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'Hottest' New Correspondent Service Page 8 Major Problems of Buyers, Sellers of Correspondent Services pag*i 2 Understanding Account Analysis: A Measuring T o o l................. pagei4 Correspondent Service Makes Home Financing a R e ality _____ C h ris tm a s Id eas T h a t W o rk ! https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Page 31 pagBi8 KNOW HOW! Our People Have The KNOW HOW in: Banking Data Processing Bank Data Processing https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis YOU Need to KNOW HOW the Total Bank System, an Interactive Real Time System, can perform for YOU First Total System s Inc. Data Processing for tne Financial Industry 1650 So. Colorado Blvd. • Denver, Colorado 80222 • 303-753-0295 INNERUN INNERLINE NAMED PRODUCT % % % % OF THE V lV v YEAR V/ The high-performance information service for today’s high-performance banker. 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Address______ City________ State_______ _ Z ip Code Telephone MCB-783 MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 MID-CONTINENT BANKER Convention Calendar (Incorporating MID-WESTERN BANKER) Volume 79, No. 7 July, 1983 IN THIS ISSUE 6 TH E B A N K IN G S C E N E T h e technological revolution in finance 8 N E W C O R R E S P O N D E N T S E R V IC E S D iscount B rokerage is “h o ttest” one 12 M A JO R P R O B L EM S O F C O R R E S P O N D E N T S E R V IC E S Th ey exist for both buyers, sellers 14 U N D E R S T A N D IN G A C C O U N T A N A L Y S IS A m onetary m easu rem en t of bank relationship 18 H O M E - F IN A N C IN G C O R R E S P O N D E N T S E R V IC E A new service that is popular with respondents 2 0 N E W S A B O U T B A N K S /B A N K E R S Prom otions, election s, general news 31 C H R IS T M A S ID E A S TH A T W O R K ! A potpourri of prom otions any bank can use 42 IN D IA N A B A N K E R S FA R E W E L L IN L E G IS L A T U R E B ut ironing out stru ctu re issue fizzles 4 4 'BULLISH' B A N K IN G P R E D IC T E D FO R '8 3 -'8 4 Report of Illinois BA convention EDITORS Ralph B. Cox ......... Publisher Rosemary McKelvey .. Editor Lawrence W. Colbert Assistant to the Publisher Jim Fabian ___ Senior Editor M ID -C O N TIN EN T B A N KER Ed ito rial/A d vertisin g O ffices St. Louis, Mo., 408 Olive, 63102. Tel. 314/4215445; Ralph B. Cox, Publisher; Marge Bottiaux, Advertising Production Mgr. MID-CONTINENT BANKER is published monthly by Commerce Publishing Co., 408 Olive St., St. Louis, Mo. 63102. Printed by The Ovid Bell Press, In c ., Fulton, Mo. Controlled circulation postage paid at S t. Louis, Mo., and at additional mailing offices. 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Subscription rates: Three years $ 2 7 ; two years $ 2 0 ; one year $ 1 2 . Single copies, $ 2 .5 0 each. Foreign subscriptions, 5 0 % additional. Commerce Publications: Am erican Agent & Bro ker, Club Management, Decor, Life Insurance Selling, Mid-Continent Banker and The Bank Board Letter. Officers: Donald H. Clark, chairm an em eritus, Wesley H. Clark, president and chief executive officer; James T. Poor, executive vice president and secretary; Ralph B. Cox, first vice president and treasurer; Bernard A. Beggan, David A. Baetz, Lawrence W. Colbert and W illiam M. Humberg, vice presidents. July 24-Aug. 5: Consumer Bankers Association Gradu ate School of Retail Bank Management, Charlottes ville, Va., University of Virginia. July 27-30: Independent Bankers Association of Amer ica Seminar/Workshop on One-Bank Flolding Com pany, Boston, Radisson Ferncroft Hotel. July 31-Aug. 6: ABA Business of Banking School, Itha ca, N. Y ., Cornell University. Aug. 7 -1 2 : C entral States C onference Prochnow Graduate School of Banking Postgraduate Course, Madison, W is., University of Wisconsin. Aug. 7-13: ABA Business of Banking School, Ithaca, N. Y ., Cornell University. Aug. 7 -2 0 : C entra] States C on ference Prochnow Graduate School of Banking, Madison, W is., Uni versity of Wisconsin. Aug. 1Ó-12: Central States C onference Prochnow Graduate School of Banking Seminar for College Faculty, Madison, W is., University of Wisconsin. Aug. 14-19: ABA National School of Real Estate F i nance, Columbus, O ., Ohio State University. Aug. 14-26: ABA National Trust School/National Trust Graduate School, Evanston, 111., Northwestern Uni versity. Aug. 28-31: Bank Administration Institute Microscape, Chicago, Hyatt Regency Chicago. Sept. 7-9: Dealer Bank Association Government Secur ities Traders Seminar, Philadelphia. Sept. 11-14: ABA National Personnel Conference, Phoenix, Hyatt Regency. Sept. 11-13: Kentucky Bankers Association Annual Convention, Louisville, Galt House. Sept. 12-14: Independent Bankers Association of America Commodity Marketing Seminar, Chicago. Sept. 13-16: Bank Marketing Association Corporate Marketing Conference, Vail, Colo., Westin Alpine Resort. Sept. 18-21: Bank Administration Institute National Convention, San Francisco, Fairmont Hotel. Sept. 18-21: National Association of Bank W omen Annual Convention, Dallas, Hyatt Regency Dallas. Sept. 18-23: Robert Morris Associates Loan Manage ment Seminar, Columbus, O ., Ohio State Universi tySept. 18-30: ABA National School of Retail Banking, Norman, Okla., University of Oklahoma. Sept. 20-23: ABA National Bank Card Convention, Los Angeles, Bonaventure. Sept. 25-29: Consumer Bankers Association Annual Conference, Scottsdale, Ariz., Camelback Inn. Sept. 28-30: Dealer Bank Association Senior FundsManagement Roundtable, Boston. Oct. 2-8: ABA Management School for Corporate Bank ers, Evanston, 111., Northwestern University. Oct. 8-12: ABA Annual Convention, Honolulu, Hawaii. Oct. 9-15: ABA National Graduate Compliance School, Norman, Okla., University of Oklahoma. Oct. 10-12: Independent Bankers Association of Amer ica Advanced Commodity Marketing Seminar, Chi cago. Oct. 16-19: Bank Administration Institute Cash Man agement Conference, Boston, Westin Hotel. Oct. 19-21: Dealer Bank Association Operations Semi nar, New York City, Vista International. Oct. 23-25: ABA International Banking Conference, New York City, Grand Hyatt New York. Oct. 23-26: Bank Marketing Association Annual Con vention, Atlanta, Atlanta Hilton. Oct. 23-28: ABA National Commercial Lending Gradu ate School, Norman, Okla., University of Oklahoma. Oct. 30-Nov. 2: Robert Morris Associates Annual Fall Conference, San Francisco, Fairm ont Hotel. Oct. 31-Nov. 2: Conference of State Bank Supervisors, Federal Legislative Conference, Washington, D .C ., Mayflower Hotel. Nov. 2-5: Independent Bankers Association of Amer ica, Seminar/Workshop on One-Bank Holding Com pany, Hilton Head Island, S. C ., Hilton Head Re sort. Nov. 6-18: ABA National Commercial Lending School, Norman, Okla., University of Oklahoma. Nov. 9-11: Association of Bank Holding Companies Fall Meeting, Seattle, Westin Hotel. Nov. 9-11: Dealer Bank Association Public Finance Seminar, New Orleans. Nov. 13-16: ABA National Agricultural Bankers Con ference, Los Angeles, Bonaventure. MID-CONTINENT BANKER for July, 1 9 8 3 To offer a dependable card program, you need a dependable source. American Fletcher National Bank. If you’re planning to issue plastic cards to your custom ers or if you ’re changing your present service, American Fletcher National Bank offers you a very dependable alternative. Our total Automated Card Services. Our ACS Bureau can develop and maintain your entire card program . A program we will custom design to your requirements and those of your custom ers. A complete program offering every service from card design to form, envelope and brochure production, to stuffing and mailing, file maintenance, m ass issues and ongoing plastic production. All protected by strict security. We itemize our estimate so you know exactly what our services will cost. And we provide a firm delivery schedule based on your timetable. Including Track I, Track II, Track III or Docutel encoding on m ass issues, reissues and daily issues. Our expertise is based on years of program developm ent and service. W e’ve issued millions of cards to m ore than three hundred financial institutions throughout the United States. To offer the card that carries expert service, fill out and return the attached coupon, or call J o e Renforth at 3 1 7 /6 3 9 -7 6 4 2 . MID-CONTINENT BANKER for July, 198 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Return to: Automated Card Services American Fletcher National Bank 4 5 0 E. Washington Street Indianapolis, IN 4 6 2 7 7 NAME POSITION COMPANY ADDRESS CITY STATE ZIP PHONE AMERICAN FLETCH ER NATIONAL BANK A FN B INDIANAPOLIS 5 THE BANKING S C E N E By Dr. LEWIS E. DAVIDS Illinois Bankers Professor of Bank Management Southern Illinois University, Carbondale The Technological Revolution in Finance ankers are aware of the revolution Cirrus System, Plus System, COMary changes in the banking indus SPEC, SPEC TEXT, TYMNET, D I try brought about by deregulation.ALOG, Compendex, National News They also need to recognize the impact paper Index, Dow Jones Information of technical advances on financial in Services. stitutions. Some of these — such as Dow Jones When I entered banking in New Information Services — seem to be York, clearin gh ouse totals w ere self-explanatory and can be identified proved by paper and pencil. We car with an educated guess. However, ried hundreds of pounds of paper even though you may read the Wall checks that were separated and sorted S treet J o u r n a l religiously, do you by hand. know what the service provides? It A generation ago, introduction of provides a retrieval system for quota m agnetic-ink-character-recognition tions on more than 6,000 stocks and (MICR) was a major step toward auto securities traded on the major ex mation. MICR permitted machines to change as well as on the national overperform tasks previously done by hu the-counter market. It also provides mans. information on revenue earnings, div A number of other concurrent de idends, price-earnings ratios and stock velopments had less application to price performance relative to market banking. One was COMPUSTAT, a — indicators not only for companies statistical com puter data base de but for about 180 industries. veloped by Standard & Poor’s, which NYTS stands for New York Times enabled the subscriber to access a vast Inform ation Service. Inform ation array of ratios and numbers on public Bank provides abstracts or prints with corporations. For those involved in in microfiche numbers. Orbit informa vestm ents and secu rity analysis, tion retrieval systems is an on-line sys COMPUSTAT was an extremely valu tem providing reference sources to able tool, but it had limited value for more than 80 separate data bases, in banking, per se. cluding business economics, govern A little more than five years ago, the ment legislation and various indus division of support services of the tries. The Source, a subsidiary of Board of Governors of the Federal Re R ea d er’s Digest, provides news from serve System began making reports on U nited Press In tern atio n al news bank income and condition from call- wires, investment-marketing informa report data available on magnetic tape tion and programs that perform busi at the incredibly low cost of $50 per ness calculations. report. The tape permitted more effi Sixteen Source Plus is another data cient data manipulation than did the bank. Legi-Slate tracks all bills re FD IC s printout of bank-operating sta ferred out of Congress. Comp-U-Star tistics. permits shopping for more than 30,000 Although I can’t prove it, I suspect items at discount prices. Management that magnetic tapes were more useful Contents is a key-word search-andto academics than to commercial bank auditing service for reprints of ab ers. Of course, larger banks incorpo stracts from recent issues of 27 busi rated m agnetic-tape data files into ness journals. Media General, another their internal systems and since then data bank, provides a listing of 58 items there has been a phenomenal growth with historical information on more of computer-related systems. than 3,000 New York Stock Exchange, Let’s play a game. Below are 10 of American Stock Exchange, and overthe many terms in current usage. How the-counter stocks. West Law is an on many are familiar to you? Nationet, line system providing the ability to re B 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis trieve documents based on the appear ance of words or phrases within a legal context. For example, it provides case summaries, head notes and classification-of-head notes by digest topic and key number. Being with an academic institution, I have been fortunate in having access to many of these and other data banks, including Lexus — a competitor of West Law. However, I suspect that these data-base sources are, for the most part, underutilized by regional and community banks. Even a good number of state banker associations have extremely limited access to data banks. A number of community banks have purchased mini-computers. While, for the most part, they are used for opera tions such as installm ent lending, more bank CEOs are becoming famil iar with their potential for other ap plications. However, let’s face it, many CEOs — not only of community and regional banks but of giant banks as well — often are uncomfortable with the awe someness of some data-retrieval sys tems. They prefer to have John do it for them. For John, there is a great oppor tunity to control the type of informa tion the CEO receives. A number of CEOs are beginning to resent this and — some somewhat timidly, others more aggressively — are putting their toes in the waters of informationretrieval systems. Most universities have superior ac cess to data banks and capable indi viduals who can demonstrate how the banks can be used profitably. For several years, I have been trying to encourage bankers in the MidContinent region to take advantage of opportunities to learn more about this vital area. While a few have been en thusiastic, the majority simply have not supported the idea. There is an old saying that you can lead a horse to (C ontinued on page 41) MID-CONTINENT BANKER for July, 1 9 8 3 WRECKED*** # #• NEEDN’T JOLT YOUR AUTO LOAN PORTFOLIO Our policy covers your risks With the average new car note running more than $10,000, your bank should have blanket single interest insurance from Financial Insurance Service, Inc. Our policy covers all your physical dam age and theft risks. Compare our blanket single interest insurance with specific (force-placed) auto insurance and see the advantages for yourself: Blanket single interest Force-placed Simple administration. One form per month. We furnish the forms. Complex administration. You have to process individual letters, certificates, premiums and cancellations. No angry customers. Customers resent and blame you for high premiums and limited coverage. Swift, easy claims handling by FIS. Your interest is covered. Claims handling may be slow; also complex because borrower’s interest is involved too. You’re protected even if you fail to perfect your security interest in financed chattels. Failure to perfect security interest in chattels is not covered, Call or write today for more information and a proposal. And ask for our new free publication, Risk Management Consultation. MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Financial Insurance Service,inc . 1010 M ea ch a m Road, Box 94099, Schaumburg, Illinois 60194, 312/884r3800 Protecting America's Financial Institutions with Integrity. 7 An MCB Survey Discount Brokerage: 'Hottest' New Service Offered by Correspondents This Year Survey Reveals What Correspondents Are Doing To Help Keep Their Respondents Competitive H E R E ’S little doubt that discount brokerage is the “hottest” new ser vice being offered to respondent banks by big-city correspondents. C ity corresp on d en ts, including Drovers Bank and First National, both in Chicago; AmSouth and Central Bancshares, both in Birm ingham , Ala.; Centerre Bank, St. Louis; and Springfield (111.) Marine — and many more — are energetically wooing re spondents with promises of ample re wards from offering the service. This fact emerged from a spot survey of correspondent banks conducted for this issue by M i d - C o n t i n e n t B a n k e r . It’s apparent that correspondent banks, always on the lookout for ways to provide new, meaningful — and profitable — products to their re spondents, are doing the “homework” on discount brokerage and offering the fruits of their labors to respondents in neat packages. The potential of discount brokerage is underlined by a study completed for the ABA earlier this year by Arthur Young & Co., titled “Assessment of Business-Expansion Opportunities for Banking.”