sid e n t, F irst N atio n al, A lb u q u e rq u e , su c c e e d in g G eo rg e L . C lark, w h o resig n e d . G eo rg e H e a d ric k h as b e e n e le c te d c h a irm an , re p la c in g H e r b e r t W ilcox, w h o also resig n e d . In o th e r n ew s a t F irs t N atio n al, N o rm an R. C o rzin e, A lfred F . M a lle tt a n d W illiam F . W e isse rt h a v e b e e n p ro m o te d to sen io r v ice p resid e n ts, w h ile M ichael C. Q u in la n h as b e e n n a m e d ex ecutive vice p re sid e n t. 89 NOW -Type Accounts Occupy Indiana Bankers*. Voss, Shaffer, McWhorter Elected By JIM FABIAN Associate Editor p ro p o se d b y th e a b a seeking p a rity am o n g fin an cial in stitu tio n s defin itely w as th e k ey issue affectin g b an k e rs a tte n d in g th e 8 0 th a n n u a l In d ia n a B ankers A ssociation co n v en tio n in F re n c h L ic k la st m o n th . A la st-m in u te sp ecia l a fte rn o o n ses sion d e v o te d to th e to p ic d re w a su r p risin g ly la rg e cro w d of b an k e rs, m a n y of w h o m h a d q u estio n s a b o u t th e v a ri ous ram ifications of b a n k s offering N O W -ty p e accounts. T h e q u estio n s w e re fielded b y a p a n e l of five In d ia n a b an k e rs, all of w h o m to o k p a r t in th e m e etin g s th a t le d to th e A BA ’s p o sitio n on p a rity som e six w eek s p rio r to th e In d ia n a co nvention. T h e A BA m e e tin g ’s consensus fo rm e d th e b asis of th e as so ciatio n ’s legislativ e bill, S. 1668, w h ic h w as in tro d u c e d in to th e U . S. S en ate early in Ju n e. A BA P re sid e n t W . L id d o n M c P e ters p re se n te d b a c k g ro u n d in fo rm atio n on th e leg islatio n d u rin g his k ey n o te a d d ress to th e co nven tio n . H e stressed th e fa c t th a t th e ABA’s b ill— o n e of L e g is l a t io n sev eral in tro d u c e d in th e S en ate b y v ario u s in te re sts— w as th e only b ill th a t se rv e d th e b e s t in te re sts of co m m ercial b a n k e rs a n d th e ir cu sto m ers. M r. M c P e ters, w h o is p re sid e n t, Se c u rity B ank, C o rin th , M iss., sa id th a t v ic to ry fo r th e ABA le g isla tiv e p a c k a g e in C ongress w o u ld re su lt in e q u a lity fo r b an k s a n d th e ir cu sto m ers. H e a d d e d th a t th e A BA h as e sta b lish e d a p re tty good tra c k re c o rd in W a sh in g to n in g e t tin g its id e as rec o g n iz e d , citin g th e re c e n t in te re st p a rity g iv e n to b a n k s b y th e F e d re g a rd in g K eogh p la n acco u n ts. H e to ld th e In d ia n a b a n k e rs th a t th e A BA ’s p ac k a g e isn ’t p e rfe c t, b u t it is p rac tica l. T h e A BA h as a goo d p a c k a g e to sell, h e said. I t ’s o n e th a t strives to m e e t th e ch a lle n g es of th e fu tu re . A t th e N O W -a c c o u n ts sp ecial m e e t in g , it w as b ro u g h t o u t th a t, sh o u ld th e A BA ’s p la n b e e n a c te d , b a n k s co u ld estab lish th e ir o w n policies re g a rd in g size lim ita tio n s on N O W -ty p e acco u n ts. F o r in stan c e, th e y co u ld stip u la te m in i m u m b a la n c e s of $50 0 or $ 1 ,0 0 0 an d levy service ch a rg es— o r th e y could choose n o t to offer th e ac co u n ts a t all. I t w as th o ro u g h ly e x p la in e d th a t b an k s w o u ld n o t ac h ie v e in te re st p a rity w ith S&Ls a n d c re d it u n io n s if th e y chose n o t to offer N O W s, th a t th e p a r ity w o u ld ap p ly to all savings in stru m e n ts in in stitu tio n s offering N O W s, th a t th e F e d w o u ld p a y in te re st on N O W -a c c o u n t rese rv e s a n d th a t sta te n o n m e m b e r b a n k s w o u ld lose o u t b e cau se th e y w o u ld n o t b e r e q u ire d to m a in ta in reserv es w ith th e F e d a n d th u s w o u ld n o t q u a lify fo r in te re st on th o se reserves. N u m ero u s co m m en ts w e re m a d e to th e effect th a t c re d it u n io n s are b a n k in g ’s g re a te st c o m p e tito rs in In d ia n a , ra th e r th a n S&Ls. I t w as also p o in te d o u t th a t p a ssa g e of S. 1668 w o u ld h a v e little effect on th is situ atio n , since few c re d it u n io n m e m b ers w o u ld sw itch to b an k s b e c a u se m a n y firm s sponsoring c re d it u n io n s stip u la te C U m e m b e r sh ip as a re q u isite fo r em p lo y m e n t a n d th a t C U s ca n offer m o re a ttra c tiv e ser vices b e c a u s e th e ir o v e rh e a d u su a lly is low b e c a u se th e y o cc u p y q u a rte rs su p p lie d b y th e sp o n so rin g firm. I t w as b ro u g h t o u t th a t th e th rifts say th e y d o n ’t w a n t N O W -ty p e ac co unts, b u t it’s th o u g h t th e y w ill u se th e m o n ce th e y are au th o riz e d . A show in g of h a n d s re v e a le d th a t n o t one b a n k e r in a tte n d a n c e w a n te d N O W ty p e ac co u n ts either! O u tg o in g IB A P re sid e n t W illiam C. F a rre ll Jr., p re s id e n t E lsto n B ank, C raw fo rd sv ille, d e v o te d a g o o d p o rtio n of his a d d re ss to th e N O W situ atio n . H e re v ie w e d th e v ario u s bills p ro m o tin g N O W -ty p e ac co u n ts in tro d u c e d in th e S en ate in p rev io u s w eeks an d said th a t if th e analysis of th e se bills is co rrec t, “p ra c tic a lly all of us sh o u ld ex p e c t re d u c e d e a rn in g s. I t is q u ite n a t u ra l to re a c t n e g a tiv e ly to th a t p ro s p e c t,” h e said, “b u t w e sh o u ld n o t re a c t n e g a tiv e ly to a c h a n g e ju st b e c a u s e it w o u ld b en e fit th e la rg e b an k s. G en eralNew officers of IBA include (from I.) Tom G. Voss, pres., Seymour N at'l—pres.; Paul E. Shaf fer, eh. & pres., Fort Wayne N at'l—v.p.; and Russell R. McWhorter, pres., Citizens Bank, Michigan City—treas. 90 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for July, 1977 ly sp eak in g , th e ir e a rn in g s a re p ro p o r tio n a te ly less th a n (th o se o f) sm aller b an k s a n d th e ir ca p ita l-to -d e p o sit ratio s a re n o t as h ig h . T h e m o re h e lp th e y c a n get, th e b e tte r off o u r e n tire in d u s try w ill b e .” M r. F a rre ll p o in te d o u t th e A BA ’s b ill w ill m e e t w ith th e stro n g e st o p p o sitio n of an y of th e bills, p a rtic u la rly fro m th rifts. H e p re d ic te d th a t th e A BA p ro b a b ly w ill h a v e to rev ise its p o sitio n a fte r th e h ea rin g s b eg in , p a rtic u la rly w ith re g a rd to h o ld in g o u t for rem o v al o f th e sav in g s-rate differen tial. “I t seem s to m e th a t th e o d d s are a little g re a te r th a t leg isla tio n in som e fo rm w ill p ass,” h e said. “O d d s are a t le ast g re a t en o u g h th a t w e h a d b e tte r b e giv in g som e serious stu d y as to w h a t w e are g o ing to do. “In an tic ip a tio n th a t a c h a n g e m ig h t o ccu r,” h e c o n tin u e d , “w e sh o u ld all le a rn w h a t it costs us to serv ice o u r ch eck in g acco u n ts a n d b e p re p a re d to p ric e o u r services to p ro d u c e a re a so n a b le profit. “I f w e g e t in to th e gam e, le t’s p la n o u r m oves w ell a n d se t o u r fees se n sibly,” h e said. “If y o u do o th erw ise, e n o u g h c o m p etitio n surely w ill follow to k ee p y o u fro m g e ttin g all th e tern-« p o rarily u n p ro fitab le b u sin ess th a t you w o u ld h o p e to m a k e p ro fitab le la ter. “If w e d o n ’t g e t in to th e gam e, w e sh all c o n tin u e to ‘g e t th e b u sin e ss’ from th e c re d it u n io n s th a t are still d o in g a flo u rish in g business w ith th e ir sh are d ra fts.” D r. L e o n a rd L. B erry, ch a irm an , d e p a r tm e n t of m a rk e tin g , G eo rg ia S ta te U n iv ersity , A tla n ta, p re s e n te d th e “fac ts o f life” of m a rk e tin g to th e au d ien c e. H e said co n su m erism is in v a d in g th e b a n k in g w o rld , re su ltin g in e sc a la tin g d is tru s t a n d h o stility to w a rd b an k in g . H e sa id b an k s are b ec o m in g m o re a u to m a te d an d , th u s, im p e rso n al, w h ic h b re e d s h o stility. H e also said th a t custo m ers re sp o n d to effective c o n ta c t efforts b y w elltra in e d a n d m o tiv a te d b a n k e rs, th a t b an k e rs m u st realize th e y n e e d th e r e ta il acco u n ts th a t a re th e n e t su p p liers of fu n d s, th a t b a n k co n ta c t em p lo y ees d e te rm in e w h a t k in d of serv ice cu sto m ers rec eiv e a n d th a t th e re ’s a c h a n g in g a ttitu d e to w a rd w o rk on th e p a r t of em p lo y ees in b an k s a n d o th e r in d u s tries. H e a d v ised b an k e rs to re sp o n d to th e se facts of life b y p a y in g as m u c h a tte n tio n to in te rn a l m a rk e tin g as ex te rn a l m a rk e tin g . If m a n a g e m e n t co n sid e re d em ployees to b e “in te rn a l cu s to m e rs,” a n d jobs as “in te rn a l p ro d u c ts,” p e rfo rm an ce w o u ld im p ro v e, r e su ltin g in b e tte r service a n d ad d itio n a l cu sto m ers for th e b an k . H e ca lle d on C E O s to en c o u ra g e fe e d b a c k fro m em ployees, to n u rtu re th e m on th e job, to p u t th e b e s t e m W. Liddon McPeters (I.), ABA pres., and pres., Security Bank, Corinth, Miss., visits with out going IBA Pres. William C. Farrell Jr., pres., Elston Bank, Crawfordsville, prior to opening of IBA convention. p loyees in b ra n c h -m a n a g e r po sitio n s a n d to p a y g ood w ag es. T h e se are som e of th e th in g s m a n a g e m e n t ca n do to c o u n te ra c t th e fac ts of life th a t affect b a n k in g n eg a tiv e ly to d a y , h e said. A n o th e r sp e a k e r on b a n k m a rk e tin g w as D u a n e M cC u llo u g h , senior vice p re sid e n t, F a n n in B ank, H o u sto n . H is th e m e w as th a t all th e b ra in s of b a n k m a rk e tin g are n o t lo c a te d in m o n e y -c en te r ban k s. B ankers w h o k n o w th e ir m a r k ets sh o u ld p la n th e ir o w n m a rk e tin g strateg ie s ra th e r th a n follow th e soca lle d “le a d e rs” in N e w York or C h ic a go. M a n y of th e “b ig b o y s” h a v e fol lo w ed m a rk e tin g p la n s fo r re ta il a c co u n ts th a t h a v e re su lte d in losses, h e said, so th e y n o w are sa y in g th a t re ta il acco u n ts are n o t p ro fitab le. I t ’s an e sta b lish e d fa c t th a t b a n k s u n d e r $50 m illion in size can do w ell w ith re ta il ac co u n ts; in fac t, th e y m u st h a v e th e se acco u n ts to re m a in co m p etitiv e . I t’s a m a tte r of a ttitu d e , h e said, a n d th e local b a n k e r sh o u ld k n o w his o w n te rrito ry b e tte r th a n a n y o n e else. T h e sp e a k e r of th e In d ia n a H o u se of Two panelists at NOW-account session at IBA convention were Jim McLaughlin (c.), ABA staff, and Cornelius O. Alig Jr., vice chairman, In diana Nat'l, Indianapolis. They are shown field ing., question from Indiana banker following sp lljifl session. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis R e p re se n ta tiv e s, K erm it O. B urrow s, ask ed b a n k e rs to m a k e su re th e y con ta c t th e ir re p re se n ta tiv e s to express th e ir view s. H o w ev er, h e said, b an k ers sh o u ld e x p e c t th e ir re p s to com e h o m e to solicit c o n stitu e n ts’ view s, ra th e r th a n e x p e c t c o n stitu e n ts to tra v e l to th e c a p ito l to co llar th e ir reps. H e w a rn e d a g a in st a g ro w in g tre n d am o n g In d ia n a legislators to p ro m o te th e c o n c e p t of a fu ll-tim e le g islatu re, r a th e r th a n th e p re se n t citiz en s’ legisla tu re . O n c e a le g isla tiv e b o d y b eco m es a fu ll-tim e one, h e said, staffs e x p a n d a n d all sorts of m a rg in a l leg isla tio n is d re a m e d u p ju st to k e e p th e ca p ito l h u m m in g th ro u g h o u t th e y ear. T oo m a n y legislators, h e said, are seeking th e p re stig e of liv in g in In d ia n a p o lis, r a th e r th a n seek in g to serv e th e p e o p le in th e b e st w ay. N e w officers. T o m G. Voss, p resi d e n t, S ey m o u r N atio n al, assu m ed th e IB A p re sid e n c y d u rin g th e co n v ention. O th e r n e w officers are P a u l E . Shaffer, c h a irm a n a n d p re sid e n t, F o rt W a y n e N a tio n a l— vice p re sid e n t, a n d R ussell R. M c W h o rter, p re sid e n t, C itiz en s B ank, M ic h ig a n C ity — trea su rer. T h re e b a n k e rs w e re e le c te d to oney e a r te rm s as m e m b e rs-a t-la rg e of th e IB A b o a rd . T h e y a re T h o m a s M. M il ler, p re sid e n t, In d ia n a N atio n al, I n d ian ap o lis; W illiam H . O lds, p re sid e n t, M ario n N atio n al, a n d R o b e rt C. Rose, p re sid e n t, A m eric an N a tio n a l, V in cennes. P a u l E . S haffer, in c o m in g IB A v ic e p re sid e n t a n d c h a irm a n a n d p re sid e n t, F o rt W a y n e N atio n al; a n d W ilb u r S. R oby, p re sid e n t, A n d erso n B a n k in g Co., w e re e le c te d to th e ABA G o v ern in g C o u n cil fo r tw o -y e a r term s. T h e th ird m e m b e r o f th e In d ia n a c o n tin g e n t to th e A BA is C. L lo y d Griffis, c u rre n t A BA v ic e p re s id e n t for In d ia n a a n d p re sid e n t, O ld -F irst N atio n al, B luffton. H is te rm expires n e x t y ear. N e x t y e a r’s c o n v e n tio n w ill m e e t in In d ia n a p o lis, b re a k in g th e F re n c h L ick tre n d . H o w ev er, it is e x p e c te d th a t F re n c h L ic k o n ce m o re w ill b e th e co n v e n tio n site in 1979. • • ■ C O N R A D E . U IT T S h as b e e n n a m e d p re sid e n t, F irs t N atio n al, Koko m o. In a d d itio n , C h arles W . C a m ero n h as b e e n n a m e d e x e cu tiv e v ice p resi d e n t a n d Jam es S. B riscoe h as b ee n e le c te d sen io r v ic e p re sid e n t. M r. U itts jo in e d F irs t N a tio n a l in 1953 as assist a n t m a n a g e r, b o o k k e e p in g d e p a rtm e n t, a n d a d v a n c e d th ro u g h th e ran k s to his p rev io u s p o sitio n of senior v ice p resi d e n t a n d controller. H e is a p a st state p re s id e n t a n d fo rm e r sta te d ire c to r of th e B ank A d m in istra tio n In stitu te . M r. C a m e ro n jo in e d F irs t N a tio n a l in 1950 a n d M r. B riscoe jo in e d th e b a n k in ..J ? 7 5 . £j 91 F T H E 86 th a n n u a l co n v e n tio n of th e Illinois B ankers A ssociation w as a h a p p ie r m e e tin g th a n u su al, it w a sn ’t necessarily b e c a u se of th e v a rie d co n v en tio n p ro g ra m o r th e social g a th e r ings th a t w ere h e ld in co n n e ctio n w ith th e a n n u a l m eetin g . I t w as th e fa c t th a t th e Illinois leg isla tu re h a d effectively killed all p ro sp ec ts of Illinois b e c o m in g a b ra n c h in g a n d m u lti-b a n k h o ld in g co m p an y sta te in 1977. T h e a n n u a l le g islativ e a tte m p t to c h a n g e th e stru c tu re of b a n k in g in Illinois h a d p ro g re ssed closer to re a lity this y e a r th a n it h a d in re c e n t years, y e t th e d e te rm in e d e f forts of th e IB A staff a n d m e m b ers o n ce m o re th w a rte d b a n k stru c tu re changes. T h e leg islativ e v ic to ry fo r th e IBA co uld b e co n sid ered a trib u te to R o b e rt S chrim ple, lo n g -tim e IB A ex ecu tiv e vice p re sid e n t, w h o step s asid e th is y e a r to p e rm it his successor, W illiam J. H o cte r, to ta k e over. M r. S ch rim p le w ill d ev o te his tim e in th e fu tu re to m o n ito rin g th e sta te le g isla tu re for th e IB A w h ile M r. H o c te r ru n s th e C h i cago o p eratio n . A p a g e in th e co n v e n tio n p ro g ra m w as d e d ic a te d to M r. S ch rim p le’s w ork w ith th e IBA . I t in c lu d e d th e fo llo w in g trib u te : “A 2 1 -y ea r v e te ra n of th e IBA , R o b e r t C. S ch rim p le has d e d ic a te d h im self to th e w o rk of th e association. T o th e activities, p ro g ra m s, le g islativ e issues I By RALPH B. COX Editor and Publisher a n d to th e b a n k e rs th em selv es, h e h as g iv e n m o re th a n a n y o n e co u ld ask for — a n d th a t is him self. “B ob S ch rim p le’s success stem s fro m his c o n tin u a l striv in g , a c h ie v in g an d ca rin g . . . alw ays so m e th in g p o sitiv e.” In in tro d u c in g M r. S ch rim p le’s su c cessor, o u tg o in g IB A P re sid e n t R ay G. L iv asy , p re sid e n t, M illikin N atio n al, D e c a tu r, said th e IB A h a d in te rv ie w e d 200 c a n d id a te s fo r th e p o sitio n b e fo re se le c tin g D r. H o cte r. “I b e liev e th e co u n cil m e m b ers are u n ifo rm ly im p re sse d w ith D r. H o cte r, as I ’m su re y o u w ill b e as y o u h a v e an o p p o rtu n ity to w o rk w ith h im ,” M r. L iv a sy said in his p re s id e n t’s ad d ress. T h e m a in p o rtio n of M r. L iv a sy ’s ad d re ss d e a lt w ith th e c h a n g es b u ffe t in g th e b a n k in g in d u stry . “O u r b u sin ess in 2 0 y ea rs h as m o v ed fro m a fairly id y llic e ra to o n e of p ro fo u n d c h a n g e ,” h e said. “I ’m a w a re th a t fe w of us h a v e lik e d th e c h a n g es or en d o rse d th e m , b u t w e ’v e su rv iv ed a n d a d a p te d a n d h a v e m e t m o st of th e ch allenges. T h e re a re m a n y a h e a d , a n d w e ’re n o t goin g to g re e t th e m w ith relish b u t w e a re a n d h a v e b e e n re silient. “M y o n ly a d m o n itio n to y o u is to p a y a tte n tio n to w h a t is o n -g o in g ,” h e co n tin u e d . “V isit w ith th o se in o u r bu sin ess w h o h a v e a c o n tra ry view . T a lk a b o u t th e su b je c t of y o u r co n cern a n d fo rm opin io n s a n d p o sitio n o n th e b asis of th e fac ts a n d y o u r b a n k ’s need s. T h e re are still m a n y in o u r b u si ness w h o le t o th e rs esta b lish th e ir p osi tio n w ith o u t b e n e fit of ex a m in in g th e facts. I find th a t alm o st an in ex cu sab le p ro c e d u re .” P re sid e n t Jim m y C a rte r a p p e a rs to g ra sp fac ts w ell a n d is a lo t m o re con se rv a tiv e th a n th e fin an cial co m m u n ity w o u ld th in k , sa id D r. W a lte r H eller, re g e n ts’ p ro fe sso r of econom ics a t th e U n iv ersity of M in n eso ta. H e said th e P re sid e n t h as se t th e se goals fo r th e y e a r 1980: • L o w e r th e u n e m p lo y m e n t r a te to • S tab ilize th e ra te of inflation a t 4%. • B rin g th e fe d e ra l b u d g e t d o w n to 21 % of th e gross n a tio n a l p ro d u c t. I t ru n s m o re th a n 22% now . • B a la n ce th e b u d g e t. D r. H e lle r said th e p re sid e n t know s th e re ’s no w a y to b a la n c e th e b u d g e t e x c e p t th ro u g h h ig h e m p lo y m en t. B u t to g e t fu ll em p lo y m e n t, h e said, th e eco n o m y is g o in g to h a v e to g row a t th e r a te of a b o u t 5% to 5 /2% a y e a r for th e n e x t fo u r years. D r. H e lle r p re d ic te d a $2-trillion G N P fo r 1978, a $ 1 0 -$ 2 0 -billion in co m e-tax d e d u c tio n a n d a d ec lin e in fe d e ra l s p e n d in g of fro m $5 to $7 b il lion unless th e eco n o m y falters. T h e e c o n o m ist d o esn ’t e x p e ct to see a c o n fro n ta tio n b e tw e e n P re sid e n t C a r te r a n d F e d C h a irm a n A rth u r B urns. H e also sa id in flatio n w ill n o t ro ar a h e a d n e x t y ear. H e p re d ic te d a n in flation ra te o f a b o u t 6%-6 /2% in stea d of th e 10%-14% e x p e rie n c e d o v er th e re c e n t sh o rt-term . E v e n th o u g h sh o rt te rm ra te s a re u p , h e said, th e re w ill b e no c h a n c e of lo n g -te rm ra te s risin g ra p id ly . T h e g o o d signs in th e econom y, D r. H e lle r said, a re in c re a se d co n su m er sp e n d in g , b u sin ess a n d c a p ita l sp e n d in g u p a b o u t 15% a n d h o u sin g starts u p 20% to 35% n o w a n d a n o th e r 8 % e x p e c te d n e x t y e a r Three of four new IBA officers pose with out going Pres. Ray Livasy (seated, I.). Seated at r. is John R. Montgomery III, new pres. Stand ing (from I.) are Gavin Weir, 2nd v.p., and B. F. "Chip" Backlund, 1st v.p. and pres.-elect, respectively. 92 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for July, 1977 LEFT: (from I.) Arthur Busboom, pres., Bank of Rantoul; Incoming IBA Pres. John Montgomery, pres., Lakeside Bank, Chicago; Kenneth Cook, pres., DuQuoin State; John D. Lemmerman, outgoing IBA treas., and pres., Nat'l Bank, Monmouth. CENTER: (from I.) Robert C. Schrimple, IBA e.v.p.; Speaker Robert S. Brown, Interbank Card Assn., New York City; Warren Burmeister, s.v.p., Lake View Trust, Chicago; Speaker John H e p re d ic te d som e slow ing d o w n in th e eco n o m y in th e se co n d h a lf of 1978, b u t no recession. “C o st p u sh is o u r g re a te st p ro b le m ,” h e said. “A n n u al 8 % av e ra g e h o u rly in creases in w ag es w ith a n in c re a se d p ro d u c tiv ity of 2 /2% sim ply m ean s 5 /2% in flation. Y et,” h e c o n tin u ed , “la b o r costs a re u p less in th e U . S. th a n in an y o th e r c o u n try in th e w o rld .” D u rin g th e 1 970-75 p erio d , la b o r costs w e re u p 48% in th e U . S., 146% in G erm a n y a n d 151% in F ra n c e , h e said. S p eak in g on “T h e Im p a c t of E n e rg y on th e F in a n c ia l C o m m u n ity ,” R o b e rt C. T h o m p so n , v ice p resid e n t-fin an c e, S hell O il C o., said th e e n e rg y bu sin ess is hig h -risk a n d ca p ita l-in te n siv e b y n a tu re. “T o fin ance c a p ita l p ro g ra m s h isto r ically,” h e said, “th e oil in d u stry h as u se d in te rn a lly g e n e ra te d fu n d s fo r as m u c h as 85%, h a v in g only to d e p e n d o n d e b t a n d e q u ity c a p ita l for 15%. B u t th a t’s c h a n g ed . As of 1975, th e in d u stry , o n th e av e rag e, w as fin an cin g o nly 67% of its c a p ita l n e e d s in te rn a l ly-” H e said th a t g o v ern m e n ta lly im p o se d restric tio n s on th e oil in d u stry ’s ab ility to in te rn a lly g e n e ra te fu n d s w ill re q u ire a d d e d em p h asis o n e x tern al c a p ita l m arkets. “A sim ple fa c t is th a t m o st m a jo r oil co m p an ies h a v e h ig h c re d it ra tin g s a n d w ill c o n tin u e to u se lo n g -te rm d e b t fi n a n c in g to raise c a p ita l,” h e said. “B u t as this ac tiv ity increases, it co u ld b e m o re difficult fo r o