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MID-CONTINENT BANKER (ISSN SOUTHERN EDITION 002Ó-296XJ Christmas Ideas That Work! . . . Page 27 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis JULY, 1984 James E. Talkington, Senior Vice-President, Correspondent Banking Division, Liberty National Bank and Trust Company. Liberty wrote the book on Correspondent Services. The first edition of Liberty’s Correspondent Bank Services Notebook is hot off the press. And it’s destined to become a classic in the field. Designed as a handy reference tool for our correspondent banks, the notebook outlines the services and benefits we provide and how to receive the best results from them. It also contains answers to the questions most frequently asked about our correspondent services, plus the names of the Liberty professionals to call for additional information. The Correspondent Bank Services Notebook was written by Liberty specialists in Check Clearing/ltem Processing, Data Services, Electronic Banking, Funds Transfer, Investment Services, Management Reporting Systems, Trust Services, VISA® and MasterCard™ Services, and related fields. Contents are arranged in a binder so the notebook can be updated with ease. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Compact and attractive, the Correspondent Notebook not only provides answers, it also reflects Liberty's commitment for providing the very best correspondent services available. Whatever your correspondent banking needs may be, call one of the Liberty correspondent bankers listed below... because Liberty wrote the book on correspondent services. James E. Talkington George R. Kelly John E. Koch Louis B. Fournet William H. Nelson William H. Pulley Jack Richards 405/231-6170 405/231-6810 405/231-6169 405/231-6172 405/231-6105 405/231-6171 405/231-6173 L IB E R T Y THE BANK OF MID-AMERICA P.O. Box 25848 • Oklahoma City, Oklahoma 73125 Member FDIC Our commitment couldn’t be more clear. * * its investment specialists to work full-time on your special needs. In total, it is a program which keeps your finger on the pulse of today’s W h lC h m e a n S Tom Fage, V ies President & M aracer, Correspondent Services, thO need fox COmpXO :n the Trading Room of the new Investments Center. money markets and provides direct a ccess to key hensive investment information financial options and opportunities and services is no longer just — including Treasury Bills, Notes important. It’s critical. and Bonds, Farm Credit Bank The establishment of our Bonds, Government Agencies, Investment Trading Room in 1982 Municipal Bonds and Banker’s signaled The Fourth’s recognition A cceptances. of this need and reconfirm ed our It’s a level of commitment commitment to provide leadership unmatched by any other Kansas services for our correspondent financial institution. customers. A commitment that assures And our commitmen: is you tomorrow is here with us. growing stronger. B ecau se now The Fourth has positioned two of The ability to act quickly m today’s investment environment can have a significant impact on your bank’s bottom line. Your Future Is At The Fourth THE FOURTH NATIONAL BANK & TRUST CO. BANK INVESTMENTS / (316) 261-4449 / P.O. BOX 1090 / WICHITA, KS 67201 / MEMBER FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CONVENTION CALENDAR MID-CONTINENT BANKER (Incorporating M ID-W ESTERN BANKER) July 22-25: ABA State Association Staff Conference, Chicago, Chi cago Marriott. July 22-Aug. 3: Consumer Bankers Association Graduate School of Retail Bank Management, Char lottesville, Va., University of Vir ginia. Aug. 12-17: ABA Banking Person nel Graduate School, Boulder, Colo., University of Colorado. Aug. 12-17: ABA National School of Real Estate Finance, Columbus, O., Ohio State University. Aug. 12-17: Central States Confer ence Postgraduate Course — Graduate School of Banking, Madison, W is., U niversity of Wisconsin. Aug. 12-24: ABA National/Graduate Trust School, Evanston, 111., Northwestern University. Aug. 12-24: Central States Confer ence Graduate School of Bank ing, Madison, W is., University of Wisconsin. Aug. 15-17: Central States Confer ence Banking Seminar College F acu lty G raduate School of Banking, Madison, W is., Uni versity of Wisconsin. Aug. 19-22: Independent Bankers Association of America Seminar/ Workshop on the One-Bank HC, Colorado Springs, C olo., the Broadmoor. Aug. 19-24: Independent Bankers Association of America Senior Bank Officer Seminar, Boston, Babson College. Sept. 1-4: A ssem blies for Bank Directors Assembly 58, Colorado Springs, Colo., the Broadmoor. Sept. 9-11: Kentucky Bankers Asso ciation Annual C on vention, Louisville, Galt House. Sept. 9-12: ABA National Bank Card Conference, Washington, D. C., Washington Hilton. Sept. 10-12: Independent Bankers A ssociation of Am erica Basic Commodity Marketing Seminar, Chicago, Westin Hotel. Sept. 12-15: Bank Administration Institute National Convention, Denver, Fairmont Hotel. Sept. 16-18: Independent Bankers Association of America Commer cial Loan W orkshop, Kansas C ity, Radisson M ueh lebach Hotel. 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis IN THIS ISSUE July, 1984 Volume 80, No. 7 6 T H E B A N K IN G S C E N E Serious talk abou t switching charters 8 C O R R E S P O N D E N T B A N K IN G : W H E R E IS IT H E A D E D ? City correspon den ts respon d to MCB survey 15 M U L T I-B A N K H C s O K ’d IN K E N T U C K Y , LO U ISIA N A O rderly m erger activity expected 16 R E S P O N D E N T BA N K S R A T E C O R R E S P O N D E N T S On quantity, quality o f services 18 ST A T E -A S S O C IA T IO N -C O N V E N T IO N R O U N D U P Continental, fe d e r a l deficit spotlighted 26 N E W S O F BA N K S, B A N K E R S Promotions, reorganizations, appointm ents rep orted 27 C H R IS T M A S IN JU L Y C ollection o f holiday celebration s at banks 30 C H R IS T M A S C L U B T U R N A R O U N D S They’re cred ited to sales efforts 34 BA N KS R E Q U IR E W IS E R T E C H N O L O G Y U S E N ational operations!autom ation con feren ce report m m m Ralph B. Cox Publisher Lawrence W. Colbert Vice President, Advertising MID-CONTINENT BANKER is published monthly by Commerce Publishing Co., 4 0 8 Olive St., St. Louis, Mo. 6 3 1 0 2 . POSTMASTER: Send address changes to MID CONTINENT BANKER at 408 Olive St., St. Louis, MO 63102. Rosemary McKelvey Editor Printed by The Ovid Bell Press, Inc., Fulton, Mo. Second-class postage paid at St. Louis, Mo., and at additional mailing offices. Jim Fabian Senior Editor Subscription rates: Three years $27; two years $20; one year $12. Single copies, $2.50 each. Foreign subscriptions, 50% additional. John L. Cleveland Assistant to the Publisher Commerce Publications: American Agent & Broker, Club Management, Decor, Life Insur ance Selling, Mid-Continent Banker and The Bank Board Letter. Shelia Humphrey Subscriptions Editorial/Advertising Offices St. Louis, Mo., 4 0 8 Olive, 6 3 1 0 2 . Tel. 3 1 4 /4 2 1 5 4 45; Ralph B. Cox, Publisher; Marge Bottiaux, Advertising Production Mgr. Officers: Donald H. Clark, chairman emeritus, 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. MID-CONTINENT BANKER for July, 1 9 8 4 Rapid transit. Speed. It’s the essential ingredient of intelligent m ovem ent of money. It’s also why m ore correspondents choose the rapid transit system at C om m erce. Our day starts with balance reporting at 5 :0 0 A.M. B y 9 :0 0 , w e’re on the phone with custom ers, advising them of how much m oney is immedi ately available for investm ent and how much is deferred. Same day available balance reporting coupled with timely information on previous day’s ending ledger balance enables correspondents to manage their funds position accurately and maximize profits. W hat’s m ore, we handle exception item s, exceptionally fast. O ther banks take w eeks to g et return item s back to you. Our unique post office box and special zip code allow us to handle these item s quicker. F a st turnaround on return item s m eans less float as well as minimal risk of em barrassm ent and loss. In addition, we have a special problem-solving team for cash letter adjustm ents. Our Special Adjustment Staff (S. A.S.) pays quick attention to your problems. If an e rro r has been made in the checks sent to us for clearing, this special team quickly catch es the erro r and adjusts the correspondent for the proper amount. Large dollar adjustm ents receive immediate priority. Rapid transit at Com m erce adds up to the best availability schedule around. If you’d like to plug into our rapid transit system , call your Correspondent B anker r n n i «nA Y T O R e n t at C om m erce— now. Vi*/ \ ^ 0 1 1 1 1 1 1 C iv C D c U l K No one knows the value of ® Kansas City (816) 234-2000 • 10th & Walnut • Kansas City, MO 64141 time b etter than C om m erce. MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MEMBER FDIC 5 THE BANKING SCENE By Dr. LEWIS E. DAVIDS Professor of Finance Southern Illinois University, Carbondale Serious Talk About Switching Charters UGGESTING in the November, 1983, issue of M i d - C o n t i n e n t B a n k e r that banks seriously consider switching charters to that of federally chartered thrifts produced a high inci dence of telephone calls and letters. A number of banks have taken the idea seriously, but so far there has not been a tremendous movement toward banks switching charters. On April 18, no less than C. T. Conover, Comptrol ler of the Currency, suggested in an address to the North Carolina Bankers Association that the time has come to take switching charters seriously. Let me quote the remarkable words used by Mr. Conover in that address: “Is it time to switch charters? If you doubt the seriousness of the choice, let me give you some facts. First, federal thrift institutions have most of the powers of commercial banks in that they can engage in real-estate develop ment and can operate ATMs across state lines. Furtherm ore, federally chartered thrifts virtually are un limited in their activities — plus thrifts receive special tax benefits. If I were in your shoes, I would consider trading in my commercial-banking charter and becoming a unitary-thrift HC. “Your HC could include segments in loan associations, a full-service securities firm, an insurance company and a commercial-finance company. Your S&L could have a nationwide network of ATMs and could meet a portfolio test. If you start getting too many commercial loans, you can sell them to your commercial-finance com pany, buy them for your insurancecompany portfolio or pool-sale them on the outside with your full-service securities firm. You certainly can’t do any of that with the charter you have now.” When an academic such as myself makes such statements, one might easily dismiss them as the thoughts oi an individual who has little power to change policy. That the Comptroller of the Currency would suggest that banks S 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis switch their charters — especially in front of a large group of bankers — is remarkable. In effect, the primary reg ulator of banks was telling bankers they’d be better off if they sought another regulator. It is almost unheard of that the head of a major government Banks thus would face an in teresting situation in which they would be forced to g ra ze familiar pastures, but with new and pow erful com petitors fighting for the same limited turf. agency would take such a stance. In fact, I can recall only one other incident of a government official trying to put his agency out of business. That was in the 1800s, when the head of the U. S. Patent Office said that every thing of significance already had been invented and that the patent office no longer was needed. W e’re now in the midst of a charade that takes place every four years. Con gress suddenly decides that no legisla tion of significance can be passed with elections imminent, and all substan tive proposals — no matter how badly needed — must wait until after the elections are over. Some financial in stitutions can take a rather sanguinary view of this period of congressional in activity. Nonbanks such as Sears are having a heyday in getting their positions con solidated in financial areas bankers previously had considered their sole domain. Mr. Conover made an additional point in this regard. He said: “If we look at the financial-services market place, we can see that there no longer is a single service or product line that is offered exclusively by com m ercial banks. “I can have my checking account at Dean W itter,” he continued. “I can get my mortgage from a real-estate company or from First Boston and I can have a bank card from the AAA. The only way you can catch up without changing your charter is through fur ther deregulation.” Another significant point made by Mr. Conover is that further deregula tion appears unlikely. In fact, strong sentiment for turning back the clock and reregulating the financial-services market exists in Congress, according to Mr. Conover. The recent debacle at Continental Illinois National of Chica go can only have helped make further deregulation even less likely. We even may see an exponential growth in new financial-service legisla tion. As is common in legislation ema nating from Washington these days, a grandfather clause of some type prob ably would be included. Organizations that had slipped out before Congress had shut the barn door probably would be permitted relatively free range within their already established limits. Banks thus would face an interesting situation in which they will be forced to graze familiar pastures, but with some new and powerful competitors fighting for the same limited turf. It, indeed, is much easier to scram ble the financial egg than to unscram ble it. So far, some banks have shown relatively little enthusiasm for the pri vilege of expanding into new, unchar tered w aters d eregu lation would bring. Banks, rightly, have taken pride in their emphasis on caution compared to other types of financial institutions. Recent events have shown that caution is warranted; banks seem to get into trouble when they venture too far (C ontinued on page 40) MID-CONTINENT BANKER for July, 1 9 8 4 FINAUX A GOmPUANCEMANUAL FORBANKERS. FROmBANKER& W h en it comes to compliance information, w ho knows more about w hat bankers need to know, than other bankers? No one. T h a t’s w h y T h e First National Bank of Cincinnati has created the Consumer Compliance M anual. A comprehensive guide to all the most up-to-date information on all the regulations cited by the major banking regulatory agencies—including the Office of the Comptroller of Currency, the Federal Deposit Insurance Corporation and the Fed eral Reserve. All information in this Compliance M anual has been compiled by our staff of banking experts. It’s all clearly indexed and presented in concise, understandable language. You’ll find everything you need at your fingertips—including information on Adjust able Rate Mortgages, Electronic Fund Trans fers, Interest on Deposits and m uch more. And, because we have a special sensi tivity to your needs, w e’ll provide you with regular updates to the Consumer Compliance M anual throughout the year. Making sure you’re aware of new laws or revisions to exist ing regulations. W e’ll even explain how those changes affect your bank in a cover letter. So, w h y not get the Compliance M anual designed for bankers? MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis To reserve your copy of First National’s Consumer Compliance M anual or to simply find out more about this unique service, call toll-free, 1 -8 0 0 -5 8 2 -1 8 0 4 in Ohio or 1 -8 0 0 -5 4 3 -7 2 1 5 in Kentucky, Indiana and West Virginia. Consumer Compliance M anual. An indispensable reference guide for bankers. From bankers. First itional B an k CINCINNATI Member f d ic 7 Correspondent Banking: W here Is It Headed? O RRESPO N D EN T RANKING. Is it changing? How? What effect has competition from the Fed had on it? W hat new services are being planned or offered? What services are being dropped because of nonprofita bility or lack of demand by respon dents? M i d - C o n t i n e n t B a n k e r editors asked these and other questions of cor respondent-bank-department heads in the area served by this publication. Replies showed that, contrary to some rumors, correspondent banking is alive and well, as shown by this com ment from Troy Philley, senior vice president, cash management, InterFirst Bank Austin (Tex.): “The corre spondent-banking business is going great. I think the reason some banks have quit or slowed down is because they stopped serving their customers’ needs or stopped giving good service. It is a service business, and when we quit serving our customers’ needs, they will look to someone else for their needs.’’ Another enthusiastic plug for cor respondent banking came from J. Max Smith, vice president, Citizens Fidel ity, Louisville: “Within the industry, the business of correspondent banking probably is the most challenging, most stimulating and offers more opportuni ties than virtually any other area. Changing and evolving — yes; dying — no.” Mr. Smith points out that this era for his business is influenced by several factors that, heretofore, had been nonexistent: 1. Increased Fed com petition. 2. Deregulation of the indus try. 3. Increased competition from in side the industry. 4. Increased availa bility of affordable high technology to respondents. John R. Reynolds, vice president, Manufacturers Hanover Trust, New York City, also is optimistic about cor respondent banking’s future as he says, “At M anufacturers Hanover Trust, we certainly believe correspon dent banking offers excellent and ex citing market opportunities. In our opinion, the key to success in this mar ketplace is an accurate analysis of, and response to, a competitive environ ment being reshaped by deregulation and profit pressures being experi enced by the industry.” F ed C om petition. Is the Fed taking much check-processing business away from correspondent banks? If so, to replace this income, are correspon dent banks developing new services for th eir resp on d en ts? Are they searching for a special “niche” to fill in correspondent banking? A Chicago banker says the Fed has been an aggressive marketer for non credit services throughout the coun try. In fact, he continues, the Chicago Fed has been so aggressive it has taken business not only from his bank, but from other large downtown Loop banks. "Arkansas Bank is responding slowly to changes in correspondent-bank services. It is our feeling the Fed has a distinct advantage in certain correspondent services, such as check clearing, to the point its pricing makes this type of service unprofitable to us. Therefore, we are not too alarmed by the Fed's sudden insurgence into this activity. "I am of the opinion that the greater threat to independent banks is not necessarily the Fed, but interstate banking and multi-bank-HC affili 8 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis “Pricing pressures,” he believes, “play a large part in the Fed’s market ing efforts, and we will continue to watch how this pressure may or may not change over the next year. It’s diffi cult to indicate specifically how much volume we have lost, largely because we also have gained additional volume from other parts of the country — away from our competitors — and currently are in the process of regaining some of our lost volume from the Fed. The key ingredient to the customer is quality of service, and our bank historically has b een held in high regard as an achieved processor.” This same banker adds that his bank has not moved away from check proc essing as an income producer. In fact, it continues to upgrade its internal pro cedures and systems to provide an even better quality product in the fu ture. An adjunct to this, he continues, means more timely information to the bank’s customers around the clock, seven days a week. ” Those banks reporting loss of busi ness to the Fed give percentages such as 1%, 2%, 5%, 8%, 10%, 15%, 20% and even 50% ! M anufacturers Hanover’s checkcollection-service volume, says John Reynolds, comes mostly from retail and non-correspondent wholesale cus tomers. About 15% of its check volume comes from correspondents. Imple mentation of noon presentment and the Fed’s expanded interdistrict trans- ates. "It seems to me that over the next few years, correspondent services most likely will be pro vided by a flagship bank to those banks affiliated with them in a holding-company structure. As a result, we see a lot of shifting from one bank to another. We do feel, however, there may be a place for correspondent banks such as ours to fill the void by providing services to other inde pendent banks." — B ill L y n ch , sen ior vice p resi d en t, A rkan sas B an k, H ot Springs. MID-CONTINENT BANKER for July, 1 9 8 4 portation system (ITS) in 1983 caused a respondents