* The study identifies dis count brokerage as one of three ser vices most attractive to banks in their efforts to compete effectively with in creasingly encroaching nonbank com petitors. The other two services — in surance brokerage and real-estate equity — are not permitted to most banks, except in the few states that have lowered the bars on insurance brokerage. Discount brokerage has the follow ing points going for it, according to the Arthur Young study: • High transferability of customer base. • High system distribution, particu larly in branching states. • Low risk, low capital require ments, as well as a minimum of train ing requirements for personnel. T 8 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • Relatively high pre-tax profit mar gin. Drovers Bank, Chicago, completed a series of seminars throughout its trade area last month at which discount brokerage was explained to prospec tive respondent bankers by Greg Beard, vice president/senior trust officer. Mr. Beard discussed what discount brokerage is, what the advantages are with dealing with his bank and how a respondent bank can become a part of the program. According to Mr. Beard, the pro gram provides a means for purchasing or selling securities for a commission substantially less than the amount charged by a traditional full-service broker. The discount broker can charge a lower commission, he said, because its activity is limited to the execu tion of buy and sell orders directed by its customers. The dis count broker doesn’t provide invest ment advice, he added, nor does it offer counseling or research services for particular stocks or the stock mar ket in general. In explaining the Cole-Taylor Dis count Brokerage Service, which Drov ers offers, Mr. Beard said the program permits individual customers the op tion of having the proceeds of transac tions automatically debited or credited to their designated account with a re spondent bank or to separately remit proceeds to cover transactions inde pendent of existing bank accounts. Further, he said, due to the fact that the service is bifurcated, customers * “A ssessm ent o f B usiness-Expansion Opportunities fo r Banking” is the title of the study authorized by the economic/poli cy-research division o f the A B A . The com plete study (688 pages) cost more than $200,000 to prepare and is available to ABA members at $75 per copy. It reported ly is the most sought-after report ever offered by the A B A . can consider the separate custodial fee charged to them as a current, deducti ble, business expense. By claiming such a deduction, he added, the cus tomer is able to reduce the actual cost for trading, resulting in additional sav ings. “In addition, our individual custom er is able to select among various methods of safekeeping or taking de livery of securities purchased through the Cole-Taylor service,” Mr. Beard said. He explained how the service oper ates. After a respondent signs up with Drovers, designated representatives of the respondent deal with ColeTaylor on behalf of the respondent’s customers to place orders. On settle ment dates, respondents’ accounts automatically are debited or credited for transactions. The respondent is re sponsible for collecting or delivering funds to individual customers. Individual respondents, he added, may want to consider whether their customers will be required to desig nate an established account for debit ing and crediting proceeds and fees of transactions in order to minimize any risk of non-payment or inability to de liver. One question respondents asked Mr. Beard was whether customers can trade on margin or trade options through the service. Mr. Beard ex plained that the service is limited to cash transactions in the securities mar ket at this point. Another frequently asked question: When can a customer begin to trade? With the written notification of the respondent’s account approval, Mr. Beard said. Prior to any transactions, however, a respondent’s customer should complete an application and ex ecute an appropriate agency agree m ent estab lish in g the custodial account. Applications should be reviewed by MID-CONTINENT BANKER for July, 1 9 8 3 the respondent-bank’s officer who is most familiar with the customer, fol lowing which he will approve or dis approve the account and set a trading limit for the customer. Then the cus tomer is notified that trading can be gin. Although representatives of the ser vice can’t and won’t give investment advice or counseling, they will provide factual information on given securities, such as current market price, last-bid price, last-asking price, annual high and low and certain dividend informa tion. Central Brokerage Services is the title of a new discount brokerage ser vice offered to respondent banks by the investment banking division of Central Bank of the South, Birming ham, Ala. According to Dan Matheson, the service offers respondent banks “the ability to successfully compete with heavyweights such as Merrill Lynch and Bache by offering fast, efficient and equally professional services for substantially lower prices to their cus to m ers.” He added that C en tral’s payback to respondents is higher than that paid by most brokerage firms, which means contributions to direct fee income could be “substantially greater than those offered by other correspondents. Brochures explaining the service were sent to prospective respondent banks prior to the July 1 startup date for the service. Mr. Matheson said the service is being offered because there are a lot of banks out there that want it. He also says there is heavy com petition among Alabama big-city cor respondents offering this service. AmSouth Bank, Birmingham, intro duced its discount brokerage program earlier this year and Charlie T. Gray, vice president in the correspondent department, said the reception has been good. More than a dozen banks had signed up for the program by midJune, with many others expressing in terest. The service is sold through the cor respondent department and AmSouth provides participating respondents with training sessions. The bank also shares any commissions with respon dents. The bank prides itself as being the first in its market with the service. Springfield (111.) Marine Bank sells a brokerage package to other banks for a one-time fee, according to Ronald E. Sides, assistant vice president. In addition to customized camera-ready art work for the agency agreement, advertising campaign and confirma tion forms, the bank provides staff training, an operating manual and rec MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ommendations on necessary equip ment. “Our brokerage service offers finan cial institutions the opportunity to position themselves as a leader in pro viding a full-range of financial services and, at the same time, earn 40% of the total fees generated, a return higher than most broker-provided services,’’ Mr. Sides said. A variety of other new correspon dent services is being offered by banks responding to the survey. Centerre Bank, St. Louis, has be gun conducting strategic planning seminars for its respondents, accord ing to William J. Barnett J r ., vice pres ident and correspondent department head. “Our strategic-planning program p resen ts a stru ctu red , p ractical approach to determining a bank’s most profitable long-term direction,’’ Mr. Barnett said. “The program is proved with banks of all sizes and it’s being used by each of the 22 banks that com prise Centerre Bancorp. Centerre is about to introduce an asset/liability m an agem en t-in for mation system to help respondents cope with new Fed reporting regula tions. “Centerre is making the report ing process easier,” Mr. Barnett said, “combining a state-of-the-art compu ter system with our analytical exper tise to deliver a broad-based asset/ liability management-consulting ser vice.’ (C ontinued on next page) Forum Planned September 11-13 For Banks and Brokerages IL L COM M ERCIAL BANKING and the securities industries merge as Glass-Steagall dissolves? Or will an even hotter com petitive battle emerge as banks and brokers continue to fight for the consumer-investment dollar? These questions will be addressed at the national brokerage conference, scheduled to be held September 11-13 at New Orleans Marriott Hotel. It will be sponsored by the Bankers Institute, headquartered in Corte Madera, Calif. Designed as a common forum for the banking and brokerage indus tries, the conference will include a brokerage-services exposition, which will feature displays and exhibits by leading brokerage and sup port organizations that provide services to banks entering the discountbrokerage business. Key aspects of emerging banker/broker relationships will be dis cussed, including: discount brokerage, full-service brokerage, secondary-CD marketing, brokerage of money-market accounts, assetmanagement accounts and the role of advice in consumer-investment services. Presentations will address strategy, product development, financial marketing and operational aspects of various types of brokerage services. ‘A ‘brokerage revolution’ is on us,” says James M. Shelton, president, Bankers Institute. “Discount brokerage and bank entry into the secu rities field is one of the most significant developments to occur in banking in the past 50 years. Banks and brokers now must assess their roles in the consumer-investment market.” Mr. Shelton points out that the conference is designed for brokers and bankers. As banks get into the securities-brokerage business, he points out, new opportunities also will open up to the securities industry as suppliers. As he puts it, brokerage firms now must assess their role in the deregulated environment in terms of whether they want to be partners with or competitors to banks, or walk the fine line of being both. Also, says Mr. Shelton, it will be more productive to both indus tries if legal differences can be resolved in the conference room instead of the courtroom, with the marketplace determining the final outcome. A major brokerage-services exposition will include displays of prod ucts and services offered to banks/thrifts entering the retail-securities field. Exhibitors will include: discount brokers, clearing firms, quota tion systems, research/consulting firms, data systems companies and large banks offering services to smaller correspondent banks. A Brokerage Services Guide” also will be prepared, and it will include a description of service offerings available to banks. Further information on the conference may be obtained from: Bank ers Institute, 21 Tamal Vista Blvd., Corte Madera, CA 94925. W 9 Chase Offers Cash-Letter Products EW CO RRESPON DEN T services offered by Chase Manhattan Bank, New York City, include cash-letter products, according to Frances H. Schmidt, second vice president. Three such services are: • Off-Peak Cash Letter. Chase accepts for deposit into accounts of its resondents fully encoded checks drawn on New York City banks. Items are further sorted for presentation and collection at the New York City Fed and the New York City Clearing House. Off-peak items submitted before 6 a.m. cost from $.02 per item for mixed to $.035 per item for off-peak 2260s. Late off-peak items, after 6 a.m., cost from $.025 for mixed to $.040 for 2260s. • Chase-Only Early-Morning Cash Letter. Deposits, consisting of checks drawn only on Chase, presented between midnight and 9:30 a.m. daily, receive immediate credit. Costs range from $.0005 per item for Chase-only a.m. items to $.10 for Chase-only regular items. • On-Us Share-Draft Letters presented by respondent banks for credit to their accounts with Chase. On-Us Share-Draft cash letters are fully encoded, endpoint sorted and sorted and comprised of share drafts drawn on credit-union accounts with Chase. Prices for items presented before 4 a.m. range from $.005 each for 200M items or more to $.01 each for up to200M items. From 4 a.m .-7 a.m ., items cost from $.005 each for 300M items or more to $.015 each for up to 100M items. From 7 a.m. to 9 a.m., items cost from $.01 each for over 300M items, to $.02 each for up to 100M items. N The bank also has formulated a com prehensive personnel-services pack age to address the increasing complex ity of employment practices in the banking industry. The package en ables respondents to receive assistance in the areas of salary administration, employee relations, resource plan ning, affirmative action and other areas, Mr. Barnett said. C enterre works with the Bryant Planning Group to offer respondents and corporate customers assistance in the areas of estate planning, executivebenefit planning, employee-benefit planning and business insurance. The bank is planning a brokerage service that will offer discount com missions. Hutchinson (Kan.) National has two new programs for respondents. The first enables respondents to clear items directly with the bank, bypassing the Fed and reducing costs. “We offer our customers the advantage of availability and lower per-item handling charges, ” said Dean R. Thibault, vice president. The second service is an accountanalysis program whereby respon dents are hard-dollar charged whenev er the six-month average on the analy sis of their account is a loss. “This pro vides our respondents the opportunity to use excess balances over a six-month basis and/or to pay for services in harddollar fee charges if they are not able to maintain adequate balances,” Mr. Thi bault said. First National, Chicago, lists three new correspondent services, including a computer-based asset/liability mod10 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis el, discount brokerage and new-check processing services that include price reductions for items under $100 and for those arriving during “off peak” hours. Deposit Guaranty National, Jackson, Miss., recently published a LoanProcedures Manual and is offering it to respondents for a fee. Response has been excellent, according to Barney H. Jacks, senior vice president. As reported elsewhere in this issue, Union Planters Mortgage C o., an affili ate of Union Planters Corp., Mem phis, whose lead bank is Union Plant ers National, is offering a correspon dent mortgage-banking program that enables respondent banks to offer var ious types of home mortgage plans to their customers. Two plans are available. The first requires Union Planters to take loan applications, prepare necessary docu ments and obtain all verifications prior to submittal to the mortgage affiliate, which orders appraisals, processes loans, obtains approvals and prepares for closings. Plan two provides for the respon dent bank to take loans all the way from applications to closings, at which point they are purchased by the mortgage affiliate. More than 100 respondents had signed up for one or the other of these programs by June 1. Trust Company Bank, Atlanta, is offering the bank s answer to asset/ liability management for banks. “We have experienced a good reception to the product, ” said John E. Foster, vice president, “signing up some 30 banks in just four months. To me this is even more impressive in light of the ‘mini com puter rage’ that touts ‘do-ityourself software. This tells me that correspondent banking is alive and well.” The program is named “G A PS,” which stands for Gap Analysis and Profitability Service. It analyzes the gap between rate-sensitive assets and liabilities and projects profitability. “GAPS requires no investment in computer equipment or programs,” Mr. Foster said. “You simply supply appropriate balance-sheet data and Trust Company handles the rest on a straightforw ard and co m p etitiv e annual-fee basis.” The service also in cludes advisory services of Trust Com pany’s staff at no extra charge. Commercial National, Shreveport, La., is offering respondent banks its Individual Financial Services (IFS). The service enables a bank to provide its upscale customers with a one-stop financial shop at which they can handle all their money matters. “I believe this department signals the new wave of the future in supplying financial ser vices,” said Fred N. Myers Jr., assis tant cashier. Services are offered with a charge from the participating respondent bank to its customer or a fee-splitting arrangem ent betw een Commercial National and the respondent. Response has been substantial, Mr. Myers said. Commercial National also offers a discount-brokerage service and hand les the buying and selling of bonds and securities for individual customers. First National, Louisville, has de veloped a consulting services area of its correspondent banking division. Its purpose is to provide services f o r bankers by bankers, said Ken Reinhardt, vice president. A popular new service developed by More Assistance Offered Merchants National, Topeka, is increasing its services to respondent banks, acording to W. E. Levering, senior vice president. New services include discount brokerage, assistance with trustservice needs and assistance in op erations, in-house auditing, human resources and marketing. The bank plans to offer micro computer services soon in several areas. This new service will be in addition to services currently pro vided by the bank’s main-frame com puter data processing. MID-CONTINENT BANKER for July, 1 9 8 3 MORE BWLDMG BUKXS FORYOURCUBITS’GROWTH COMMERCIAL CREDIT’S ASSET-BASED LENDING MAXIMIZES THEIR BORROWING POWER. Term and Package Loans Revolving Loans Acquisition Financing Short-term Unsecured Loans Factoring MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Sustaining your clients’ growth requires capital. Commercial Credit’s asset-based financing can help you pro vide them with the capital they need. Since 1912, Commercial Credit has helped growing businesses raise capital. Capital to build a company’s inventory. Capital to take advantage of supplier discounts. Capital to make acquisitions. What’s more, Commercial Credit Business Loans, Inc. offers uniquely qualified experts in the business financing field and a nationwide distribution network geared spe cifically to the needs of growing companies. So whether your clients are manufac turers, wholesalers, or service companies, call us. We’ll provide the money they need to build their business’ success. For more information, contact us at: ( 800 ) 638-1520 In Maryland call 332-3659. Offerings also available through the Control Data Business Centers. COMMERCIAL CREDIT BUSINESS LOANS, INC. a Control Data Company 11 First National for its respondents is a credit analysis school/workshop that features one-on-one contact between correspondent-bank instructors and respondent-bank students. The cur riculum is similar to that offered by First National to its own employees and it basically covers the procedures First National uses in its own shop. The school consists of two day-long sessions and features four instructors from First National’s credit area. Two schools have been held so far this year, and three more are planned for the fall. The response has b een “ tre mendous,” said Mr. Reinhardt. Stu dents have come from respondent banks in Kentucky, southern Indiana and West Virginia. The bank plans to solicit respondent banks in Tennessee soon. Survey Reveals Major Problems Of Buyers, Sellers of Corres. Services By Richard G . M eloy V ice President G reenw ich Research Associates G reen w ich , Conn. E d ito r ’s N ote: G reen w ich R esearch A sso cia tes, a b u sin ess-streteg y re search and consulting firm , has con du cted surveys o f the nation’s largest ban ks that p u rch ase corresp on d en t services fo u r times since 1975. Follow ing is an overview o f the latest survey, ba sed on interviews with 2,600 indi viduals at 890 ban ks. H REE major problems exist for both buyers and sellers of corre spondent banking services among the nation’s 890 largest banks: • The elements of profitability and the scope of services required to serve the market are not clearly defined. • Uncertainty surrounds the likely pace and extent of movement toward interstate banking. • Federal Reserve banks’ plans to expand service capabilities and com pete more aggressively could change the nature of the business. Two broad market segments exist in correspondent banking for which sepa rate business strategies need to be de signed: • A regional business strategy de signed around a broad-based corre spondent-banking market. • A national business strategy de signed around highly defined seg ments within the national correspond ent market. The major challenge for bank man agements — whether at large moneycenter or regional banks — is to realis tically match the geographic definition of their markets with the capabilities of their own organizations. Our research covers 23 of the most often used correspondent services. The correspondent business is driven by four key services: • C ash-letter service is a lead ser vice in most banks’ strategies. Availa bility schedules are critical. Efforts to improve cash letter availability must be continuous. Competition exists not only from commercial banks but also from Federal Reserve banks. T Taking part at First of Louisville's credit a n alysis school/workshop are Kentucky bankers Ray Plummer (I.), s.v.p., Beaver Dam Deposit Bank, and George E. Mays (r.), v.p., State National, Frankfort. Instruc tor is Jozsef Szilagyi, senior credit adm inis tration officer/school administrator, First of Louisville. School/workshop is one of sever al offered by First of Louisville to respon dent banks. Classes are limited to 25 students, and tuition is $290 per student. A loan-review school is scheduled for October and inquiries are already arriving in Louisville, many from banks that enrolled students in the credit-analysis workshop. Other projects in the works include a problem-loan review school and a corporate sales school. In addition, the bank offers an offi cer-call program to respondents with training conducted on the respon dent’s premises; a model policy manu al that is customized to the respondent bank; and a cash-management service, in which First of Louisville is “trans parent” to respondent-bank custom ers. First of Louisville is utilizing its cor respondent calling officers to market these new products, Mr. Reinhardt said. — Jim Fabian, senior editor. • • 12 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M r. Meloy served as a lending officer at First National, Chicago, as a consultant with Booz, Allen ir Hamilton and director o f corporate services at the Marling Group p rio r to jo in in g G reenw ich R esearch Associates. • Securities-handling service must be available. F o r non-N ew York banks, the development of a fully