th e r b o rro w e rs to g e t th e ir ca p ita l fin an cin g .” H e p o in te d o u t th a t scores of a d d i tio n a l c a p ita l d e m a n d s w ill b e c re a te d b y exp lo ratio n a n d p ro d u c tio n p lu s conservation. “T h e au to in d u stry w ill re q u ire m o re c a p ita l to m a k e cars lig h ter, sm aller a n d m o re e n e rg y efficient,” h e said. “M o re d e m a n d s w ill b e m a d e on th e p lastics in d u stry , m a ch in e tool a n d d ie m akers. B anks w ill b e lo a n in g m o n ey fo r som e of th e se c a p ita l ex p ansion n eed s. “A n o th e r stim u la n t fo r in c re a se d c a p ita l d e m a n d s is th e h o m e a n d b u ild LEFT: (from I.) Speaker Stephen S. Gardner, v.ch., Fed Board of Governors; Larry E. Harshbarger, pres., Bank of Charleston; Robert Verheyen, e.v.p., Bartonville Bank; Neil Bach, e.v.p., Bank of Pontiac. RIGHT: (from I.) Speaker Kermit Hansen, ch., U. S. Nat'l, Omaha; Daniel N. Quigley, ch. IBA EFT com. & e.v.p., N at'l Boulevard Bank, Chicago; Outgoing IBA Pres. Ray Livasy, pres., Millikin Nat'l, Decatur. in g co n serv atio n p la n . A v a st m a rk e t w ill b e c re a te d for in su latio n . E x istin g h o m e b u ild in g su p p ly firm s w ill b u ild in v e n to ries; o th e rs w ill e n te r th e m a r ket. B oth w ill n e e d cap ita l. “F a c to rie s a n d u tility p la n ts u n d e r going co n v ersio n to coal p o w e r w ill c re a te f u rth e r c a p ita l d e m a n d s. F u r n ac es w ill h a v e to b e c o n v e rte d a n d a n ti-p o llu tio n e q u ip m e n t in stalled . “As y o u c a n see,” h e c o n tin u e d , “th e spin-off of th e e n e rg y situ a tio n — in te rm s of c a p ita l fo rm a tio n n ee d s— is trem en d o u s. M a n y co n serv atio n a n d co n v ersio n te ch n o lo g y in te re sts w ill b e v y in g w ith oil, gas a n d coal p ro d u c e rs fo r c a p ita l.” H e ca lle d fo r im m e d ia te in cen tiv es fo r oil a n d gas ex p lo ra tio n a n d p ro d u c tio n so th a t th e n a tio n w ill n o t ru n o u t of e n e rg y co m p o n en ts b y 1985. “W e b e liev e th a t in th is ag e of r e a son, p e o p le su c h as y o urselves, w h o u n d e rsta n d th e c o m p lic a te d w o rld of c a p ita l fo rm a tio n , w ill b e ab le to explain th e n e e d fo r profits to o th e rs— to y o u r sen ato rs a n d re p re se n ta tiv e s. W e b e lie v e th is w ill re su lt in p e o p le seein g th e n e e d s fo r eco n o m ic in c en tiv es to e n e rg y p ro d u c tio n , n o t c o n stra in ts,” M r. T h o m p so n said. D u rin g th e A BA a n n u a l m e etin g , A rth u r F . B usboom , ABA sta te vice p re sid e n t fo r Illinois, a n d p re sid e n t, B ank of R a n to u l, p re se n te d th e ABA’s p la tfo rm fo r th e ac h ie v e m e n t of p a rity w ith o th e r financial in stitu tio n s, fol lo w ed b y th e offerin g of in te re st-b e a r MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Russell, City Nat'l, Columbus, O. RIGHT: 50-Year Club inductees are congratulated by Pres. Livasy (far r.). From I.: Bernie Zaur, Metropolitan Bank, Chicago; Marion Ellsworth, Manufacturers Bank, Chicago; E. N. Peterson, Winnetka Bank; Raymond A. Till, First Nat'l, Mt. Prospect; C. G. Bauer, DuQuoin Nat'l. Speaker Howard K. Smith, ABC-TV correspon dent; B. F. Backlund, incoming IBA 2nd v.p.; J. D. Lemmerman, outgoing IBA treas., relax on podium. in g ch e ck in g ac co u n ts, on a n o p tio n al basis, b y all fin an cial in stitu tio n s. D e tails of th e ABA’s p la n a p p e a re d in th e J u n e issue. M r. B u sb o o m ’s rem a rk s w e re se co n d e d b y S te p h e n S. G a rd n e r, v ice c h a ir m an , F e d B o ard of G overnors, w ho g av e th e F e d ’s v ie w p o in t on p a y m e n t of in te re st on reserv es a n d th e a u th o ri z a tio n fo r n a tio n w id e N O W -ty p e ac counts. T w o a m e n d m e n ts w e re v o te d into th e IB A co n stitu tio n , in c re a sin g th e m e m b e rsh ip on th e co u n cil of a d m in istra tio n b y a d d in g th e c h a irm a n of th e c o m m itte e on b a n k m a n a g e m e n t an d th e c h a irm a n of th e b o a rd of tru stees of th e Illinois B ankers School; a n d p e r m ittin g th e co u n cil of a d m in istra tio n to d e sig n a te th e titles of a p p o in tiv e of ficers. Jo h n R. M o n tg o m ery I II , p re sid e n t, L ak e sid e B ank, C hicago, w as elec ted IB A p re sid e n t, su c c e e d in g M r. L ivasy. N e w first vice p re s id e n t is B. F . “C h ip ” 93 b a n k a n d th e re m a in d e r of th e ca rd w ill b e re se rv e d fo r th e b a n k ’s id en tifi cation. T ra n sa ctio n s w ill b e a u th o riz e d a t m e rc h a n t lo catio n s in a m a n n e r sim ilar to th a t fo r M a ster C h a rg e p ro ced u res. A te le p h o n e or P O S te rm in a l m a y b e u se d to tra n sm it a c h e c k -g u a ran tee re q u e s t m e ssag e to th e issu ing b a n k th ro u g h th e I n te rb a n k sw itc h in g c e n te r in St. L ouis. W h e n th e ap p ro v a l is r e c e iv e d fro m th e issu in g b a n k , th e m e r c h a n t also receiv es a u n iq u e g u a ra n te e n u m b e r, w h ic h is e n te re d on th e c a rd h o ld e r’s check. A Revealing Analysis of Today's Important Issues and Controversies in BANK CAPITAL Robert C. Schrimple (I.), IBA e.v.p., congratu lates William J. Hooter, who is scheduled to succeed Mr. Schrimple at IBA in September. Mr. Schrimple will retire then. At present, Mr. Hocter is staff v.p., IBA, having gone there last February 22 from Cleveland Fed, where he was v.p. & economist. Mr. Schrimple has been with IBA 21 years. $16.50 p e r copy In th is n ew ly -p u b lish ed book, tw o le a d in g financial specialists provide th e b an k er w ith an in -d ep th analysis of w h at b an k cap ital is all about. O bjectively directed to th e o p p o sin g v ie w p o in ts of b ankers an d reg u lato rs, it focuses on th e a ll-im p o rta n t issues of definition, function, m easu rem en t, an d adequacy of b an k cap ital. '•*’ A n im p o rtan t section p u ts fo rth th e view s of b an k ers an d investors . . . an d all th o se w ho m ig h t loosely be ch a ra c te r ized as subscribing to a fre e m a rk e t view of b an k capital. S ources of b an k capital a re fu lly d e scrib ed fro m th e p erspective of costs, and th e in stitu tio n al fram ew o rk of th e capital m ark ets. T he genesis of th e b an k holding com pany an d how it relates to th e b an k cap ital decision are discussed in detail. A fter th e discussion h as been couched in a reg u la to ry -fre e environm ent, th e role an d th e influence of th e reg u lato r on the b an k cap ital decision a re introduced. T he book p resen ts th e re g u la to r’s view on ho w capital serves to control and re g u late risk. W ith em phasis on social b en e fits an d costs, it considers an d com pares th e policies an d practices of th e th ree fed eral reg u lato ry agencies . . . th e F edev -1 R eserve Board, C om ptroller of the C u rren cy an d th e FDIC. EVERY BANK NEEDS A COPY FOR TOP MANAGEMENT AND ITS BOARD OF DIRECTORS. ORDER YOUR COPY TODAY. IF NOT COMPLETELY SATIS FIED, RETURN W ITHIN 10 DAYS AND UUR MONEY W ILL BE REFUNDED! I TO: M ID-CONTINENT BANKER I BOOK DEPT. I 408 O live St. I St. Louis, Mo. 63102 I Please send . . . . co p y (s) of BANK CAPI ITAL @ $16.50 each to: I N am e ...................................................................... I I l I I I i T itle ...................................................................... B ank ..................................................................... A ddress ................................................................. City .............. . S tate ........ . Z ip.......... I Check fo r $ .................. enclosed. I (In M issouri ad d 414% tax —no I orders please.) I 94 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis billed B a ck lu n d , p re sid e n t, B a rto n v ille B ank, a n d n e w seco n d v ice p re sid e n t is G av in W e ir, c h a irm a n a n d p re sid e n t, C h icag o C ity B ank. E le c te d tre a su re r in a b se n tia w as E d m o n d J. A rsen ea u lt, p re s id e n t, Soy C a p ita l B ank, D e c a tu r, w h o w as in E u ro p e d u rin g th e co n v en tio n . E le c te d to th e ABA g o v ern in g c o u n cil fo r tw o -y e a r te rm s w e re M r. M o n t g o m ery a n d o u tg o in g T re a s u re r Ja ck L e m m e rm a n , p re sid e n t, N a tio n a l B ank, M o n m o u th . • • Dissmeyer Elected President O f National ACH Association C H IC A G O — V irg il M . D issm eyer, ex e cu tiv e v ice p re sid e n t, N o rth w e ste rn N a tio n a l, M in n eap o lis, w as e le c te d p re s id e n t, N a tio n a l A u to m a te d C lea rin g H o u se A ssociation (N A C H A ), a t its a n n u a l m e e tin g h e re J u n e 7. H e m o v e d u p fro m v ic e p re sid e n t. G eo rg e W . M cA ulay, senior vice p re sid e n t, F irs t N a tio n a l, D allas, w as e le c te d N A C H A v ic e p re sid e n t. E le c te d s e c re ta ry /tre a s u re r w as C h a rles H . C h a p p a s, asso cia te d ire c to r, A BA P a y m e n ts S ystem P la n n in g D ivision. D u rin g th e m e etin g , N A C H A ’s b o a rd v o te d to seek a n d o b ta in a single con tra c t p ro v id in g fid elity in su ra n c e cov- Nat'l Check Guarantee Launched by Interbank N E W Y ORK C IT Y — “S ig n et,” a n a tio n a l c h e c k -g u a ra n te e p ro g ra m , has b e e n la u n c h e d b y In te rb a n k C a rd A s sociation, licen so r of th e M a ster C h a rg e card . T h e S ig n et p ro g ra m is e x p e c te d b y In te rb a n k officials to b e fu lly o p e ra tio n al b y S e p te m b e r. T h e p ro g ra m w ill a l low a c a rd -b e a rin g c u sto m e r to o b ta in a g u a ra n te e for a p e rso n a l, g o v e rn m e n t or o th e r th ird -p a rty c h e c k to p a y for p u rc h a se s a t p a rtic ip a n t m e rc h a n t lo c a tio n s th ro u g h o u t th e U . S. In a d d itio n , c a rd h o ld e rs w ill b e ab le to cash checks a t a n y p a rtic ip a n t b a n k in th e co u n try . T h e S ig n et system w ill u tiliz e p re s e n t In te rb a n k facilities th a t c u rre n tly are b e in g u se d fo r th e in te rc h a n g e of M a ste r C h a rg e a u th o rizatio n s. A u th o ri za tio n s n e e d e d to o b ta in ch eck g u a ra n tees, reg a rd le ss of g eo g ra p h ic a l d is ta n c e fro m th e c a rd h o ld e r’s o w n b an k , w ill b e p ro v id e d in a b o u t five seconds, ac co rd in g to S ig n e t officials. B anks a n d m e rc h a n ts p a rtic ip a tin g in th e p ro g ra m w ill d isp lay th e greena n d -w h ite S ig n et logo. A sm aller v e r sion of th e S ig n et service m a rk w ill a p p e a r on ca rd s issu ed b y th e c u sto m e r’s For a com plete line of C hristm as gifts in July, call or write: j.i.m c irfq co. 725 Bdtcs St. Louis, MO 63111 (314) 353-8337 MID-CONTINENT BANKER for July, 1977 e ra g e fo r m e m b e r A C H associations. T h e in su ra n c e w o u ld co v e r b o th in tra a n d in te rre g io n a l tran sactio n s. C o st of su c h co v e rag e w ill b e allo c a te d b y as sessm