has been regional in did slow down, and he assumes that shift to the Fed of 10%-12% of MHT’s scope, and we have not competed for those letters that did move went to the correspondent volume, he says. Since the same type of processing city cor Led. This is not to suggest, he adds, that initial drop, he adds, through respondents have been involved with. that C&S has lost any tremendous new-product packaging and incentive Because of this regional influence, we amount of its business, but it has pricing, MHT has recovered about have not lost any appreciable check noticed that the Led is a much more 50% of the lost volume. Measured processing business to the Led, and we competitive factor than in years past. against total check volume processed, are in the process of taking steps to Since last January 1, Chase Manhat says Mr. Reynolds, MHT’s losses to assure we will be able to maintain that tan Bank, New York City, has lost 8% the Fed over the last two or three years regional influence.” of its check-processing business to the are between 1% and 2%. At Citizens & Southern National, Led. However, this has been substan H. E. “Sonny” Johnson Jr., first Atlanta, Executive Vice President tially offset by increases in the bank’s vice president, Third National, Nash John B. James says that of the cash off-peak cash-letter business. ville, reports his bank has lost less than letters the bank lost in 1982, 70% went On the other hand, Troy Philley of 10% of its check-processing business to to the Led. Although Mr. Jam es InterLirst Bank Austin doesn’t believe the Fed. Some banks that went to the doesn’t have figures for last year, he his bank has lost any of its clearing Fed, he points out, are having second knows the trend of cash letters moving (C ontinued on page 12) thoughts about leaving Third National because the Fed does not give good, prompt service to a customer when help is requested on such things as lost items, etc. While Citizens Fidelity, Louisville, has lost less than 10% of its cheek processing volume to the Fed, says ORRESPO N D EN T banking is one of the most rapidly evolving J. Max Smith, the Fed is a formidable businesses in the financial-services arena, according to a study force to be dealt with. Of course, he made for the ABA early this year. adds, its main thrust continues to be The rapid evolution should be expected because the market for strictly price advantage, and while this correspondent services is under tremendous pressure to change, the is an important advantage, it is, by no study says. Correspondent banks are looking at the business in different means, the overriding factor. ways. It’s seen to be either unchanged and not unique, shrinking and At Fourth National, Wichita, the less attractive or evolving and offering great opportunities. vast majority of its check-processing Which of these conclusions a bank reaches depends to some extent on volume is generated through its coun its market position and the degree of local competition. The more try-bank customers. Up to this point, profitable banks and those with broader customer bases generally are says Thomas A. Page, vice president, the most energetically committed. Larger banks show more willingness the Fed has made a significant, but not to retrench in correspondent banking because they see greater business overwhelming, inroad in the market. opportunities in other areas. He cannot quote a percentage of A major factor in influencing a bank’s commitment is the extent to check-processing business Fourth which it has been able to systematically analyze its position, formulate a National has lost to the Fed, if any, but strategy and organize and evaluate the function appropriately. It the Fed’s statutory privileges give it a appears that the business of selling services to financial institutions can distinct advantage in competition for be a growth business over the next decade. Due to economies of scale check-processing activity. and deregulation, the business will require more innovative and A Kansas City bank lost less than thoughtful management than previously. Many banks will choose not to 10% of its check-processing business to make such a commitment, finding other opportunities more attractive. the Fed initially, but has recouped all Committed banks will find barriers to overcome as well as opportuni or more of that business. ties for growth. The barriers come primarily in the form of geographic Bart J. Solon, vice p resid en t, deregulation, which is likely to reduce the number of independent Springfield (111.) Marine Bank, reports banks, and from the Led, whose aggressive competition already has his bank has lost little business to the resulted in reduced cash-letter profitability. Fed in the past year. However, he says Product deregulation will provide opportunities to offer new corre the F e d ’s influ ence is more pro spondent services to financial institutions that would like to provide nounced in his bank’s efforts to acquire expanded services, such as discount brokerage, but can t do so in-house. new check-processing clients. Even geographic deregulation may provide new opportunities within “The Fed indeed has garnered a correspondent banking as it enables banks to utilize location expansion larger share of the check-processing to provide better delivery systems to customers. Geographic expansion market on a national basis,” says L. provides better opportunities for correspondent banks to compete with Dean Clausen, vice president, Millithe Led, which has as one of its strengths the ability to deliver services kin National, Decatur, 111. “As a matter nationwide. of fact, much of our outgoing-clearings The study concludes that, while absolute market size measured by items now are being sent to the Fed, number of customers may shrink over time, the breadth and complexity where previously, they were cleared of new services required to remain competitive in the banking industry through a series of city-bank corre will present challenges on which new business can be built. spondents. The above material is taken from "Report on the Strategic Importance of “Our bank is located in central Illi Correspondent Banking Services," prepared by Peter Merrill Associates, Inc., nois, approximately equidistant be Boston. It was presented at the ABA's corporate banking conference in March. tween Chicago and St. Louis. Our con centration in check processing for our 9 MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis New Correspondent-Service Demands Mean More Business for Suppliers C â : ter fie y r.4 : bon weve reallygot it MONROE Installment Loan Transaction System Transaction System '• monROE Mortgage __ Assets andfliabilities M C W Œ Management System MONROE Safety Deposit Bo* Accounting ’Onerai Ledger r. V * y 1 ,1 C 3 I 4, ; v o ' \ s ' v ''v U v * ' '\v\ ' 0 ' ' ' M Jr3 Sure it took time. But in spite of what most computer companies might think, you don’t learn banking overnight. At least that’s not the way we learned it. We started in 1912 and it took years. The result is that today Monroe has considerably more experience in banking than most other computer compa nies. That’s what makes our computer the logi cal choice to meet all your banking needs. System 2 00 0 is a trademark of Litton Business Systems, Inc. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis \\v* - V The Monroe System 2000™ is setting a new standard in financial PC’s. It’s expandable, flexible and surpasses the speed, memory and data storage of yes terd ay’s small computers. It comes with the two industry standard operating systems. As well as other advanced technical features w ell be happy to explain to you in banker’s terms. For software, Monroe has a wide range of programs to tell you where you are, where you’re going and how to get there. We can help you handle Assets and Liabilities, M ortgage Loans, Installment Loans, Fixed Assets, W ord Processing, Safety Deposit Box, Spread Sheet and more. Each was written or chosen by Monroe people, based on their years of banking expertise. W h a t’s more, Monroe employees staff the 2 5 0 branch offices conveniently located across the country, ready to provide full service and software support in your bank. For more information on the Monroe System 2 0 0 0 , call 8 0 0 - 5 2 6 - 7 8 4 3 , ext. 4 4 4 (in N.J. 8 0 0 -5 2 2 -4 5 0 3 , ext. 444). SSMONROE SYSTEMS FOR BUSINESS. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis For leaders, not followers. Correspondent Banking (Continued) business to the Fed. “We are just as competitive and will stay that way,” he vows. “We use the Fed for items we can get better collec tion on and on items we can clear cheaper than with our correspondents. All figures I have seen show the Fed’s business has decreased throughout the country.” “W e are attracting considerable check-clearing volume away from our other competitors and from the F ed ,” says Donald B. Jeffery, first vice presi dent, National Bank of Detroit. “We feel we have better pricing, better cutoff times and b etter availability than the Fed. We are busy setting up direct sendings to bypass the Fed to hold down our invoice there and, therefore, keep our prices lower than the F ed .” Mr. Jeffery says it bothers many cor respondent bankers that the principal com petitor in today’s environment turns out to be the banks’ own regula tor, but he believes NBD is more than holding its own and, in fact, is attract ing additional business. According to Herbert L. Doughty, assistant vice president, Commercial National, Shreveport, La., the em phasis the Fed has placed on check processing has not affected his shop, due mainly to his bank’s geographic location. He points out it is not conve nient or cost justified for banks for which C om m ercial N ational does check processing (cash letters) to send such items directly to the Fed. Thus, he continues, his bank continues to emphasize its check-processing ser vices. Two Kansas bankers also reported no loss of business to the Fed. In the case of one of the banks, the opposite is true. That banker says that in Kansas, most correspondents have re-routed their checking volume around the Fed the last two years because of the lat ter’s competitive posture. However, he adds, this tide is turning because the Fed again is changing its attitude and wants to be more cooperative with correspondent banks, especially with later deadlines for one-day credit. This banker maintains his bank has not lost business to the Fed; in fact, it actually has gained volume in item processing during the last two years. The other Kansas banker says his bank hasn’t lost any customers to the Fed, primarily because of its directsending program on southwest Kansas banks. Its volume of cash-letter busi 12 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ness has almost doubled in the past two years. He attributes this to excellent service at a fair price. “Niche M arketin g.” As pointed out in a correspondent-banking study done for the ABA by Peter Merrill Associates, Inc., Boston, most large banks are moving toward a niche approach, either regional or national. This era for the correspon dent-banking business, says J. Max Smith, vice president, Citizens Fidelity, Louisville, is influenced by several factors that, heretofore, had been nonexistent: 1. Increased Fed competi tion. 2. Deregulation of the in dustry. 3. Increased competition from inside the industry. 4. Increased availability of affordable high technology to respondents. For instance, First National, Chica go, started a community banking divi sion a few years ago, says Thomas M. King, vice president and head of that division. Its staff is composed of ex p erien ced correspondent-banking officers who have expertise in non credit and general banking. These officers work exclusively with com munity banks that have under $200 million in assets and that are looking for retail-banking services rather than for credit services. First of Chicago’s Midwest group handles credit-related services. The bulk of accounts are in the com munity banking division. Mr. King calls it “one-stop banking” because any respondent who calls in for help can get it from anyone in the division. There’s no “I ’ll have someone call you back about this matter” since all staff members can handle any request. Mr. King points out that the average length of service in the community banking division is 29 years. The division offers six community banking sem inars for C E O s each spring in Illin ois, Iowa, Indiana, Michigan and Wisconsin. About 75 CEOs attend each seminar, which is designed specifically for community bankers’ interests. Bank of the Southwest, Houston, is in the process of offering asset/liability management to small banks for a fee. The bank has increased its effort to obtain S&L check clearings, in addi tion to setting up a cash-management service for correspondents to provide quicker availability of funds. A Louisville bank has significantly expanded its Treasury operations, i. e ., security sales to correspondents, re gional-lending efforts, m icro-com puter sales, card-interchange system and repricing of many current ser vices, including check processing. Fourth of Wichita has introduced several new correspondent services during the past year. They include check-guarantee/on-line credit-cardauthorization services, sophisticated asset/liability-management software/ consulting services and international services, including documentary col lections, letters of credit and foreign exchange. At Citizens Fidelity, Louisville, four new services were developed during the past year: 1. Improved and betterpriced data processing. 2. M icro computer educational courses. 3. New investment alternatives for commer cial banks/trust d ep artm en ts. 4. Brokerage services. “While these services have filled a void in the marketplace,” says J. Max Smith, “the one service for which we still get the greatest demand is loan participations.” Various consulting services are offered by First National, Louisville. Most important of these services, says Robert E. Aldridge, senior vice president/director, correspondent banking, are the educational schools the bank provides for a fee: 1. Credit analysis. 2. Loan review. 3. Problem-loan work shop. 4. Agricultural lending. 5. Pro fessional sales. In addition, these ser vices are available from First of Louis ville: officer-call program, personnel adm inistration and franchising of schools. First of Louisville has dropped two products — data processing and debitcard interchange. Both were nonprofitable and were not much in de mand by respondents, according to Mr. Aldridge. He says respondents have begun to ask for help in micro-computer processing/software, but the bank has not been able to offer these services princi pally because of a lack of available ex pertise to devote to this effort for re spondents. Mr. Aldridge believes fu- MID-CONTINENT BANKER for July, 1 9 8 4 ture products and services will be in dependent analyses for acquisitions/ mergers, third-party loan review and analysis services/data-processing con sulting. Chase Manhattan reports that re spondents have begun to request these services: downstream participations and discount brokerage for correspon dent consumers. The bank foresees offering these ser vices in the future: mutual funds/term federal funds/asset pools; investmentadvisory services; insurance services such as reinsurance and retail-insur ance products for resp on d en ts; money-management/financial-planning services; and reporting-systems enhancements. Chase Manhattan has dropped for eign drafts because of nonprofitability or lack of demand by respondents. A Missouri bank has begun offering its respondents trust, foreign exchange and international-trade services. This bank doesn’t refer to these services as filling its niche. Rather, it’s doing a better job of cross-selling services available through other departments in the bank. At Louisiana N ational, Baton Rouge, new services offered are: 1. Discount brokerage. 2. Precious met als. 3. Turnkey in-house data proc essing. 4. Seminars on personal man agement, security, bankruptcy, credit and teller training. American National of C hicago’s niche, says Lad. Kavsnicka Jr., vice president, is to serve smaller banks (under $100 million), where the bank concentrates on relationship banking rather than on selling a commodity. American National is in the midst of looking at the kinds of services it can add. It is working specifically on real time-balance reporting. Third National, Nashville, is trying to determine what its niche should be. It still is offering traditional services to its correspondents and is working to ward determining what services are needed in the marketplace that can be offered on a fee basis. A Kansas bank provides ju st the basic services. With the help of its data center, this bank has developed a bal ance-reporting system, which allows banks to monitor their balances and charges on a daily basis from their own cathode-ray tubes. Banks using this service must be clients of the bank’s data center. According to this bank, most banks want to use micros for loan processing, for instance, installment loans, to do all their docum entation work. Asset/ liability management is an important issue for southwestern Kansas bank ers, says this bank, and its data center could have a program on-line later this year. Another Kansas bank says corre spondent banks are finding their niches by specializing within tradition al services, rather than by developing new ones. Although new services are important, it continues, correspon dent banking continues to revolve around traditional services reshaped for current conditions. Examples are more innovative check-processing procedures and an easy and flexible way to pass through reserves to the bank’s correspondents. A spokesman for this bank says that to his knowledge, his bank has been able to provide any service requested by its respondents. He believes ser vices respondents will ask for in the future are those provided in the past also is being considered. Another Illinois bank continually looks for im provem ents in check clearing points to improve availability. Through its HC, it now clears checks through clearinghouses in memberbank cities. Many banks, a spokesman for this bank points out, are asking for on-line processing services, and he foresees banks getting more direct-inquiry in formation from mainframes through their micro-computers. John Reynolds of Manufacturers Hanover reiterated his earlier state m ent that two key variables that underpin new products/strategies are the industry’s profit squeeze and con tinuing deregulation. On the former, he continues, annual non-interest expense has doubled over the last 10 years, and this, in turn, "The correspondent-banking business is going great. I think the reason some banks have quit or slowed down is because they stopped serving their customers' needs or stopped giving good service. It is a service business, and when we quit serving our customers' needs, they will look to someone else for their needs." — Troy Philley, sen ior vice p resid en t, cash m a n a g em en t, InterFirst Bank Austin (T ex .) with innovations to match changing conditions. He generally has found new “services” tend to be fads that come and go, with little staying power. Respondents, he adds, want better “service” more than better or more “services.” Bart J. Solon of Springfield (111.) Marine says that while his bank still offers traditional correspondent products/services, it continually looks for better ways of serving its financial in stitutions’ clientele. For the past few years, Springfield Marine has offered a brokerage-service product, which has been well received. It also is beginning to offer more educational services to its financial institutions’ clientele. A Chicago banker maintains respon dent banks need information services in various forms, and his bank is con sidering developing several invest ment programs for its respondents. These programs may dovetail with the bank’s bond-department services in some combination. Faster information processing for safekeeping products BANKER for July, 1 9 8 4 DigitizedMID-CONTINENT for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis demands more cost-effective methods of relationship administration. MHT is aggressively developing customer ter m inal-based com pu ter tele co m munications systems as a way of offset ting adm inistrative and productdelivery expenses. The bank also fore sees these technological advances serving as the basis for constructing new-product offerings, especially in the efficient movement and invest ment of funds. Development of interactive-com puter systems also gives MHT capabil ity to present a comprehensive invest ment program to correspondents on a nationwide basis. More diverse and higher-yielding investm ent instru ments are essential for banks to offset