com petitive securities-handling capability is a significant challenge. • L oan -participation service must be equally balanced with both up stream and downstream loans. Con sistency and speed of response are key factors for success. • D irect-credit availability offered at competitive rates must be provided to bank holding companies. The prin cipal credit service is for commercialpaper backup, but willingness to make term loans on a selected basis also is important. These services form the “core” of a bank’s correspondent service scope. Without them, correspondent banking capability is limited. Before a bank can fully implement its correspondent-banking strategy, it must clearly distinguish between rela tionship and transaction sales objec tives. Separate strategies need to be developed for each customer. • A relation sh ip -sales strategy targets “bottom line” profitability on a “blended service return. ” The provid ing bank must have strong capabilities in the most important correspondent services for each correspondent mar ket segment selected. Tier selling with the correspondent bank is required, resu lting in “p e o p le -in te n siv e ’’ marketing and servicing. Offering “un profitable” stand-alone services is som etim es requ ired. P rofitability analysis, accurately designed on a g lobal basis, is mandatory. • A transaction-sales strategy is based on individual services that can be produced and distributed to meet bankw ide p ro fitability standards. These services are sold and priced in dependently of each other. Services are sold to specialists by specialists. A wide range of services is unnecessary. • These strategies are not mutually exclusive, but the bank must know its dependence on each strategy on a cus tomer-by-customer basis. In a market dominated by uncer tainty, the banks that plan most care fully for both short-term and long-term opportunity will be the winners. Clar ity of market definition and of purpose and objectives in serving that market is essential. Two things are certain: Cor respondent banking is changing and the rate of change is accelerating. • • MID-CONTINENT BANKER for July, 1 9 8 3 you W HEN W AN T TO GET IT D O N E, CALL A CORRESPONDENT W HO H AS BEEN THERE And his knowledge is now channeled into providing services like fast, efficient tran sit operations, bond and investm ent services and bank stock loans. T h e sam e responsiveness he provided to his bank cu s tom ers is now offered to you. T h ere are only a handful of correspondents who can say th ey ’ve learned the needs of com m unity banks firsthand. E rn ie Yake is one of them . He successfully m an aged Com m erce Bank of Moberly. And before th at, he headed a su b u r ban K an sas City bank on the K ansas side. So give E rn ie a call at 234-2483. He knows how to get it done for you, because he’s already done it himself. Today, E rn ie runs the Correspondent D epart m ent at Com m erce Bank of K an sas City. Ernie knows w h at bankers need. «fiCommerce Bank £% w NA of Kansas City MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MEMBER FDIC GETTING IT DONE 13 Understanding A ccount Analysis C O R R E S P O N D E N T N A T IO N A L B A N K A N A L Y S IS F O R : Respondent State Bank Balance Maintained Average Daily Ledger $ 580,352 Average Daily Float (351,270) Average Daily Collected 229,082 Reserve Requirement at 13% By Rick D. Shirrell And Joseph T. Calvaruso (2 9 ,7 8 1 ) Balance Available to Support Services $ 199,301 Earnings Credit* $ 1 ,3 7 0 .1 9 SERVICES PERFORMED Item HE AUTHORS have noticed re cent increased concern among both correspondent and respondent financial institutions with the cost/benefit of their relationships. The ac count-analysis statement, a document normally prepared each month by the correspondent bank, is designed to monetarily measure the relationship between the two. The statement compares balances the respondent bank maintained to that calculated by the correspondent as needed to profitably support ser vices rendered. It theoretically indi cates whether the respondent bank is maintaining sufficient deposit balances at the correspondent to cover both the costs of, and a margin of profit for, services performed. Discussion of account-analysis state ments has increased recently due to several factors: • Recent decline in interest rates is reflected on the analysis by increasing balances required by the correspon dent. • With the impact of deregulation and other factors, many correspondent banks have become more cost-sen sitive, and services are being added to the analysis that may not have been previously included. In addition, many correspondent banks have found it necessary to adjust their fees for ser vices to maintain service quality. • Competition has increased, both within the commercial-banking indus try and through increased marketing efforts on the part of the Fed. It thus is deemed important for both the upstream correspondent and the downstream respondent to under stand all aspects of the analysis state ment and uses for which it is designed. Rick Shirrell and Joseph Calvaruso are financial-institution consultants with the St. Louis office of Peat, Marwick, Mitchell & Co. 14 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Volume Account Maintenance It is not uncommon to en counter banks that do not receive analysis state ments from their corre spondents. Substantially Ledger Entries - Debits - Credits Deposited Items - In-District - Out-District and .30 .30 9 .0 0 28.50 1,309 4,145 .035 .070 679.95 957.52 98,902 66,598 1 prepare account-analysis statem ents, 30 95 _ they 125.00 _ $ 10.00 Balance Required $ 10.00 Safekeeping all correspondent banks Fee i 19,427 6,536 Other Price $ 1,955 125.00 18,182 98.00 $ 1 ,9 0 7 .9 7 19,255 $209,796 Additional Balances Required (Including Reserves) $ 6,316 Potential Service Charge $ 37.78 generally are available for the asking. ♦EARNINGS RATE THIS MONTH - 8.25% This discussion is geared toward en hancing the comprehension and rele vance of the statement as it is used by the industry. Obtaining the Analysis The first step in this process is, quite obviously, to obtain analysis state m ents on all sign ifican t deposit accounts. It is not uncommon to en counter banks that do not receive analysis statements from their corre spondents. Substantially all corre spondent banks prepare accountanalysis statements, and they general ly are available for the asking. From the authors’ persp ectiv e, analysis statements should be obtained month ly on all correspondent accounts. Analysis-Statement Review For illustration purposes, a simpli fied analysis statement is presented in Exhibit 1. The form, content, prepara tion methodologies and accuracy of the statements will vary by institution, and the exhibit is for discussion purposes only. As d escribed , the sam ple account-analysis statement normally will consist of two major sections. The first is a calculation of the de posit balance maintained at the corre spondent for the respective period (normally a calendar month) and the portion of the balance available to sup port services rendered by the corre spondent. The second section details services provided the respondent bank, trans lated into either fees or a required bal ance. A comparison then is made between the balance maintained (or an earnings credit) to the balance required (or fees for services) to calculate net gain or loss to the correspondent. This format is commonly followed by correspondent banks. Calculation of the balance maintained consists of three compo nents: average daily ledger balance, average daily float and reserve re quirement. A v era g e D a ily -L ed g er B a la n ces. These can be calculated directly from the respondent bank’s deposit state ment. The amount shown on the analy sis can easily be re-computed from the bank statement by totaling the balance at the end of each calendar day (includ ing weekends) and dividing by number of days in the period. A verage Daily F loat. While the re spondent bank generally cannot re calculate this number, it is key to the analysis statement and should be mon itored by the respondent. The major, if not sole, component of this number MID-CONTINENT BANKER for July, 1 9 8 3 W hen you w ant faster availability on cash letters, lo o k to B an k o f Am erica. When Bank of j 1........ ......_ ... — -.- • America processes your cash letters, the emphasis is on maximizing speed and accuracy and minimizing float. With operation centers in both Los Angeles and San Francisco—plus a rapid air transportation system—we’ve made the commitment to collect your dollars fast. Also, you’ve probably noticed that Bank of America items can add up to a big part of your California cash letters. Perhaps as much as 35%. So when you clear those items with us, you can get a lot more same-day availability And a lot less float. Of course, we handle your “mixed-sort” items, too. Let us send you our new avail Bank of America NT&SA • Member FDIC © Bank of America NT&SA 1982 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ability schedule. Need balance informa tion? Our computer-based reporting services give you timely information in a variety of formats. You get balance reporting with daily summaries, and detail reporting that includes all debit and credit items posted to your account during the past 5 business days. You can even get money market representative quotes twice daily When it comes to managing your cash, look to Bank of America. Call us in San Francisco at (415) 622-6909. In Los Angeles, at (213) 228- 3288. Look to the Leader.™ BANK of AMERICA C o rre s p o n d e n t B a n kin g S e rv ic e s will be check-clearing float for items deposited at the correspondent. R eserv e R equ irem en t. The corre spondent bank normally must main tain reserves on deposit balances it car ries for respondents; therefore, re serves generally are deducted from the average daily collected balance main tained by the respondent. The rate at which these reserves are calculated often is the highest reserve rate as sessed the corresp on d en t in the tiered-rate reserve calculation. Subtracting the average daily float and reserve requirement determines the balance which, in the estimation of the correspondent bank, is compensa tion for the service it has provided. As previously noted, the compensation may be stated either in balances to support services or an earnings credit based on the balance. In Exhibit 1, both the balance available and the earnings credit are shown. The earnings-credit rate used by the corre spondent should approximate prevail ing short-term interest rates. Services Performed The second section of the analysis statement entails a calculation of fees to the respondent for the services it has been providing during the respective period. The format of this section, as seen in Exhibit 1, typically is a descrip tion of the service performed; volume count of the service (such as number of noted earlier, the largest component of float generally will be related to checks deposited at the correspondent. In creasingly more banks, however, are including float other than that related to check clearing in this total. Items that may be included consist of returnitem float, float associated with creditcard and security transactions and other float “adjustments. ” The respon dent bank should consider the follow ing: • Periodic review of the corre spondent bank’s availability schedule to ensure significant deadlines are being met. • Computation of a few key “float ratios,” such as average number of days to collect. These ratios then can be tracked from month to month and significant fluctuations investigated. • Allocation of float being charged to the respective product lines and appropriate inclusion in the bank’s pricing of services. C ontrolling F ees. With increased com petition in the correspondent banking industry, opportunities fre Managing Analysis Statement quently exist to reduce fees being To maximize the usefulness of the charged to the analysis. This can be account-analysis statement, the au accomplished by packaging or sorting thors have a few recommendations for the outgoing cash letter in a manner acceptable by the correspondent. This both parties to follow: M onitoring flo a t . The amount of will reduce the correspondent’s han float charged to the analysis statement dling costs. In addition, the respondent should by the correspondent is difficult for the respondent to manage and control. As (C ontinued on page 40) items deposited) and a per-item fee for the service. Again, calculation of what was required of the respondent to sup port services received may be ex pressed in either fees or balances. The authors observe two significant changes occurring in this section of the statement. One is inclusion of addi tional services provided in the analysis statem ent that previously had not been analyzed. The second is increases in fees for services as the co rre spondent-banking industry more accurately analyzes its costs of services being offered and used by its custom ers. With calculation of balance main tained and balance required, the num ber that’s the real objective of all pre vious calculations can be determined. The difference between the two indi cates whether the relationship was “profitable” or not for the correspond ent bank. The result can lead to some interesting interchanges between the correspondent banker and the custom er. 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Our assistance to form a bank holding company includes an operations review of the key departments and functions of your bank such as, teller operations, proof, bookkeeping, float, etc. This review has previously revealed opportunities to improve pretax income exceeding several times the investment in establishing your bank holding company. For a complimentary copy of "What Every Director Should Know About Bank Holding Companies" or additional information on bank holding companies or our other services contact: Tom McNerney MAI 1916 Berthoud Pass Ct., St. Louis, Missouri 63011,314-458-2381 M C N E R N E Y AND A S S O C IA T E S , INC. Digitized for 16 FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CO N SU LTA N TS TO FIN A N C IA L IN STITU TIO N S St. Louis, Missouri Columbus, Ohio MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W t!'*' W h y sell a travelers cheque •fj:; ■■■':' with y ou r com petitor's nam e when you can sell one with y ou r own nam e? To find out how you can put you r nam e on the fastest grow ing travelers cheque in the world call Tom G allagher o r Jim Ryan at Visa. (415) 5 7 0 - 3 6 2 8 . You can do it. We'd like to help. Popular New Correspondent Service Makes Home Financing a Reality T U SED to be that, when someone walked into Merchants & Farmers Bank, C olum bus, M iss., and re quested perm an en t financing to purchase a home, he or she was turned away. It happened time and time again. But not anymore. That’s because Merchants & Farm ers now is participating in a correspon dent mortgage-banking program that enables the bank to offer its customers conventional, FHA and VA permanent home financing for the first time ever. Merchants & Farmers’ management had been wanting to get into the homemortgage business for several years. But about the time the bank was ready to make the move, rates skyrocketed, making it difficult for would-be homebuyers to qualify. Management de cided to postpone the program indef initely, or at least until the market sta bilized. Two things happened last fall to re kindle the bank’s interest: rates stabi lized to a degree and Barbara Cren shaw at Union Planters Mortgage Co. (UPMC) called on the bank to tell man agement about U PM C’s correspon dent mortgage-banking program. The program enables Merchants & Farm ers to make mortgage loans without assuming the risk or incurring the ex pense that usually accompanies entry into the mortgage-lending business. Two plans are offered by UPMC. Merchants & Farmers opted for “plan one,” which requires the correspon dent bank to take loan applications, prepare necessary documents and obtain all verifications. Loan packages are submitted to UPMC in Memphis, which orders appraisals, processes loans, obtains approvals and prepares for closings in conjunction with Mer chants & Farmers’ attorneys. (“Plan two” will be discussed later in this arti cle.) Each loan is funded entirely by U PM C, which pays M erchants & Farmers half the loan-origination fee for its role. Union Planters also ser vices the loans and eventually sells them in the secondary market. “Now we are able to offer our cus tomers a complete package of financial services,” says Shirley Rogers, mana ger of Merchants & Farmers’ Leigh I 18 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Barbara Schwerin is v.p. and administra tor of Union Plant ers' correspondent m ortgage-banking program. Mall Branch. “And that’s the primary advantage we have over competing mortgage bankers. They can offer permanent financing only; but we can do it all — from construction loans to permanent mortgage loans to homeimprovement loans to handling all of a customer’s personal-banking needs. That’s a real plus for us, and we try to sell the package, not only to our cus tomers, but to real-estate agents as well.” Applications are taken at the bank’s two branches rather than at the main office downtown because of the prox imity of the branches to the growing residential areas of Columbus. Mike Walker, manager of the Gate way Branch, says that, in addition to taking applications from Mississippians, he expects to begin taking ap plications from Alabamans, since the branch is within three miles of the Shirley Rogers and Mike Walker, branch mgrs. at Merchants & Farmers, Columbus, Miss., handle mortgage loans. Bank uses correspondent service provided by Union Planters Mortgage Co., Memphis. state line. Because M erchants & Farm ers’ management knew it would take time to communicate the fact that the bank is in the mortgage-lending business, no volume goals were set for the first year. Currently, however, the bank has nearly $1.75 million in the mort gage-loan pipeline. “The relationships that local mort gage companies have established with real-estate agents and builders in the area have taken years to develop,” Mr. Walker says. “We know we can’t ex pect to jump in and take all the busi ness right away. But, we re constantly working at it, and I believe over time we will get our share of the market. Our volume to date and the inquiries we have received have been very favorable, especially when you keep in mind how new we are to the business. ” In addition to offering competitive rates, Merchants & Farmers is able to lock in discount points for a period of up to 45 days — something the com petition hasn’t been able to do. Citing an example that illustrates this benefit, Ms. Rogers described a case in which she was able to lock in a D/2 % discount point, saving the seller from paying the then current discount rate of 6%. “In this particular instance, because of what we had saved the seller in dis count points, he moved all his accounts to the bank,” Ms. Rogers says. “We re not only excited about offering our cus tomers the added convenience of firstand second-mortgage loans, but about the cross-selling opportunities we en counter as a result.” A nother m ajor b en efit the Co lumbus bank has over other local banks is that it takes applications every busi ness day. In the case of one competi tor, whose loan officer travels a large regional area, applications are accepted only one or two days each week. Following a brief training session in Memphis for Ms. Rogers and Mr. Walker, the bank officially