en t of N A C H A m e m b e rsh ip , p re s e n tly co n sistin g of 32 re g io n a l A C H associations, 2 7 o f w h ic h c u rre n tly are o p e ra tio n a l a n d p ro cessin g a b o u t 6 , 000 ,000 d eb its a n d cre d its m o n th ly . Second of Four Workshops Held By Bank Directors' Assn. ' r N E W Y O R K C IT Y — T h e P a rk L a n e H o te l w as th e site Ju n e 2 4 of th e E a s t e rn B ank D ire c to r-M a n a g e m e n t W o rk sh o p of th e N a tio n a l A ssociation of B ank D irectors. T h e asso ciatio n h as a n n o u n c e d th a t its th ird a n d fo u rth w o rk sh o p s w ill b e h e ld in S an F ra n c isc o in S e p te m b e r a n d in N ash v ille in O cto b e r, resp ectiv ely . T h e first w o rk sh o p w as h e ld in St. L ouis in F e b ru a ry . M ajor sp eak ers o n h a n d for th e sec o n d w o rk sh o p h e re in c lu d e d G eo rg e L eM a istre , n ew ly e le c te d F D IC c h a ir m a n ; W illiam E . W hitesell, se c re ta ry of b a n k in g fo r th e s ta te of P e n n sy lv a n ia; a n d C arol G re en w a lt, com m ission e r of b an k s fo r M assach u setts. In ad d itio n , tw o M id -C o n tin e n t-a re a ex p erts w e re on h a n d to a d d re ss th e co n fe re n ce: R o b e rt M a rsh m an , vice p re sid e n t, S carb o ro u g h & C o., C h icag o , a n d Jam es W e b b , N A B D p re sid e n t, a n d c h a irm an , N ash v ille C ity B ank. T h e N A B D has an n o u n c e d p la n s to spo n so r th e I n s titu te fo r B ank D ire c to rs N o v em b e r 11-14 a t th e U n iv ersity of C o lo rado-B oulder. Jam es V. B aker, ex e cu tiv e v ic e p re sid e n t, F id e lity N an k , O k lah o m a C ity, a n d P e te r A. R eilly, N A B D ex ecu tiv e v ice p re sid e n t, w ill h a v e resp o n sib ility for th e c u rric u lu m a t th e In stitu te . Operations, Technology Group Formed as Subunit by BAI \ £ T h e B an k in g Services D ivision of th e B an k A d m in istra tio n In s titu te has fo rm e d a n e w s u b u n it to b e n a m e d th e O p eratio n s a n d T e c h n o lo g y G ro u p . A cco rd in g to G e ra rd V. C a re y , BA I ch a irm an , th e m e rg e r of th e fo rm e r B ank S ystem s G ro u p a n d th e In d u stry S ystem s G ro u p in to o n e n e w u n it ac k n o w led g es th e ex ten siv e in te rre la tio n sh ip of th e fo rm e r g ro u p s a n d w ill u n ite th e ir efforts to se rv e B A I m e m b e rs in areas su c h as b a n k o p era tio n s, E F T S , th e ch e ck collection system , bu sin ess E F T a n d o th e r re la te d in d u stry c o n cerns. B A I’s v o lu n te e r b an k e r-sta ffe d I n d u stry S ystem s C om m ission a n d th e O p eratio n s a n d A u to m a tio n C o m m is sion w ill c o n tin u e to fu n c tio n u n d e r th e ir p re s e n t n am es a n d le ad e rsh ip . B o th w ill w o rk w ith th e n e w O p e ra tio n s a n d T ec h n o lo g y G ro u p . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a word, it’s terrific — —_ _ 1 8 H >e o f a snappy one million dollars. And now we have a special offer to convince you to stay with us.\ A ¡beautifully decorated room with queen size bed, color TV —plus gg swimming pool, restaurants, the Dancing & Drinking Emporium, everyth else you’d expect from a full service hotel—and, a 1977 rental car. All for the incredible rate of $27.77 a day. That’s enough to make Holiday Inn, Howard Johnson and the other franchise operations blanch. .. ™ Next time you land in Chicago, grab our free, direct line for instant limo service. At this rate, we could make you a customer for life. O’Hare Motor Inn 6 minutes south o f O’Hare Airport 3939 Mannheim Rd., Schiller Park, 111.312/678-4801 NEWS From the Mid-Continent Area A labam a Kelly Cited by Young Bankers, J. R. Jones Named President During Gulf Shores Convention G U L F S H O R E S — K ay K. K elley, v ice p re sid e n t, F irs t A lab a m a B ank, M o n tg o m ery , h as b e e n n a m e d A la b a m a ’s O u tsta n d in g Y oung B a n k er for 1977 b y th e A lab am a Y oung B ankers. T h e an n o u n c e m e n t w as m a d e d u rin g th e g ro u p ’s 1977 co n v e n tio n h e re in M ay. in g S chool C o o rd in a to r fo r his e d u c a tio n in econom ics p ro g ra m in g ro u p 6 . O u ts ta n d in g G ro u p C h a irm a n of th e y e a r k u d o s w e n t to Jeff K elly, vice p re sid e n t, F o rt P a y n e B an k (g ro u p 3 ) , w h ile Bill N ettles, B ank of T h o m asville, w as h o n o re d fo r th e b e s t p re se n tatio n . Bill G ray , th e n e w g ro u p 5 ch a irm an , w as h o n o re d fo r th e b e s t scrapbook. M rs. K elley, A la b a m a ’s O u tsta n d in g Y oung B a n k er fo r 1977, is in th e m o rtg a g e lo a n d e p a rtm e n t of F irs t A la b a m a B ank, M o n tg o m ery , w h e re she o rig in a tes co m m ercial a n d resid e n tia l c o n stru c tio n loans. M rs. K elley jo in ed th e b a n k in 1964. ■ DAN STONE, ad v iso ry b o a rd ch a irm an , F a rm e rs & M e rc h an ts B ank, C e n tre , h as b e e n e le c te d p re s id e n t of th e A u to m o b ile D ea lers A ssociation of A lab am a, Inc. M r. S to n e is th e o w n er of an a u to -tru c k d e a le rsh ip in C e n tre. In o th e r co n v en tio n new s, th e fo l lo w in g officer electio n s w e re an n o u n c e d : P re sid e n t— J. R. Jones, p re si d e n t, E sc a m b ia C o u n ty B ank, F lo m aton; vice p re sid e n t— D o w d R itte r, vice p re sid e n t, F irs t N atio n al, B irm in g h am ; tre a su re r— R a n ee K elly, lo a n officer a n d b ra n c h co o rd in ato r, C e n tra l B ank, H u n tsv ille; a n d se cre ta ry — W . J. “H a p p y ” F u lfo rd , assista n t cash ier, M e r ch a n ts N atio n al, M obile. N a m e d g ro u p ch a irm e n fo r 1977-78 w ere: g ro u p 1— R ich a rd T h ra sh e r, as sista n t vice p re sid e n t, E a s t L a u d e rd a le B anking C o., R ogersville; g ro u p 2— R o n n ie D ukes, assista n t v ice p re sid e n t a n d A u stin B ran ch m a n a g e r, F irs t N a tional, D e c a tu r; g ro u p 3— P h il D avis, vice p re sid e n t, F a rm e rs & M e rc h a n ts B ank, C e n tre; g ro u p 4 — B ob M o n t gom ery, C e n tral B ank, B irm in g h am ; g ro u p 5 — Bill G ray , assista n t vice p re sid e n t, P eo p les B ank, P ell C ity; g ro u p 6— S teve R ogers, o p era tio n s of ficer, C o m m ercial N atio n al, D em o p o lis; g roup s 7 a n d 8— A n n ice D u n c a n , as sistan t tru s t o p eratio n s officer, A lab a m a N atio n al, M o n tg o m ery ; g ro u p 9— H al B ryars, assistan t vice p re sid e n t an d B rookley Office m an ag e r, F irs t N a tio n al, M obile; a n d g ro u p 10— Jo h n S tack, R ailro ad B ran ch m a n a g e r, C ity N a tio n al, D o th an . M a rtin P ace, vice p re sid e n t, F irst N atio n al, B utler, w as n a m e d O u tsta n d 96 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis KENYON STONE ■ P E T E R M . K E N Y O N , h e a d o f M e r c h a n ts N a tio n a l of M o b ile’s in te rn a tio n a l d e p a rtm e n t, h as b e e n p ro m o te d fro m v ic e p re sid e n t to senior v ice p re si d e n t. E le c te d v ice p re sid e n ts w e re : W a lte r I. C lev e rd o n , D a v id R. D u n la p I II , Jam es S. D o w d ell, D o ro th y D o rg a n , R ussell M . H a rris a n d F re d e ric k W . T au l. N e w a ssista n t v ice p re sid e n ts are: N . E u g e n e B arnes, R u d y P. B a u g h an d A lvin W . Seale. ■ F IR S T A L A B A M A B A N K , M o n t gom ery, h as p ro m o te d L a u re n c e B. T ip to n Jr. fro m tru s t officer to v ic e p re si d e n t a n d tr u s t officer a n d B e rth a B. T h o m as fro m a ssista n t c a sh ie r to assist a n t vice p re sid e n t. ■ F IR S T N A T IO N A L , M obile, h as p ro m o te d O. D u a n e E th e re d g e , K en n e th E . N iem ey e r, T h o m a s E . S h arp Jr. a n d T h o m as G. St. Jo h n to v ice p re si d en ts. All w e re a ssista n t v ic e p resid e n ts. M r. E th e re d g e is m a n a g e r, B ayou L a B a tre B ran ch . M essrs. N iem ey e r, St. Jo h n a n d S h arp are tr u s t officers. T h e b a n k re c e n tly o p e n e d its n e w M a in O f fice d riv e -u p facility , w h ic h h as six p n e u m a tic -tu b e -sy ste m te lle r stations an d a n ig h t d ep o sito ry . I t’s lo c a te d a blo ck fro m th e fo rm e r d o w n to w n facil ity. ■ F IR S T N A T IO N A L , B irm in g h am , h as p ro m o te d th re e tr u s t d e p a rtm e n t m e m b ers to sen io r v ice p re sid e n ts: B en jam in S. C arro ll, p e rso n a l tru st; Jo h n H . G off Jr. a n d H u g h B. H a rris Jr. T h e la tte r is in th e in stitu tio n a l a n d cor p o ra te tru s t section. M r. C arro ll an d M r. H a rris also a re tru s t officers, an d M r. Goff is a tru s t in v e stm e n t officer. a G E O R G E A. W IL S O N has b ee n p ro m o te d fro m assista n t vice p re sid e n t a n d cash ier to v ic e p re sid e n t an d ca sh ie r a t S o u th ern N a tio n a l, B irm in g h am . A lso p ro m o te d w e re : G e rald S. T o u g e r, fro m c o rre sp o n d e n t b a n k a u d i to r to co n tro ller a n d g e n e ra l au d ito r, a n d H a ro ld J. W h itlo c k fro m assistan t ca sh ie r a n d a u d ito r to assistan t vice p re sid e n t a n d assista n t o p eratio n s of ficer. M essrs. T o u g e r a n d W h itlo c k al so h a v e b e e n g iv en a d d itio n a l resp o n sibilities. L a rry R. M ath ew s, w h o w as assista n t ca sh ie r, h as b e e n m a d e assist a n t in v e stm e n t officer. T h e la tte r ch a n g e w as m a d e to id e n tify sp e c ia lty areas m o re clearly. ■ W . D A N P U C K E T T , m a n ag e r, in v e s tm e n t division, C e n tra l B ancshares of th e S o u th , In c., B irm in g h am , has b e e n p ro m o te d to senior v ice p re sid e n t. H M. T O M R O D E N h as b e e n a p p o in te d in sta llm e n t lo a n d e p a rtm e n t m a n ag e r, B ank of H u n tsv ille. M r. R o d e n p rev io u sly se rv e d as senior v ice p re sid e n t, P eo p les N atio n al, H u n ts ville. ■ FLO Y D T IR E Y JR . h as b ee n n a m e d vice p re s id e n t a n d lo an officer, F irs t N atio n al, R ussellville. M r. T irey h as 10 y ea rs’ b a n k in g ex p erien ce. ■ BA Y N E V A U G H A N SR. has b ee n h o n o re d w ith a d in n e r fo r his 4 0 years’ service to F irs t N atio n al, D e c atu r. H e is th e b a n k ’s p re sid e n t. A rk an sas ■ T W O M E N h a v e a c c e p te d m e m b e r ships on th e n a tio n a l ad v iso ry b o ard of C o m m ercial N atio n al, L ittle R ock. T h e y are Jo se p h A. B u rn h am , ch airm an a n d C E O , M arsh a ll F ie ld & C o., C h i cago, a n d F re d e ric k D . W a tk in s, presi- MID-CONTINENT BANKER for July, 1977 Must Reading for Every Director and Officer! These Three Board-Related Books (Including Revised Edition of Conflicts of Interest) Conflicts of Interest $6.25 Responsibilities of Bank Directors $4.95 Composition and Compensation of Bank Boards $4.25 (1) C O N F L IC T S O F IN T E R E S T F O R D IR E C T O R S A N D O F F IC E R S O F F IN A N C IA L IN S T IT U T IO N S $6.25 . . . T h e n ew , rev ise d e d itio n in c lu d es e v e ry th in g d irecto rs a n