higher interest expenses being in curred with the phaseout of Regulation Q, says Mr. Reynolds. What services has MHT dropped? All correspondent services and market segments are under constant scrutiny to ensure that MHT is receiving an adequate return. As a result of ongoing 13 Correspondent Banking (Continued) analysis, the bank has limited sharply new-product investment in cash let ters and other check-based services the past two years. In addition, marketing of advisory services has been curtailed to selected correspon dent segments. These actions, Mr. Reynolds points out, represent a grad ual de-emphasis of paper-based prod ucts as part of a longer-term strategic shift by MHT to serve correspondent markets with electronic-based prod ucts. In terF irst Austin has developed cash-management products its respon dents can offer their customers. First of Chicago hasn’t dropped any services because of nonprofitability or lack of demand. Instead, says Thomas King, the bank has priced all its ser vices profitably. “Services of the future,” says Mr. King, “will center around electronic linkage and make it unnecessary for a correspondent to consider distance when deciding whom to do business with. It is becoming a small world. ” Earlier this year, Millikin of D e catur, 111., introduced a regional clearinghouse in conjunction with some of the larger banks in Peoria, Bloomington, Springfield and Urbana. L. Dean Clausen says he believes this regional clearinghouse will allow his bank to offer to its respondents an attractively priced clearings option. He also believes the price per item and availability schedule afforded respon dents not only will stabilize Millikin’s business, but provide it with an entry into many banks in its area for in creased check-processing business. The only serv ice M illikin has stopped offering aggressively has been safekeeping. The decision to downplay safekeeping was not predicated on profitability, but rather on changes in handling securities and on the bank’s geographic location. Mr. Clausen sees the biggest area of inquiry, at this point, to be cashmanagement services. Although Milli kin has no formal package to market to its respondents, he feels this is an im portant future revenue source, and his bank certainly will be offering prod ucts specifically designed to meet the needs of its customer banks and their small and medium-sized corporate customers. Thomas Page of Fourth of Wichita believes one of the most promising ser vices his bank could offer respondent 14 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis banks in the future would be ongoing educational and consulting services with regard to specialized products that will become more popular in the future. A Missouri bank offers a special asset/liability software package de veloped by Littlewood, Shain & Co., Wayne, Pa. Third National, Nashville, is deter mining what new services to offer. Sonny Johnson believes better man agement reporting is going to be a must for all CEOs. Other services he feels will be needed are loan-doc umentation training, training in how to properly set up and maintain credit files and training in the loan-review/ administration area. Smaller banks, he points out, need help in all these areas, and, later this year, Third National may decide to develop training courses on a fee basis. National Bank of Detroit has, for some time, been conducting many workshops, conferences and clinics on such su bjects as com m ercial-loan documentation, individual retirement accounts, safe deposit, asset/liability management, audit, etc. In addition, NBD is selling discount-brokerage services and setting up a new auto m a tic-teller-m ach in e netw ork in Michigan called Network One. The network, in effect, is CIRRUS, plus Payment Line. This is a method of paying bills by phone with a longrange view toward video banking. New services developed by Chase Manhattan in the past months for re spondent banks are: 1. CIMMA — Chase Institutional M oney-M arket Account (an FD IC -insured moneymarket investment for bank trust de partments). 2. Chase Wholesale Dis count Brokerage (discount-brokerage services for bank trust departments). 3. BankRoll II — a bank-HC analysis system. 4. Descriptive demand-deposit-account statements. 5. Audio Balance/Cash L e tte r R ep o rter (a voice-simulated telephone-reporting system for customer balances or cashletter-availability information). A Kentucky bank has dropped no significant services; it merely has re priced them. The only one dropped is a time-sharing asset/liability service, which has been replaced by micro computer software. Generally speaking, according to this bank, respondents will want more consultant services, such as asset/ liability planning, em ployee com pensation, etc., which can be priced independently of balances. John James of C&S, Atlanta, be lieves there is a great opportunity to provide services in the financialadvisory/consulting area, and his bank also is taking a hard look at supporting micro-computer processing. A service dropped by a Missouri bank is passthrough reserve accounts. F ee In co m e. Is fee income emerging as an important source of correspon dent-banking revenue? Is it taking the place of com pensating b alan ces? Manufacturers Hanover, says John Reynolds, is interested in developing fee income not as a substitute for bal ance compensation, but rather as a complement. Fee charges are consid ered where the form of compensation is particularly apt; e .g ., an analytical study performed for a correspondent resulting in a bill of perhaps $5,000. In this instance, managing balance com pensation for a charge this size is un wieldy, and payment by fee is more efficient both for the respondent and MHT. Contrary to the experience of many, Mr. Reynolds continues, MHT s duefrom -correspondent balances have grown substantially over the last two years. The bank prefers balance com pensation, and its ability to run coun ter to an industry tide, Mr. Reynolds believes, is due to a conscious nurtur ing of correspondent relationships. As a percent of overall revenues, says Mr. Reynolds, MHT’s fees have been less than 5% in 1981, 1982 and 1983. Millikin of Decatur has not found that its respondents look favorably on direct fees for any services rendered, but remain tied to the idea of using compensating balances in payment of services. Over the past couple of years, a Chi cago bank has developed larger fee in come, which has been generated from various international transactions, swap transactions and, as such, a com bination of non-credit/credit services. Compensating balances continue to be significant to this bank because it has had a significant share of the corre spondent market and historically has been compensated through balances. Another Chicago bank has stressed a desire to develop more fee income. This has come in the form of corporateservice fees rather than non-creditservice fees. The bank expects this to increase in the future from approx imately 20% of the bank’s income at this time. InterFirst Bank Austin’s Troy Philley says fee income is popular when MID-CONTINENT BANKER for July, 1 9 8 4 Innovation. Vision. 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CENTERRE BANK One Centerre Plaza St. Louis, MO 63101 314-554-7737 Member FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 9th & Walnut Streets Kansas City, MO 64106 800-892-2472 Louisiana National, Baton Rouge, mand balances or by fee income. the credit rate on the analysis is high. Chase Manhattan reports the per The bank collects fees from only two reports fee-generated income com pared to total income was 6.6% in centage of fees generated by the cor banks out of 227. Commercial National of Shreve 1981; 7.4% in 1982 and 8.4% in 1983. respondent bank department com National Bank of Detroit continues pared to overall income for the depart port’s correspondent department be gan charging fees in the last quarter of to increase its fee income each month ment is as follows: 1981 — 4.7% ; 1982 1982 to replace income lost from com and has taken the position that banks — 9 .5 % ; and 1983 — 1 3 .2% . — pensating balances. For 1982, the per either can compensate NBD by de- Rosemary McKelvey, editor. centage of fees generated was nominal, maybe 2% to 3%, says Herbert Dough ty. By 1983, the percentage of fees jumped to approximately 15% and, in 1984, the percentage is up to 25% to 30%. The bank also is analyzing the possi Willis Moremen, executive vice presi ULTI-BANK holding-company bility of paying fees instead of compen dent, Kentucky Bankers Association, enabling legislation has cleared sating balances to its upstream corre no great amount of activity from the legislatures in both Kentucky predicts and spondents in 1985. Kentucky banks for awhile. “It’s going to Louisiana, and an orderly transition is Bank of the Southwest of Houston’s be a gradual thing,” he says. fees doubled in 1983 over 1982, and expected in both states. In Louisiana, a takeover hunt is said to Opposition to multi-bank HCs has the bank added more than $350,000 to be taking place, but no announcements been strong in both states, but most inde the bottom line in 1983. C itizens of D ecatu r collects no pendent bankers (the principal oppo of proposed mergers or acquisitions have direct fee for correspondent services nents) state they can live with the new surfaced. Passage of enabling legislation culmi from respondent banks. However, laws. The Kentucky legislature passed nates a 12-year effort on the part of the they pay Citizens’ data processing divi enabling legislation in March, with an state’s largest banks to convince the sion on a direct basis. Fee income, says a spokesman for a effective date of July 15. Louisiana’s law legislature that multi-bank HCs will be Kansas bank, certainly has become was passed by the House in June, follow beneficial to the state. New Governor more attractive to many of its respon ing earlier approval by the Senate, and Edwards favors the change. The bill was called “one of the most dents over the last few years. It’s diffi was on the desk of Governor Edwin Ed wide-open multibank laws” by Richard wards for signing as of this writing. The cult to guess which percentage of its K. Easterly, president, Louisiana Inde department’s income is generated by legislation takes effect January 1, 1985. The Kentucky bill permits multi-bank pendent Association of Banks, which fees versus balances, says the spokes HCs in the state for the first time and opposed passage. He is critical of the lack man. He guesses that fees represent 10% of service income outside of in limits acquisitions to three per year for of deposit and acquisition limits in the terest income in 1983 and 5% in 1982. the first five years. Any bank chartered bill. “It’s a relatively clean deal, with few The bank gives its respondents a for less than five years is ineligible for choice of paying for services by bal acquisition. No HC can control more onerous provisions,” says Ian Arnof, ances or fees, and most still pay with than 15% of the deposits in the state. The president/CEO, First Commerce Corp., bill permits immediate reciprocity with New Orleans. compensating balances. As is the case in Kentucky, most Fee income at American National, contiguous states and provides for reci Chicago, has increased slightly, but lit procity on a nationwide basis after two Louisiana bankers don’t expect the ad tle increase is noted in the correspon years. None of the contiguous states has vent of multi-bank HCs to have a large indicated it will pass reciprocity legisla immediate impact on banking in the dent bank department. state. — Jim Fabian, senior editor. At a Missouri bank, some check tion in the near future. Louisiana’s bill authorizes multi-bank processing fees will be levied in the Free Dinners Draw 1,000 Entries near future, but the bank sees fees as HCs, but imposes no cap on deposit con still negligible. This bank, however, is centration. It carries a five-year de novo service charging accounts with defi clause and restricts multi-parish acquisi tions to one branch per year for five cient balances. years, up to a maximum of four acquisi Fourth National, W ichita, calcu lates hard-dollar-fee income as a per tions. Multi-parish branching is pro centage of total income for the corre hibited. Tender offers must be made on spondent bank department because an equal basis to all stockholders to avoid the comparison of hard-dollar income discrimination against minority share and analysis income or income gener holders. As of this writing, there has been little ated from compensating balances is not an accurate com parison, says activity in Kentucky and a lot of specula Thomas Page. However, the level of tion in Louisiana. First Ashland Corp., hard-dollar-fee income generated by which controls First Bank & Trust, Ash Devon Bank, Chicago, held a drawing re his department has increased almost land, Ky., has announced a proposed cently for free dinners at area restaurants 50% in the last year. Most of this in merger agreement with Pikeville Nation in conjunction w ith Devon-N orthtow n come has come from sources that, in al Corp., which controls First National, Business Association's annual summer prior years, would have maintained Pikeville. First Guaranty Bank, Martin, sidewalk sale. Nearly 1,000 entries were is expected to be included in the transac received. Irving Loundy (r.), v.p./business compensating balances. develop m ent, congratulates James H. Fee income at a Missouri bank was tion. According to P. J. Wonn III, presi Fackler and Doralee Shannon, both of Chi negligible in 1981-82 and 2%-3% of dent, First Bank, the combined assets of cago, who won two of 10 dinners awarded. the three banks will be $550 million. total income in 1983. M u lti-B an k HCs O K 'd in Ky., La.; O rd e rly M erg er A ctivity Expected M MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 15 Respondent Banks Rate Correspondents O n Quantity, Quality of Services RE RESPO N D EN T banks getting i all the services they need and desire from their correspondents? most cases they are, yet the quality of those services isn’t always the best. This is the consensus of a group of com m unity bankers contacted by M i d - C o n t i n e n t B a n k e r (MCB) re cently. These bankers were asked a series of questions in an attempt to determ ine how well correspondent banks are serving their respondents. Participating respondent banks told MCB that they use from one to 16 correspondents. Some respondents parcel out their business among cor respondents, using one for discount brokerage and bond/investment activi ties, for instance, and another for check clearing. One banker who admits to maintain ing correspondent relationships with six banks designates one of the six as his institution’s primary correspon dent. Another of the accounts is main tained solely because “we have used its bond portfolio for many years.’ The other four accounts are meaningless, the banker says, but he has been hesi tant to close them because of the long time relationships they represent. Another community banker states that his bank is getting all the services it needs, but “at times we would like to buy more loans from upstream banks. ” Only one responding banker told MCB there is a service he would like to get from his institution’s primary cor respondent — asset-based lending. Respondent bankers were asked to rate the responsiveness of their corre spondents to requests for assistance in solving various kinds of problems. Responses ranged from adequate to excellent. A Kentucky banker replied as follows: “If our request is perceived to be in the best interest of the corre spondent, we get good response. If not, the response is slow.” Another banker rated the services of his bank’s correspondents as “better than average — except for loan par ticipations.” Response was mixed when bankers were asked to rate their correspon dents in the area of cooperating fully A 16 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis on overlines rather than soliciting such loans directly. In Several bankers said they appreciate the fact that correspondent banks don’t solicit loans from customers of respon dent banks. An Illinois banker had this to say: “This is the weakest point in corre spondent banking. Most correspon dents are unwilling to help to any great degree on overlines. Most of them talk through a correspondent bank and a corresp on d en t bank cash le tte r. Another says his bank’s cash letters are received from the Fed, but are inter cepted at the bank’s service center, which happens to be a wholly owned subsidiary of the bank’s primary cor respondent. Banks that utilize both the Fed and correspondents for cash letters say the percentage of the service secured from each source varies from 90% corre spondent and 10% Fed to 50% from each. An Oklahoma banker states that his Q u a n tity of services is bank has a 60%-40% cash-letter ser adequate, but quality some vice, with the correspondent being on the high end. “Previously, all service times leaves something to be was with the Fed until our correspon desired, say respondent bank dent started an exchange-intercept ers about services received program and quit working 100% with the F ed .” from correspondent banks. Respondent bankers were asked to predict the direction of correspondent banking in the future in light of con tinuing deregulation. a good game on this point but only a Responses included the following: few perform well. It seems to be the • “Correspondent banking, like all general consensus among correspon other phases of banking, appears to be dent bankers that country banks don’t heading toward the philosophy of pric know how to evaluate credit and there ing services based on cost and making are few good credit risks outside met each service pay its own way. The days ropolitan areas. This basically is un of offering services as ‘loss leaders’ true. Big banks are as prone — or more and making the required profit else prone — than we are to make wrong where have gone by the wayside.” credit judgments. ” • “I don’t see that correspondent The Kentucky banker says his bank’s bank relationships should be any dif correspondents neither cooperate ful ferent in the light of deregulation than ly on overlines nor do they solicit loans they have been in the past. It’s simply directly from customers of respon whether or not they want to offer the dents. “The major correspondent par expanded services permitted under ticipates in overlines only if such par deregulation. I think that some region ticipation is in the best interest of the al banks are preoccupied in trying to correspondent.” position them selves for intrastate Another banker rates correspon banking and thereby have neglected dents as providing “pretty good” coop their correspondent-bank relation eration on overlines, but not much ships.” help in selling loans to respondents. • “C orresp on d en t banking is Bankers were asked if they receive headed for a more challenging future. cash-letter services from their corre It will need to become more full ser spondents or from the Fed. More than vice,’ in that more country banks are half use their correspondents, while developing their own in-house data about 20% use the Fed and about 25% systems supported by the new genera use both sources. tion of personal computers. Country One banker says his bank receives banks are now able to generate support c a sh -le tte r service from the Fed (C ontinued on page 40) MID-CONTINENT BANKER for July, 1 9 8 4 The First National Bank of Batavia The First National Bank of Batavia, a commercial bank in Batavia, Illinois has assets of $46 million. has been acquired by Norris Bancorp, Inc., a bank holding company headquartered in St. Charles, IL, owns the State Bank of St. Charles, Illinois, with assets of $86 million. Norris Bancorp, Inc. W.T. Grimm & Co., mergers and acquisition specialists, prepared a valuation report, developed a marketing plan, searched for and contacted prospective buyers, and assisted in the negotiations on behalf of The First National Bank of Batavia. W.T. Grimm & Co. 135 S. LaSalle Street Chicago, Illinois 60603 312-346-5265 Now Available MERGERS1AT REVIEW 1983 . . .the definitive one-stop source for merger and acquisition data from W.T. Grimm & Co. 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In addition, MERGERSTAT REVIEW 1983 contains a 20-year historical data checklist, allowing you to spot trends in transactions. And it's prepared by the foremost authorities in the merger/ acquisition field, W.T. Grimm & Co.