kicked off its program in February by hosting a dinner meeting for Columbus realestate agents and builders. Ms. Cren shaw drove down from Memphis to assist the new mortgage bankers in ex plaining the benefits characteristic of (C ontinued on page 41) MID-CONTINENT BANKER for July, 1 9 8 3 How TO GET THE MOST FROM YOUR CHECKING PROGRAM. H e r e ’s another service from Franklinton Financial Services that can give you a competitive edge in the financial market place: The debit card. It looks and works very much like a credit card. The difference is that trans actions are electronically debited against the customer’s deposit account, rather than charged against a revolving line of credit. The debit card lets you offer your custom ers credit card convenience and reduces float for your institution. It reduces your operating costs by eliminating check processing. It generates new income through transaction and service fees. And its custom er appeal helps maintain your existing base, while attracting new deposit accounts with higher balances. Maximum customer convenience. With debit card s, your custom ers have access to their checking funds at bank and m erchant locations around the world, to make a purchase or draw a cash MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis advance. No need to carry a lot of cash or worry about a check being accepted when they’re away from home. Merchants appreciate the debit card, too. It reduces bad check losses and collection ) costs while ) increasing sales. And it’s just as quick and simple to process as a credit card transaction. A custom program to fit your needs. The Franklinton debit card processing program is designed for complete flexibility, with a number of options that allow you to tailor a program to fit your specific needs and philosophy. Franklinton offers process ing services for either the MasterCard II or VISA debit card. The card can be offered with or without an over draft credit line. It can be issued as a separate service or combined with your existing credit or proprietary card. It can be packaged with other banking services such as Money Market and NOW accounts. It can be offered by application only or sent in an unsolicited mailing to selected account holders. It’s really up to you. Franklinton can support your program with a full range of state-of-the-art processing techniques, including: plastic embossing, encoding and issuing; on-line inquiry, maintenance and automatic reissue; immediate reduction of account limits upon transaction authorization; detailed daily transaction summaries sent by magnetic tape or transmitted via automated clearing house; and com pre hensive reporting on microfiche and/or printed form. W ith over ten years of experience in EFT and bank card processing, Franklinton is a leading provider of electronic banking services. It’s our only business. Our facilities are totally dedicated to electronic banking services. Franklinton offers a number of services to make your operations more profitable and efficient. In addition to debit card pro cessing, Franklinton also offers credit card processing, agent credit card programs, plastic preparation, participation in the AnytimeBank® regional and PLUS SYSTEM® national shared ATM networks and the Home Banking Interchange™ Whatever the service, Franklinton has the capability, experience and flexibility to give you a valuable edge in this highly competitive age of electronic banking. To get your edge, call Del Tonguette at 614/863-8222. FRANKLINTON FINANCIAL SERVICES a division of BancOhio National Bank 4661 East Main Street, Columbus, Ohio 43251 Your com petitive edge in the electronic age. ® Registered service mark ® Registered service mark of Plus System, Inc. 19 About Banks ILLINOIS Continental Illinois National, Chica go, has named the following vice presi dents: Daniel W. Taylor and Thomas J. O ’Connor — bond/treasury; Stephen A. Lescohier, Anthony P. Moody and William E. Read — financial; Allen D. Brown and Derek W. S. Morrison — general banking; Thomas R. Williams Jr. — multinational banking; A. Cadry Genena — real-estate; Miranda L. Ferrell, James J. McGuire and Joseph A. Vilardo — special industries; Thom as F. McGrath and Susan M. Spalding — trust/investment; Thomas S. Bagley — U. S. banking; Douglas E. Meneely — operations/management; Susan G. Gleason and Edwin F. Skonicki — personal banking. Judith C. Ostertag has joined Harris Bank, Chicago, as an investment offic er, heading the section responsible for investment processing. She formerly was with First National, Fouisville, where she headed the bond depart ment. Magna Group, Inc. (formerly First Bancorp of Belleville, Inc.) has ac quired Fairview Heights Community Bank. Fead bank of Magna Group is First National, Belleville. Richard G. Walker has been named president, Lake View Trust & Savings, Chicago. He formerly was senior ex ecutive vice president/chief adminis trative officer, Lake Shore National. Prior to that he was with Continental Bank. William R. Smith has joined First National, Libertyville, as senior vice president/senior lending officer. He formerly was with Marina Bank, Chi cago, and, before that, Continental Bank. Bruce I. McPhee has been promoted to executive vice president at First Bank, Evanston, and Bradley S. Vallem, Roger C. Weissenberg, Veronica T. Mensch and Phillip K. Duncan were promoted to vice presidents. 20 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bankers James F . Dickerson has been pro moted to senior vice president/Boulevard department at Boulevard Bank, Chicago. He has additional manage ment responsibilities in the consumercredit division. Boulevard Bank is the shortened name of National Boulevard Bank. INDIANA William K. Stanley has been elected trust-investment officer at Irwin Un ion Bank, Columbus. He joined the bank last year and at one time was a senior investm ent analyst at M er chants National, Indianapolis. David V. Lakes has been appointed senior vice president/com m ercial financial services division, Lincoln National, Fort Wayne. He formerly was with BancOhio National, Cincin nati; BancOhio National, Akron; and Fifth Third, Cincinnati. He was in the correspondent department at the lat ter institution. Lincoln Financial Corp., Fort Wayne, has entered the farm-management business through purchase of the farmmanagement portion of Walley Agri cultural Service, Inc. The new depart ment is part of the fiduciary financial services division of the HC and is man aged by Dean Lichtensteiger, a long time Walley employee. Thomas L. Baumgartner has been promoted from controller to vice presi dent/chief operations officer at Fort W ayne N ational. He su cceeds C. Jean e T u ttle, who was named senior vice president/special projects. Succeeding Mr. Baumgartner as con troller was Stephen R. Gillig, former assistant controller. Robert Hill has added the duties of CEO to his position as president at National Bank, Greenwood. He joined the bank in 1958 and has been presi dent since 1977. MICHIGAN Frank J. Sellinger has been appointed chairman/president-designate, NBD Troy Bank. He succeeds Frederick M. Adams Jr., who has been elected head of N BD’s instaloan division. Mr. Sel linger joined NBD in 1964 and had been a first vice president since 1981. He will retain his position as head of the bank’s eastern regional banking di vision. NBD Bancorp., Detroit, has opened a Grand Rapids area head quarters under the direction of Thomas J. McDowell, first vice president. The office is at 190 Monroe St., N.W ., and offers commercial loans, automated cash m anagem ent, personal and corporate trust services and interna tional financing. Gerald L. Harvey has been appointed first vice president/head of the Central Group at National Bank of Detroit’s national banking division. He directs com m ercial-len d in g activ ities to businesses in the central U. S. He joined NBD in 1964. Peoples N ational, Bay C ity, has elected Karl E. Durant and Thomas E. Kraut vice presidents. Mr. Durant also is cashier. He form erly was with Citizens Commercial & Savings Bank, Flint. Mr. Kraut has been with Peo ples National since 1963. C om erica, In c ., D e tro it, has announced the following appoint ments: At the HC: James L. Costello and Krista L. Lane to assistant vice presidents and Ann N. Kotwica to op erations officer. At Comerica BankDetroit: J. Michael Fulton and Joseph A. Moran to vice presidents, Otto Kern to assistant vice president and Robert L. Quigley Jr. to productmanager officer. New officers at the HC: Frank R. Walczyk, vice pres ident; Richard A. Filipp, assistant vice president; David J. Janusz, commer cial-loan officer; and Lee R. Wyatt, personnel officer. At Comerica BankDetroit: Joseph L. Gravenstein and Leo W. Morrissey, assistant vice presi dents, and Ann F. Putallaz, associate economist. MID-CONTINENT BANKER for July, 1 9 8 3 If a bank answers, hang up. As a correspondent of The Boulevard Bank, you don’t deal with a bank, you deal with a person — a professional correspondent banker. Each one is a senior Boulevard officer and each one is capable of making some seventy Boulevard banking services available to you and your customers. This unique Boulevard combination of “big bank” service and personal attention involves four basic areas - Loan participations, Assets-Liability Management Services, Operational and Clearing Services and Management and Marketing Services. It also involves our day-to-day dedication to applying people and state-of-the-art technology in helping our correspondent customers meet the challenges and benefit from the opportunities of today’s and tomorrow’s economy. If you’d like to find out more about the Boulevard approach to correspondent banking, call (312) 836-6868. And talk to a person, not a bank. Earning your business every day. National Boulevard Bank of Chicago Boulevard Bank 410 N. MICHIGAN AVE., CH IC A G O , IL 60611 ONE ILLINOIS CENTER (111 E. W acker], CH ICAGO , IL 60601 MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (312) 836-6500 • MEMBER FDIC MINNESOTA Richard W. Osness has been pro moted to assistant vice president at First National, Brewster. He joined the bank in 1978. James Kraft has joined the bank and is working in the lending and insurance areas. National City Bank, Minneapolis, has promoted Jeffrey R. Arnold to vice p resid en t, com m ercial banking; Robert L. Comstock to assistant vice president, commercial banking; and Glenn W. Keller to vice president and branch manager. Amy C. Floyd and Ronald R. Russell, new to the bank, have been named personal trust officer and assistant vice president, commer cial banking, respectively. Bradley F. Roberts has joined First Bank Minneapolis as a correspondent banking officer. He formerly was with the Fed eral Land Bank, Norfolk, N eb., where he was assistant vice president/assistant branch manager. Stanley W. Kilbey, Paul S. Bauer and Kathryn B. Brewer were promoted to vice presidents and the following were named assistant vice presidents: Kent D. Carlson, Jan et M. M cK enzie, Thomas J. Peters, Lavera P. Fransen, Karen M. Sjoberg, Reid L. Van Duyn, Elizabeth L. Stirriup and Larry R. Hill. Otto V. Byhre Jr. has joined the bank as vice president, bond depart ment. He is in charge of a new publicfinance division. ROBERTS Norwest C o rp ., M inneapolis, has made the following appointments: Donald W. Ittner to the new post of vice president/corporate marketing; J. Bruce Jacobson to vice president/ loan administration; Clyde R. Keller, R. Wayne Parchman and O llie P. Yates Jr. to vice presidents; and Robert B. Boysen to marketing director/agriculture-business group. Norwest Bank M inneapolis has appointed Dennis A. Lind senior vice president/bond department head. He joined the bank in 1979. Charles D. White has been appointed vice president/manager, financial futures divi sion, a new post based in Chicago. The appointment marks the beginning of in-house financial futures trading for 22 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis both the bank and Norwest Corp. and eventually for other affiliate banks and subsidiary companies, correspondent banks and commercial customers. The Minneapolis Fed has announced the retirements of Howard L. Knous, vice president/general auditor; Robert W. W orcester, vice president; and Richard C. Heiber, assistant vice pres ident. They joined the bank in 1950, 1951 and 1940, respectively. OHIO Gordon C, Wagner, chairman/president, Commercial National, Tiffin, has been selected as a state banking indus try spokesperson for 1983 by the Ohio Bankers Association. Mr. Gordon will make several one-day visits to cities across the state to address local news media, civ ic organizations and college business students. Mr. Gordon is one of 15 bankers serving as Ohio banking advisers. June Shepler, vice president, Central Trust Co. of Northeastern Ohio, Can ton, has been elected president, Stark County AIB Chapter. Other new offic ers are: first vice president, Neil Honsberger, United National; second vice president, Michelle Hagan, AmeriTrust; treasurer, George Downes, Central Trust; secretary, Lorene Pear son, Harter Bank & Trust; and state representative, Rick Cramer, Central Trust. BancOhio National will be the first tenant in the new 10-story Four SeaGate office building now under con struction in downtown Toledo. Banc Ohio National Bank Four SeaGate will offer corporate financial offices, trust and international services and a pri vate banking center. The office will serve as BancOhio’s headquarters for the northwest region. Opening is an ticipated by next spring. L arry C. Glasscock has been pro moted to executive vice president in charge of corporate banking for AmeriTrust Co. and AmeriTrust Corp. He joined the bank in 1971 as a manage ment trainee. Since 1981 he has been senior vice president in the national division of the bank. Robert F. Urich has been named city executive at Huntington National, Kent. Mr. Urich, who also is a senior vice president, formerly was with H untington N ational, Colum bus, which he joined in 1969. He most re cently was senior vice president in charge of human resources. Richard C. Coriell has joined Hunt ington Bank of Northeast Ohio, Cleve land, as senior vice president/indirect lending. He formerly was with Nation al City Bank, Cleveland. John P. Gonas was named vice president/manager, commercial lending, in the Met ro Region West Office. He formerly was with Central National, Cleveland, w here he was regional manager/ branch banking. William T. McBride was named assistant vice president/ trust investments, and Wally W is niewski was named assistant vice president/consumer lending. They joined the bank in 1977 and 1972, respective ly. W ISCONSIN Susan Linck has been promoted to the new position of deputy director, Wis consin Bankers Association. She con tinues as staff counsel and is responsi ble for internal developm ent and m em ber service projects and pro grams. LINCK Harold Meser, president, Green Lake State, retired last May. He joined the bank in 1961, coming from Wayside State. He will retain his title and re main on the board. Kenneth Friend, executive vice president, has assumed Mr. Meser’s in-house duties. David J. MacCudden has joined First Bank Milwaukee as assistant vice president/retail lending. He formerly held the same title at Heritage Bank, Mil waukee. The Independent Bankers Association of W isconsin will hold its second annual convention September 11-13 at the American Club, Kohler. The asso ciation is headquartered at 30 W. Mif flin St., Madison. Gillett State has changed its name to Citizens Bank, Gillett, reflecting the bank’s affiliation in 1981 with Citizens B an co rp ., head quartered in Sh e boygan. Gillett State was organized in 1921. Nancy R. Barlow has been promoted to assistant vice president at M&I Bank, Madison. She joined the bank in 1972 and is slated to be manager of the new East Branch. MID-CONTINENT BANKER for July, 1 9 8 3 The successful banking software company defines its priorities: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis people: founders o f integrated banking softw are products: banking softw are m a d e a s com plete an d perfect a s hum anly possib le quality: in banking softw are, our g o a l is perfection service: an important tradition carried forw ard in our banking softw are technology: pushing b a c k the boundaries o f banking softw are pricing: m ore banking softw are p er penny success: front-running banking softw are * commitment: providing softw are fo r the future o f banking 0 InT^fyears, we haven’t shuffled our priorities. ^ertvice FLORIDA SOFTWARE SERVICES, INC. A KIRCHMAN COMPANY_____________ P .O . B ox 2 2 6 9 - O r la n d o , FL 3 2 8 0 2 - (3 0 5 )8 3 1 -3 0 0 1 International Headquarters: 711 E. Altamonte Dr., Altamonte Springs, FL 32701 Los Angeles Office: 603 3 W. Century Blvd., Suite 1150, Los Angeles, C A 9 0 0 4 5 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis DANIEL G. PRISKE President and Chief Executive Officer CITIZENS NATIONAL BANK AND TRUST MARSHFIELD, Wl A First Wisconsin Correspondent Banking Customer MEET FIRST WISCONSIN Accelerated Check Collection EXPERIENCE. "It's what my customers rely on," says Dan Priske, president and chief executive officer of Citizens National Bank and Trust. And when Dan's customers deposit more than a million checks throughout the year, his bank turns to First Wisconsin for ways to increase profitability and streamline check collection operations. ■AiilCSS® :i': «KXCCtt - t o Working together, we construct ed a Cash Letter Analysis report to examine their complex check collection function, and we offered recommendations about how Citizens National could min imize transportation charges, reduce check clearing fees and improve funds availability. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis When you want to streamline your check collections, whether large or small, talk to First Wisconsin. Or ask Dan Priske, he knows the advantage of work ing with a bank that clears more than a hundred million checks each year. That's experience. FIRST WISCONSIN MORE BANK FOR YOUR M ONEY FDIC c FWNB 1983 ♦ * ê Make it a storybook Christmas A fabulous new program for depos t acquisition. A sensational attraction for new, low-cost core deposits. A promotion that builds on the concept of the nobility of goal directed saving and enhances your image as “a people place." Holly Berry,’’SM an endearing little fawn, becomes an exciting premium ‘or you to sell or give away. He’s the hero of "The Adventures of Holly Berry,” a delightful children's book created just for Christmas Club —also available to you as an exclusive premium. Here’s your best source of loyal customers who use more retail services, as proven repeatedly by Unidex behavioral studies. And there’s everything c 1983 Christmas Club a Corporation, Easton, PA. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis you need to go with your "Storybook Christmas" tneme: coupon booxs, checks, application forms, posters, and more. Ask your Christmas Club repre sentative, or call Renée Brett, (800) 528-9334 New York, New Je rse y Maryland, Delaware; (800) 523-9440 all other states except Pennsylvania; (215) 258-6101 Pennsylvania residents. PO . Box 23, Easton, PA 18042. The Original a corporation SM'Holly Berry ' is a servicemark of Chrstmas Club a Corporation, Easton, PA. WASHINGTON W IRE Th e Seco n d M o st P o w erfu l M an in W ash in g to n S ECONOM IC and banking news public at large and, thus, the economy. jumped from the financial page As long as finance was seen to be the to the front page in recent years, there exclusive province of financial special occurred a great transformation in the ists, the Fed chairman could operate in job of the chairman of the Federal Re a low-profile way, while dealing with serve Board. In a relatively short time the general public could be left to by Washington standards, the public politicians. role of the chairman rocketed from A revolution, however, began to being the chieftain of a small, but re erupt in the financial marketplace. latively respected, tribe of numbers- Under the prod of inflation, the public crunching experts into a public per began to educate itself about finance sona widely hailed by the media as and to become involved in it. “the second most powerful man in Because it recognized that inflation Washington.” ary expectations on behalf of the public What prompted this transforma at large were driving inflation itself, tion? the Fed took Main Street into its cal culations. Because the financial world to include just about everybody, "As long as finance was seen came the Fed chairman found he had to talk to be the exclusive province of to just about everybody. No longer could he be a leader in his financial specialists, the Fed obscure field, he had to become a lead chairman could operate in a er, period. And, in a democracy, being low-profile way, while dealing a leader brings with it a commitment to with the general public could establishing and maintaining a public presence and a public image. No long be left to politicians." er could the Fed chairman concentrate solely on doing good, he also had to It was not the result of publiclook good. A “star’ was born. relations hype. It was not the result of The transformation of the Fed chair personality. It was not the result of man into a public persona, however, scandal. Occasionally, those factors brought problems. focus the public’s attention on one of The chairman had thrust upon him the legions of public officials who work the responsibilities and risks that have in this town, but that attention is al traditionally marked the job of the pro ways short-lived. fessional politician. However, no one What, then, pried the Fed chairman expected the Fed chairman to act like a out of the marble closet and into what politician — his was a highly serious seems to be permanent public promi- mission: to protect the national trea nance? sure, the economy. Thus, the chair Several years ago, the definition of man does not enjoy the insulation, like what constituted the “financial world” selective hindsight, that politicians en changed and the office of Fed chair joy. man was forced to respond. Furthermore, the job of communi That world used to be a fairly close- cating intentions has become much knit group of bankers, brokers and more difficult than it used to be. Fed other officials who were schooled in chairmen in the past could talk to the the arcane mysteries of “monetary people who counted in the language of aggregates” and “real vs. nominal rates banking, of finance, of economics. To of return. ” The Fed chairman sought day, the Fed chairman often must use to influence their perceptions and standard English. The process of com their decisions because, it was b e m unicating also has becom e less lieved, these were the people who direct. When Washington was a sleepy counted. It was thought that the im southern town, a financial writer who pact of their decisions would then covered the Fed for one of the wire trickle down to affect the actions of the services used to peg his stories to what the chairman told him on the elevator. Within the hour of such a meeting, he This column was written by Phil Battey, manager, editorial department, American had a story on the wire. This was direct Bankers Association, Washington, D . C . and almost instant communication be- A MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tween the chairman and those who needed to know the direction of his thinking. Today, when the chairman speaks, it most probably is in the context of a ritual media event. On these occa sions, he is likely to be asked to com ment on, say, the impact of contem poraneous reserve accounting on the “man in the street.” He must manipu late these opportunities to transmit the message that he wants to transmit. Obviously, this method of operating calls for a resourcefulness, a flexibility and a sensitivity that one is unlikely to pick up by attending or teaching a "To set the right goals and rally the public behind them now are the tasks o f the Fed chairman. . . . these are the same standards that histo rians and political analysts use to judge the performance of U. S. presidents." graduate seminar on classical eco nomic theory. The new responsibilities of the Fed chairman, however, do not mean that the old requirements of the office have disappeared. On the contrary, the Fed as a central bank continues to operate in the way it has operated — with few and temporary lapses — throughout the years. Monetary-policy decisions still are set by a slow, deliberative pro cess after a presentation of detailed economic data and scenarios. The ends remain the same, only the means of implementation have changed. The job of Fed chairman demands an indi vidual who can manage this decision making in just about as abstract a field as one can find. To use a musical metaphor, the job now requires a per son who can not only compose the opera but also go on stage and sing it as well. To set the right goals an d rally the public behind them now are the tasks of the Fed chairman. Interestingly enough, these are the same standards that historians and political analysts use to judge the performance of U. S. presidents. No other statement points 27 out as well the scale and complexity of the job facing the Fed chairman. In this context, Paul A. Volcker has set the standard for future Fed chair men. First of all, Mr. Volcker has carved out an image of being forthright. Although his prose can be rather “stream of thought” at times, he always answers the questions that are put to him. It’s not his problem that the listener sometimes cannot understand the answers. He never projects the image of qual ifying his actions. He cam e to Washington as a “white knight” intent on doing what he felt was right and he still has that reputation. For example, Mr. Volcker cannot be accused of mod ifying monetary policy for political ends. As for his image with the press, no one has done it better. Not a wealthy man, when he took up the Fed post he made it no secret that his public ser vice entailed a significant financial sac rifice. He thus won, as a person, the respect of a cynical Washington press corps which, for all its prejudices, appreciates such a sacrifice. • • 28 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank, Insurance Interlocks OK'd HE SU PREM E Court has ruled that corporate directors may serve simultaneously on boards of major banks and insurance firms. The ruling rebuked federal antitrust officials who have been claiming since 1975 that such interlocks violate antitrust laws. The 5-3 vote overturned a lower court decision that such interlocks violate the 1914 Clayton Act, which governs antitrust matters. Clayton specifically forbids individuals from serving simultaneously on boards of two or more large, competing firms. The Supreme Court supported the position of banks and insurance firms that Congress never intended the Clayton Act to apply to bank directors. The case — BankAmericaCorp. vs. U. S .— first reached the courts in 1975, when federal officials challenged five individuals who held dual directorships linking three of the nation’s largest banks with four of the largest insurors. The Justice Department, in its original suit, argued that permitting such interlocks would prove anticompetitive, since banks and insurance firms compete for the same loans, particularly as mortgage lenders. But the U. S. District Court for Northern California wasn t convinced such was the case. However, in 1981 the U. S. Ninth Circuit Court of Appeals, in San Francisco, overruled the lower court. On behalf of the Supreme Court’s majority, Chief Justice Warren Burger wrote that the law does bar dual directorships from linking two competitors, “but excludes from this general prohibition interlocking directorates between banks.” It would take congressional action to reverse the court decision. T MID-CONTINENT BANKER for July, 1 9 8 3 NABW Annual Convention Set for Dallas in Sept. “ Position in g for Tom orrow : Strategies for Power and Profit” is the theme of the 61st annual convention of the N ational A ssociation of Bank Women (NABW), set for September 18-21 at the Hyatt Regency Hotel, Dallas. Keynote speaker will be Lawrence Chimerine, chief economist, Chase Econometrics, who will look at the forces affecting the banking industry and the new corporate structures that are emerging in response. A follow-on session will feature rep resentatives from various sectors of the financial industry — including Merrill Lynch, American Express, Beneficial Management Corp. and Southwest Bancshares — that will compare sur vival tactics and outlooks for the fu ture. A session on strategic planning will be led by Robert Metzger, managing principal at Metzger, Rau & Associ ates. Sessions will be held to alert partici pants to new career challenges. Speak ers will include Julia Walsh, chairman, Julia Walsh & Sons, investment spe cialists; Chloe Aaron, former senior vice president, Public Broadcasting Service; Madeline Bohman, executive director, Bellevue Hospital; and Alene Moris, president, Individual Develop ment Center. Other workshops will focus on in formation systems, risk taking, lead ership during transitions, situational problem solving and other manage ment concerns. During the annual business m eet ing, a proposal to admit nonbank finan cial women to NABW will be con sidered. Financial/Funds Mgt. School Set for October by ABA A new school designed for experi enced mid- to senior-level bank invest ments officers and funds managers will be held for the first time October 15-21 at the University of Oklahoma, Nor man. Curriculum will cover the strategy and implications of bank planning, performance and positioning for the future. Core subjects will include im proving performance using arbitrage MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis and hedging, m aturity strategies, planning to increase bank returns and bank capital planning. Electives will include international funding and arbitrage, developing and managing a trading account and finan cial futures strategies. Attendees will receive instruction and hands-on practice using micro computers for funds management de cision making. Two case studies will be conducted, one measuring profitabil ity and performance in an actual bank and the other dealing with bank merg ers and acquisitions. Concurrent with the new school will be a renamed ABA school of bank in v estm en ts, form erly the national school of bank investments. The pro gram will provide bank investments professionals with instruction in the areas of investments, portfolio man agem ent and asset/liability-m anagement techniques. Core curriculum will include ana lyzing municipal securities, managing liquidity, measuring interest sensitiv ity and introduction to financial fu tures. Several electives will be avail able. Drovers Bank has just made discount brokerage available to its correspondent bank customers. This means fees generated for you, and substantial savings for your customers. And Drovers specialists can advise you how to market this new and valuable service in your area. Discount brokerage: another reason Drovers is one of the fastest growing correspondent banks in the midwest. Call John Crotty or Kathy Hardy at 1-800-621-8991. In Illinois, 1-800-572-2498. Remember, fees for you, savings for your customer. And it all starts with a phone call to Drovers. ft-./Drovers Bank of Chicago 4 7th & Ashland Avenue, Chicago, IL 6 0 6 0 9 • 1-312-927-7000. MEMBER FEDERAL RESERVE SYSTEM AND FDIC 29 Personal Computers Prove 'Hot Topic' At Bank's Seminars Personal computers are a popular topic now, as Huntington National, Columbus, O., can attest. When the bank decided to hold a seminar on “Things You Should Know Before Buying a C om puter,” 600 persons signed up after the sem inar was announced in only one newspaper ad and on a couple of radio spots. The bank held two sessions on one day at the Hyatt Regency in Columbus — one session for 300 at 5:30 p.m. and HOW WILL YOU DECORATE THIS CHRISTMAS?? featuring INTERIOR & EXTERIOR CHRISTMAS & ALL-SEASONS DECORATIONS for CITIES MALLS STREETS BUSINESSES BUILDING FRONTS SHOPPING CENTERS BANKS&INDUSTRIES PARKS and LAWNS For a catalog, write to: Bronner’s 25 Christmas Lane, P.O. Box 176 FR A N K E N M U T H , M ICH IGAN 48734 Phone 517 652-9931 a second session for the other 300 at 7:30 p.m. So many more also signed up that a third session was scheduled. They all were open to customers and non-customers. Huntington National, which oper ates banking offices statewide, spon sored the seminars in conjunction with area computer dealers to provide in formation about advantages and uses of personal computers. Headline speakers were Paul Kellam , ed ito r, P e rso n a l C om p u tin g magazine, and Augustin Hedberg, au thor of the recent special section on “ Choosing the Best Computer for You” in Money magazine. Programs also included hands-on exhibits and displays of various computers, direct access to the CompuServe Information Network and a presentation of the new Huntington bank-at-home service cal led BancShare. Huntington National introduced its bank-at-home service last October. Customers went to the bank and asked questions that indicated most of them were “illiterate” as far as home com puters are concerned. They didn’t even know what questions to ask, a bank spokesperson reports. The semi nar idea resulted from this situation. In addition, the bank’s business cus tomers asked for a seminar geared to their needs, and the bank accommo dated them. Disaster Planning Workshops To Focus on Recovery Two-day seminars designed to help banks prepare for and recover from unexpected catastrophes are planned by the Bank Administration Institute for September 12-13 in Baltimore and October 24-25 in Dallas/Fort Worth. The workshops are sponsored in conjunction with Norwest Bank, Min neapolis. The bank’s disaster-recovery plan enabled it to recover from a dev astating fire that all but destroyed the bank’s headquarters last Thanksgiving Day. Workshop sessions will be con ducted by members of the bank’s re covery planning team. Topics to be covered include the elements of a “to tal” contingency plan, protecting vital information and data processing opera tions, restoring key revenu e-pro ducing services, the role of the secu rity officer and the importance of effec tive communications, both internal and external. Among the course materials will be the BAI’s 82-page “Emergency Pre paredness and Security M easures” manual. ABA Offers New Resource For Strategic Planning A new aid to banks developing or revising strategic plans has been re leased by the ABA’s co rp o rate planning division. “ABA’s Planning Resource Direc tory” is a reference containing listings of more than 150 consulting firms and research organizations that banks can call on in their planning. In addition, professional and trade organizations are included in a separate section of the directory, with a third section devoted to statistical inform ation sources. Firms and organizations are listed both geographically and by areas of special expertise and range of services offered. Prin cipal con tacts, firm address, telephone number and size of banks served also are included in each listing. Managers and personnel involved in bank strategic planning, as well as banking libraries, are expected to make use of this reference book. New Scoreboard at Cotton Bowl : n_ Money Bags Buy Direct from the Manufacturer • Night Deposit Bags • Individual Pocket Bags • Canvas Coin Bags • Zippered Wallets • Lead Seals Many sizes and styles available in a wide variety of colors and materials. FREE silk screening of name and logo with minimum order. FAST DELIVERY!!! 01 Laacke & Jo y s Quality Since 1844 30 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank Products Division P.O. Box 92912, Milwaukee, Wl 53202 PHONE (414) 271-7885 Ask for Bank Products This new scoreboard w as installed recently in the Cotton Bowl in Dallas by its m anu facturer, Daktronics, Inc., Brookings, S. D., m anufacturer of tim e-and-tem perature signs and message centers for financial institutions. Scoring and animation centers consisting of 5 4 x 1 4-foot computerized boards are at each end of the bowl, with four supplemental scoreboards in other areas of the arena. The firm manufactures a wide variety of electronic devices. MID-CONTINENT BANKER for July, 1 9 8 3 Ideas That W ork! A potpourri of promotions any bank can use HC's Affiliates Spread Holiday Cheer Throughout State: It's a Tradition! O M M U N ITY gifts are spread across the state of Missouri each Christmas by affiliate banks of Mercan tile Bancorp, headquartered in St. Louis. In many of the HC’s affiliate banks gifts find their way to a wide circle of friends, some of whom range beyond the periphery of employees and cus tomers — friends who live in the com munities served by the banks. Christmas has become a city tradi tion in St. Louis, thanks to Mercantile Trust, the HC’s lead bank. The tradi tion begins on the weekend following Thanksgiving, when the bank is closed and Christmas hasn’t slipped in yet and everything is a grandiose clutter. Bank personnel work amid boxes of greenery, dolls and lights, putting ev erything in order for Monday morn ing’s opening. Floor-to-ceiling Christmas tree at Mercan tile Trust, St. Louis, soars over collection of employee-dressed dolls that are given to needy fam ilies on Christmas morning. On the plaza outside the Mercantile Tower, the Salvation Army builds its Tree of Lights, a colorful fund-raising tradition. Music floods the bank during the day. M ercantile’s carolers present noon programs and organ concerts are presented during the morning and afternoon hours. Dolls for girls and toys for boys are donated by employees and distributed to needy children through United Way agencies. Employees also donate gifts to senior citizens in centers and nurs ing homes. Mercantile Bank, Springfield, also has an annual tradition — it donates a concert by the local symphony orches tra to the public. The Sunday after noon concert is fully subsidized by the bank and plays to standing-room-only audiences each year. R esidents of W ashington, M o., know it’s almost Christmas when they form a line extending three blocks or more from Franklin County Mercan tile Bank to attend a reception honor ing the local winner of the bank’s art contest and to view all entries in an exhibit. The winning painting appears on the bank’s calendar for the following year. Each guest attending the recep tion receives a reproduction of the painting, and the artist is on hand to autograph it. Bank personnel serve punch, champagne and Christmas pas tries. Most trees aren’t in bloom at Christ mas in Monett, Mo., but the “mitten tree’’ is in full bloom at First National Mercantile Bank! Girl Scouts and bank employees decorate the tree’s branch es with a wide variety of mittens, scarves and stockings for those in the community who may not be as warmly clothed as they would like. In Kansas City, Red Bridge Mercan tile Bank adopts a family and presents its members with a bountiful Christ- MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mercantile Bank of Springfield, Mo., pre sents "Carols of Christmas" symphony con cert to community each holiday season. mas that includes holiday food, cloth ing and toys. The bank’s philosophy is that “everyone isn’t fortunate all the time, ” a thought that encourages bank employees to bring a positive Christ mas message to the community that goes beyond the material gifts they give — a message of hope. In St. Charles, employees of Mer cantile Bank of St. Charles County take them selv es and th e ir w ellrehearsed caroling voices to the St. Joseph’s Home where, amidst cookies and music, they give their time and talents to an appreciative audience. In 1982 there was no community Christmas celebration at High Ridge Mercantile Bank, nor were there any decorations in the bank. Instead, there was a donation to the victims of floods that had ravaged the area. Christmas throughout the expanses "Mitten tree" blooms each December on premises of First Nat'l Mercantile Bank, Monett, Mo. Girl Scouts and bank person nel decorate tree with mittens, scarves, stockings. 