d officers sh o u ld k n o w a b o u t th e to p ic : P re se n ts th e p ro b lem of “conflicts,” gives e x a m in e rs’ view s o f d irec to rs’ b u sin ess re la tio n sh ip s w ith th e b an k , exam ines e th ic a l p itfa lls in v o lv in g conflicts, conflicts in tru s t d e p a rtm e n ts, details p o sitiv e ac tio n s for re d u c in g p o te n tia l fo r conflicts. O th e r im p o rta n t d a ta a re th e C o m p tro lle r’s ru lin g on s ta te m e n ts of bu sin e ss in te re st of d irecto rs a n d p rin c ip a l officers of n atio n al b an k s a n d sam p le conflict of in te re st policies in u se to d a y th a t ca n b e a d a p te d b y your b o a rd . N e w m aterial w h a t is e x p e c te d of th e m a n d th e b a n k th e y serv e in te rm s o f resp o n sib ilities to d ep o sito rs, sh a re h o ld ers a n d th e p u b lic. Responsibilities exam ines re c e n t c o u rt decisions, in v e stm e n t re tu rn , c o n tin u ity of m a n a g e m e n t, lo n g -ra n g e p la n n in g , effects of stru c tu ra l ch a n g es — H C s, b ra n c h in g , m e rg e rs— on co m p e titio n , a n d m ore. QUANTITY PRICES 2-5 $4.50 ea. 11-25 $4.20 ea. 6-10 $4.35 ea. over 25 $4.10 ea. (3) C O M P O S IT IO N A N D C O M P E N S A T IO N O F B A N K B O A R D S $4.25 . . . A sta tistic a l an aly sis of b a n k b o a rd s b a s e d o n c o m p re h e n siv e surveys b y th e a u th o r, D r. L ew is E . D av id s, e d ito r of T h e B A N K B O A R D L e tte r. T h is b ook w ill g iv e th e re a d e r a n in sig h t in to th e v a rie ty o f o cc u p atio n s re p re s e n te d on b a n k b o a rd s; th e n u m b e r o f in sid e a n d o u tsid e d irec to rs; fre q u e n c ie s o f m e e t ings; salaries p a id . Also in c lu d e d a re m a n y ta b les, sh o w in g re tire m e n t ages for d irec to rs, p e r-m e e tin g a n d a n n u a l fees, h ig h e st p a id d irec to rs, etc. D e sig n e d to h e lp y o u m a k e co m p arisons a n d p u t y o u r b o a rd stru c tu re a n d fees in p ro p e r p e rsp e c tiv e . QUANTITY PRICES 2-5 $3.85 ea. 11-25 $3.35 ea. 6-10 $3.60 ea. over 25 $3.10 ea. includes F D IC regulation on insider transactions. QUANTITY PRICES 2-5 $5.50 ea. 11-25 $5.00 ea. 6-10 $5.25 ea. over 25 $4.75 ea. (2) R E S P O N S IB IL IT IE S O F B A N K D IR E C T O R S $4.95 . . . W ritte n b y R ay m o n d V an H o u tte , p re sid e n t & C E O of T o m p k in s C o u n ty (N ew York) T ru s t C o., th is b o o k is “rig h t” fo r to d a y ’s p ro b lem s. D u e to th e eco n o m ic in fluence b an k s h a v e o n th e ir co m m u n ities, th e ra p id g ro w th o f h o ld in g co m p an ies a n d th e ev e r-g ro w in g “c o n su m e r” m o v em en t, d irecto rs m u st k n o w MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TH E BANK BOARD L E T TE R 408 Olive St., St. Louis, Mo. 63102 Send These Books: ............................. copies, Conflicts of Interest $ ............................. copies, Responsibilities of Bank Directors $ ............................. copies. Composition & Compensation $ Total enclosed $ Name ....................................................................... Title ........... Bank .................................................................................................. Street ................................................................................................ City, State, Zip ................................................................................ (Please send check with order. In Missouri, add 4Vi% tax.) 97 d e n t, A etn a In su ra n c e C o., H a rtfo rd , C onn. T h e n atio n al ad v iso ry b o a rd is a g ro u p of 19 A rkansas n ativ es w ho h av e ac h ie v ed acclaim as le ad e rs in n a tio n al a n d in te rn a tio n a l b u sin ess a n d in religion. T h e b o a rd m e ets a n n u a lly in L ittle R ock to s tu d y a to p ic of b ro a d in te re st to A rkansas a n d to m a k e policy rec o m m en d a tio n s to bu sin ess a n d gov ern m e n ta l le ad e rs in th e state. ■ JA M E S E . B U R T I I I h as b e e n n a m e d ch a irm an a n d C E O , S ta te F irs t N atio n al, T ex a rk a n a, a n d B en G. Sand e fu r has b e e n e le c te d p re sid e n t. I H C H i e s s u ...the BIST m i fee m nm m i • Spacious suite with its own all-electric kitchen/bar. • Complimentary continental breakfast served in your suite. • 1300 N. ASTOR ST. CHICAGO, ILL. 60610 William C. Wolf, Gen. Mgr. (312) 943-1111 a JA M E S A. L O V E L L JR ., vice p re s id e n t in c h a rg e of p e rso n n e l, F irs t A m eric an N atio n al, N o rth L ittle Rock, h as b e e n se lec ted b y th e B ank A d m in istra tio n In s titu te as A rkansas sta te d i rec to r. H is te rm w ill ru n fro m Ju ly 1, 1977, to Ju n e 30, 1979. In th a t p o st, M r. L o v ell w ill serv e as liaison officer to c h a p te rs, d istric t d irec to rs, a n d n a tio n a l o rg an iz atio n a n d o th e r b a n k in g o rg an izatio n s. M r. L ovell e n te re d b a n k in g a t F irs t A m eric an N a tio n a l in 1961. WEST ■ C H A L K L E Y J. H A M B L E T O N has re tire d as vice ch a irm an , H arris B ank, a n d as p re sid e n t of its p a re n t c o m p an y , H arris B a n k co rp , In c., b o th of C h ic a go. H e h a d se rv e d th e b a n k fo r m ore th a n 4 2 years. M r. H a m b le to n w as e le c te d b a n k p re s id e n t in 1971 a n d H C p re s id e n t in 1972. H e a d v a n c e d to b a n k v ic e c h a irm a n la st y ear. de P A R I S J HARROW SMITH COMPANY Union National Bank Bldg. 501/374*7555 Little Rock, Arkansas J. E. WOMELDORFF, Executive Vice President 98 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis COOLEY ■ J O H N L . C O O L E Y h as jo in ed M e rc h a n d ise N atio n al, C h icago, as p re sid e n t. P rio r to th a t, h e w as h e a d of th e b a n k in g d iv isio n a t F o u rth N a tio n al, W ic h ita , K an., w ith resp o n sib ili ties fo r c o rre sp o n d e n t b a n k in g , c re d it c a rd ac tiv ities a n d m a rk e tin g . M r. C ooley p rev io u sly se rv e d M erch an d ise N a tio n a l fro m 1963 to 1965 as m a rk e t in g d e p a rtm e n t h e a d . D u rin g th e p a s t where you dine in elegance h o t e l NELSON Illinois FLOORS OF DRAMATIC SUITES & MASTER BEDROOMS STOR TO W ER \ m o n ey m a rk e t d ivision a d m in istra to r b y C h arles C. B rosius, assistan t vice p re sid e n t. M a ry O lson, vice p re sid e n t, h as b e e n e le c te d a d m in istra to r of th e b a n k ’s n e w in v e stm e n t p o rtfolio d iv i sion. In a d d itio n , th e follow ing h a v e b e e n n a m e d a ssista n t vice p re sid e n ts: M a rg e ry F . B lum e, H e lm u t L . K opke a n d R ic h a rd R. L o n ca r, b an k in g , a n d Jo h n A lex a n d er Jr., R o b e rt W . B ack, V icto r S. S id h u a n d A n d re a J. T orok, tru st. First of Gilman Builds Quarters HAMBLETON WEIR ■ G A V IN W E IR , p re sid e n t a n d C E O , C h ica g o C ity B ank, h as b e e n e le c te d to th e a d d itio n a l p o st of c h a irm an , a p o sitio n th a t h a d b e e n v a c a n t since 1970. M r. W e ir jo in ed th e b a n k in 197 0 a n d fo rm e rly w as p re sid e n t, C o u n ty B ank, B lu e Isla n d . H e is sec o n d v ic e p re sid e n t, Illinois B an k ers A s sociation. ■ B. K E N N E T H W E S T , H arris B ank of C h ica g o ’s b a n k in g d e p a rtm e n t h e a d , h as b e e n a d v a n c e d to ex e cu tiv e v ice p re sid e n t, w h ile B en T . N elson, m e tro p o lita n g ro u p ex ecu tiv e, h as b e e n n a m e d sen io r vice p re sid e n t. M ich ael M . K arn es, v ice p re sid e n t, h as b e e n a p p o in te d g ro u p ex e cu tiv e of th e n e w ly fo rm e d m o n e y m a rk e t a n d in v e stm e n t p o rtfo lio g ro u p a n d is su c c e e d e d as This is an artist's depiction of the new build ing of First Nat'l, Gilman, which is under con struction. The contemporary brick-and-stone building was designed by Illinois Bank Build ing Corp., and was planned to harmonize with First Nat'I's large wooded site. Care was taken in the planning to preserve as many of the site's trees as possible. Bank Con structors, Inc., is general contractor for the project. MID-CONTINENT BANKER for July, 1977 th re e years, h e h as b e e n a c tiv e in th e E F T field, se rv in g on th e b o a rd of K ansas C ity ’s M id -A m erica A u to m a te d C lea rin g H o u se A ssociation a n d as c h a irm a n o f th e K ansas B ankers A sso ciatio n ’s sta n d in g co m m itte e on E F T S . ■ J O H N E . P O R T A , senior vice p re si d e n t, C o n tin e n ta l Illinois N atio n al, C hicago, h as b e e n n a m e d financial se r vices h e a d as a re su lt of th e b a n k ’s re o rg an iz atio n of its le n d in g are as serv in g c o rp o ra te custom ers. M r. P o rta fo r m erly w as ex ecu tiv e d irec to r, C o n tin e n ta l Illinois, L td ., in L o n d o n , m e rc h a n t b a n k in g su b sid iary of th e b a n k ’s p a r en t, C o n tin e n ta l Illinois C o rp ., C h i cago. Kansas Kentucky ■ L A U R E N W . K IN G R Y h as jo in ed th e c o rre sp o n d e n t b a n k d ivision of F irs t N atio n al, W ic h ita , as assista n t vice p re sid e n t. H e w ill b e in v o lv ed w ith ag ric u ltu ra l le n d in g a n d co rre sp o n d e n t b a n k in v e stm e n ts a n d se r vices. H e fo rm e rly w as m a rk e tin g of ficer a t th e b a n k ’s W e st Office. C h arles Q. C h a n d le r IV h as b e e n n a m e d as sista n t vice p re sid e n t a n d w ill serv e as sp ecial p ro jec ts co o rd in a to r. ■ M Y R O N M A N N h as b e e n elec ted p re s id e n t a n d ch ief o p e ra tin g officer, S eco n d N atio n al, A sh lan d , w h ile G . B. Jo h n so n h as b e e n a p p o in te d c h a irm an a n d C E O , a n d P. J. W o n n I II h as b e e n n a m e d v ice c h a irm a n a n d c h ief finan cial a n d tru s t officer. Jo h n C. C. M ayo co n tin u es as h o n o ra ry ch a irm an . M r. M a n n jo in e d th e b a n k in 1976 as ex e c u tiv e vice p re sid e n t-a d m in istra tio n ; M r. Jo h n so n jo in e d S eco n d N atio n al in 1 966 as vice p re s id e n t a n d tru s t of ficer; a n d M r. W o n n w e n t to th e b a n k in 1965 as a m a n a g e m e n t tra in e e . ■ T H O M A S J. W IL S O N h as b ee n a p p o in te d assista n t v ice p re s id e n t a t th e L ouisville B ran c h of th e St. L ouis F e d , su c c e e d in g R o b e rt E . H arlo w , w h o h as re tire d . M r. W ilso n jo in e d th e F e d in 1965 a n d p rev io u sly se rv ed as th e L ouisville B ran c h ’s d a ta p ro cessing d e p a rtm e n t m a n ag e r. ■ D A N IE L P. IS A C K S E N h as b e e n n a m e d d e p u ty com m issioner of b an k s a n d tru st co m p an ies for Illinois, re p la c in g Jam es T . H e rb stritt. M r. Isack sen h as b e e n p re sid e n t, S u b u rb a n C o m p u te r Services, P ala tin e , a n d p rio r to th a t w as m a rk e tin g a n d d a ta p ro ce ssin g officer, C om m ercial N atio n al, P eo ria. Indiana ■ F IR S T B A N K , S o u th B end, h as b e g u n c o n stru c tio n of a n ew b ric k coloni al office b u ild in g to re p la c e th e c u rre n t te m p o