—for more than 30 years, intermediaries in the corporate buying and selling arena. MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Can you do without MERGERSTAT REVIEW? Maybe. But will you be fully prepared for the next opportunity to come your way? For more information, call W.T. Grimm & Co. right now at 31 2/3 46 -526 5, or mail this coupon. W e’ll send ordering information, and a detailed brochure that describes MERGERSTAT REVIEW. MERGERSTAT REVIEW—your one-stop source for merger and acquisition information. Send to: W.T. GRIMM & CO. Dept. MR, 135 S. LaSalle, C hicago, IL 60603 □ Please send me info rm atio n about MERGERSTAT REVIEW 1983 □ A lso send info rm atio n about W.T. Grimm & C o.’s a cq u isitio n interm ediary services. Name T itle _ Company Address _ C it y _____ C ountry 17 State Association Conventions Continental Bank, Federal D eficit Are Among Topics Spotlighted from the Comptroller, the Fed or state agencies that have been certified. The group would recommend, he said, that the FD IC examine those banks that are in trouble and that the agency be given sufficient powers for corrective actions. But as a regulator, the FD IC , he said, could be removed from ex amination procedures. Mr. Breeden acknowledged that the mood in Congress had shifted since C on tin en tal’s problem s had made national headlines. Congressmen are now saying, according to Mr. Breeden, that banks cannot handle their own business and so how can it give banks new powers for insurance, securities, etc. This will be difficult to combat, Mr. Breeden admitted, but where is the additional risk, he asked, if banks sell insurance or offer dis count-brokerage service. Certainly, there is risk involved, he agreed, if banks were to underw rite insurance or securities. But the present mood in Congress, he said, is to move slowly on any new powers for banks. Another speaker, Biff Motley, who IBA President Charles C. Wilson (c.) with heads a Chicago marketing firm, ex convention speaker Dr. Norman Vincent pressed the same b e lie f— that Con Peale (I.) and IBA Vice President Kenneth gress would move slowly on allowing Skopec. banks to offer new products. But the some of the legislative changes that “Genie is out of the bottle,” he said, could come before Congress as a result and Congress will only delay, but not of studies done by the Bush Task Force stop, banks from offering new prod on Regulation of Financial Services. ucts. Richard C. Breeden, director of that What strategy should banks adopt, work, focused on the insurance prob he asked? Mr. Motley believes that lem created when the FD IC “guaran banks, dominate in their own markets, teed” all deposits of Continental. Any will act as distributors of “products” reorganization affecting the FD IC , he offered by insurance companies, in said, now would have to consider how vestment firms and others. It will be much of a bank’s deposits would be less costly, he said, for banks to sell insured, for big banks and/or little products and services that have been banks and at what price. The riskiest tested and “debugged” by their origi bank in the nation now pays the same nators. Banks literally “own their local insurance rate as the safest, and that markets,” he said, and can be success isn’t right, he observed. ful distributors as opposed to origina The Bush Group will recommend, tors. How about the economy and in he said, that the FD IC be removed from day-to-day supervision of a bank terest rates in the months ahead? and that it accept examination reports Robert G. Dederick, executive vice days in which to come up with a coun HE Continental Bank of Chicago ter bid acceptable to the troubled situation, recommendations made by the Bush Task Force on Regulationbank, following an out-of-state offer. The instate bid need not be accepted. of Financial Services and possible With the State Senate approving the banking legislation were among topics bill 51 to four, it was agreed that the taken up at state-bankers-association Illinois House surely would pass the meetings in the Mid-Continent area measure some two weeks later. Thus, last month. Also discussed were the the Illinois legislature would have economy, the U. S. budget deficit and done its job. (The new law was signed marketing strategy for banks. Two past by Governor James Thompson on June administrations were represented at 26.) However, the search for a poten two of the conventions — Form er tial buyer would continue. President Gerald Ford at Illinois and Meanwhile — back at the conven Jody Powell, Carter Administration tion — one of the speakers discussed press secretary, at Wisconsin. Here are reports on each of those conventions. T Illinois HAT will Springfield do? This was the question that appeared to be on most minds last month as Illi nois bankers met in Peoria for their annual convention. Springfield — site of the state’s legislature — had before it a bill that would decide whether an out-of-state bank might be permitted to acquire Chicago’s troubled Continental Bank. Current law says that only an Illinois or foreign bank could acquire Continen tal. Only First National of Chicago had expressed an interest* but then backed away. A foreign bank? None seemed to be on the horizon. But Illinois bankers speculated that their legislature would accommodate Continental and it did, on the second day of the convention. The Illinois State Senate passed permissive legisla tion that would allow an out-of-state buyer, but that permission was limited to a one-year period ending July 1, 1985. The bill would affect any Illinois bank of $ 1-billion size or larger that had liquidity problems. Further, any takeover would be limited to “friend ly” partners approved by top officials of the Illinois bank. The bill also gave an instate bank 14 W 18 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for July, 1 9 8 4 tee by the FD IC on insuring all Con tinental depositors, even those with more than $100,000. Mr. Isaac said the guarantee was necessary. “The action prevented an extensive disruption to the banking industry, in cluding about 2,400 banks that had more than $3 billion in uninsured de posits at the bank,” he continued. “The situation could have precipitated Minnesota hundreds of bank failures. “If Continental had been closed and its assets liquidated, the bank’s unin sured depositors would have had to annual convention of the Minnesota wait for years to recover their money Bankers Association June 11-13 in St. through bankruptcy proceedings,” Paul. Approximately 1,500 bankers Mr. Isaac pointed out. To stem criticism that the FD IC has and their spouses were in attendance. “A merger for Continental Illinois treated Continental differently from Corp. may have been possible after the other banks in trouble, he pointed out bank holding company’s most recent the FD IC has promised to cover all funding crisis developed, but that deposits three times in the recent past approach would have been difficult and not just at large banks. The first and costly,” FD IC Chairman William was in 1981 at Greenwich Mutual Sav ings Bank in New York City. The Isaac told the convention. “We could have tried to do a merger second was United Southern Bank in in a hurry, but that would have been Nashville, and the third was last fall at costly and ill-conceived,” Mr. Isaac First National, Midland, Tex. continued. “I agree there is a problem. I do not “That’s also assuming we could have like the disparity in handling banks,” found someone right away to merge Mr. Isaac said. “A more equitable solu with Continental. This way, we will tion in the future would be a policy of have a more orderly solution.” risk-based prem ium s charged to Mr. Isaac pointed out that a perma banks,” he said. Senator Jake Garn (R.,Utah), chair nent solution soon will be found, but refused to give any more details or a man, Senate Banking, Housing and Urban Affairs C om m ittee, charac definite time frame. “Although the bank has more than terized the bill coming up through the $2.3 billion in equity, it could not meet H ouse on banking as backw ard the demands of depositors who rushed looking legislation that will cause di to withdraw their money from the ail vestiture. He described his bill as much broader and conceded that the ing bank.” Mr. Isaac said. The FD IC injected $1.5 billion into Continental Illinois problem was “like the bank to support it while a perma a knife between the shoulder blades” nent solution is worked out. Mr. Isaac that will make it difficult to produce indicated he wasn’t sure how much of another bill this year. He indicated that sum the FD IC eventually will re that opponents of the legislation will cover, but he said it’s possible the exploit the Continental Illinois prob lem. agency will not lose a dollar. Senator Rudy Boschwitz (R.Minn.) The rescue plan included a guaran Lovett, chairman/president, Dixon National. Mr. Wilson was named to the ABA governing council along with two others: Lyle P. Campbell, chairman, Peotone Bank; and R. N. Taake Jr., chairm an/president, F irst Bank, Cairo. • • IBA President Charles C. Wilson (c.) with convention speakers Dr. Don Paarlberg (I.) and ABA President Robert C. Brenton, pres ident, Brenton Banks, Inc., Des Moines, la. Dr. Paarlberg is professor emeritus, Purdue University. president and economist, Northern Trust, Chicago, expressed the belief that the economy will cool down some what from its current 6Vfe% annual rate to 4% over the next four quarters. The expansion, he said, is a great deal more robust than most observers believe. Inflation? Somewhat worse. Perhaps in the 5% to 6% range in the next six months. Interest rates? A gradual uptrend to apeak of 15% by mid-1985. Mr. Dederick also disagreed with the theory advanced by the Treasury that the federal deficit has no effect on interest rates. The problem of the budget deficits, he said, would not be handled until 1985. President Ronald Reagan, if reelected, will not, he said, compro mise on taxes. He will “hang tough,” and will seek spending cuts before compromising on tax increases. Former President Gerald R. Ford, speaking to a press conference before his convention appearance, expressed the belief that Congress and the Ad ministration would agree on both tax increases and spending cuts in 1985. Both entitlements and defense spend ing will be cut, he said, and a tax in crease likely would take the form of a value-added tax. W ould he work for P resid en t Reagan’s reelection? Yes, said the for mer President. He expects a close election. The Illinois Bankers Association did not elect officers at this year’s conven tion. Under new procedures, officers are installed in January and serve for a calendar year. This year’s president and presiding at the convention was Charles C. Wilson, chairman/CEO, First National, Rock Island. Other officers: vice p resid en t, K en neth Skopec, president, Mid-City National, Chicago; secretary, James B. Lund, president, M atteson-Richton Bank, Matteson; and treasurer, Donald R. BANKER for July, 1 9 8 4 DigitizedMID-CONTINENT for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis New Minnesota officers are (I. to r.): Roy W. Terwilliger, 2nd v.p.; Clinton D. Kurtz, 1st v.p.; Galen T. Pate, pres.; and Scott Jones, treas. 19 FDIC Ch. W illia m Isaac gestures w hile speaking to audience at Minnesota Bank ers Association's annual convention. told the convention, “We are proceed ing in the right direction on reduction of the deficit. “We have passed in the House and Senate a down payment on the deficit. The amazing thing is that it was done within four or five months of the elec tion.” He predicted that after the election, Congress will do the rest of the job. “In my first year on the Budget Committee, we dealt with the fiscal 1980 budget. Spending grew at 18% over that of 1979; in 1981, spending grew at 14% over that of 1980; in 1982, it grew at 11% over that of 1981. In 1983, growth in budget spending con tinued to decline, and spending in creases over the year before were 9%. Unfortunately, government revenues declined by 3%. But in the first six months of fiscal 1984, spending grew at less than 4% — the lowest rate of growth in 15 years — while income grew at 10%. Income now is growing twice as fast as outgo. If this continues, the deficit could look far better than is now projected, Senator Boschwitz said. Herb Lund, MBA president, de scribed the issue of greatest impor tance to evervone as the federal- Senator Rudy Boschwitz (R.,Minn.), speak er at Minnesota Bankers Association's con vention, jots down note while talking to outgoing MBA Pres. Herbert Lund, pres., Security State, Albert Lea. Digitized for 20 FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis budget deficit and damage that deficit spending is doing to the U.S. econ omy, its citizens and the world econ omy as well. He called on bankers to take a firm stand on excessive spending and budget deficits and called for an end to deficit spending. An important internal development in the association office is installation of a new computer system with the single objective of serving member banks more efficiently. The association also is continuing the strategic-p lan nin g process with a special implementation task force, which has been addressing strategies for the future to position the association to meet changing banker needs as the financial-service industry develops in the future. P ioneer Club Inductees. Four bank ers became members of the MBA’s Pioneer Club during the convention in honor of their 50 years in banking. They are Pat DuBois, First State, Sauk C en tre ; O liv er L a tte re ll, Citizens State, Kelliher; Eldon Matson, State Bank, Blomkest; and Robert Sprague, Sprague National, Caledo nia. A ssociation O fficers. Galen T. Pate, president, Signal Hills State, West St. Paul, was installed as MBA president, succeeding Mr. Lund, who is presi dent, Security State, Albert Lea. New first vice president is C linton D. Kurtz, president, Citizens State, Nor wood; new second vice president is Roy W. Terwilliger, president, Sub urban National, Eden Prairie; and new treasurer is Scott Jones, president, Goodhue County National, Red Wing. Wisconsin the clock with proposed legislation that does nothing to “address the crying need for competitive equity” in the banking industry. Incom ing President’s Speech. New WBA President John W. Johnson, president, Bank of Spring G reen, noted in his convention address that everyone — including Sears, J. C. Penney, K-Mart and Merrill Lynch — wants to be a banker. “Why do non banks say they are just like banks?” Mr. Johnson asked. “Why do savings and loans call themselves banks? Why does everyone want to be a banker? “Perhaps it’s just like the old butterversus-margarine argument, ” he said, answering his own question. “Why do the margarine people say it tastes just like butter? Do butter people ever say butter tastes just like margarine? No.” Mr. Johnson said that he agreed with Federal Reserve Chairman Paul Volcker that there is something unique about banks. He cited evidence from a recent Federal Reserve Board of Gov ernors’ report to support his faith in a Al Clark, pres., Farmers Exchange Bank, Neshkoro, Wis., is bracketed by two of his bank's inductees into Wisconsin Bankers Association 50-Year Club: Stanley Loshinski (I.), retired, and Clarence A. Rhode (r.), s.v.p. An even dozen bankers were in ducted. viable future for smaller depository in OR TH E banking industry, the destitutions despite the influx of new regulatory clock may have come to competitors and a Congress that has a halt and — in light of the much- yet to give banks the powers they need publicized problems of Chicago’s Con to compete effectively. tinental Bank — even could be ticking Bankers are asking Congress for two backward, according to some of the things, said Mr. Johnson. They want to speakers at the Wisconsin Bankers close the loophole allowing everyone Association (WBA) convention in Mil to call them selves banks without waukee. assuming the responsibilities of a William H. Kennedy Jr., ABA chair bank. Bankers also want the ability to man and chairman, National Bank of offer new products and services Com m erce, Pine Bluff, Ark., lam needed to compete with nonbanks that basted Congress for the “faulty” logic already are well established in the through which some members feel banking business. they can legislate “against reality” or in Outgoing P resident’s M essage. Mr. a “piecemeal” fashion with no loss of Johnson’s speech was preceded by a effectiveness. Some members of Con speech by his predecessor, W. J. Mor gress feel they must take an in rissey, p resid en t, In d ep en d en ce crem en tal approach to financialBank, Elkhorn, who said that lawmak industry deregulation while consum ers must decide if banks are to be a ers bear the additional cost of the slow viable part of the financial-services in pace of change, Mr. Kennedy said. dustry. If the answer is “no,” he said, Others in Congress want to turn back banks don’t have much of a future to F MID-CONTINENT BANKER for July, 1 9 8 4 rates were higher than most econ om ists cu rren tly are forecastin g, however. • Sanford Rose, associate editor, A m erican B an ker, New York City, who explained his theory of duration analysis as a key ingredient of a suc cessful asset/liability program. • • Indiana New Wisconsin Bankers Association officers for 1984-85 are (from I.): John W. "Jack" Johnson, WBA pres, and pres./CEO, Bank of Spring Green; Dean A. Treptow, WBA v.p. and pres./CEO, Brown Deer Bank; and Richard J. Roesler, WBA treas. and pres./CEO, First Nat'l, Platteville. forecast. “But if the answer is ‘yes,’ we will have a rendezvous with destiny,” he said. “Some of our federal lawmakers want to avoid changing the legislative status quo,” he said. “They are wager ing that things won’t get worse. This could be a very bad wager, for they would lose. The system is going to change, whether they want to recog nize it in statute or not. Not being allowed to change will only add to our (banks’) disadvantage.” The only good wager federal law makers can make is to bet on the fu ture, Mr. Morrissey continued. Call ing 1984 a year of decision, he said that lawmakers must take the opportunity to enact the reforms that would grant banks the freedom to com pete, to change and to meet customer needs. 1984-85 O fficers. In addition to Mr. Johnson, other officers who will serve the WBA during the 1984-85 term are: Vice President Dean A. Treptow, president/CEO, Brown D eer Bank, and Treasurer Richard J. Roesler, presiden t/ C EO , F irst N ational, Platteville. Mr. Treptow served as WBA treasurer in the 1983-84 term. 50-Y ear Club In du ctees. At a cere mony at the historic, richly decorated Pfister Hotel, the WBA honored and inducted a large contingent of new 50Year Club members. Among the in ductees were Lester E. Bedessem, president, Farm ers State, Bangor; Even O. Evenson, Orville P. Omberg and Roy Sundstrom , all re tire d , National Bank of Commerce, Supe rior; Howard M. Kiniery, vice president/director, First State, Edgerton; Adolph L. Langefeld, chairman, M&I New Holstein Bank; Stanley Loshinski, former chairman, and Clarence A. Rhode, senior vice president, Farmers Exchange Bank, Neshkoro; Fred S. R ogers, d irecto r, F irst N ational, Viroqua; Aage Morris Schou, chair man, Stro n g ’s Bank, D o d gev ille; Eugene J. Steckbauer, director, Fir star Bank Oshkosh; and Milton M. Voelz, chairman, Citizens State, W it tenberg. W isbankpac, the political-action arm of the WBA, is shooting for a 50% participation level (up from 40% last year) during the year ahead, according to a report distributed at the conven tion by Robert C. O’Malley, chairman/ CEO/president, United Bank, Madi son. This level of participation is admittedly steep in view of last year’s 39% increase in participation, Mr. O’Malley said. But the ability to assist candidates early on in the current elec tion year — during which a large num ber of offices are up for grabs — will require an even more efficient politi cal-action effort, he said. Other speakers at the convention were: • Jody Powell, Carter Administra tion press secretary, who advocated that the press be required to suffer for its mistakes just as people in other pro fessions are. He criticized journalists who do not point out the “rotten ap ples” in their profession. • Lawrence A. Kudlow, president, Lawrence Kudlow & Associates, Inc., W ashington, D. C ., who said that most economic analysts are underesti mating the current rate of government pump priming and that the current re covery should extend into 1986. His projections for inflation and interest MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PROPOSED OVERHAUL of In diana’s banking laws was approved last month by directors of the Indiana Bankers Association prior to the start of the IBA convention in Indianapolis. Material on the proposal had been mailed June 1 to IBA mem bers, who were invited to attend an open meeting held before the opening of the convention, whose theme was “Pursuit of Excellence. ’’ The proposal, if passed into law in the 1985 Indiana General Assembly, would allow a form of statewide banking and permit banks to cross county lines to open branches. It has two main sections: 1. M u lti-ban k h old in g c o m p a n ie s . Such firms would be allowed, sub ject to the following limitations: a. Percentage of deposits each HC controls would be based on total deposits as defined by callreport “total deposits.” b. This percentage would be as fol lows: 10% September 1, 1985; 11% January 1, 1986; and 12% January 1, 1989. c. A bank must have been orga nized at least five years before being eligible to be acquired or merged or otherwise consoli dated. d. Percentage lim itation would apply to HC acquisitions, merg ers or any other form of con solidation. 