31 of the Mercantile family of banks is marked by the desire of employees to give a gift to their communities. The overwhelming support of such a gesture doesn’t change — and that’s tradition! • • A ctivity -Fille d H o lid a y Season C eleb ra te d at T h ird of N a sh v ille HRISTMAS never is overlooked at Third National, Nashville! And the 1982 season was no exception, according to Daphne C. Rooker, marketing officer. Preparation began long before the holidays arrived. For instance, the bank’s Christmas choir began rehears ing in October. Last year the choir sang for the em ployees’ Christmas breakfast in mid-December and then performed for the public in the bank’s lobby over a five-day period. The annual Chirstm as breakfast makes a requirement of employees for admission — either they plunk down $2 or they bring a toy. After the break fast, toys were distributed to children at Clover Bottom and admission fees were contributed to the Parade of Pen Judges carefully examine entries in dressnies and Big Brothers. a-doll contest at Third Nat'l, Nashville. Em Each of the bank’s 30 offices was ployees dressed dolls, but only those with decorated by em ployees and East "homemade" outfits qualified for contest. Nashville office employees made cos tumes to wear the working day prior to another. The two needy families re Christmas. Third National’s main lob ceived toys, food, clothing and person by was decorated with red poinsettias, al items. The families were selected greenery and a large tree. The execu with assistance from Big Brothers. A dress-a-doll contest was held. tive dining room was decorated simply with an apple tree, poinsettias and Dolls were acquired through the AIB and were dressed by bank employees. bowls of apples festooned with holly. Members of the bank’s Christmas Those with “homemade” clothes were choir decorated a tram car from Opry- entered in a contest and cash prizes land USA and entered it in the Nash were awarded. The bank sponsors a “T rees of ville Christmas parade. Choir mem bers rode the tram and sang carols dur Christmas” exhibit each year at the local botanical garden. Each tree is ing the parade. One area of the bank’s consumer- decorated in the style of a foreign credit department adopted two fami country. Last year, the bank arranged lies instead of giving gifts to one for live animals native to the countries C Em plo yees in one area of consumercredit dept, adopted two fa m ilie s and provided g ifts for each m em ber, in cluding toys, food, clothing and person al items. 32 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis represented to be part of the exhibit. The bank’s employee newspaper, “The Third Edition,” published holi day recipes, photos and news relative to the season in its November-December issue. The front page featured a Christmas message from bank Chairman/CEO Charles J. Kane. According to Ms. Rooker, “It was a busy time but the sights and sounds of the season had far-reaching effects.” Senior Citizens Help Needy At Bank-Sponsored Party The special Christmas observance of First Banks, St. Joseph, Mo., last year was the annual Christmas party for Dimension 60 members, according to Virginia Stephens, marketing repre sentative for F irst N ational, St. Joseph. Dimension 60 members are indi viduals who are 60 years old or more and who have a savings account with one of the First Banks. More than 8 ,0 0 0 m em bers participate in the seven-year-old program that provides members with free special bank ser vices, m erchant discounts, group travel tours, social events and educa tional seminars. Theme for the party last year was “Happiness Is Sharing.” The 1,200 members and guests who attended brought gifts of canned food, toys and clothing for people in the community who needed extra help due to the higher-than-normal unemployment rate in northwestern Missouri. Those attending the party danced to a live band, sang carols, sampled re freshments and won door prizes. “ Happiness Is Sharing’’ displays were set up in each bank lobby to en courage customers and Dimension 60 Before-and-after scenes at Dimension 60 Christmas party in St. Joseph, Mo. Top shows gift-collection center before party; bottom shows collection center at end of party! Party w as sponsored by First Banks. MID-CONTINENT BANKER for July, 1 9 8 3 Introducing THE HEAVY-DUTY A H THE DRIVE-UP BANKING SYSTEM FOR CUSTOMERS Now there’s a new Autoveyor, custom-designed to handle the large-volume and heavy-weight transactions from your im portant com m ercial customers! The Heavy-Duty Autoveyor handles up to 20 lbs., and your commercial clients never have to leave the comfort of their cars, vans or trucks. Plus, you get the same dependable service bank operators across the country have come to expect from the Bavis Autoveyor II, its retail counterpart: • Smooth, conveyor operation - a simple system of friction belts transport transactions between teller and customer. • Low m aintenance - because the Heavy-Duty Autoveyor is conveyor-driven, you won’t have to contend with the problems that often cause monorail and wire rope systems to break down. • Energy-efficient - the Heavy-Duty Autoveyor operates on fractional horsepower motors which run only while the system is in use, for long-term energy savings. • Versatile - the Heavy-Duty Autoveyor can be installed as an overhead or downsend system. For more information, please contact: E. F. BAVIS & ASSOCIATES INCORPORATED 201 G ran d in Road, M a in e v ille , O h io 45039 (513) 677-0500 BAVIS MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Welcome your im portant business customers with the ease and convenience of the HeavyDuty Autoveyor Drive Up System. 33 members to bring in gifts during the weeks before the party. Gifts collected at banks outside the St. Joseph area were distributed through local agen cies. Gifts collected in St. Joseph were distributed through United Way agen cies. FREE Banks Report Variety O f Holiday 'Specials' For Christmas Time Santa rings If y o u ’re c o n s id e r in g a C h r istm a s g iv e a w a y ite m to sp r e a d g o o d w ill d u rin g th e 5 to 6 w e e k s b e fo r e C h r istm a s, th e n our S a n ta C la u s ring is w orth in v e s tig a tin g . It is m olded in 3 c o lo r s , a d ju sts to fit any s iz e fin g er and c o s t s on ly 6^ each . M inimum order is on ly 1 ,0 0 0 p ie c e s . A lso a v a ila b le are R ed ,W h ite & B lu e w h is t le s , D u ck C a lls , O ld F a sh io n ed Train w h is tle s , B ubble P ip es, T r iv e ts and E aster Bunny rin gs. F ree b roch u re and sa m p le s on req u est. WILSON PREMIUM CORPORATION Box 30185 Memphis,TN 38130 Phone (901)346-8803 Almost without exception, banks observe the Christmas season with some special event. Following is a pot pourri of what some banks did during the 1982 holiday season: • M erchants N ational, Topeka, held its third annual holiday celebra tion with lunch-time entertainment provided by area choral groups. One group performed on each of the nine business days prior to Christmas. Music was varied and included per formers from the Topeka Opera Socie ty Concert Association, the Highland Park Scots, the Topeka High Madri gals and the Seaman Seamanaires! School children provided choral concerts for seven days at Cincinnati’s Central Trust last year during the noon hour. In addition, the bank provided harp music before and after each vocal concert. A flute-harp duet also was performed. • First Bank, Ashland, Ky., hosted a Christmas party for its senior-citizen customers as part of the bank’s “Top of the Trust Club” program. The club is an exclusive program for deposit cus tomers 62 years or older and holds four functions annually and provides a vari ety of bank services to m em bers. About 400 seniors attended the party, which offered entertainm ent by a chorus of 18 bank employees and re freshments. • Texas American Bank, Houston, supports an activity each year in which about 100 retarded children create Christmas ornam ents, which they hang on the bank’s tree during a spe cial Christmas party. The party also included entertainm ent by a local magician, a visit from Santa and a holi day luncheon. • First National, Fort Worth, en couraged its employees to serve as “elves” last year to help decorate the bank. Three Christmas trees were dec orated for the main bank and one for the mini-bank. Tellers passed out can dy canes to children and wassail and nutbread were served in the lobby for a week prior to Christmas at both the main and mini banks. Harp music was provided during the noon hour and a special visit was made by the Texas Boys Choir. • F ou rth N ational, W ich ita, mounted a Holiday Magic seasonal dis play in its nine-story, glass-enclosed courtyard for the second year last D e cember. The display is more than 30 feet high and contains about 20 anima tions. The first year it was displayed, more than 150,000 people saw it. The bank’s purpose in mounting the dis play is to reestablish in people’s minds that coming downtown to see holiday decorations is a part of enjoying the season, said Mike Keller, advertising/ communications oificer for the bank. Caroling programs were held in front of the display. Your complete Meeting Package includes: Deluxe guest room Meeting salon Lunch in separate dining salon Two coffee breaks per day One cocktail per person I Seasonal rooftop pool resort I Nightly turndown service I Concierge service I Breakfast, reception and dinner options available Available from November 1983 to February 1984 and from June to August 1984. Any day arrival. All taxes and gratuities except bellmen included. Meeting salon available from 9 am to 5 pm on a 2-for-1 basis (i.e 25 rooms booked entitles you to meeting space for 50). Minimum 15 guest rooms per night. 100 of 372 rooms available for this package. Rates and features subject to availability and change without notice All this is yours in the heart of historic Washington. 10 minutes from National Airport. Superb service, cuisine and a professional meeting staff at your full disposal. On-site video-teleconferencing available. IPLAZA HOTEL 480 L Enfant Plaza. SW. Washington. D C. 20024 Contact our Director of Sales at (202) 484-1000 or call toll-free (800) 223-0607 or see your Travel Agent. 34 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Thirty-foot-high 'Holiday Magic' Christmas display w as featured for second year at Fourth Nat'l, W ichita, last year. W alk through exhibit features silver castle and numerous animated characters. MID-CONTINENT BANKER for July, 1 9 8 3 Innovative Marketing Pays Off When Promoting Christmas Clubs NNOVATIVE ways of promoting accounts and encourages customers to Christmas clubs pay off for financial make additional deposits of any institutions, according to bankers who amount to their clubs. have put their ingenuity to work and Merchants & Farmers Bank, Merid reaped results. ian, Miss., featured a contest for tellers For instance, Mercantile Trust, St. last year to see which teller could “sell” Louis, saw its club totals rise after it the most Christmas club accounts (in offered employees automatic transfers dollars). Winners received monetary from ch eckin g accounts to club awards. accounts, by compounding the in The bank also used premiums to en terest rate on a daily basis and by in courage signups. Although the bank cluding a signature card for the next experienced only a 5% increase in the year’s club in all bank statements and number of clubs during the last sign letters to previous year’s depositors. In up period, it expects to experience addition, the bank deleted its $15 club more than an 11% increase in deposits and added a new $40 club. in those clubs. Mercantile Trust capitalizes on the A special effort was made to sell club fact that many club savers use their accounts to non-customers. The pur clubs to save for taxes and other ex pose was to get those people to come penses. Customers also appreciate the regularly to the bank to make their low initial deposit requirem ent to club payments so they could be crossopen a club and thus some prefer a sold by employees. club to a regular savings instrument. First National of St. Bernard Parish, Guaranty Bank, Lafayette, L a., has Arabi, La., set aside extra funds to done the following to make its Christ promote its Christmas club last year. mas clubs grow: It provides an incen Gifts were used both as giveaways and tive by making the final payment, pro as premiums. vided the customer completes 48 pay The bank also used outdoor adver ments; starts its promotion earlier than tising to promote its Christmas club for its competitors; and encourages tell- the first time, and tellers were encour ters to push the clubs during signup aged to sell club accounts. periods. The bank also permits auto All this resulted in a 20% increase in matic transfers of funds into club number of accounts opened. Crocker Bank, San Francisco, ex On the Cover pects to gain more than a 50% increase in 1983 Christmas club deposits, fol A plush fawn named Holly Berry lowing an aggressive promotion that will be appearing at banks this holi featured a Currier and Ives pie baker day season, courtesy of institutions and a satin ornament. sponsoring Christmas clubs pro vided by Christmas Club a Corp. These premiums were given to cus Eight-inch-high versions of the toy tom ers opening or renewing club will be offered as premiums by par accounts. Those who opened a club ticipating banks. with deposits of $40 or $50 biweekly Holly Berry is the main character received a pie baker. The pie baker in a new book titled “The Adven also was available to customers who tures of Holly Berry and How He used the bank’s automatic transfer plan Got His Name. ” The full color, hard of $25 or more per month for their bound children’s book features a clubs. story set in the Pocono Mountains of Pennsylvania. The book relates Hol More than 45,000 ornaments and ly Berry’s escapades, including a 23,000 pie bakers were distributed chance meeting with Santa Claus. throughout C alifornia during the Savio, a New York artist whose illus bank’s six-week campaign and the trations have appeared in popular number of club customers increased magazines, produced 14 water colors by more than 9,000. The bank expects for the book. to make a payout exceeding $23 mil M i d - C o n t i n e n t B a n k e r ’ s cover lion this year. photo shows a four-foot-tall version Reliance Federal Savings, Garden of Holly Berry with an admirer. One City, N. Y., increased its Christmas giant fawn is available to any finan cial institution purchasing 360 small club account openings from 8,984 in fawns, according to Christmas Club 1981 to 11,312 in 1982 by offering Nor a Corp. man Rockwell porcelian mug pre- Cubs Take Part in Parade I MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Christmas Cubs were used to help promote a Toys-for-Tots cam paig n in Syracuse, N. Y., last year. In conjunction with its yearly Christmas club campaign, Lincoln First Bank donated 15 giant Cubs supplied by Christmas Club a Corp. to take part in a Christmas parade. The cubs were placed in troop carriers and on tanks appearing in the parade in cooperation with the local Marine Corps Reserve Company that spon sors the Toys-for-Tots promotion. The cubs eventually ended up in children's wards at local hospitals. Smaller versions of the cub were used as premiums at the bank, which saw a 3,000 increase in club signups last year. miums. The attractive premium was given the credit for the increase in signups. With an initial deposit of $10, custom ers could choose one mug from a set of four. Additional mugs could be pur chased. The premiums were so popular that the supply of 12,000 was exhausted long before the holiday season arrived. MIDDLE EASTERN BANKING REPRESENTATIVE To communicate with foreign financial institutions in the Middle-East and near-East promoting company’s bank ing products and services. To expand the company’s involvements to new markets in these areas by establishing branch office in that part of the world. Salary: $400 a week. Minimum requirements: BA or BS in accounting, business, finance or marketing or three years experience in business, finance, banking manage ment, accounting or related fields. Must be fluent in Arabic, Turkish and Farsi (write Persian). Contact Madison Financial Services, P.O. Box 12328, Nashville, TN 37212 Attn: Mr. William B. King. 35 Everything you wanted to know about computers but didn’t know who to ask. To get a straight answer ask . . , . M. Arthur Gillis Computer Based Solutions, Inc. 3 3 9 0 Peachtree Rd., N.E. Atlanta, GA 3 0 3 2 6 (4 0 4 ) 261-0501 management consulting in bank automation NEW g a s® « Ä o « i^ s C O N SU M ER LENDING POLICY A Manual for Directors, Management and Lending Officers By Dr. Lewis E. Davids 200 Pages $25.00 B ank d ire c to rs d o n ’t get in day’s changing environment. This 208-page manual includes volved in consumer lending, per se, but they do get involved in for an array of consumer loan policies mulating consumer-lending policy. in force at various-sized banks, In order to formulate such policy provides checklists of topics on in intelligently, they MUST be familiar stallment-credit policy and proce with the broad scope of consumer dures and policy com ponents; lending as well as the pitfalls such model application forms; an over view of the Federal Reserve’s con lending can hold for a bank. Dramatic increases in personal sum er regulations; the Federal bankruptcies call for new policies Reserve Functional Cost Analysis in the co n su m e r-le n d in g area. of the installment-loan function; in State usury laws are being revised stallment-loan department plans; or preempted by federal statutes. consumer-credit terminology, and Existing “ rule of thum b’’ lending bibliography of reference mate practices aren’t always valid in to rials on installment loans. Save! Send check with order. THE BANK BOARD LETTER 408 Olive St., St. Louis, MO 63102 1 Copy @ $25.00__________ 5 or more @ $20.00 e a : ----------Consumer Lending Policy N a m e.............. I Bank .............. J S tre e t.............. I City, State, Zip 36 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Title Indiana Nat'l Bell Ringers Put Salvation Army Over Top For 1982 Collection Drive Each year, officers at Indiana National, Indianapolis, have “rung the bell” during December for the Salva tion Army, but last year, they overdid themselves! The bell ringers brought in a record $11,653, representing a monumental increase over the 1981 total of $232. The money collected by the bank’s officers helped the Salvation Army ex ceed its goal of $550,000 by almost $50,000. Bank President Andrew J. Paine Jr., who