ra ry stru c tu re a t th e M ish aw ak a E a s t B ran c h Office. T h o m a s J. H ill h as b e e n n a m e d th e office’s m a n a g e r. H e jo in ed th e b a n k in 1971. T h e n ew b u ild in g is sc h e d u le d to b e c o m p le te d in S ep te m b er. In o th e r n ew s a t F irs t B ank, E u g e n e L. C a v a n a u g h Jr. h as b e e n n a m e d a ssista n t v ice p re sid e n t, p la n n in g a n d services; Jam es S. Jackson has b e e n a p p o in te d o p e ra tio n s of ficer; a n d W illiam P. Y erkes h as b e e n n a m e d L in c o ln w ay W e st Office m a n ager. ■ JA M E S M . O ’D W Y E R h as e le c te d a ssista n t v ice p re s id e n t tru s t counsel, L in co ln N atio n al, W a y n e. H e ho ld s a la w d e g re e In d ia n a U n iv ersity a n d jo in e d th e in 1976. been an d F o rt from bank JONES KINGRY ■ L A W R E N C E M. JO N E S , p re sid e n t, C o lem a n C o., In c., W ic h ita , h as b e e n n a m e d a d ire c to r of F o u rth F in a n c ia l C o rp ., W ich ita. Jo h n L . C ooley, w h o h a d b e e n sen io r v ice p re sid e n t, F o u rth N atio n al, W ich ita, h as b e e n e lec ted p re sid e n t, M e rc h a n d ise N atio n al, C h i cago. M r. C ooley h a d se rv e d M e rc h a n d ise N a tio n a l in th e 1960s a n d jo in ed F o u rth N a tio n a l in 1973. A t th e la tte r, h e h a d h e a d e d th e b a n k in g division a n d h a d d ire c te d th e b a n k ’s co rresp o n d e n t b a n k in g , c re d it c a rd a n d m a rk e t in g fu n ctio n s. ■ T H E L M A J. W E L L S h as b e e n e le c te d a d ire c to r of S ecu rity S tate, G re a t B end, filling th e v a c a n c y le ft b y th e d e a th of Jo h n G ra h am . M rs. W ells is th e se co n d w o m an to serve on th e b a n k ’s b o a rd . She is a n o te d c h u rc h a n d civic le a d e r in G re a t B end. WILSON MAZEIKAS ■ T H O M A S J. M A Z E IK A S h as joined F o rt K nox N a tio n a l as v ice p r e s id e n t/ co n tro ller. H e goes th e re fro m A rth u r Y oung & C o., C P A firm , w h e re h e se rv e d as a sen io r au d ito r. A C PA , M r. M azeikas ho ld s a b a c h e lo r’s d e g re e in ac c o u n tin g fro m th e U n iv e rsity of D ay ton. B F IR S T N A T IO N A L , N icholasville, h as b e g u n co n stru c tio n on an a d d itio n to its M ain S tre e t Office. T h e s tru c tu re w ill a d d 4 ,2 0 0 sq u a re fe e t of sp ace to th e b a n k a n d is b e in g c o n stru c te d a d ja c e n t to th e p re se n t b u ild in g a n d over th e ex istin g p a rk in g area. I t w ill b e s u p p o rte d b y steel colum ns a n d w ill We make automated service easier for you! John Strube COMMERCIAL NATIONAL BANK Jim Hefley 6TH & MINNESOTA AVENUE • KANSAS CITY, KANSAS 66101 • 913 371-0035 • MEMBER F.D.I.C. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 99 m a tc h th e p re se n t b u ild in g in design. T h e ad d itio n w ill h o u se th e c re d it a n d in stallm en t lo an d e p a rtm e n ts a n d th e office of F irs t N a tio n a l’s a g re p re s e n ta tive. ■ C IT IZ E N S F ID E L IT Y , L ouisville, has a n n o u n c e d th e fo llo w in g p ro m o tions a n d a p p o in tm e n ts: F elix D e n t, v ice p re sid e n t, to tim e c re d it d e p a rt m e n t m a n ag e r; F . G e ra ld G reen w ell, to v ice p re s id e n t a n d tru s t officer; T e r ry L ee ch , to re a l e sta te officer, tru st division; C h u ck W o o d , a ssista n t vice p re sid e n t, to b a n k c a rd se rv ic e c e n te r m a n ag e r; D o n ald S ibler, fro m a u d ito r to assistan t v ice p re sid e n t, ac co u n tin g ; a n d B ob R obinson, assista n t vice p re si d e n t, to n a tio n a l services div isio n m a n ag er, b a n k c a rd service ce n te r. D ie d : L o u ise B ell L o g an , 83, vice p re sid e n t, d ire c to r a n d b o a rd secreta ry , B ed fo rd L o an & D ep o sit B ank, a t C arroll C o u n ty M em orial H o sp ita l follow in g a h e a rt attack . T h e d a u g h te r of W illiam R. L o g an , w h o w as first vice p re s id e n t a n d cash ier of B e d fo rd L o a n & D ep o sit a t its 1891 o p en in g , Miss L o g an jo in ed th e b a n k in 1910 as a clerk follow ing h e r fa th e r’s d e a th . She a d v a n c e d th ro u g h th e ran k s, w as e le c t e d a d ire c to r in 1924 a n d w as n a m e d cash ier in 1950, re p o rte d ly b e in g th e first w o m an b a n k c a sh ie r in T rim b le C o u n ty . M iss L o g an , w h o w as sa id to h a v e b e e n one of a few w h o p io n e e re d a tte n d a n c e of w o m en a t b a n k co n v e n tions, w as a p a s t tre a su re r of th e K en tu c k y BA a n d a p a s t p re s id e n t of th e K BA ’s G ro u p F iv e. n a tio n a l U. S. b a n k in g c o m m u n ity in th e ■ H . D A V ID D A B D O U B h as b e e n n a m e d v ic e p re sid e n t, C o n tin e n ta l B ank, H arv ey . H e fo rm e rly w as w ith a n o th e r b a n k in th e a re a, w h e re h e se rv e d as assista n t v ic e p re sid e n t. In o th e r n ew s a t C o n tin e n ta l B ank, F re d B. M o rg an I I I h as b e e n n a m e d ca sh ie r a n d Jo se p h D . P e ep les Jr. h as b e e n a p p o in te d assista n t cash ier. M r. M or g an is a C P A a n d fo rm e rly w as a n a c c o u n ta n t w ith a b a n k in N e w O rlean s, w h ile M r. P eep les p rev io u sly se rv e d a b a n k in Jefferson P arish . ■ T. F R A N K W A L L A C E h as b e e n n a m e d p re sid e n t, C o m m u n ity B an k of L a F o u rc h e , R a ce lan d . H e goes th e re fro m E x c h a n g e B ank, D allas, w h e re h e h e ld th e p o sitio n of se n io r vice p re si d e n t a n d m a rk e tin g d ivision chief. N ew O rlean s B o ard of T ra d e , a n d a p a s t p re sid e n t, N e w O rlean s A IB C h a p te r. T h e B an k ers’ A ssociation for F o re ig n T ra d e w as fo u n d e d in 1921 a n d concerns itself w ith le g isla tiv e a n d re g u la to ry m a tte rs, p ro fessio n al b a n k in g s ta n d a rd s a n d in te re sts of th e in te r 100 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank of McComb and First Mississippi Nat'l, Jackson, and their ad agency, Maris, West & Baker, Jackson, received regional advertising recognition in the 7th district ADDY compe tition. Shown here are (from I.) Norman West, ad agency e.v.p.; Tal Braddock, mktg. dir., Bank of McComb, holding the ADDY his bank won for a black-and-white newspaper ad; Harry Baxter, v.p., mktg., First Mississippi Nat'l, holding silver certificate his bank won for an annual report; and Gerrit Maris, ad agency pres. Mississippi ■ F IR S T N A T IO N A L , Jackson, h as p ro m o te d E rn e s t K n ig h t, H ig h la n d V il la g e Office m a n a g e r, a n d S tev e L ee ch , o p era tio n s division, to v ice p re sid e n ts. T h e fo llo w in g h a v e b e e n n a m e d as sistan t vice p re sid e n ts: G eo rg e A ycock, p e rso n a l lo an ; K en B eal, o p era tio n s; Louisiana ■ H . G E R A R D E R A T H , v ic e p re si d e n t, W h itn e y N atio n al, N ew O rlean s, has b e e n e le c te d a d ire c to r of th e B ankers’ A ssociation fo r F o re ig n T ra d e . H e is a m e m b e r a n d fo rm e r d irec to r, Named in ADDY Competition LEECH Missouri ■ ROBERT H E N D R IX , ex ecutive v ice p re sid e n t, C a p e G ira rd e a u C h a m b e r of C o m m erce, h as b e e n elec ted a d ire c to r of F irs t M isso u ri D e v e lo p m e n t F in a n c e C o rp . fo r 1977-78. M r. H e n d rix re p re se n ts th e 1 0 th C ongressional D istric t on F irs t M isso u ri’s b o ard . F irst M issouri, a p riv a te ly o w n e d sta te b u si ness d e v e lo p m e n t c o rp o ratio n , is h e a d q u a rte re d in Jefferson C ity . I t w as es ta b lish e d in 1968 to p ro v id e a source of c re d it, n o t o th e rw ise av ailable, for b u sin ess a n d in d u stry . T h e co rporation to d a te re p o rte d ly h as h e lp e d cre ate or re ta in m o re th a n 4 ,3 3 2 jobs fo r M is so u rian s th ro u g h its loans to firm s in th e state. KNIGHT M a rk C lem ons, a c c o u n tin g ; L e ste r R. F u rr, W o o d la n d H ills Office; T ish H u g h e s, cre d it; C o n n ie Jones, P o in d e x te r Office; R ick Polk, n e w acco u n ts; B a rb a ra R ussell, te lle r o p era tio n s m a n ag er; a n d Bill W a tso n , M a ster C h a rg e se c u rity officer. D o n n ie T y n es, a c co u n tin g , S u z e tte S um m ers, ac c o u n t services a n d Jo h n n ie G ray , p erso n a l loan, h a v e b e e n e le c te d assista n t ca sh iers. ■ W IL L IA M F . H A N K IN S h as b e e n n a m e d sen io r v ice p re s id e n t a t M issis sip p i B ank, Jackson. H e jo in e d th a t in stitu tio n in 1976. ■ A N IN T E N D E D m e rg e r h as b e e n a n n o u n c e d b y M ississippi B ank, Jackson, a n d F irs t N atio n al, C a n to n . A p p ro v al fo r th e m o v e is p e n d in g . ■ H E N R Y D . S C H O D D E , vice p res id e n t-p e rso n n e l, S o u th w e ste rn Bell T e l ep h o n e , St. L ouis, h as b e e n ele c te d a d ire c to r of C o u n ty N a tio n a l B ancorp., C lay to n . H e w as n a m e d a d irec to r of th e H C ’s le a d b a n k , St. L o u is C o u n ty B ank, C lay to n , in F e b ru a ry . n U N IT E D M IS S O U R I B A N K , K an sas C ity, h as a n n o u n c e d th e follow ing p ro m o tio n s: M ich ael A. K leinm an, to vice p re s id e n t a n d p e n sio n tru s t officer; Sal O. P an is Jr., to v ice p resid e n t; D an ie l F . Fox, to assista n t d e p a rtm e n t m a n ag e r, b a n k c a rd division, asset m a n a g e m e n t; Jo n J. H en d e rso n , to vice p re s id e n t a t th e affiliate, U n ite d M is souri of B lue V alley, b u sin e ss d e v e lo p m e n t d e p a rtm e n t; R a n d a ll J. K lein, to b o n d in v e stm e n t officer; H a rry A. P eel, to assistan t v ic e p re sid e n t, p erso n al b an k in g ; A n n G a rd n e r S m ith, to as- MID-CONTINENT BANKER for July, 1977 Depend on the bank that other bankers depend on. The Whitney doesn’t want you to feel let down when you think about correspondent banking in the part of the South that we know best. We’ve been holding up our end with other banks all over the world since 1883. Perhaps now we can join with you to build a firm foundation of correspondent banking for the future. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NATIONAL BANK OF NEW ORLEANS I Reliability in banking since 1883 sista n t cashier, p e rso n a l b an k in g ; C h arles N . V an Z an te, to assista n t cash ier, co m m ercial loan; a n d R o b e rt L . B reviglieri, to assista n t v ice p re si d e n t, co m p u te r services m a rk e tin g . ■ G E R A L D R. S P R O N G , p re sid e n t a n d C E O , a n d W illiam F. E n rig h t Jr., ch a irm an , A m erican N atio n al, St. Jo se p h , h av e b e e n h o n o re d b y tw o M is so u ri in stitu tio n s of h ig h e r learn in g . M r. S pro n g re c e iv e d a D istin g u ish e d A lu m n i A w ard from N o rth w e st M is so u ri S tate U n iv ersity , M aryville, a n d M r. E n rig h t rec eiv e d a n h o n o ra ry D o c to ra te of L aw s d e g re e from M issouri W e ste rn S ta te C ollege, St. Joseph. L ouis. H e h as b e e n w ith th e b a n k sin ce 1961. In ad d itio n , M e rc an tile T ru s t h as a n n o u n c e d th e fo llo w in g p ro m o tio n s: R o b e rt P. C a n g e a n d B ru n o C. B ucari, to a ssista n t v ice p re sid e n ts, in te rn a tio n a l; M ic h ae l T . N o rm ile a n d Jo n A. L in d h je m , to a ssista n t v ic e p re s id e n ts, c o m p tro lle r d e p a rtm e n t; S ch u y le r G. H e rb e rt, to tr u s t officer; D o u g las C. D ra w e , to in v e stm e n t officer, tru st; Jo se p h F . L ic a ta , to in te rn a tio n a l b a n k in g officer; a n d R o n a ld M . C leary , to a ssista n t tru s t officer. ■ E M M A R. S C H O L L , sen io r vice p re sid e n t, F lo rissa n t B ank, h a s b e e n e le c te d c h a irm an , M e tro p o lita n St. L o u is G ro u p , N a tio n a l A ssociation of B an k W o m en , fo r 1977-78. O th e r offi cers: v ice c h a irm a n , B e tty M cK innon, assista n t cash ier, E d w a rd sv ille (111.) N atio n al; se creta ry , S h irley B u sh art, as sista n t ca sh ie r, L in d b e rg h B ank, H a z e l w ood; a n d tre a su re r, J u d y th F isch e r, a ssista n t ¡cashier, E d g e m o n t B ank, E a st St. L ouis, 111. ■ D O U G L A S M . L E S T E R h as b e e n e le c te d ex e cu tiv e v ice p re sid e n t, B oone C o u n ty B ank, C o lu m b ia. H e jo in e d th e in stitu tio n as v ic e p re s id e n t in ch a rg e of o p era tio n s in 1974. FRINTZ BANGERT ■ W A L T E R J. F R IN T Z , cash ier, F irs t N atio n al, St. C harles, h as b e e n e le c te d p re sid e n t, F o u r C o u n ty B ankers Asso ciation. T h a t association consists of b an k s in th e co u n ties of L in co ln , St. C h arles, M o n tg o m ery a n d W a rre n . ■ T H O M A S A. B A N G E R T h as b e e n n a m e d vice p re sid e n t, o p e ra tin g sys tem s d e p a rtm e n t, M e rc a n tile T ru st, St. TRY US FOR YOUR NEXT ENVELOPE REQUIREMENT* ■ T H O M A S H . H O L C O M JR . h as b e e n p ro m o te d fro m assista n t v ice p re s id e n t to v ice p re sid e n t, F irs t N atio n al, K ansas C ity. H e m a n ag e s th e c o rp o ra te b a n k in g services g ro u p . In o th e r p ro m o tio n s a t th e b a n k , E la in e M. W h iteh o u se h as b e e n p ro m o te d fro m assist a n t c a sh ie r to a ssista n t v ice p re sid e n t; Jam es K. S h in em a n a n d G ary G. S te w a rt h a v e b e e n e le c te d tru s t offi cers; R ic h a rd A. M arks, R u th N ichols, P h ilip R ogers a n d L a rry D . T h o m p so n h a v e b e e n n a m e d assista n t cashiers; a n d D a v id C. R ig g h a s b e e n a p p o in t e d d e p u ty co m p tro ller. A t F irs t N a tio n a l’s affiliate H C , F irs t N atio n al C h a rte r C o rp ., K ansas C ity , it h as b e e n a n n o u n c e d th a t F e d a p p ro v a l h as b e e n re c e iv e d fo r affiliation w ith F a rm e rs T ru st, L e e ’s S um m it. S h a re h o ld e r a p p ro v a l fo r th e m o v e is p e n d in g . ■ M IC H A E L P. D O L A N , ex ecu tiv e v ice p re sid e n t, P la z a B ank of W e st P o rt, St. L ouis C o u n ty , h as b e e n MISSOURI ENVELOPE CO. 10655 GATEWAY BLVD. ST. LOUIS, MO. 63132 Phone 314/99 4-1 300 *Ask for our new Plastic S izer® Tem plate— Free w ith your first inquiry. HOLCOM 102 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis DOLAN HC Seeks Purchase Approval B R E N T W O O D — Brentwood Bancshares, Inc., a new HC, is seek ing Fed approval to purchase Brent wood Bank, according to a joint an nouncement by Gayle W. Lichten stein, bank chairman, and Holland F. Chalfant Jr., HC chairman. Mr. Chalfant formerly was asso ciated with Mercantile Trust and Manchester Bank, both of St. Louis. According to a bank spokesman, Peter C. Baerveldt Jr., bank presi dent, will retain that position and no personnel changes are expected after the proposed purchase. It was pointed out that the sale would not affect any accounts or deposits and that plans have been made to ex pand the institution with additional facilities. Also associated with Mr. Chal fant in the HC are: Stephen R. Apted, president, Apted-Hullings, Inc.; William P. Beavers, president, Biddle Co.; F. Gilbert Bickel III, Donelan-Phelps Investment Advisors Inc.; Taylor S. Desloge, vice presi dent, secretary and treasurer, Gen eral Steel Industries; Patrick M. Donelan, general partner, DonelanPhelps & Co.; Nicholas V. V. Franchot III, president, Christy Fire brick Co.; William R. Hostetler, vice president, Universal Printing Co; Zoe Desloge Lippman, director, Killark Electric Manufacturing Co.; Joseph L. Mason, president, MasonCassilly, Inc.; Jackson C. Parriott, president, Par Development, Ltd.; Thomas E. Phelps, president, Done lan-Phelps Investment Advisors; and Robert L. Sharp, president, Bob Sharp, Inc. Brentwood Bank was founded in 1912 as Bank of Labadie and moved to Brentwood in 1949 as America State, renamed Brentwood Bank. Bank officials say the pro posed HC purchase is unrelated to the operation of two other banks that make up the ABC group, which also consists of American National and City Bank, both of St. Louis. Mr. Lichtenstein will remain as chairman of the three institutions. e le c te d p re sid e n t, St. L o u is C h a p te r, A m eric an In s titu te o f B anking. Also e le c te d as c h a p te r officers w ere: first v ice p re s id e n t— R o sem a rie Stallings, assista n t v ice p re s id e n t a n d tru s t o p e r atio n s officer, E d g e m o n t B ank, E a st St. L ouis, 111.I se co n d v ice p re s id e n t— T h o m as M . N o o n an , v ice p re sid e n t, St. L o u is C o u n ty B ank, C lay to n ; associate v ic e p re sid e n t— J u d ith A. Z eilm ann, H a m p to n B ank, St. L ouis; tre a su re r— E d w a rd C. B erra, p re sid e n t, S o u th w est B ank, St. L ouis; a n d ex e cu tiv e d irec to r a n d se c re ta ry — Jo se p h G. S teel, A IB staff, St. L ouis. MID-CONTINENT BANKER for July, 1977 vice p re sid e n ts, w h ile Joy C o w e n a n d L in d a M oore h a v e b e e n a p p o in te d m a rk e tin g officers. CRIST ■ E D G A R H . C R IS T h as b e e n sw o rn in as M issouri’s com m issio n er of fi n an c e, su c ce ed in g W illiam R. K ostm an. M r. K o stm an re sig n e d th e p o st to r e join C o m m erce B ancsh ares, K ansas C ity , as a vice p re sid e n t. M r. C rist jo in ed th e St. L o u is F e d in 1942, w as tra n sfe rre d to its ex am in a tio n d e p a r t m e n t in 1949 a n d m o v ed th ro u g h e v e ry title p o sitio n in th e com m ercial-ex am in a tio n area. W h e n h e re tire d re c e n tly , h e w as a vice p re sid e n t. ■ JO H N G. W E IN M A N N , N e w O r lean s a tto rn e y , h as b e e n e le c te d a d i re c to r of F irs t N atio n al, O k lah o m a C ity. ■ B A N K O F O K L A H O M A , T u lsa, h as m a d e th e fo llo w in g a n n o u n c e m e n ts: L e e D a n ie l I I I a n d W illia m R. H ellen Jr., c o rre sp o n d e n t b an k in g , h a v e b e e n n a m e d assista n t vice p re si d e n ts, w h ile D a v id B. C hristofferson s tru c tu re ’s ex terio r w as re d o n e in g ra y e d a sp en w ith g ree n w alls, a c c e n t e d b y a m e ta l o v e rh a n g a n d e n tra n c e canopies. Oklahoma ■ G L E N N P. “R E D ” W A R D h as r e tire d as senior v ice p re s id e n t in ch a rg e of co rre sp o n d e n t b a n k in g , F o u rth N a tio n al, T ulsa. H e h a d b e e n w ith th e b a n k since 1 959 a n d h as jo in e d A rk a n sas V alley S tate, B roken A rrow , as p re s id e n t a n d a d irecto r. N ee ly W . K im b ro u g h , w h o w as p re sid e n t, h as b e e n a d v a n c e d to ch a irm a n a n d C E O . Receiving words of praise for service from Frank X. Henke III (r.), v. ch., Fourth Nat'l, Tulsa, is Glenn P. "Red" Ward, who had been with bank since 1959 and retired recently. Mr. Ward had served as bank's s.v.p. in charge of corr. banking and was honored with a party attended by correspondent bank ing associates from five states in Mid-Con tinent area. HELLEN DANIEL h as b e e n e le c te d a n assista n t v ice p re si d e n t, en e rg y d e p a rtm e n t. A t th e b a n k ’s H C , B a n cO k la h o m a C o rp ., T u lsa , R o b e r t N . M iller, vice p re sid e n t of m a n u fa c tu rin g , m a rk e tin g a n d d istrib u tin g , G e tty O il C o., h as b e e n e le c te d a d i rec to r. ■ F IR S T N A T IO N A L , P o n c a C ity, h as c e le b ra te d th e o p e n in g of its ex p a n d e d facilities w ith a n o p e n ho u se. T h e ex p an sio n h as a d d e d a b o u t 100 sq u a re fe e t of fro n ta g e to th e b u ild in g ’s G ra n d A v en u e side. T h e m o v e w as m a d e in th re e p h ases: T h e first in c lu d e d a n e w b u ild in g a d d itio n , w h ic h o ccu p ies th e sp a ce w h e re co m m ercial e stab lish m e n ts h a d b e e n lo c ate d ; th e seco n d w as a re m o d e lin g of th e w e st 50 fe e t of th e b a n k b u ild in g ; a n d th e th ird p h a s e w as a re m o d e lin g of th e e a st 25 fe e t of th e b u ild in g . A b o u t 5 ,0 0 0 sq u a re fe e t of sp a ce w e re a d d e d to th e n e w b u ild in g . T h e b a n k ’s lo b b y w as e x p a n d e d to ru n th e e n tire le n g th of th e b a n k , w h ile a 1 3-space cu sto m e r p a rk in g lo t w as a d d e d o u tsid e. T h e ■ JO H N M. H O L L IM A N SR . h as b e e n h o n o red b y a n in -h o u se p a rty m a rk in g his 5 0 th a n n iv e rsa ry of co n tin u o u s service as le g a l co unsel to U n io n B ank, B artlesville. ■ L IB E R T Y N A T IO N A L , O k lah o m a C ity, h as n a m e d Jam es E . T alk in g to n , L a rry T e ste rm a n , Jim R. C ole, E d d ie Jack so n a n d J a n e t L a m b e rt assista n t New interior of First Nat'l, Ponca City, shows lobby, which was expanded to run entire length of bank. MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Exterior of First Nat'l, Ponca City, has under gone complete remodeling. Exterior is covered with grayed aspen and has green walls ac cented by metal overhang and entrance can opies. ■ F IR S T A M E R IC A N N A T IO N A L , N ash v ille, h as a n n o u n c e d th e follow in g electio n s: C h a rles J. W o m ac k a n d N o rm a n A. C arl, to vice p re sid e n ts a n d tru s t officers; R o b e rt J. S ullivan, to vice p re sid e n t; G re g o ry M . O ’N e a l a n d M a rk L in v ille, to tru s t officers; an d L a w re n c e W . K ain, to assista n t vice p re sid e n t. In a d d itio n , D av is W . A dkisson h as b e e n g iv e n a title ch a n g e to as sista n t tru s t officer. ■ A P R O C L A M A T IO N sig n e d b y R ic h a rd F u lto n , N ash v ille m ay o r, d es ig n a te d th e w ee k of Ju n e 5-11 as A IB w ee k in th a t city. O n h a n d to c e le b ra te th e e v e n t a t an in stallatio n a n d aw a rd s b a n q u e t a t th e R ic h la n d C o u n try C lu b , w e re M o n ro e K im b rel, p re sid e n t, A t la n ta F e d , a n d Je rry Jason, n a tio n a l A IB p re s id e n t a n d assista n t v ic e p re si d e n t, S o u th e a st F irs t N a tio n a l, M iam i. N e w officers of th e N ash v ille A IB C h a p te r a re th e fo llo w in g N ash v illians: p re sid e n t— A n to in e K h o u ry , c o m p tro l ler, N ash v ille C ity B ank; first