2. Branching: a. Banks with $200 million and under would be allowed one branch de novo or by merger or acquisition each year for five years. b. Banks $200 million-$400 million would be allowed three total branches de novo or by merger or acquisition — one each twoyear period for the first four years and one branch in the fifth year. c. Banks over $400 million would be allowed two total branches de novo or by merger or acquisi tion — one each 2 V2-year period. In addition, branching would be 21 governed by natural-market bound aries (contiguous counties with a mini mum of five counties). For those coun ties not having five contiguous coun ties, excess counties must touch con tiguous counties. It was further understood that for a bank acquired by any means, branch ing rights would be those of the acquir ing bank or HC. The proposal also says — in lan guage recomended by the Indepen dent Bankers Association of Indiana — “During the five-year period, Septem ber 1, 1985, through September 1, 1990, any contiguous-county banking in operation at the time of any acquisi tion or merger by a bank or HC shall be gran d fathered , but no new con tiguous-county banking by the ac quired bank shall be permitted during this period unless the merged and sur viving bank or multi-bank HC, as a whole, would otherwise have qualified by size on Decem ber 31, 1984. ” In addition, branching would be un limited in contiguous counties, includ ing the five minimum counties, after five years. Size categories would be d eter mined by call-report deposits as of D e cember 31, 1984. The proposal also would allow Indi ana to pass reciprocity legislation that would allow banks in that state to be acquired by or merge with banks in the four surrounding states if those states pass similar legislation regarding Indi ana. In addition, Indiana banks would be permitted to form “bankers’ banks,” which would provide funds and ser vices that individual banks, normally small ones, could not obtain as easily on their own. The proposal would allow participants to own larger shares of the bankers’ bank than allowed in a proposal advanced by Indiana Gov ernor Robert D. Orr last January, thus making bankers’ banks easier to form, according to IB A officials. Also in the proposal is establishment of a community business credit cor poration to provide financing for loans individual banks might term too risky. Its funding, on a voluntary basis, 22 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis would be promoted among Indiana banks. Association officials say the proposal has the support of both past supporters and opponents of statewide banking, giving it a good chance for passage in the 1985 Indiana General Assembly. New O fficers. Robert W. Hill, pres ident, National Bank of Greenwood, was elected IBA president. Elected vice president was David H. Howarth, president, Lafayette National. John W. Perry, vice president, finance, T e rre H aute F irst N ational, was elected treasurer. Mr. Hill succeeds William H. King, chairman, Second National, Richmond. • • New Mexico N E S T IM A T E D 900 bankers from throughout New Mexico and surrounding states were on hand for the 73rd annual convention of the New Mexico Bankers Association in Albuquerque and renewed a tug-o-war with New Mexico Governor Toney Anaya, this time over recommenda tions of the chief executive’s InterestRate-Policy Task Force. Governor Anaya’s relationship with state bankers has been blowing hot and cold since the last legislative session, when the Administration went all out in favor of a measure that would have allowed out-of-state banks to conduct banking business in New Mexico. That measure never got to the floor of either House, but the governor did indicate it would be coming back in the future — possibly at the 60-day session coming up next January. In his speech to this convention, G overnor Anaya ou tlined recom mendations of his special task force, which, he said, could build state cof fers to the tune of $5 million, increase competition among banks for state de posits and spur lending activity. Task-force recommendations would want the state treasurer to set interest rates above the statutory minimum when cred it demands and yield spreads suggest a reasonable rate in crease. It also was recommended that state deposits be placed with institutions that offer rates above the statutory minimum. Another recommendation said the State Board of Finance each month should compare rates on state certificates-of-deposit investments to rates on federal securities and moneycenter banks. In his closing remarks, Governor Anaya said the state will use deposits as an inducement to foster more lending, saying banks with high loan ratios should be rewarded with state de posits. As a parting shot, he said his task force soon would address collateral re quirements on state deposits, invest ment of the state severance-tax fund and possibly investment restrictions to prevent discrimination against women and minorities. Keynote address of the convention was made by New Mexico senior U. S. Senator Pete Domenici, chairman, Senate Budget Committee. Senator Domenici updated bankers on the progress of Senate and House efforts to cut back the huge U. S. def icit, indicating the problem will be addressed, although somewhat uncer tain as to the exact form the cutbacks will take. The second general session of the convention also heard from James G. Cairns Jr., ABA president-elect and president, Peoples National of Wash ington, Seattle. Mr. Cairns held a press conference immediately following his convention address, and he said he is not overly concerned about the size of thirdworld-nation debits to U. S. banks. He also said many of the problems of Continental Illinois National, Chica go, could be attributed to unfounded rumors spread by the new electronic (C ontinued on page 36) Sharon Janecka, e.v.p., New Mexico Bank ers Association, is pictured w ith NMBA's newly elected pres., Jack Daniels, ch., Moncor Bank, Hobbs, at association convention. MID-CONTINENT BANKER for July, 1 9 8 4 Pam D elam ore, Jim O'Hare, Drew Whitley, Gus Tramonte, R ose G reco, Roger Ayers, and D oug Lore. Bankers w hose business is helping your ban k grovx management. 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Our leasI ing experts are ready to provide you with an alternative to the high cost of equipment purchasing. Leasing can be beneficial to W both your business and your bottom line. ■ We are the only bank in the area with a full-time staff specializing in _lea^ing. So, if you’re U I I U!C c a j ^ 1 tS in the Leasing Department of F irst N ational Charter Bank. H ap K elly Betsy Jensen M artha Carpenter Sr. V ice President Asst. Vice President Asst. Vice President M S W I About B anks & B ankers ALABAMA_______ AmSouth in N ew Orleans AmSouth Bancorp, Birmingham, opened a wholly owned subsidiary June 4 in New Orleans that will spe cialize in providing financial services to businesses. The new company, AmSouth of Louisiana, Inc., opened its offices in the 39-story Energy Centre. Robert L. Browning, a 10year veteran in international banking/commercial lending in the New Orleans area, is president. Bruce P. Leonard has been promoted to vice president/manager, correspon dent banking, Central Bank of the South, Birmingham. He joined the bank in 1976 in its correspondent au diting division. Mr. Leonard received the outstanding correspondent-officer award for 1981 and 1982. Vernon C. Bice has been promoted to vice president, commercial finance de partment, AmSouth Bank, Birming ham. He joined the bank as a credit analyst in 1979 and became assistant vice president in 1983. In other action, the bank promoted Steven B. Agricola to assistant vice president, bond de partment, and Barbara F. Rhodes to assistant vice president, personal financial service department. Am South Bank last month opened a new branch in the Tinsley Harrison Tower. L. Wayne Moore, vice president/man ager, Southside Branch, since 1974, is the new branch’s manager. Mickey Freeman has been promoted to senior vice president, W orthen Bank, Little Rock, which he joined in 1975. He is marketing manager re sponsible for advertising/public relations/market research/marketing planning/sales promotions. He also super vises marketing/public relations for First Arkansas Bankstock Corp., Little Rock, Worthen Bank’s parent com pany. Also promoted at Worthen Bank were: to vice presidents, Patrick Ed wards and Charles Lynch; to assistant vice presidents, Thomas Bearden, Holly Eddins and Elizabeth Farris; and to assistant cashier, Terry Dennis. Closed Bank Sold First Alabama Bank, Anniston, has purchased certain assets and assumed all deposit liabilities of Cherokee County Bank, Centre. The latter bank was closed June 5 by Kenneth R. McCartha, superinten dent of banks, and the F D IC was named receiv er. Mr. M cC artha attributed the closing to the fact that “the bank’s capital account was de pleted by substantial losses in its loan account.” All offices of Cherokee County Bank opened for business June 7 as branches of First Alabama, Annis ton. All Cherokee County Bank de positors were fully protected as a re sult of the purchase. Digitized for26 FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FREEMAN McADAMS H erb ert H. McAdams, chairman/ CEO, Union National and Union of Arkansas Corp., Little Rock, has re ceived an honorary doctor of laws de gree from Arkansas State University, Jonesboro. The honorary doctorate is based on standards of creativity of thought, high personal standards of in tegrity, contribution to education and society in general and dedication to free inquiry and search for truth. Mr. McAdams is founder and chairman of the board of the Arkansas State Uni versity Foundation, In c., and has been instrumental in acquiring private gifts for the university. In addition to his Little Rock bank posts, Mr. McAdams is chairman/CEO, Citizens Bank and Citizens Bancshares C orp., Jon es boro. W ayne Harness has join ed L ittle Rock’s Pulaski Bank as senior vice president, commercial loan division. He formerly was vice president/mana ger, specialized lending department, Worthen Bank, Little Rock. ILLINOIS Thomas Peters has been named farm manager, Springfield Marine Bank. He formerly was beef herd manager, Shissler Seed Co., Topeka (111.). At Springfield Marine, Mr. Peters’ pri mary responsibility is to help manage farms south of the Springfield metro politan area. The bank has received a national advertising award from Bank Advertising N ew s. The award honored the series of three 30-second TV spots featured in Springfield Marine’s “We Live up to Your Potential” promotion introduced in August, 1983. The 1984 Golden Eagle Award was given the bank in recognition of its achievement in the area of “television campaigns.” The TV ads, depicting a beaver, goat and egret, were cited for honorable mention among more than 500 entries from financial institutions across the country. Magna Group, Inc., Belleville-based multi-bank HC, has executed a defini tive agreem ent providing for the merger of Central Illinois Banc Shares, In c., into a wholly owned subsidiary of Magna. Central Illinois Banc Shares is a Springfield-based one-bank HC, which owns Capitol Bank, Springfield. Cole-Taylor Financial Group, Inc., Chicago-based multi-bank HC, has ac- MID-CONTINENT BANKER f o r July, 1 9 8 4 We believe a service is only as good as the people behind it. Jerald L. F lesch n er O w e n D. H end rixso n At Mercantile you’ll find one of our greatest services is our correspondent bankers. They have the authority to help you with any loan or investment. Start to finish. Loan Services. From simple commercial loans to overline and bank stock loans, your correspon dent banker has the authority to approve your loan. And knows the full responsibility for your satisfaction falls on him. Investment Services. Fed funds, bonds, securities, BAs, CDs. It’s a big job keeping up with all the domestic and interna tional money markets. Your cor respondent banker has access to the latest communications and computer equipment. And knows how to use them to help you make decisions wisely. Check Clearing Services. Are you paying too much for your clearings? Why aren’t you getting better availability? If you have questions like these about your check clearing services, you can find the answers at Mercantile bank. Just call any of our corres pondent bankers for a quote on an investment or more details on any of our services. We’re w ith you R c n rm iE B B fK Member FDIC Correspondent Banking Division R ich ard G. Ross Mercantile Trust Company N.A. St. Louis, MO 63101 Please feel free to call us collect at (314) 425-2404. M a tth e w A. F avazza MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis quired Ford City Bank. The latter, which has offices in Chicago and Bur bank, continues to operate under the Ford City Bank name. Eugene F. Tatera has joined Devon Bank, Chicago, as vice president, loan department. Fie formerly was with Park National, Chicago, where he was vice president/manager, real estate department. Chicago Bank Closed CHICAGO — Deposit liabilities of Washington National have been assumed by Banco Popular de Puer to Rico. Washington National was closed May 18 by Acting Comptrol ler of the Currency J. Joe Selby, and the FD IC was named receiver. The failed bank’s sole office reopened May 21 as a branch of Banco Popular. Mr. Selby said Washington Na tional experienced substantial loan and operating losses over the six months preceding its closing, and it was unable to remedy its problems. He added that losses finally ex hausted the bank’s capital funds, re sulting in its insolvency. Wayne Bank, Cambridge City, has opened a new branch in Richmond. The structure, which completed the final stage of the Richmond Rede velopment Plan, is located on the southwest corner of the city block now known as Waytru Plaza and is adjacent to the County Court House in down town Richmond. Exterior walls of the branch building are iron spot face brick, and this material continues into the lobby as flooring material in hightraffic areas. There are drive-up facili ties. The building’s design was chosen to recognize historical buildings in the area — mainly in use of brick walls and soft forms in the arches over windows and entries and sheet-metal mansardroof edges. National, Toledo, as new business de velopment officer. Raymond “Larry’’ Parker has been elected vice president, Midwest Com merce Banking C o., Elkhart, which he joined recently as a product manager, customized consumer products. He formerly was a vice president/trust officer, First Wichita National, Wichi ta Falls, Tex. KANSAS ■ byshire, custom er service officer, formerly with Fourth National, Wichi ta. Dorothy J. Wells was promoted to assistant cashier/m anager, South Broadway facility. She has been a banker since 1971. G rant W. Gill has joined Admire Bank, Emporia, as cashier/operations manager/trust officer. He was with State Bank, Meriden, as cashier. KENTUCKY Variable-Rate CD Offered By Liberty of Louisville Thomas E. Bishop Jr. has been named senior vice president/manager, com mercial banking division, Commercial National, Kansas City. Most recently, Mr. Bishop was senior vice president/ manager, commercial loan depart ment, at a large Oklahoma bank. Don Adams, senior vice president/ trust officer, First National, Hutch inson, has been named to the Kansas Task Force on Permanency Planning. This project of the National Council of Juvenile and Family Court Judges is being sponsored by the U. S. Office of Juvenile Justice and Delinquency Pre vention. Purpose of the task force is to promote permanency planning for abused, neglected and other depen dent children. The first national con feren ce was held Ju n e 10-13 in Washington, D. C. LO U ISVILLE — Liberty National says it is the first major financial in stitution in the area to offer variablerate certificates of deposit. Unlike other CDs, according to the bank, this one is a variable-rate CD in which the interest rate will be adjusted each calendar quarter over the CD s term, which is three years. Liberty National also guarantees a consistent method of interest-rate determination. A $1,000 minimum deposit is required. This three-year CD is tied to the 91-day Treasury-bill rate and consist ently priced 50 basis points, or Vz%, higher than the current weekly Treas ury-bill auction rate. Liberty National points out that, with the new CD, customers have the flexibility to adjust to interest-rate fluctuations and essentially remove the interest-rate risk from their invest ments. If interest rates continue to rise, the bank points out, this would allow customers to take advantage of increasing rates, due to the quarterly adjustment of the variable-rate CD. Bernard A. Hugo has joined Bank of Mid-America, Wichita, as comptrol ler. He was with First Federal S&L, Newton, and, before that, with Indus trial State, Kansas City. Another new staff member is Jacquelyn M. DarBank Gives Scholarships This is new Richmond branch of Wayne Bank, C am bridge City. Structure was erected as part of Richmond Redevelop ment Plan. Dale J. Amborski has been named vice president, Lincoln National, Fort W ayne. He was with BancO hio S/2 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis G R E A T B E N D — Two Great Bend High School seniors received the second annual Security State Bank scholarship awards in amounts of $1,000 each. “We are pleased to provide these scholarships to deserving young peo ple as part of our effort to be a good corporate citizen in the Great Bend community,” says J. A. Mermis Jr., vice chairman/CEO, Security State. Marie Cooper, who has been in First National of Louisville’s correspondent banking division since joining the bank in 1953, has been named a vice presi dent in that division. Sarah “Susie” J. Schaaf, who joined the bank in May from Citizens Fidelity, Louisville, has been elected a vice president in the marketing division’s product-devel opment area. MID-CONTINENT BANKER for July, 1 9 8 4 Conquering the alien world of international trade. MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis It could happen to you. One day a valued business customer comes in for help with an import or export transaction. And suddenly you’re thrust into another world. A world popu lated by strange beings with mystify ing names like Standbys, Aggregate Limits, Tenors and Two-Party Recourses. What to do? If you turn your customer away, he may take all his jss elsewhere. Fortunately there’s an easy ative. A phone call to Conal Bank. Continental is a major factor in international trade. In fact, w e’re one of the few banks who are members of the International Chamber of Commerce headquartered in Paris. We can provide every financial service your customers could need. From issuing participating in International stters of Credit to Bankers ceptances to Currency HedgDocumentary Collections. We do all the work. You ce your relationship with your customer. And you collect a while fee to boot. If that sounds good, why not make that phone call now, before that customer comes in. Call E . Gerald Gale at (312) 828-6781. Tell him you’re looking for new worlds to conquer. CONTINENTAL BANK Continental Illinois National Bank and Trust Company of Chicago, 231 South LaSalle Street, Chicago, Illinois 60697 Atlanta * Boston •Chicago •Cleveland •Dallas •Denver Houston •Los Angeles •Minneapolis * New York Oklahoma City' St. Louis •San Francisco •Seattle •White Plains S/3 L ib erty N ational, L ouisville, has promoted Jeffrey P. Norton and John D. Sweeney to senior vice presidents and James E. Massey to vice presi dent. Mr. Norton is in the metropoli tan division, corporate banking group. Mr. Sweeney is in the cash manage m ent division, corporate banking group. Mr. Massey is in the U. S. banking division, corporate banking group. LOUISIANA Opelousas Bank Closed First National of St. Landry Par ish, Opelousas, has assumed deposit liabilities of Planters Trust, also in Opelousas, which was closed May 18 by James A. Hayes, commissioner of financial institutions. The FD IC was named receiver. The closed bank’s four branches reopened May 21 as branches of First National. People A t the same time, you as an employer, must find more effective ways of managing your human re sources in today's