also chaired the Salvation Army Christmas campaign, explained the in crease: “I was convinced that some thing could be done to increase the bank’s total from the previous year. The Salvation Army provides so many necessary services to people who are in need. The solution was to organize the officers who volunteered to ring the bell into teams. A little friendly com petition helps.” Four teams were formed and each team had four different days during D ecem ber to staff the well-known Salvation Army red kettle. Members of the team collecting the largest final total would receive a bison sweater (the bison is the bank’s logo animal). With those simple ground rules, each team was off and “ringing. ” One team captain promised to deliv er hot coffee to each member half-way through each shift. Another team cap tain elected to move the red kettle in side the bank on a rainy day. He also took advantage of the fact that many people eat their lunches inside when the weather is inclement, so the kettle was moved close to the lunch area and team members sang carols to “lunchers.” Other enterprising employees orga nized a department auction. Personnel were encouraged to donate items that could be auctioned with the proceeds going to the red kettle. Result: more than $500 in donations. On the last day of the campaign, the team on duty gathered around the red kettle outside to sing carols. A woman approached the kettle and began de positing $100 bills into it. When the deposits were totaled later in the day, it was discovered that $5,000 in $100 bills had been donated by the woman. Needless to write, the team on duty that day won the sweater. “The real winners are the happy children and adults the Salvation Army served during the Christmas season,” said Mr. Paine. “Everyone did an out standing job for a very worthy cause. ” MID-CONTINENT BANKER for July, 1 9 8 3 There are some places where we don’t do credit insurance business. But not many. We’re not at the South Pole. But if you do business anywhere from Maine to California, Florida to Alaska, you will find a USLIFE Credit Insurance Group represen tative waiting to serve you. Then again, it’s the coverage that you’d expect from the credit insurance group whose combined companies’ sales rank it as one of the largest in the business. Since the USLIFE family of in surance companies operate nation wide, we can serve you wherever you do loan business. Yes, USLIFE is prepared for the future and more than ready to satisfy all your credit needs. One way is with the most com plete coverage that you can find. Another way is with our own staff of salaried representatives—an ad vantage that few credit insurers offer. That means our people are specialists—they serve you better. One big reason: credit insurance isn ’t gravy to them —it’s their bread and butter. That’s why our three companies, USLIFE Credit Life Insurance Company, Sooner Life In su ran ce Company, and Security ofAmerica Life Insurance Company, have sophisticated com puter systems. What’s more, they are companies backed by the exper tise of USLIFE Corporation—the insurance-based financial ser vices company that now has more than $3 billion in assets. So if you want to expand your business, talk to the credit insurer that has the people, products, and systems waiting for your call. To see how we can help, call, toll-free, 1-800-323-4747.* 1HJFE CREDIT INSURANCE GROUP USLIFE Credit Life Insurance Company • Sooner Life Insurance Company • Security of America Life Insurance Company 1-800-323-4747 ‘ (within Illinois, call 312-490-6000) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank's Twin-Theme Holiday Show Features 'Surprise' Boxes, Doll Contest crosssell T customers To cross sell to a customer, you must be able to identify needs. At Christmas Club A Corporation, we've been marketing year round coordinated deposit acquisition programs to financial institutions for over 72 years. We can tell you all about the cross-selling opportunities available when you promote goal directed savings through Christmas Club savings. To learn about cross-selling more services to your retail market, talk to us today! ch R istm as C lC lb a co rp o ra tio n Helping America Save Since 1910 P.O. Box 20 • Easton, PA 18042 Call Collect— (215) 258-6101 HE H OLIDAY presentation at tique grocery store, an antique photo Citizens North Shore Bank, Mil studio, a bakery, a “mouse house,” an waukee, had two themes last year. elves’ carpenter shop and carolers in The first was titled “The 24 days of Christmas and Hanukkah.” It was celebrated with 24 boxes of many shapes and sizes being placed in var ious parts of the bank. Each day, be ginning on December 1, there was a “grand opening” of one of the boxes, each of which contained a display of Yuletide or Hanukkah activity. Some of the larger boxes contained scenes showing Santa checking his list, a “deer-washing” station, Santa’s mail room, a candy factory and a tailor shop. One large wall display showed a group of animals practicing Christmas carols. Another showed elves building a doll house. A box opened on the first day of Hanukkah contained a traditional menorah. On another day of Hanuk kah, a surprise box displayed games played by Jewish children during the Miniature rooms were revealed when some holidays. "surprise" boxes were opened at Citizens A group of boxes contained minia North Shore Bank, Milwaukee, during holi ture-room displays, including an an- day celebration. Designed for the busy executive — The nation’s newest and most com prehensive Financial Institutions Directory is now available. McFadden’s new Savings Directory when combined with its American Bank Directory becomes a handy 3-volume directory of American Financial Institutions. 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(plus shipping and handling) □ SEND ME MORE INFORMATION PLACE YOUR ORDER TODAY! Mail to: McFadden Business Publications, 6195 Crooked Creek Rd., Norcross, GA 30092. COMPANY NAME ADDRESS 38 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis STATE ZIP MID-CONTINENT BANKER for July, 1 9 8 3 Our lack of insurance services makes the future look fuzzy. To put our profits back in focus, I'm calling Integon today. Integon provides customers the variety of insurance services they deserve. With more than three decades experience serving small and large financial institutions with a wide range of credit life and credit disability plans, Integon can tailor a program for my institution and customers that reduces red tape and red ink. Integon also offers a full-time account manager who reviews and revises plans and procedures to make sure financial institutions don't fade from the picture in the changing world of finance. Integon has other ways to help you and your customers. Tape-to-tape availability for direct mail and direct billing to checking and savings for NOW account customers. And private mortgage insurance for first mortgage loans. To keep a clear picture of your bottom line's future, call Integon today. I'm calling Integon today. 919-770-2588 Or, to request more information about Integon, mail this coupon. Please send me information about Integon's Credit Protection Division. Jo h n M e ssn e r, C L U P re sid e n t, C re d it P ro te ctio n D iv isio n In te g o n L ife In su ra n ce C o rp o ra tio n P .O . B ox 3 199 W in s to n -S a le m , N .C . 2 7152 N am e T it le I n s t it u t i o n C ity ( S t a te Z ip ) T e le p h o n e https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis INTEGON INSURANCE A d d ress MCB 783 front of a house. For its second theme, the bank held its fifth annual Christmas doll contest. Residents of the community dressed 100 18-inch-tall dolls and entered them in the contest. Professional judges awarded cash prizes in six cate gories. The dolls were displayed for two weeks in the bank lobby and the public was asked to vote for a grand champion. In mid-December the dolls were packed up and distributed to eight charitable agencies for distribu tion to girls in needy families. •• For faster service on BANK CREDIT INSURANCE CALL THESE SPECIALISTS Harold E. Ball • Carl W. Buttenschon John E. King • M ilton G. Scarbrough 1 - 800- 527-5511 (s ) INDUSTRIAL LIFE INSURANCE COMPANY P .0 . Box 220998, Dallas, Texas 75222 A member company of o°t Republic Financial Services. Inc Varied Holiday Program Put on at Preston State Preston State, Dallas, celebrates the holidays by decorating its lobby with a 13-foot Christmas tree, large wreaths and poinsettias, according to Linda Barton, communications officer. The bank’s exterior is decorated with lights in the form of a Christmas tree and the facade is illuminated by red floodlights. C arolers from area elem en tary schools usually sing in the lobby dur ing Christmas week. Each student is given a silver dollar as a memento. The bank is a sponsor of the Salva tion Army toy drive. The drive is publicized through news releases, em ployee pu blication s and b u lletin boards and contributed toys are dis played around the lobby Christmas tree. The bank also makes a holiday donation to a nearby industrial school. It’s traditional for the bank to pre sent each employee with a small gift, and a refreshment table is placed in the lobby during the entire week of Christ mas. Paul Volcker Reappointed WASHINGTON, D. C. — Presi dent Ronald Reagan last month reap pointed Paul A. Volcker Fed chair man, ending months of speculation on whether he would keep the job or a new person would be named to succeed him. Mr. Volcker’s current term would have ended in August. Mr. V olcker was named Fed chairman by President Jimmy Car ter in 1979 to succeed G. William Miller. Mr. Volcker entered banking in 1951 at the New York Fed and later served as under secretary for monetary affairs in the Johnson and Nixon administrations. He also was in management positions at Chase Manhattan, New York City, and was vice chairman, Federal Open Mar ket Committee. Introducing . . . HOME BANKING REVIEW The most important resource on home banking systems available today! Only $50.00 Published by: DATAPLUS Research & Publishing 1724 Lincoln Avenue San Rafael, CA 94901 (415) 459-5200 40 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Christm as Clubber Profile Christmas-club savers frequently purchase additional retail banking services such as checking accounts, savings accounts, credit cards, safedeposit boxes and installment-loan services, according to a recent report compiled by Unidex Corp., Phoe nix. Each 1,000 Christmas-club cus tom ers rep resen t 817 checking accounts, 120 NOW accounts, 614 regular passbook savings accounts, 162 CDs, 192 installment loans, 615 bank credit cards, 281 safe-deposit boxes and 169 home mortgages. More than half the club customers open their accounts for more than three years. More than eight out of 10 complete their club payments for the year. Fifty-four percent said they would go to another institution, if necessary, to open a club account. Three out of four club savers are married home owners with fewer than three children, according to the report. Most often, it is the head of household who plans and maintains the Christmas-club account for the family. Club customers prefer making payments with coupon books or passbooks and many refuse to accept automatic transfer of funds as a method of payment. Seventy-five percent expect to receive interest on their accounts. Seventy-six percent of club savings are used strictly for holiday spending. A c c o u n t A n a ly s is (C ontinued fr o m page 16) be informed of the nature of all items for which it is being charged. Addition of new analysis items or one-tim e charges may be specified only as “other’’ on the statement. Any items of significance should be investigated. B alance R equ irem en ts. Where bal ances maintained exceed balances re quired on the analysis statement, the respondent banker should consider other services being received to en sure appropriate benefits are derived from this non-interest-bearing asset. Balances over or short of those re quired should be tracked from month to month so the profitability of the rela tionship can be tracked over a longer time frame than one month. The au thors suggest a 12-month moving aver age be maintained. The foregoing recommendations can be difficult to implement, but are considered worthwhile. The authors’ experience indicates correspondentbank personnel can help the respon dent deal with these issues. • • MID-CONTINENT BANKER for July, 1983 H o m e F in a n c in g (C ontinued fr o m p age 18) the program. C om m enting about the Union Planters staff, Mr. Walker says, “Any time I have called UPMC to get some thing done or to receive an update on the status of a particular application, their people have been very helpful. I get immediate response. They never say they’ll call back or put you on hold.” Of the 100 institutions signed up for the program, 12 have chosen “plan two.” Citizens Bank, Paducah, Ky., is one of those banks. Citizens takes loans all the way from application to closing. (C onventional loans are approved by UPMC p rio r to closing.) U PM C purchases the loans from Citizens, paying the bank 1% of the loan amount. Again, UPMC services the loans and usually sells them in the secondary market. Under both “plan one” and “plan two,” correspondents quote UPMC’s rates and products. U P M C ’s m ortgage-banking pro gram was introduced about 18 months ago. Institutions in Tennessee, Missis sippi, Arkansas and Kentucky are par ticipating. These institutions range in size from $10 million to more than $500 million. Due to the unexpected success of the program, it is taking longer than the 30 days UPMC originally promised to process the loans. In addition, in creased loan volume due to decreasing rates has been a contributing factor in slowing down processing of FHA and VA loans. A ccording to Barbara Schwerin, vice president/administrator of the program, UPMC currently is hiring additional staff to speed up its end of the processing function and ex pects to be able to meet the 30-day time frame on a regular basis soon. • • out th ese soph isticated system s. However, organizations that have at their fingertips the ability to retrieve and analyze data — not only on banks but on companies and industries — undoubtedly will be in a b ette rinformed position. The real dilemma is that little analy sis has been or is being done about the cost benefits of having access to such data banks. In my judgment, benefits for typical community banks probably have not yet been sufficient to justify cost; but in the future that ratio no doubt will change. Someone in your bank should be assigned the responsibility of staying current and conversant, not only with data banks, but with their potential benefit to the bank. • • Bank Foregoes Decorations B a n k in g S c e n e (C ontinued fr o m page 6) water but you cannot make him drink. If you could identify fewer than half the terms in my list, it indicates that your bank probably has not been caught up in the technological revolu tion of management-information sys tems and data retrieval. Many com munity bankers can be successful with- There were no holiday decora tions at Bank of St. Louis last De cember. Instead, there were lobby signs that informed customers that funds earmarked for decorations had been donated to area children’s hos pitals. “We think that the true spirit of the season is in giving and in sharing with those in need,” said Kenneth Poslosky, bank president. CUMMINS: The Innovators in Money Systems! Proven Throughput Thoroughbreds of Automatic Coinwrapping. The time tested reliability and proven productivity of the Cummins Model CA-118 and CA-130XL Coinrollers have made them the standard against which other machines are measured. Wrap up to 14 or 24 rolls per minute day in, day out. Cummins Coinrollers provide you with consistent throughput with minimal spills or jams. Branch Sales and Service. An added plus behind its quality equipment is the Cummins direct Factory Branch Sales and Service Network. Each office is stocked with machines and parts inventories and staffed with factory-trained sales and service professionals all of whom are Cummins employees. Write or call for more information or to arrange for a demonstra tion of Cummins Automatic Coinrollers, or JetSort® Coin Sorters, or JetCount® Currency Counters or Coin Counter/Packagers. Í# I CA C UMMINS C U M M IN S -A L L IS O N C O R P . Corporate Offices/Factory 891 Feehanville Drive Mt. Prospect, IL 60056 (312) 299-9550 MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Cummins Branch Offices in your area: Consult local Yellow Pages (“ Coin & Bill Counting & Wrapping Machines” ) or call Cummins Hotline for Factory Branch Office nearest you: 312/635-5499. 