v ic e p re s id e n t— F ra n k St. C h a rles I II , assistan t v ice p re s id e n t a n d 8 0 0 M ain S tre e t O f fice m a n a g e r, U n io n B ank; seco n d vice p re sid e n t— O lin W e st I II, assistan t vice p re s id e n t a n d C h u rc h S tre e t Office m a n a g e r, T h ird N atio n al; tre a su re r— R ic h a rd P u rd y , b a n k in g officer, U n ite d A m eric an B ank; c h ief co n su l— M ary A n n E ak es, F irs t A m eric an N atio n al. N a n c y B oyd serves as c h a p te r execu tiv e se creta ry . ■ R E P U B L IC N A T IO N A L , D allas, h as a n n o u n c e d th a t Jam es F . C h a m b ers, sen io r v ice p re sid e n t, h as b e e n n a m e d to th e n e w ly c re a te d p o st of m a n a g e r of m a rk e tin g a n d ad m in istra- 103 tive services, w h ile Bob R ork, senior v ice p re sid e n t, h as b e e n a p p o in te d to h e a d th e b a n k ’s re ta il b a n k in g services. M r. C h a m b e rs w ill serve as sen io r vice p re sid e n t of th e c o rp o ra te office re p o rt in g to th e p re sid e n t. H e jo in e d th e b a n k in 1961 as a m a n a g e m e n t tra in e e . M r. Rork, w h o jo in e d R e p u b lic N a tio n al in 1962 as a m a n a g e m e n t tra in ee, w ill c o n tin u e in his d u tie s as m e t ro p o lita n co m m ercial d ivision m a n ag e r. NEWTOWN CHAMBERS MATTHEWS RORK MELTON ■ W IL L IA M J. M A T T H E W S has b e e n e le c te d v ic e p re s id e n t a t F ro st N atio n al, S an A ntonio, w h ile Jesse M a rtin ez has b e e n n a m e d a ssista n t vice p re sid e n t. M r. M a tth e w s jo in e d th e b a n k in 1972 a n d is b en efits-an d -co m p en satio n a n d m e th o d s-a n d -p la n n in g m an ag er. M r. M a rtin e z jo in ed F ro st B ank in 1 969 a n d is an a d m in istra tiv e officer a n d te lle r services m a n ag e r. ■ JA M E S M E L T O N h as b e e n a d v a n c e d from assista n t v ic e p re sid e n t to vice p re sid e n t, F irs t N atio n al, A m a rillo, w h ile H ersh e l K im e a n d H ersh ell T h ax to n h a v e b e e n p ro m o te d fro m as sistan t cashiers to assista n t vice p re si den ts. ■ T H E F E D h as ap p ro v e d th e m e rg e r of C u llen B ankers, In c., H o u sto n , a n d F ro stB an k C orp., San A ntonio. I t is ex p e c te d th a t th e m e rg e r w ill b e co n su m m a te d follow ing a sta tu to ry 3 0 -d ay w a itin g p erio d . T h e re s u lta n t H C w ill b e n a m e d C u lle n /F r o s t B ankers, In c. ■ L U B B O C K N A T IO N A L h as e le c t e d Jesse K. M atto x Jr., p re s id e n t a n d g en e ral m a n ag e r, T ersco , In c., of W e st T exas, a n d J. W . W rig h t, p re sid e n t, As so ciated S u p p ly Co. of L u b b o c k , as d i rectors. 104 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis VINCENT BAEZ CROSBY ■ F IR S T C IT Y N A T IO N A L , H o u s to n , h as n a m e d th e fo llo w in g as vice p re sid e n ts: C arlos T . B aez, in te rn a tio n al; G eo rg e E . C ro sb y , eco n o m ic a n a ly sis; J. C h risto p h e r N e w to w n , n atio n al; E lle ry R. R ih a, facilities m a n a g e m e n t; L e o n S torem ski, lo a n a n d co llectio n services; a n d B ru ce H . V in ce n t, p e tro le u m a n d m inerals. E le c te d assista n t v ice p re sid e n ts a t F irs t C ity N a tio n a l w e re A lex a n d er C. B aker, w h o also w as a p p o in te d a tru s t officer; D a n ie l T. B etsin g er, b a n k services; Ja n e ll B lue, cu sto m e r service; N ich o las P. C ostas a n d R a n d a ll R eeves, reg io n a l a n d cor re sp o n d e n t; M ac L o n g o ria, m e tro p o l ita n ; M o n ty J. L u tto n , c o rp o ra te ser vices; M ich ael W . M o u ser, em p lo y ee rela tio n s; a n d G re g o ry R. S porak, p la n n in g a n d o p e ra tio n a l analysis. ■ BANK O F T H E S O U T H W E ST, H o u sto n , h as a n n o u n c e d th e fo llo w in g p ro m o tio n s: D w ig h t T . Jo h n sto n a n d H o w a rd H . S ch n e id e r Jr., in v e stm e n t d e p a rtm e n t, a n d Jam es B. T rim b le , as se t b a se d le n d in g m a n a g e r, to assista n t vice p re sid e n ts. ■ G E R A L D W E E K S h as b e e n n a m e d cash ier, F irs t N atio n al, B ro w n w o o d . H e goes th e re fro m F irs t N atio n al, H u rst, w h e re h e h a d se rv e d as v ic e p re sid e n t a n d cashier. ■ C E N T U R Y B A N K , G a rla n d , has a n n o u n c e d p la n s to c o n stru c t a n e w b u ild in g a t B eltlin e a n d B ra n d roads. T h e b u ild in g w ill ad jo in C e n tu ry B ank’s p re se n t site a n d co m p letio n is e x p e c te d b y m id -1978. T h e n e w facili ties w ill h a v e 1 2 ,3 0 0 sq u a re fe e t of sp a ce fo r b a n k o p era tio n s a n d 12,200 sq u a re fe e t of lease space. T h e b a n k h as re c e iv e d re g u la to ry a p p ro v a l fo r th e p ro ject. B LA S C O L IN A S N A T IO N A L , I r v in g , h as o p e n e d in th e C o rp o ra te P la z a B u ild in g a t 4 9 5 0 N o rth O ’C o n n o r R oad. A su b sid iary of F irs t U n ite d B an co rp ., In c., F o rt W o rth -b a s e d H C , L as C olinas N a tio n a l h as an in itia l c a p ita liz a tio n of $ 1 ,2 5 0 ,0 0 0 . Officers of th e b a n k in c lu d e Jo h n W e st, p resid e n t; D a v id G ra eb e r, vice p re s id e n t a n d loan officer; a n d G u n th e r W e n ig e r, cashier. S erv in g on th e in stitu tio n ’s b o a rd are M r. W e st, W illiam C. B ever, Sloan STOREMSKi RIHA Blair, C h a rles L a sa te r, D a v id M c D av id , H . C. “W o o d y ” C lem ons an d E u g e n e S m ith Jr. L as C olinas N atio n al w ill fe a tu re e x te n d e d lo b b y h o u rs u n til a m o to r b a n k is c o m p le te d in S ep te m b er. • Index to Advertisers • Advertising Concepts ................................. 18-20 Aetna Business Credit ..................................... 11 American Bank Directory ............................... 73 American Express Co. (Money Order Div.) 25 American Express Co. (Travelers Cheques) ................................. 54-55 Astor Tower Hotel ............................................ 98 Bank Board Letter ..................................... 87, Bank Building Corp............................................ Bank Capital ...................................................... Bank of Oklahoma, Tulsa ............................... Barclay, The ........................................................ Blender Co., Howard J....................................... Brandt, Inc............................................................ 97 58 94 69 81 68 37 Central National Bank, Chicago ................... Christmas Club— A Corp.................................... Commerce Bank, Kansas City ....................... Comm’l Loan Insurance Corp. (MGIC) ........ Commercial Nat’l Bank, Kansas City, Kan. . Country Press, Inc.............................................. 3 44 61 49 99 22 De Luxe Check Printers, Inc............................ 71 Depositors Portrait Service, Internat’l ........ 60 Douglas Guardian Warehouse Corp................. 86 Fabcraft, Inc............................................................43 Financial Insurance Service, Inc..................... 79 Financial Placements ....................................... 80 First Alabama Bancshares ............................. 64 First City National Bank, Houston ............. 77 First National Bank, Jackson, Miss............... 15 First National Bank, Kansas City ................. 27 First National Bank, St. L o u is ..................... 106 First Nat’l Bank of Commerce, New Orleans 51 Foundation of the Southwestern Graduate School of Banking ..................... 76 Fourth National Bank, Tulsa ......................... 35 Globe Life & Accident Insurance Co................75 Harland Co., John H .............................................29 Harris Trust & Savings Bank, Chicago . . . . 65 Harrow Smith Co................................................ 98 Heller & Co., Walter E...........................................30 Hibbard, O’Connor & Weeks, Inc......................67 Hobby Marketing, Inc.................................. 41, 47 Holiday Inn Riverfront ..................................... 84 Liberty Nat’l Bank & Tr. Co., Oklahoma City ................................................ 2 MGIC— Indemnity Corp........................................4-5 Madison Avenue Associates, Inc..................38-39 Marty Co., J. 1........................................................ 94 Manufacturers Hanover Trust Co................... 23 Memphis Bank & Trust Co........................ 13, 63 Mercantile Bank, St. Louis ............................. 6 Missouri Envelope Co...................................... 102 Mosler Safe Co.................................................... 53 National Bank of D e tr o it................................... 28 National Boulevard Bank, Chicago ............. 83 National Stock Yards National Bank ........ 105 O’Hare Motor Inn ............................................ 95 Premiums for Financial Institutions, Inc. .. 48 Rand McNally & Co. (Banking Div.) ........... 85 Scarborough & Co.............................................. 26 Third National Bank, Nashville ................... 17 Tri-State Industries .......................................... 52 United Missouri Bank, Kansas City ........... 9 van Wagenen Co., G. D...................................... 10 Western Banker Publications, Inc................. 72 Whitney National Bank, New Orleans . . . . 101 MID-CONTINENT BANKER for July, 1977 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis bankeronthego A banker friend once said, “ He’s off to see customers so soon, so diligently, he beats the heat in July and convoys the snow plow in winter." A mite overstated perhaps, but in essence, true. Bob Heifer believes a correspondent banker must stay on the go if he wants to stay in the know about ever-changing local problem s... a most cogent reason why Bob has authority to make decisions, and why he can serve S.Y.B. customers so efficiently. Should you call 618-271-6633, and it so happens that one of Bob's colleagues with decision-making authority handles your correspondent matters, it may be because Bob is on the way to see you. THE NATIONAL STOCK YARDS NATIONAL BANK OF N A T IO N A L C ITY Work with a banker who knows what his bank can do for you. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis At First National Bank in St. Louis, our corre spondent bankers are trained in what our bank can do for you. Across the board. Department by department. The result is men with solid experience and individual authority. So they can make fast decisions for you on their own. They’re backed by a bank with strong, steady growth. And total banking capabilities including overline loans, bond department services, computer ized check collection, cash management systems. Plus our annual correspondent seminars where you can exchange ideas and learn about new profit opportunities. Get to know your First National correspondent banker. He knows his bank. He’d like to put us to work for you. First National Bank in St.Louis Member FDIC 1 ÊM
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