constantly changing environment. CORNERSTONE, personnel management services from Union Planters, can provide you with direction for meeting these needs through Personnel Profile— an assessment of every aspect of your personnel function. Personnel Profile is designed to recom mend improvements in your personnel function and to help you establish priorities. And this is on ly one of the many services of CORNERSTONE. Call today for more information on how CORNERSTONE can benefit you. In Tennessee, call 1-800-582-6231, extension 6310. O utside Tennessee call 1-800-238-5028, extension 6310. SM S/4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Robert A. Cline Jr. has joined First National Bank of Commerce, New Orleans, as vice president/director of product management. He formerly owned a marketing/computer services firm in South Carolina. Before that, Mr. Cline was manager, retail banking division, Fifth Third Bancorp, Cincin nati, where he was instrumental in de veloping one of the first shared-EFTS systems. MISSISSIPPI People. They are the center of every organization, regardless of its size or the nature of its business. And they have very real needs that must be met by the organizations for which they work. A Division of Union Planters National Bank P.O. Box 387 • Memphis, TN 38147 CLINE Deposit Guaranty National, Jackson, and M erchants & Farm ers Bank, Meridian, have announced plans to merge. James G. Riggan Jr. has joined Jackson’s First National as senior vice pres ident with responsibility for managing branches outside the Jackson area. He formerly was senior vice president/ manager, international division, First Tennessee Bank, Memphis. Died: Donald E. Sutter, 73, chairman, Hancock Bank, Gulfport. He joined the bank 57 years ago after graduating from high school. His first job was file clerk. After serving as teller, he was elected assistant cashier in 1935, vice president in 1947, vice president/ cashier in 1953, director in 1961, ex ecutive vice president in 1963 and chairman in 1977. He served on the faculty of the Mississippi School of Banking at the University of Mississip pi. MISSOURI Southwest Bank, St. Louis, has signed a definitive agreement with Mississip pi Valley Investment Co. containing revised terms of a proposed merger. Under the agreement, all Southwest Bank shareholders will receive $11 a share in cash for their common stock. Mississippi Valley Investment Co. is a recently organized Missouri corpora tion headed by Andrew N. Baur, for mer president, County Tower Corp., Clayton. If the proposed transaction is MID-CONTINENT BANKER for July, 1 9 8 4 approved, Mr. Baur will become the bank’s chairman/CEO. I. A. Long, now chairm an/CEO , will becom e chairman emeritus; Fred A. Giacoma will continue as vice chairman, and Edward C. Berra will remain president/chief operating officer. Centerre Bancorp, St. Louis, has filed an application with the Comptroller of the Currency to open a facility in St. Louis County. Steven K. Dieringer and Bobert H. Myers have been elected vice presi dents, Centerre Bank, St. Louis. Both were assistant vice presidents. Jay W egm an, Pamela M. Fattore and Mary Jo Hrabusicky have been named assistant vice presidents. Mr. Wagman joined the bank’s investment banking department in March. Ms. Fattore and Ms. Hrabusicky were operations offi cers. William B. Gresham III has joined Bank of Popular Bluff as trust officer. He had been an attorney in Poplar Bluff for four years and served as an administrative assistant to Senator Nelson B. Tinnin before moving to Poplar Bluff. D. R. L andw ehr has jo in e d Ray County Bank, Richmond, as president/director. He was president, First Community Bank, Windsor. B U ETTN ER NOW EVEN SMALL BANKSCAN OTTER BIG BANK ESTATE PLANNING. S M IT H David C. Buettner and Scott E. Smith have b een nam ed corresp on d en t banking officers, Bank of St. Louis. M r.Buettner’s territory is southern/ east central Illinois, and Mr. Smith’s is northeast Missouri/west central Illi nois. Before getting their new posts, Messrs. Buettner and Smith were analysts in the credit department and had joined the bank in 1983. Robert L. Firle has been named vice p resid en t, M erca n tile T ru st, St. Louis, which he joined in 1970. He was an assistant vice president. Named assistant vice presidents were: Edwin P. Altomare, Stephen M. Hasser, Mary L. Hillerich, Paul J. Piechowski, B. Stevens Plowman and Robert A. Friederich. MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis You don't have to be a big bank to give your custom ers big bank services— like estate planning. Now, First National Bank can bring it to you. That's right. At First National, our trust depart m ent is full or estate planning experts. Our correspon dent bank officers— Bill M anring, Jeff Harrison, Bob Holt or Mark Thom pson— will be glad to set up a group seminar or an individual consultation with you. So give us a call. With the help of First National, you can offer big bank estate planning, too. No matter what size you are. First National Bank St. Joseph, MO 64502 • Call: (816) 279-2721 Affiliate of First Midwest Bancorp., Inc. Member FDIC S/5 Joel S. Markus and Donald Kudart have been elected vice presidents, United Missouri Bank, Kansas City. Mr. Markus is in the communication systems department. Mr. Kudart is in the software services departm ent, where he has charge of managing the systems/programming staff. Named assistant vice presidents were: Greg Bernard, Roger Hershey and Gregg Thomas. Mr. Bernard is in the bond department; Mr. Hershey, financial services division, trust department; and Mr. Thomas, trust department. NEW MEXICO Sandy W. Thompson has joined Moncor Bank, Albuquerque, as senior vice president/real estate loan officer. He formerly was vice president/manager, Albuquerque office, First Security Realty Services, Inc. E. Michael Cunnington has been promoted to senior vice president/commercial loan offi cer. He has 11 years’ experience in commercial lending. Gerald A. Koury, vice president/manager, Eldorado Office, has been promoted to senior vice president/office manager. Loren zo G. “Larry” Leyva has been pro moted to vice president/manager, Highland Office. He was an assistant vice president/loan officer. Joining Moncor as vice presidents/loan review officers are Paul S. Richman and Bruce F. Marturano. Mr. Richman formerly was a national bank examiner, Office of the Comptroller of the Currency. Mr. Marturano had been with the FD IC . F . Jam es Volk, has b een named president/CEO and James R. Payne chairman of the United New Mexico Bank, Las Cruces, which is being orga nized. Mr. Volk until recently was senior vice president/commercial loan officer, Western Bank, Las Cruces. Mr. Payne formerly was senior vice president, investments, United New Mexico Financial Corp., Albuquer que. Patrick G, Cahalan has joined Santa F e ’s First National as vice president, commercial loans, Main Office. He was vice president, real estate lending, In te rF irs t Bank, Beaum ont, Tex. Verne McCarthy has been appointed manager, Cerrillos at St. Michael’s Office, and assistant vice president. He had been a commercial loan officer/ assistant m anager, W estA m erica Bank, Vacaville, Calif. Michael W. Altum has been named assistant vice president, accounting departm ent, First of Santa Fe. He transferred from Banquest National, A lbuquerque, Digitized forS/6 FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis which, like First of Santa Fe, is an affiliate of New M exico Banquest Corp., Santa Fe. Joni M. Franco has joined First of Santa Fe as a customer service officer, Main Office. She was manager, West Central Office, Banquest National, Albuquerque. OKLAHOMA Mortgage Group in Memphis Formed by First of O C O KLA H OM A C IT Y — F irst National has formed a new department to be headquartered in Memphis. First Mortgage Strategies Group will have as its principal clients S&Ls, pen sion funds and insurance companies. Senior Vice President Don Hughes will manage the new department. Vice presidents Bill Faron and Howard Lasley will hold key positions. Mr. Faron’s background is in mortgage banking, and Mr. Lasley formerly was with the S&L industry. First Mortgage will offer mortgage restructuring/trading strategies. Vining-Sparks Securities, Inc., Memphis, a firm offering securities/analytical ser vices to the financial industry, has been retained to assist in execution and efficient delivery of this service. A Crystal Exhibit First Continental Closed Both insured and secured deposits of First Continental Bank, Del City, have been transferred to United Oklahoma Bank, Del City, a newly chartered state nonmember subsidi ary of United Oklahoma Bancshares, In c., Oklahoma City. The two offices of the failed bank have reopened as offices of United Oklahoma, Del City. First Continental was closed by State Bank Commissioner Robert Y. Empie, and the FD IC was named receiver. Mr. Empie attributed the bank’s closing to “careless lending practices.” Bank of Oklahoma, Claremore, has promoted Judy Standridge to assistant marketing officer, Kenna Parish to mortgage loan processor and Diane Deardurff to loan administration offi cer. Douglas L. Ruhl has been promoted to executive vice president, L ib erty National and Liberty Financial Corp., Oklahoma City. He joined Liberty Mortgage in 1977 and transferred to the bank in 1981. He heads its real estate loan department. At Liberty National, Tony Boghetich has been named vice president, legal depart ment; Michael Houle, assistant vice president, special assets department; and Dean Hirschy, assistant vice presi dent, loan review. Mr. Boghetich joined the bank four years ago. Mr. Houle went there in March from W es tinghouse Credit Corp., where he was senior area sales m anager. Mr. Hirschy formerly was a national bank examiner, Office of the Comptroller of the Currency. He is loan review mana ger at Liberty National. William A. Dick, president, First National, Oklahoma City, has been named to the board of PSI Process Sys tems, Inc., a Memphis-based process en gin eerin g construction-m anageLinda Moore (I.), v.p., Liberty Nat'l, O kla ment firm. homa City, and Mary Fitzhugh, owner of Fitzhugh's, stand beside "The New York Concorde." Ms. Moore and Ms. Fitzhugh coordinated the cocktail preview showing of Baccarat crystal sponsored by the bank and Fitzhugh's. The $ 1 0,00 0 Baccarat crys tal obelisk pictured was auctioned off to benefit the Statue of Liberty Restoration Campaign. First bids were accepted at the preview. Once sold, it w ill be mounted on an ebony base, which w ill be inscribed personally to the purchaser. The obelisk was designed by Andre Vulliet, and it is his personal version of a monument in the Place de la Concorde in Paris. Exhibited at the showing was a selection of the most im portant pieces produced by Baccarat and valued at more than $100,000. Al Woods has been promoted to vice president, commercial lending, Cen tral National, Enid, which he joined in 1978. He formerly was an assistant vice president. RUHL DICK WOODS MID-CONTINENT BANKER for July, 1 9 8 4 M eet an A sset/Liab ility Consultant who won't talk the subject to death. There’s no question that Asset/Liability Management is a concept whose time has come. Trouble is many experts, so-called, insist on beating a good thing into the ground. Perhaps you’ve seen these people at work. After they’ve finished a presentation, you’re more confused than before. Our Asset/Liability message can be put into one simple sentence. “We’ll help you maximize earnings while minimizing risk.” That’s it. And we can do so by implementing our own system or working within yours. Call Lee Allen at 405-272-4689. He’s eminently knowledgeable and can speak yo ur language. Though a man of few words, he has a good deal to say...all of it going straight to your bottom line. F O R M O R E IN F O R M A T IO N O N M E A N IN G F U L A S S E T / L I A B I L I T Y M A N A G E M E N T C A L L O R W R IT E : LEE ALLEN THE FIRST NATIONAL BANK & TRUST COMPANY OF OKLAHOMA CITY P.O. BOX 25189 OKLAHOMA CITY, OKLAHOMA 73125 405-272-4689 *«1 m THE FIRST »SOU OVER $150,000,000 CAPITAL STRUCTURE MEMBER F.D.I.C./ A SUBSIDIARY OF FIRST OKLAHOMA BANCORPORATION, INC. Lee Allen Assistant Vice President The First THE FIRST NATIONAL BANK AND TRUST COMPANY O F OKLAHOM A CITY MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis S/7 F irst Sta te, So m erv ille; Phoebe Waynick, association vice president, and assistant vice president, Harde man County Bank, Bolivar; and Lloyd Cash, secretary/treasurer, and execu tive vice president, Bank of Bolivar. TEXAS New Landmark Bank Opens In Downtown Fort Worth HOPPER CATE Third National, Nashville, has pro moted Richard Cate to senior vice president; Michel Hopper to senior vice president/comptroller; Everett Davis to vice president; James Hofstetter Jr. to assistant vice president/ legal officer; and G erm aine Van Cleemput to legal officer. New officers include R. Stephen Iler, assistant vice president/trust officer, and Retty Har rison, assistant trust officer. Mr. Cate joined the bank in 1962 and heads the loan review department. Mr. Hopper has been with Third National since 1974. Union Planters National, Memphis, has elected Richard L. Roals and D eb orah D. Boyanton senior vice presi dents at InnoVision, Inc.; Cecil E. Anthony, Frank W. Blalock Jr., Fred H. Collins, Frank B. Horrell, Billy B. Jackson and Stephanie V. Musial vice presidents; and Phillip V. Koen, Dean E. Quandahl, David T. Riddle, Fulton L. Young and John S. Young III assis tant vice presidents. Landmark Bank of Fort Worth has opened its doors, in the 65-year-old W. T. Waggoner Building in down town Fort Worth. The bank has re stored the building to its former oppulence. It is the original site of Con tinental National. As an introductory special, the bank is paying 12% interest on its Landmark NOW Accounts until August 31. Keller Smith is president; Morrie Minshew is executive vice president; Haynes Morris is senior vice president and Jeannie Richardson is vice president/cashier. Merger Agreement Approved Shareholders of Cullen/Frost Bank ers, Inc., San Antonio, have approved the definitive agreement to merge with First City Bancorp, of Texas, In c ., Houston. First C ity’s share holders also have voted to approve the merger. The merged institution will have 78 member banks with assets of $19.2 bil lion, making it among the 20 largest commercial-banking organizations in America. Hamilton Bank, Johnson City, has promoted Patsy K. Elliott to assistant vice president/business development; Mary Jane Hendren to training officer; Frank G. Reynolds to credit officer; and Randy K. Humphreys and Duane U. Peterson to branch managers. D ep osit lia b ilitie s of Bled soe County Bank, Pikeville, have been assumed by Citizens Bank, Dunlap. Bledsoe County Bank was closed in May and the assuming bank paid the FD IC a purchase premium of $201,000 for installment loans and other assets. The FD IC Advanced cash amounting to $2 million to the assuming bank and retains assets of the failed bank with a book value of about $2.2 million. S/8 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis John A. Wolf, executive vice pres ident/trust officer, First City Nation al, Austin, has been elected chair man of the Texas Bankers Associa tion trust division. Other officers include Bruce Pet ty, Texas A m erican Bank/Fort W orth — first v ice chairm an; Richard S. White Jr., RepublicBank T ru st C o ., D allas/H ouston — second vice chairman; Jonathan A. Moore, Marshall National — secretary/treasurer; and Karen J. Cole, InterFirst Bank Houston — immedi ate past chairman. University National, Galveston, has promoted Marvin G. Langston to senior vice president/cashier, Roger R. Quiroga and Nana Beth Turner to vice presidents, Mary Bernard to assis tant vice president and Wallace H. Overly III and Sharon “Cricket” Sim mons to assistant cashiers. The bank also has begun construction of a threestory building that will include a driveup and parking areas. William B. Watkins has joined Texas American Bancshares, Fort Worth, as vice president/loan administration director. He formerly was a bank reg ulator for the Comptroller of the Cur rency’s office. Frost Bank, San Antonio, has pro moted James P. Cotton and Marvin Rickabaugh to vice presidents and Rudy Guevara, Caroline A. Ceniceros and Daniel J. O’Connor to assistant vice presidents. First Nat'l, Snyder, Fails New Officers of the Tri-County Bank ers Association are Jack Dawson, asso ciation president, and vice president, Bledsoe County Bank Fails Wolf Is Trust Div. Chairman DAVIS EDWARDS Ted Davis has been elected chairman/ CEO, First National, and CEO, First Am arillo B an corp ., In c ., both in Amarillo. He retains his titles as presi dent of both firms. He succeeds Gene Edwards as bank chairman/CEO. Mr. Edwards remains as HC chairman and a bank director. Mr. Davis joined the bank in 1969 and has been president since 1981. Mr. Edwards has been with the bank since 1949 and had been CEO/chairman since 1975. Insured and secured deposits of First National, Snyder, were trans ferred to American State, Snyder, recently. American State is a newly formed subsidiary of American State Financial Corp., Lubbock. First National was closed in May because it was said to lack available funds to meet depositor demands and had loan losses, conditions that promoted the Acting Comptroller of the Currency to declare insolvency. Insured deposits in First National amounted to $15.2 million. Amer ican State’s administration of the transferred deposits is funded by an equivalent cash payment from the FD IC . American State is paying the FD IC a premium of $962,000 for the right to receive the transferred de posits. Am erican State has pur chased First National’s installment loans and certain other assets total ing $6.8 million. MID-CONTINENT BANKER for July, 1 9 8 4 'A Frost correspondent banker gives you the personal response your bank deserves!’ Leonard Magruder, Senior Vice President, Correspondent Banking Division “ A correspondent banking rela tionship doesn’t mean a thing unless your upstream correspondent is in touch with the banking industry as a whole and, at the same time, knows the marketplace in which your bank does business. “ You can count on Frost corre spondent bankers to know your marketplace. After all, we’ve been in the banking business for more than a century, and that’s a lot of years of experience you can call on. Equally important, Frost correspondent bankers constantly monitor the mar ket to keep you apprised of economic developments and trends. We know the unique combination of problems your bank faces daily and on a long term basis. And we work out solutions to banking problems, often before they happen, so our ability supple ments your own.” Experience, Commitment services and loan participation. Frost Bank can provide your bank “ Frost correspondent bankers with exactly that kind of dependable, are committed to working with your bank on a personal as well as a pro creative, full-scale backing that makes a real difference in your fessional level. And that’s more im ability to succeed.” portant than ever before, in today’s rapidly changing marketplace where responsiveness is vital to any corre The Bottom Line Look at the bottom line. Today’s spondent banking relationship. business environment calls for up “ When you run into a problem, you need a solution. Now. Your corre stream correspondents with in-depth knowledge of the banking industry spondent banker’s response should be rapid and it should be based on and your marketplace. If that’s what you’ve been miss substantial professional experience ing in your correspondent banking and expertise. relationship, you haven’t talked with “ Your bank deserves a corre a Frost correspondent banker like spondent banker with the ability to Leonard Magruder. Call him today at respond with answers when you need them. With the ability to back (512) 220-4181 and discover the per sonal response your correspondent you with a complete range of ser banking relationship deserves. vices. From clearing functions and asset liability services to account management tools, automated Frost Bank The personal response your bank deserves. Frost National Bank, P.O. Box 1600,100 West Houston St. San Antonio, Texas 78296 Member FDIC MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis S/9 Discount-Brokerage Success Requires Good Marketing, Speakers Tell Bankers ISCOU N T-brokerage services are part of an increasingly com petitive financial-services market and have an exciting future, but a strong marketing program and a banker’s tra ditionally keen eye on operations are required for success. That seemed to be the consensus of speakers at a Peat, Marwick, Mitchell & Co. day-long seminar on discountbrokerage services held in St. Louis in late April. The program was the third of its type sponsored by New York Citybased Peat, Marwick in selected U. S. cities. Earlier, the program was pre sented to financial-services executives in New York City and Chicago. Roy M. Stolze, one of the pioneers of discount-brokerage services in St. Louis and currently president of Bru no, Stolze & Co., St. Louis’ largest discount broker, set the stage for the day’s activity with a review of events that had brought discount brokers into existence. Mr. Stolze, who was joined on the program by his brother, James, a St. Louis-based Peat, Marwick part n er, traced the roots of discount brokerage back to 1817, when the con stitution of the New York Stock Ex change set the fees brokers could charge their clients. Until the early 1950s, he said, the brokerage business was dominated by the individual investor, but then, insti tutional investors began to dominate. By the early 1970s, 60% to 70% of the average trading volume was done by institutions, and when fixed brokerage commission fees were eliminated in 1975, institutional investors began de manding discounts for the volume they were providing their brokers. Broker age services began passing along high er percentages of their costs to indi vidual investors who previously had been charged the same fees as the in stitutional investor, said Mr. Stolze. The stage by then was set for the discounter, who could undercut large brokerage houses by eliminating the “walnut walls, big desks and tickertape machines’’ normally associated with brokerage houses, said Mr. Stolze. But the market wasn’t quite ready for discounters, and the services that were established got off to a slow start. D S/10 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By now, how ever, every major U. S. city has a discount broker and within the next year, more than 2,000 financial institutions will be offering such services, said Mr. Stolze. Amer ica’s ever-more sophisticated financialservices user has at last awakened to the savings potential of going through a discounter rather than a full-service broker, he said. With the savings on transactions, an investor can purchase research a full-service broker normally provides, and, in any case, investors usually make their own decisions with out relying on a broker’s advice after they’ve been active in the market for a while, he stressed. Bud F eu ch tw an ger, p resid en t, Feuchtwanger Group, Inc., New York C ity, publisher of B a n k e r /B r o k e r T ie lin e , a fortn igh tly n ew sletter, emphasized the importance of market ing in building a solid base of custom ers for a discount-brokerage service. He showed examples of what he con sidered good and bad attempts to mar ket discount-brokerage services. An advertisement by New York City’s Chem ical Bank urging prospective customers to trade their full-service broker if he proved more expensive than the discount offered by Chemical Bank drew Mr.Feuchtwanger’s unre served praise. “ Rem em ber, your custom er can smell if your ad conveys that you don’t know what you are talking about, ” he said. Ralph Nixon, president, Torchmark Brokerage Services, In c., Boston, agreed that marketing is a critical ele ment in building a successful discountbrokerage operation. “You have to sell something before you can make a prof it on it,” he said, but he warned new entrants into the field not to expect to show a profit the first year. Even if the discount-brokerage ser vice does not prove profitable the first year, hanging on for a year or two until the profit picture improves is smart because the potential market for dis count brokers is so vast, Mr. Nixon said. He cited statistics from a Novem b er, 1983, study of the discountbrokerage market by Market Facts, In c., Chicago, as evidence of the mar ket’s potential. The study presents three possible scenarios for the evolu tion of discount-brokerage services over the next few years. Even under the “most pessimistic” scenario, the industry will exp erien ce some — albeit modest — growth, Mr. Nixon says. U nder the “ m ost re a lis tic ” assumptions made in the Market Facts study, banks will increase their dis count-brokerage customer base from .5 million to 3.5 million households by 1986, Mr. Nixon said. While the market potential is enor mous, several speakers warned finan cial-service executives to beware of the liabilities a discount-brokerage service entails. “You still have to focus attention on the operations side,” Richard Brueckner, senior vice president, Pershing Division, Donaldson, Lufkin & Jenrette, New York City, told his audi ence. “The worst thing you can do is hire a $25,000 clerk to handle the (dis count brokerage) business when you need a $50,000 person who knows the business.” A “$100,000 loss” can make hiring a $50,000-a-year expert seem like inex pensive insurance, Mr. Brueckner warned. He and other speakers on the program advised against hiring fullservice brokers to man the discount operation because the discounting business is so different from the fullservice operations to which they are accustomed. Full-service brokers, for example, often find it difficult to re strain themselves from crossing the line between presenting and recom mending alternatives, Mr. Brueckner said. Maintaining accurate and up-todate information on customers and where they can be reached also is a good policy, said Mr. Brueckner. In the brokerage business, reaching cus tomers in a matter of hours, not days, is of critical concern, he said. A discount-brokerage service does not have to be the cheapest in town to su cceed , speakers agreed. Even though the discounter is not providing all the services a full-service operation does, the service provided still has to be first rate, said Mr. Stolze. — John L. Cleveland, assistant to the pub lisher MID-CONTINENT BANKER for July, 1 9 8 4 MPX Merger Creates Third-Largest ACH Three automated clearinghouses merged recently to create MPX, which serves more than 2,000 banks, S&Ls and credit unions in Arkansas, Kansas, Missouri, Nebraska and major por tions of Illinois, Oklahoma and the southwestern portion of Iowa. M PX, which stands for MidAmerica Payment Exchange, is said to be the third-largest ACH of the 30 associations making up the nationwide network for automatically transferring funds. MPX is headquartered in Kansas City, and its chairman is Thomas H. Holcom Jr., executive vice president, First National CharterBank, Kansas City. Jerome S. Goldstein, senior vice president, Mercantile Bancorp, St. Louis, is vice chairman. Other offiers include John P. Bor den, president; C. Thomas Jeffrey, ex ecutive director/assistant secretary; Robert A. Horn, vice president; Larry Phillips, secretary; Marvin W. Smith, treasurer; and D eena J. McCamis, assistant secretary. Directors of MPX were selected from predecessor organizations: MidAmerica Automated Clearinghouse Association (MACHA), Kansas City; Arkansas Automated Clearing House Association (ARACHA), Little Rock; and Mid-America Payment Exchange (MAPEX), St. Louis.' The merger has enabled MPX to re duce its operating budgets by more than 15% due to economies of scale, says Mr. Holcom. MPX’s membership consists of more than 2,000 financial institutions. Transaction volume of M PX’s pre decessors last year exceeded 17.8 mil lion item s, Mr. G o ld stein says. Volume for 1984 is expected to exceed 25 million items. MPX directors include the follow ing: Steve Marsho, vice president/ cashier, First National, Belleville, 111.; George M. Ryrie, president, First National, Alton, 111.; Jerry Goldstein, senior vice president, Mercantile Ban corp, St. Louis; Thomas H. Holcom Jr ., executive vice president, First National CharterBank, Kansas City; William C. Imming, executive vice president, Commerce Bank, Kansas City; F. Howard Manning, vice presi dent, Centerre Bank, St. Louis; and Marvin W. Smith, senior vice presi dent, Boatmen’s National, St. Louis. New Orleans to Be Site O f 69th BMA Convention “Marketing: The Driving Force’ has been selected as the theme of the Bank Marketing Association’s 69th annual convention, slated for September 1619 at the New Orleans Marriott and Sheraton New Orleans hotels. The theme expresses the idea that marketers will play a pivotal role in determining the future direction of commercial banking, says Joyce Healy, senior vice president, Manufactur ers Hanover Trust, New York City, convention-program council chairper son. The three-day convention program will feature a roster of speakers with a MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis If you're a community bank looking for a package of advertising tools with a proven rec ord of success—here's TIPS for you! Each bi monthly edition of TIPS from Union Planters provides everything you need—from newspaper and radio ads, to statement stuffers, point-ofsale materials and newsletters —to successfully market your bank's services to your com “nuts-and-bolts’’ approach to bank marketing topics. S. F. Bradley, marketing director, First Commonwealth Bank, Prestonburg, Ky., is the prizewinner in the BMA’s convention “early bird’ reg istration drawing. His name was selected from among 140 delegates who submitted their registrations be fore a March 1 deadline. The prize is two first-class round-trip airline tickets to a city of the winner’s choice. • James R. Pastorello has been pro moted from executive vice president, education, to group executive vice presi dent, professional development, Bank Administration Institute, Rolling Meadows, 111. munity. And TIPS can be yours for far less than you'd expect to pay. To learn more about TIPS, or the complete array of correspondent services offered by Union Planters, phone toll free: Ten nessee 1-800-582-6231/Tennes see Border States 1-800-2387501 /Other 1-800-238-5028/ Ask for Correspondent Depart ment, Extension 6666. Union Planters National Bank P.O. Box 3 8 7 —Memphis, T N — 38147 S/ll Earnings-lmprovement Seminars Mark Entrance of CPA Firm Into Bank/Thrift Consulting ELO ITT E , Haskins & Sells has been in the co rp o ra te-co n sulting business for a long time, but recently it has made its services avail able to financial institutions through its new RESU LTS Project Group. Deloitte, Haskins & Sells (DH&S) acquired a consulting firm named Re sults International about 18 months ago and re-christened it the RESU LTS Project Group. Results International personnel were part of the acquisition. Group personnel have been holding half-day earnings-improvement semi nars geared specificially for financial institutions. Management-session seminar agen das cover practical methods and man agement tools for improving earnings, despite pressures resulting from de regulation, loan quality, competition and other factors. Earnings-im provem ent seminars address primary areas of concern for bankers, including non-interest in come opportunities, non-interest ex pense reduction and micro-computer tools for management. The first area of concern was ad dressed by Wayne Johnson, who heads the RESU LTS Project Group, when the “road show” visited St. Louis. Mr. Johnson discussed service-charge pric ing, NSF/criteria pay system, com m ercial-accou n t pricing and feeincome opportunities. Mr. Johnson, in his opening re marks, stressed the fact that R E SULTS personnel aren’t any smarter than bankers, but they have an advan tage in that they have discussed earn ings-improvement techniques with bankers throughout the nation and have observed which ideas work well and which do not. Much of the material presented at the seminars is ju st good common sense, Mr. Johnson said, and he asked the 100 representatives from banks and thrifts in his audience to strive to be aware of what was being presented so they could recognize at least one new idea they could take back to their bank or thrift that would enable the institution to improve its earnings. He likened conducting an earningsimprovement program to building a D S/12 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis house. A plan must be followed. Most financial institutions don’t have solid plans in mind when they embark on such a project. “They just hammer away at the building materials,” Mr. Johnson said, and the result often is less than adequate. When making a blueprint for earn ings improvement, bankers should ask themselves what factors are most im portant, Mr. Johnson said. He listed float, fee income and service-delivery productivity. “You can find money in these three areas,” he said. The objective of fee income is to evaluate a pricing policy relative to the competitive situation. Refore this can be done, a determination must be made as to the competitiveness of each bank service or product. Any product that is noncompetitive (such as NSF) can carry a service charge that relates to the true cost of providing the ser vice; thus, the bank can make money on it. Any product or service that can be classified as a “dawg” (Mr. Johnson is a native of Georgia and speaks — and sometimes writes — with a southern accent!) should be priced outrageously high so that it either drives customers using that service to another bank or makes the service so profitable that it no longer is a “dawg.” Business C o m m u n ic a tio n s Service . . . . . . w ith 50 years of listen ing . M IS S O U R I E IN C O M , IIV C . 10655 GATEWAY BLVD. ST. LOUIS. MO. 63132 3 1 4 /9 9 4 -1 3 0 0 He advised bankers to consider su per NOW customers as up-scale, since they are among the few bank custom ers who can afford to deposit $2,500 to open an account. These people should be treated as special customers. Offer them free coffee; let them participate in package plans as add-on — not free — services (so as not to reduce the bank’s income). Since most up-scale customers are not subject to service fees, add-ons — tied to transaction accounts — enable the bank to collect fees for the additional services. The second portion of the seminar discussed non-interest expense reduc tions, attainable through using staffing guidelines, float-reduction techniques and cash-management practices. One of the speakers during that por tion of the sem inar was W illiam Swords, manager of R E SU L T S’ Atlan ta office. In discussing achieving prop er staffing levels, he listed four vari ables: cost, quality, procedures or con trols and volume. The last variable is most important, he said, and if any one variable changes, the other three are affected. He cited branches as ideal locations to achieve staffing reductions because many employees at branches can per form the work of others. Tellers, he said, constitute 20% of a bank’s person nel expense. It’s possible to achieve a 10%-15% staff reduction simply by asking existing personnel to account for their work. This tends to make peo ple more productive, he said. He added that banks can schedule staffing more accurately to meet peak demand periods. Too often, banks tend to maintain full staffing even dur ing times when demand is low. They can save up to 10% of staffing costs by using R E S U L T S ’ software program that enables a bank to schedule per sonnel more efficiently. He also said many banks don’t realize that certain work can be carried over to the next day if it’s not completed by closing time — a practice that can permit per sonnel reduction. — Jim Fabian, senior editor Mass. Banking-Law Center Receives Citicorp Grant Citibank-Citicorp has given a $2,000 grant to the Morin Center for Banking Law Studies at Boston University School of Law. Purpose of the grant is to support the center’s educational programs in banking-law studies. The center was established in 1978 and publishes a banking-law review and conducts conferences and re search on current issues of importance in the financial-services industry. MID-CONTINENT BANKER for July, 1 9 8 4 W here should you be Septem ber 13? Join John J. Detterick, Gerald Greenwald, Alfred E. Kahn, Allan Munro, John Naisbitt, Joseph Pinola, John S. Poelker, Charles E. Rice, F.G. "Buck" Rodgers, Charles Schwab, Robert Townsend, and others - plus hundreds of your colleagues - in Denver, Colorado for a landmark meeting of the financial services industry. MINISTRATION INSTITUTE In Denv< S ep tem l Across th e C o n tin e n t S e p te m b e r 1 3 ,1 9 8 4 An unprecedented meeting for executives who listen. A satellite teleconference broadcast live to over 30 convenient sites across the continent. For three days this September, the U.S. financial commu nity will turn its attention to Denver, Colorado. Hun dreds of executives - from bankers to brokers - will meet to examine success stories of industry leaders who are parlaying today's market conditions into profit. It's MONEY TALKS, Bank Administration Institute's An nual Meeting, an unprecedented assembly of decision makers from virtually every sector of the marketplace: banks, savings and loans, brokerage houses, insurance companies, investment firms, and credit unions. In addition to hearing prominent general session speak ers, participants will be able to choose from among some 30 concurrent sessions. Each features a national author ity who will address a topic critical to understanding today's changing environment. The latest in products and services will be on display in the Exhibition Hall. And there will be numerous spouse attractions, plus a special Barbara Mandrell show. Program Registration Fee: Institute Member: $455 (Spouse: $190) Nonmember: $500 (Spouse: $210) MONEY TALKS is a landmark meeting. A conclave so sig nificant and timely, that no single meeting site can ac commodate all those who can benefit from hearing about what it takes to succeed in today's financial environment. Recognizing this, the Institute has drawn upon its exten sive experience as the industry-leader in teleconference programs. The result is the MONEY TALKS teleconference, broadcast live from the assembly floor to key locations across the continent. Now, everyone can view the key general sessions and profit from the business and money-making insights of fered by the forum's outstanding selection of speakers. Call for times and locations nearest you. Wherever you are - whether in Denver or at one of the teleconference sites - you should be listening when, on September 13, MONEY TALKS to you. Program Registration Fee: Institute Member: $135 Nonmember: $170 For im m ediate registration or information, call the Education Hotline: 1-800-323-8552 (In Illinois, 1-800-942-8861), or 1-312-228-6200. DANK ADMINISTRATION INSTITUTE 60 Gould Center, Rolling Meadows, IL 60008 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MONEY TALKSSM is a service mark owned by Bank Administration Institute, Rolling Meadows, Illinois 60008, U.S.A. ■*» WÊËÊèèb. Some bankers hope It won’t. And if you don’t consider your options, you may be left with out any. At least one leading consul tant predicts that over 5,000 banks will disappear within this decade. Some for being unable to com pete with products or technology, some for just not being able to compete profitably any longer. An alternative to joining the growing list of merged or acquired financial institutions is a franchise from First Interstate Bancorp. It’s https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a way not just to survive, but to thrive. Franchising: the profitable partnership. The First Interstate Bank system is the nation’s seventh largest banking organization with assets of over $44 billion. 