41 Indiana Convention Report Indiana Bankers Fare Well in Legislature; Ironing Out Bank Structure Issue Fizzles NDIANA bankers took a page out of finance committee never got to the the book of procedures of the ABA floor for a vote.” over the past year in order to attempt He declared that Indiana is not to attain a consensus on troubling known as an innovative state, which, issues. he added, is not an indictment. In fact, So reported outgoing IBA President he continued, it could be a virtue. Joseph W. Bibler, chairman/CEO, “This doesn’t mean that we are not Northern Indiana Bank, Valparaiso, at populated by people who become frus last month’s annual convention of the trated with the unhurried pace with Indiana Bankers Association, held in which we attack both problems and French Lick. opportunities. We are a blend of peo In his comprehensive president’s ple who will not be rushed to do some message, Mr. Bibler told how the IBA thing (like change bank structure) that administration revamped its series of is not proved or that would abruptly regional meetings to not only learn overturn the status quo. We don’t what was on the minds of the state’s make sharp moves. Our glacial speed bankers, but to get their views on the has shaped our character. ” position the IBA should take on the He added that the political process issue of bank structure. is, with all its faults, a “truly marvelous Theme of the regional meetings was apparatus to behold. I believe that the “You Tell Us.” And Indiana bankers legislative process will decide the told the IBA that its position should be proper tim ing for bank stru ctu re that the association was n eith er change.” opposed to, nor supportive of, any In Mr. Bibler’s opinion, the IBA changes in banking structure in the should confine its efforts to continuing state. its prime purposes of education, com “An earnest attempt was under munications, research and legislation, taken to provide a forum for the pre without subverting its time and ener sentation of both viewpoints under gies to any stand on structure apart sponsorship of the IBA ,” Mr. Bibler from neutrality. said, which had been strongly sug He reported that the IBA legislative gested at the regionals. But attempts program was successful, and cited ex to get leaders of the rival factions — amples of this success, including clear the League for Economic Develop ing up many provisions of the Uniform ment and the Independent Bankers Consumer Credit Code. Association — to sit down and discuss Although the IBA advocated their differences came to nought. amending the UCCC to permit for And the state legislature was in no late-payment charges, prepayment mood to grappje with the topic either, charges and optional loan-origination he said. “Economics, the budget and charges, the legislature allowed only taxes weighed more heavily on (legisla for late-payment charges on simpletors’) minds. The multi-bank holding interest consumer loans. company bill that passed the Senate The IBA supported the Troubled- I 42 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank B ill and the T ech n icalA m endm ents B ill, w hich, among other things, facilitated the establish ment of ATMs and eliminated the need for a phantom bank in forming a one-bank HC. He said that “translates into big savings in fees and legal ex penses.” Mr. Bibler reported that the IBA also was deeply involved with the Crop Lien Law and that considerable com promising on both sides of the issue left the lending community with a workable resolution of the problem, especially when compared to some of the “wild plans” promoted at different times throughout deliberation. The IBA was successful on three other fronts: (1) Passing a bill to ex empt from state taxes foreign transac tions executed by international bank ing facilities located in Indiana, (2) allowing banks to offer growing equity mortgages in Indiana and (3) equaliz ing lending limits between state and federal laws. Annual elections of officers saw Wil liam H. King, chairman/CEO, Second National, Richmond, installed as new IBA president. Elected vice president was R ob ert W. H ill, p resid en t, National Bank, Greenw ood. New treasurer is Charles E. Stanley, presi dent, Farmers National, Remington. Elected to one-year terms as members-at-large of the IBA board were Jon S. Armstrong, chairman, Midwest Com m erce Banking C o., Elkhart; Ronald C. Seals, president, Edinburg State; and David Sursa, chairman, In dustrial Trust & Savings, Muncie. Mr. King began his banking career in 1958 at Terre Haute First National. He joined his present bank in 1965 in the trust department, was elected ex ecutive vice president in 1972 and president in 1974. He became chair man/CEO last year. Mr. Hill became a banker in 1948 when he joined Rockville National. He moved to his present bank 10 years later, was elected cashier in 1959, vice president in 1964, executive vice pres ident in 1966 and president in 1977. Mr. Stanley joined his bank in 1963, following service at Albion National. He was elected executive vice presi dent in 1967 and president in 1977. • • MID-CONTINENT BANKER for July, 198 3 The Smart Money is Heading to Atlanta 68th Annual Convention of the Bank Marketing Association Managing THE ATLANTA HILTON • ATLANTA, GEORGIA • OCTOBER 2 3 -2 6 , 1983 The good news is, deregulation is going to make marketing people the heroes of the banking industry. The bad news is, heroes aren’t allowed to fail. Which means that marketing will not only be expected to make a greater contribution to bank profitability, it will also be held more accountable. That’s why the smart money is heading to Atlanta in October. To get a crash course on what marketing people can do to insure their own success and the success of their banks. It’s the 68th Annual Convention of the BMA, and the cynics among us are already calling it a survival course. Here are some of the highlights: ■ Presentations from non-banking executives who have fought the battle of deregulation. And won. Which gives us a chance to learn from them, instead of reinventing the wheel. FOR F U L L D ET A ILS C A L L S H IR L E Y A N TEN U CCI AT (312) 782-1442. to BANK MARKETING ASSOCIATION 309 W. Washington St. Chicago, IL 60606 MID-CONTINENT BANKER for July, 1 9 8 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ■ A fascinating analysis of the trends that are shaping our lives and our futures by John Naisbitt, author of the current best-seller MegaTrends. ■ For perhaps the first time in history, the presidents of three Federal Reserve Banks on the same podium, discussing the future of our industry from their unique perspective. ■ Workshop sessions developed along five different tracks. You can follow one track all the way through, or you can mix ’n match. ■ “How To” sessions, which you’d expect, and ‘‘Why To” sessions, which you might not expect. So, you can not only learn the nuts and bolts, you can also explain the concept to top management. And tw BANK MARKETING ASSOCIATION that might be the most important thing you’ll ever learn. ■ We’ve left room for a red-hottopic session. Nobody knows what it’ll be about, but you can bet that by convention time the rumor mill or DIDC will have given us all something to talk about. ■ And, apropos to our Georgia convention site, we’ve put together a peach of a program on the social side. For you and your spouse. So, before you do anything else today, send in the attached response form for further information and a convention registration form. And join the smart money in Atlanta. Nam e_____________________________________________________ Title_______________________________________________________ Institution__________ _______________________________________ Address_______________ ____________________________________ C ity---------------------------------------------------------State ____________ Zip Phone ( )__________________________________________ 43 Banking to Be 'Bullish' in '83-'84, Illinois Conventioners Are Told / / I^ U L L IS H for banking in ’83 U and ’8 4 .” Those were the terms used by economist Dr. Roy E. Moor as he spoke at the Illinois Bank ers Association annual convention last month in Chicago. Although Dr. Moor referred pri marily to Illinois banking throughout his speech, his remarks applied gener ally to banking around the nation. Cer tain areas, he said, might not have the same expectations. Dr. Moor, chief economist for Chi cago’s First National, predicted an up turn in bank earnings in 1983-84 of 10% to 15%. Bankers also could expect inflation rates to remain low during the same period and interest rates to move up or down (from their present level) in a narrow range. Savings, said the Chicago econo mist, are up substantially (to a level of 6Vz% of income), and a good bit of this is in the lower-cost passbook account. Also, he said, banks are attracting new customers at an increased rate of 51/2% and predicted this would climb to 7% in 1984 (which, he said, would be above the national average). As a result of increased savings, household “balance sheets’’ are much improved over 1980. Borrowers, he said, thus would be in “much better shape’’ when they go to their banker for various types of loans. Installmentcred it rates, he said, should be Speakers Dr. Roy E. Moor (c.), chief econo mist, First Nat'l, Chicago, and Gerald M. Lowrie (r.), exec, dir., ABA government re lations, are shown with IBA Pres. Donald R. Lovett. “steady,” and he could not forsee these rates rising more rapidly than the prime rate. Dr. Moor expected steady gains in employment and rising purchases of new homes. New-home starts in 1982 (in Illinois), he said, were 16,000. He anticipates home starts of 27,000 in 1983 and 30,000 in 1984. M ortgage rates should rem ain steady throughout 1984, according to Dr. Moor, but he was not overly opti mistic about the public’s acceptance of variable-rate mortgages. Although he still could see business failures occurring in 1983 and 1984, he could not point to any specific type of CURRENT IBA OFFICERS: pres., Donald R. Lovett, ch./pres., Dixon Nat'l; v.p., James A. Forster, ch., DeKalb Bank; sec., T. R. McDowell, pres., First Nat'l, Westville, and treas., C. C. Wilson, ch., First Nat'l of Quad Cities, Rock Island. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis business m ore likely to fail than another. The “survivors,” he said, will have improved their balance sheets and “leaned” their operations. Dr. Moor was particularly bullish on retailing types of business as well as defense manufacturing. But he saw lit tle to be excited about in general con struction (except housing) and agri cultural equipment. Dr. Moor did have some advice for his banker audience. Cost manage ment, he said, should be banking’s next goal. Manage costs of all types, particularly labor costs, through in creased employee productivity. Was Dr. Moor concerned with the nation’s anticipated huge deficits? Yes, but he felt they would be manageable because of the nation’s increased rate of savings, plus huge investments that would come from overseas. The dollar is in good shape, he said, and overseas investors will contribute substantially to the financing of the nation’s deficit. These investors, he concluded, often are overlooked. Illinois bankers were holding their first “com bined” convention since AMBI (Association for Modern Bank ing in Illinois) split away from the asso ciation in 1973. The two groups (IBA and AMBI) were successfully merged at the beginning of 1983. Their basic difference over holding companies and branching disappeared in 1982, when the Illinois legislature approved lim ited branching and/or m ulti-bank holding companies in five separate re gions of the state. Officers of the association now serve on a calendar-year basis and for the foreseeable future will be elected by ballot in November of each year and serve in the following calendar year. Current officers are pictured with this article. Their terms will expire at the close of 1983. IBA officials do anticipate, however, that traditional elections (at conven tion time) will be reinstated at some point in the near future. As Illinois bankers met, they were faced with local newspaper stories about the impending sale of First Federal Savings & Loan, the city’s second-largest S&L ($4.2 billion). It has been in the hands of the FSLIC since April, 1982. IBA leaders were MID-CONTINENT BANKER for July, 1 9 8 3 Illinois Bank Commissioner W illiam C. Har ris (r.) receives a plaque from IBA Pres. Donald R. Lovett for his efforts in helping to reunite IBA and Association for Modern Banking in Illinois (AMBI). Mr. Harris w as named No. 1 honorary member of IBA. concerned over the possible sale of First Federal to Sears Roebuck, Citi corp or any other out-of-state organiza tion. Accordingly, they quickly sent off letters to their Illinois delegation in Congress, urging support of the princi ple that if and when sold, First Federal would remain in “local” hands. First National of Chicago indicated it “had an interest” in making a bid, but it was not known whether First National has submitted a bid to the Federal Home Loan Bank Board and the FSLIC . Citicorp reportedly submitted a bid through its subsidiary, Citicorp Sav ings, and Allstate Savings & Loan (a Sears subsidiary) reportedly submit ted a bid. A takeover of First Federal by First National might raise some antitrust objections, but under the Garn-St Germain Act, a sale of this type re quires that a “like” financial organiza tion in the same state be sought to take over a distressed institution. W e are very much concerned about the board turning over First Federal to subsidiaries of either Citi corp or Sears,” said William J. Hocter, IBA executive vice president. “W e’d like to see an extension of time to allow current management to get the asso ciation back on its feet or to keep it under Chicago ownership.” A decision on ownership of First Federal probably will not be made un til early August. As they met, Illinois bankers also were perplexed about the status of withholding on in terest (and divi dends). What should they do, they asked one another? ABA representa tive Gerald M. Lowrie expressed his opinion following the speech by Dr. Moor. Mr. Lowrie, executive director of MID-CONTINENT BANKER for July, 19f https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the ABA’s governm ent relation s group, fully expects the withholding act to be repealed by July 1. Congress, he explained, is up to its old tricks in carrying an issue “to the brink.” The IRS is asking for some new penalties to be assessed against those who do not pay taxes on interest or dividends. Also, he said, some “other measures could be tacked onto the repeal. But he saw no problem on final repeal of Speakers Jam es Cairns (I.), ABA pres.-elect the bill. Banker mobilization of the designate and pres., Peoples Nat'l, Seattle, public (some 22 million letters) had and Sander Vanocur (c.), chief diplomatic correspondent, ABC News, are pictured done the trick, he said. with IBA Pres. Donald R. Lovett. Congress also would be considering, he said, a bankruptcy-reform bill, but the nation’s leading agricultural states. he could not say whether final action Economist Dr. Barry Asmus (Boise would be taken in 1983. State University in Idaho) startled and He was concerned over the new pleased his audience with “put downs” disclosure” law that would make pub of political myths. Private ownership lic bank loans that were 90 days over of capital has been and will continue to due. Potential misuse by the media be the key to America’s wealth, he could, he said, have a disastrous effect said. He advocates a reduction in the on the public. marginal rate of taxation, as well as a The real problem in Congress in the return to the “old school of thought” on future, he said, will be to decide economics. New students and new ‘What is a bank,” and also determine teachers are flooding the universities, the issue of in te rsta te banking. he said, and these new “converts’ will Whether to allow banks to get into in turn the nation away from the old phi surance, real estate, etc., probably losophy of “something for nothing.” would not be considered in 1983. At Let s teach our children to work, he the same time, Congress would have said, read books and pass them along to to decide whether “near banks’ should others. The choice, he said, is freedom get into banking activities. The ABA, or serfdom. — Ralph Cox, Publisher. he said, would take its position on these subjects at its July, 1983, “con sensus” meeting. Congress, he said, will not have to decide the matter of interstate bank ing. When bankers agree on a pro gram, Congress might consider it, he said. The chances are, however, that “MAKE IT MONARCH” “reciprocity actions” taken by certain FOR ALL OF YOUR states — as well as de facto mergers CUSTOM DESIGNED and acquisitions — will have decided the issue long before Congress can act. ABA P resid en t-E lect D esignate Jam es Cairns agreed that present trends of acquisitions and mergers would set the tone for future legisla tion. He predicted that Sears, for ex ample, will have in place some 600 so-called full-service banking units by 1986, unless the role of a bank or “near bank” is defined. ■ CERTIFICATES The Washington state banker (presi dent, Peoples National, Seattle) also commented on recent actions by Con ■ STATEMENT SAVINGS PACKAGES gress to increase the nation’s contribu tion to the IM F (International Mone ■ WALLETS & FOLDERS tary Fund). He agreed with the impor ■ RECORD BINDERS tance of this action. The IM F is neces sary, he said, in handling importexport transactions. Some 10% of all U. S. jobs, he said, currently rely on 333 NORTH MICHIGAN AVENUE exports, and almost 25% of agricultural CHICAGO, ILLINOIS 60601 jobs depend on export sales. This is (312) 236-1127/1128 especially important to Illinois, one of m onarch, Graphics BANKING ACCESSORY NEEDS 45 B A N K PO S ITIO N S AgriLoan — head $11MM dept . . . $30K Operations — $45MM bank........... $32K CEO — $40MM community bank .. Open Instai. 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The prom otion includes O hio’s largest international Christmas tree with more than 2,000 ornaments rep resenting countries from around the world, and a 25-foot-tall international children’s village with animated childsize mannikins. During the international Christmas celebration, visitors to the center re ceive $1 off the normal admission price by using a discount coupon available at any of the bank’s 62 central Ohio offices or by bringing in a homemade Christmas ornament. All ornaments are distributed to Children’s Hospital in Columbus to be used to decorate rooms for the holidays. FOR SALE: Three (3) NCR 7750-2501 proof machines with (12) pockets, Auto Feed Hopper and Data Capture. Excellent condition, eligible for vendor maintenance. Purchase $18,500.00 each or lease for 36 months at $625.00 per month. Call: Dan Holte, (612) 331-1164. CREDIT DEPARTMENT MANAGER Bank in South Mississippi is expanding credit analysis function. If you have four to six years experience, including formal training, in credit analysis/review, please send resume and refer ences to Personnel Department, First Missis sippi National Bank, P.O. Box 1231, Hatties burg, MS 39401 (EOE) INVENTIONS WANTED Mike Wall Manager Tom Cannon Associate Call us! W e can help find the right person or the right position. Inventions, ideas, new products wanted for presentation to industry and exhibition at national technology exposition. Call toll free 1-800-528-6050. Arizona, call 1-800-352-0458, extension 831 or write: IMI-MCB, 701 Smithfield, Pittsburgh, PA 15222. 912 Baltimore Kansas City, MO 64105 46 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Ind ex to A d v e rtise rs • Agricareers, Inc...................................................................... 46 American Bank Directory ............................................... 38 American Fletcher National Bank, Indianapolis ...................................................................... 5 Arrow Business Services, Inc........................................ S/3 Bank Administration Institute ..................................... Bank Board Letter .............................................................. Bank Building Corp.............................................................. Bank Marketing Association.......................................... Bank of America, San Fran cisco ................................. 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Call without obliga tion today. a division of BANK NEWS - • AG BANKING PER SO N N EL FINANCIAL PLACEMENTS 816 421-7941 The bank also participates in the Columbus Secret Santa Parade and sponsors m usical perform ances throughout the downtown area during the holiday season. Jeannie 512/263-9598 Massena, IA 50853 aDli CAREERS, INC. _J T H E ORIGINAL AGRICULTURAL R EC R U ITER Linda 515/394-5827 New Hampton, IA 50659 MID-CONTINENT BANKER for July, 1 9 8 3 R emodeling F or R esults Before https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Successful remodeling takes more than just a face lift! It is usually more demanding than new construction. Fitting a new design to an existing structure demands highly specialized skills in architectural design and space and function planning. It requires the ability to anticipate problems unique to your building. Plus, a special sensitivity to your needs as well as those of your customers. In the last two years Bank Building Corporation completed successful remodel projects for over 140 financial clients. Projects completed on time, within budget and without business interruption. Call Tom Spalding: 8 0 0 -3 2 5 -9 5 7 3 . Architectural experience counts more than it costs. Bank Building Corporation 1130 Hampton St. Louis, MO 63139 800-392-9168 (In Missouri) Meeting the needs of the community you serve... by design. 19»Corporation Bank Building From Now Accounts ¡reg u la tio n Information Don Shay, Executive Vice President, University Bank o f Carbondale, with Russ Spaulding, Correspondent Banking Officer, Boatmen’s A Boatmen’s Correspondent Banker can assist you. Call Russ Spaulding today. 314-425-3600 O v e rlin e s Member FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • In v e s t m e n ts • P r o c e s s in g • S to c k lo a n s • F e d e r a l F u n d s O p e ra tio n A s s is t a n c e • R e g u la t io n In fo r m a t io n • Correspondent Banking Division THE BOATMEN'S NATIONAL BANK OF ST LOUIS 3 1 4 -4 2 5 -3 6 0 0
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