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Premiums are the way to m ake m arketing prom otions fun for you, your em ployees and, above all, your customers. Who can resist such personalities as “Me, Too!,”SM “Christmas Cub,”™ “Holly Berry”™ or “Smart Cookie”™? Many of these premiums are exclusive with us, and are availab le to you to m ake your m arketing prom otions unique, varied, highly successful-and fun! We a t Christmas Club a Corporation have been designing and m arketing pro m otion packages for m ore than 7 0 years-and we know how to m ake them work! If you haven’t received your 1984 Premium C atalog, ca ll us tod a y and let us share the fun with you. TM-Christmas Cub" is a trademark and a servicemark of Christmas Club a Corporation, Easton, PA. S M -M e Too!” is a servicemark of Christmas Club a Corporation, Easton, PA. SM-Holly Berry” is a servicemark of Christmas Club a Corporation, Easton, PA. SM-Smart Cookie” is a servicemark of Christmas Club a Corporation, Easton, PA. c h R is r m a s c l a b a corporation PO. Box 20 Easton, PA 18042 ATTN: Hal Gregory (215) 258-6101 in PA. (800) 523-9334 in NY, NJ, DE and MD. (800) 523-9440 in all other states. Please send me a 1984 Premium Catalog. NAME _______________________________ CITY_____________________STATE______ ZI P TELEPHONE NUMBER _________________ A Collection of Holiday Celebrations at Banks H ERE N EVER is a shortage of ideas for making banks attractive and hospitable during the holidays. Each year, new ideas are blended with more traditional ones in banks across the nation and each year those in charge of displays and decorations seem to think of better ideas they can utilize the following year. Following is a collection of holiday ideas that worked successfully at banks last year. Most of them are adaptable to almost any bank’s situation. • Music brought the spirit of Christ mas to noon-hour crowds at the main office of Marine Bank, Milwaukee, from noon until 1 p.m. during preChristmas week last year. Daily per formances featured a harpist, a high school choir and a woodwind quintet. The bank lobby was decorated with a hanging illum inated starburst and numerous decorated Christmas trees. • It's traditional for the Christmas season to begin at First Plaza in front of First National’s building in Albuquer que. The eye-catching feature in plaza decorations is a 60-foot Christmas tree made of 200 eight foot white fir trees, topped by a 20-foot white fir tree. The 11-ton tree is wrapped in onethird of a mile of lights (2,000 bulbs). The bank invites Albuquerqueans to gather on the plaza, join the Albuquer que Boys’ Choir in the singing of carols, visit with Santa and watch the tree’s lights come on. Santa descends in a sleigh from the top of the sevenfloor building to visit with the crowd and bank employee “elves” distribute T candy canes to children. The city’s mayor officially opens the Christmas season by throwing the switch that lights the tree. Luminarias grace the top of the bank building and outline the fountain on the plaza. • Something new in Shreveport, L a., last year was the introduction of a new holiday back-lit billboard by First National that features a white dove with wings outstretched, along with the message “Peace — the wings of the future. ” The panagraphic billboard has a background that is brilliant blue sky by day, but that changes to a stainedglass background at night. The board is illuminated from the rear by light boxes operated by an electronic eye that turns lights on at dusk and off at daylight. The billboard features other messages during the year. • A Christmas tree made from 1,000 poinsetta plants brought color to the lobby of Hawkeye-Capital Bank, Des BANKER for July, 1 9 8 4 DigitizedMID-CONTINENT for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis On the Cover Christmas “gifts” to the public by banks include (clockwise, from up per left) a Christmas tree made from 1,000 poinsettia plants at HawkeyeCapital Bank, Des Moines, la.; a banking lobby decked with a hang ing illuminated starburst at Marine Bank, Milwaukee; collection of toys wrapped by em ployees of Frost Bank, San Antonio, being judged by personalities from TV’s “PM Maga zine” ; and backlighted billboard bearing message of peace sponsored by First Nat l, Shreveport, La. Moines, la., last year. The tree con sists of a wooden frame that is 16 feet high with a diameter at its base of 12 feet. Plants are arranged on the frame to produce the shape of a Christmas tree. The tree provides a backdrop for high school singing groups who per form during Christmas week. When the poinsetta tree is dismantled, the plants are donated to customers, em ployees or area nursing homes. • A series of musical entertainment programs for local senior citizens groups and residences has been pre sented for the past 11 years by Devon Bank, Chicago. Six shows were given last year at various locations. • A Christmas tree auction and show was held in the lobby of First National, Hutchinson, Kan., last year early in December. Thirty-five trees were displayed, each donated by a community group. The auction benefitted the Training and Evaluation Center of Hutchinson. A wood sculp ture tree brought $775, the highest price bid for any of the trees. The auc tion raised more than $10,000 for the Training and Evalu ation C en ter, which helps handicapped and retarded children and adults. All trees were dis played in roped-off rings in the bank lobby. • A teddy bear Christmas promo tion was staged at Charter-Bank Inde pendence (Mo.) last year. Thirty-six bears were used to decorate the bank for the holiday season. Each bear was destined to be a gift to a child. Names of the children were collected in a box 27 Auctioneer (I.) takes bids on dolls auc tioned by Sterling Nat'l, Sugar Creek, Mo. in the lobby and a drawing was held just before Christmas. The promotion not only decorated the bank, it made many children happy at Christmas. • A doll auction was the highlight of the holiday observance at Sterling National, Sugar Creek, Mo., last year. The bank purchased 85 dolls and asked residents to dress them. The costumed dolls were taken to a local hotel ball room where they were auctioned, with proceeds donated to several local char ities. Prizes were given for the three best costuming jobs, with a new sew ing machine going to the top winner. • Lunch-tim e holiday en tertain ment was provided by area choral groups in the main bank lobby of M er chants National, Topeka, last Decem ber. Groups performing over a twoweek period included the Topeka Opera Society Concert Association, Topeka West Singers, Topeka High Madrigals, Hayden Singers, Shawnee Heights Corraliers, Highland Park Scots, Seaman High School Seamanaires and a group from Washburn Ru ral High School. All concerts were 30 minutes in length. • A locally produced recording of Christmas music was sold to the public last year at Fourth National, Wichita. Object of the sale was to raise funds for music scholarships at local universi ties. Title of the recording was “Wichi ta Holiday Magic, ” and a color photo of the bank’s continuing holiday magic Christmas display appeared on the record jacket. Almost 4,000 albums were sold at $5 each last year and more are expected to be sold this coming holiday season. Sixty-foot-tall Christmas tree adorns First Plaza at First N at'l, Albuquerque. Tree lighting ceremony at plaza marks start of holiday season each year. • Dolls dressed in everything from blue jeans to bridal gowns and toys painted in bright colors filled the mid dle lobby at First National, Belleville, 111., prior to last Christmas. The dolls and toys were dressed and painted by members of the bank’s Senior Security Club and were donated to the local Empty Stocking Fund, a non-profit organization that donates toys, cloth ing, money and food to the needy at Christm as. The club is for senior citizens. • • HOW WILL YOU DECORATE THIS CHRISTMAS?? Toys wrapped by employees of Frost Bank, San Antonio, were presented to 250 chil dren from area children's homes during bank's annual Christmas party last year. Santa is shown giving gift to deserving youngster. 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 IC H IG A N 48734 Phone 517 652-9931 Digitized for28 FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis « More than 2,000 gifts for abused and neglected children were collected by Texas American Bank/Fort Worth last year through the bank’s “Spirit of C h ristm as’’ gift-giving program . Through the program, bank customers and employees picked cards bearing a child’s name, age and what his or her needs were for Christmas. The names were provided by the Texas Depart ment of Human Resources. Partici pants chose a card, wrapped their gifts and brought them to the bank for placement under a Christmas tree in the lobby. The gifts were delivered to the Department of Human Resources for distribution to recipients. Approx imately $600 was collected to purchase additional gifts for more than 70 other children. Spirit of Christmas is shared w ith custom ers of Liberty Nat'l, Oklahoma City, by harpist playing Christmas music in bank's lobby. Four three-hour concerts were given last year. MID-CONTINENT BANKER for July, 1 9 8 4 There's no subs iiM - i l l * f e le ^ i / investments. hen it comes to investments— long-term or short-term —nothing outperforms quality. n A B ~ r v , And when it comes to quality, no one beats the outstanding track record of United Missouri’s Investment Banking Division. Sound bond portfolio recommendations are our business. They have been since the 1920’s. You can rely on our ability to adapt in this changing financial world. Today and tomorrow, your bond portfolio will benefit from our consistently high standards. Call or write United Missouri Bank today. W e’ve mastered the art of quality. W Investment Banking Division UNITED MISSOURI BANK of Kansas C ity n.a. Member FDIC United we grow. Together. 10th and Grand o P.O. Box 226 Kansas City, Missouri 64141 o (816) 5 5 6-7200 BANKER for July, 1 9 8 4 DigitizedMID-CONTINENT for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 29 Christmas Club Turnarounds Credited to Sales Efforts E L L E R TRAINING is the key to a successful Christmas Club promo tion, according to two midwestern bankers who have seen their banks’ clubs perform turnarounds in the past two years. They add that an important adjunct to training is incentives that make the extra effort to promote Christmas clubs worthwhile for bank personnel. The bankers are Rita Painter at City Bank, Moberly, Mo., and Mary Doak at Grundy National, Grundy Center, la. Both banks saw their clubs falter during the recession year of 1982 and both are seeing the results of a deter mined effort to make the clubs success ful. Ms. Painter says a special meeting is held annually at City Bank to familiar ize tellers with the training they need to cross sell Christmas club accounts. Tellers are made aware of the bank’s policy to push club-account sales dur ing the year-end sign-up period. They are told that the three tellers opening the most clubs will be rewarded for their efforts. Both renewals and new club accounts qualify for the competi tion. The public is reminded about club availability by statem ent stuffers, newspaper ads and some radio adver tising. The bank’s effort to promote Christ mas clubs is the result of stock taking after a bad year for clubs in 1982, Ms. Painter says. Consideration was given to dropping the accounts, but manage ment decided to try to reverse the de crease in club sales by offering a free stuffed-bear premium to anyone open ing a club with a payment coupon of $20 per week. In addition, the bank made the 50th payment for every club account kept up to date through its term. The bear prem ium , which was purchased from Christmas Club a Cor poration, proved a real hit among cus tomers. Bears were placed throughout the bank’s lobby, where they would attract the customer’s eye. T e lle rs’ sales efforts were made easier when customers approached them to ask how they could obtain “one of those cute bears” as a Christ mas gift. More than 850 of the plush animals were given away or purchased during the two-m onth prom otion period, Ms. Painter says. Customers T Digitized for30 FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis opening club accounts with weekly payments less than $20 could purchase the premiums. Ms. Painter says Christmas clubs are useful to banks because they con stitute excellent “openers” for making sales of other types of accounts. Cus tomers appreciate Christmas clubs be cause they see them as a way of making a commitment to saving. They also like to have a savings account that is not readily accessible during the year. They know the money will stay put until payout time. Ms. Painter reports that Christmas club dollar activity was quite static prior to the offering of premiums. Dol lar activity increased only 1% in 1980 over 1979 and only 8% in 1981 over 1980. A 9% d ecrease occurred in 1982 (due to the recession). That’s when it was decided to beef up club appeal with prem ium s. D ollar activity jumped 34% in 1983, the first year pre miums were offered! It’s important that bank personnel know how to sell Christmas clubs, Ms. Doak says. Actually, the accounts are easy to sell, and the experience per sonnel get in promoting them helps condition tellers to sell other bank ser vices. After two months of pushing Christmas clubs, tellers are sufficient ly fortified by their success to tackle the sale of services that aren’t as readi ly accepted by the public. Grundy N ational sets goals for Christmas club sales and offers re wards to all bank personnel who attain the goals. Personnel are placed in teams to make the effort a cooperative one. In the interest of operational econ omy, the bank decided to make some changes in its Christmas club policy last year. Since it costs the bank almost 300 to process a Christmas club pay ment each week, it seemed reasonable (and practical) to make an effort to con vert accounts to an automatic-payment plan. But, in order to do this, custom ers would have to arrange for their pay ments to be deducted from checking accounts, and, in so doing, they would lose any interest their club accounts had been earning in the past. Teller teams were told that one of their goals would be to convince a per centage of club account holders to make this switch. This meant tellers had to be able to give convincing argu ments to counteract customers’ dis appointment at losing their annual in terest. Tellers became adept at advis ing customers that the convenience of an automatic club payment more than made up for the loss of a few cents of interest. Not all customers would or could make the change to automatic deduc tions of payments. Those who didn’t have checking accounts had no choice but to continue making weekly pay ments by coupon. Since a number of children fell into this category, the bank continues to honor this method of payment. Grundy National has had mixed re sults with the use of prem ium s, according to Ms. Doak. In 1981 a Christmas collector’s plate was offered that was a great success, accounting for a 32% increase in business. Manage ment was so pleased with the results that a similar plate was offered the fol lowing year. But the recession took its toll and a 16% d ecrease in volume re sulted. Last year, candleholders were offered, with much-improved results — only a 2% decrease was registered! Although this may seem to be a less than satisfactory result, Ms. Doak says, it really represents quite a turn around from the previous year’s de crease, especially when the changeov er to automatic deductions and subse quent loss of interest is taken into con sideration. Ms. Doak is convinced that pre miums are essential to successful Christmas club sales. They get the cus tomer’s attention, she says. It’s the point-of-sale factor! And it helped Grundy National convince 40% of its Christmas club customers to opt for automatic deductions of payments. The experiences of these two banks point to the fact that there’s no substi tute for effort in the promotion of Christmas clubs! • • MID-CONTINENT BANKER for July, 1 9 8 4 Christmas Club President Guinan Looks Forward to Greater Successes HE FINANCIAL institutions de scribed in the article on page 30 have at least one thing in common — profitable use of the Christmas club concept. John H. G uinan, p resid en t of Christmas Club a Corporation, points out that club savers actually can con tribute to profitability in other ways. “These savers offer more to financial institutions than simply a source of low-cost cash,” he says. “W e’ve found that most Christmas club participants have a strong sense of loyalty to their banks, and that loyalty can pay off very well. A recent survey showed that nearly all club savers have checking or NOW accounts, and the majority of them have passbook accounts and bank credit cards. Many club savers, we learned, also borrow money, rent safe ty deposit boxes, or use other services offered by their banks.” But financial institutions across the country are not the only ones benefitting from Christmas clubs. The Eas ton, Pa.-based corporation itself en joyed remarkable success in 1983 — the best year in its 73-year history. At the firm’s annual sales meeting earlier this year, Mr. Guinan acknowl edged the current turmoil in the finan cial industry, but said, “We are confi dent that demand for our products will remain strong. In addition to market ing our traditional product line, our diversification efforts will continue.” Mr. Guinan’s confidence is demon strated by current information: • Overall sales in 1983 were 14% higher than in 1982. • Full Service Bank Productions (FSBP), a wholly owned subsidiary, generated 10% of the Corporation’s total income and operated at 350% of its expected level. F S B P supplies banks with collateral materials en dorsed by the American Bankers Asso ciation. • “A Better Way . . . , ” a series of informational pamphlets covering auto loans, IRAs, checking accounts, NOW accounts and other services, was de veloped to offer banks a low-cost way of promoting these services. The design allows customized copy to be added to the back page, thereby personalizing an othrwise “stock” item. Mr. Guinan also is enthusiastic about two new 1984 Christmas Club programs, which he believes will be substantial successes: “Smart Cookie” and “Me, Too!” T MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis G n o m e -like b aker sets tone of " I'm a Sm art C o o kie" C hristm as C lub promotion for com ing holiday season. The central figure in the “Smart Cookie” program is a bearded, be spectacled elfin baker (see illustra tion). The premium line includes twofoot and eight-inch stuffed velour gin gerbread men, coordinated apron and oven mitt sets, old-fashioned ceramic cookie molds from PfaltzgrafFs “Amer ica collection, a cookie recipe book from B etter Hornes an d G ardens, sets of gift-boxed metal cookie cutters and Danish-style cookies packed in deco rated, reusable tins. The “Me, Too!” program includes eight-inch and 40-inch versions of a stuffed plush puppy and a plush SANTA CLAUS RINGS $ 6 0 PER 1,000 Made in AM ERICA The perfect giveaway for attracting new customers and spreading goodwill. Our (ACTUAL SIZE 1 1 /4 ” DIA.) Santa Claus rings are decorated in four colors with non-toxic paint and are F.D.A. approved for children of all ages. One size fits all. Minimum order is 1,000 rings and shipping is FREE with payment in advance. Don’t delay, order your rings today. Train W histles, Duck Calls and Red, W hite & Blue Whistles W e will print your logo or message for only 1 6 $ each plus a plate charge of $ 3 0 .0 0 . Plain whistles are only 6 V i$ each. Minimum order is 1,000 of one style. Details available. FREE SAMPLE KIT ON REQUEST. Wilson Premium Corp.-, P.O. Box 30185, Memphis, TN 38130 Phone (901) 346-8803 31 Christmas stocking with enough ironon letters to personalize it. Mr. Guinan says both programs in clude the full range of Christmas club support materials, such as coupon books, checks, envelopes, statement enclosures, cutout application cards, counter cards and teller badges. The “Smart Cookie” them e also lends itself to the promotion of other bank services throughout the year, and is carried out through color brochures featuring “cookie” graphics for each bank service. “We think the concept will appeal to many customers,” Mr. Guinan says. “They’ll be able to think of themselves as being ‘smart cookies’ for selecting these services, such as IRA or Keogh plans, personal loans, charge cards and others.” Other premiums offered by the Cor poration run far beyond stuffed ani mals and cookies. A quick look through the new catalog uncovers many more items, several of them Christmas Club exclusives. Of particular interest are Norman Rockwell and Currier & Ives designs reproduced on a variety of items, such as mugs, plates, Christmas ornaments, lamps and other goods. Regarding the future of the Cor poration, Mr. Guinan is optimistic. “W e’re riding the crest of the best sales year we’ve ever had, our field sales staff was recen tly expanded with talented and aggressive people, our new products are performing well and we have a terrific customer base, ” he says. “We expect 1984 to be even bet ter than 1983, and it really should be. After all, every day is Christmas for us!” • • Settlement Is Made In Case Involving Bank Directors A N O RD ER accepting a settlement offer from a state-chartered bank k regarding its directors’ responsibility for loans made in excess of the bank’s lending limits has been accepted by Eugene W. Kuthy, commissioner of Michigan’s Financial Institutions Bureau (FIB). In March, 1981, the bank and its board were informed by the F IB commissioner that several loans made to different parties were so in terrelated as to be considered one unit for purposes of the bank’s lending limits because proceeds of the loans were directly or indirectly to one entity. The combination of these loans resulted in a statutory-lending violation that exposed the bank to financial loss as a result of the directorate allegedly not properly discharging its legal responsibility. Subsequently, the commissioner issued a notice of charges for issuance of a cease-and-desist order after the bank failed to reduce the loan to its legal lending limit within 90 days. The order would have required the bank to hold the bank’s directors responsible for any losses incurred. Prior to the hearing scheduled before a hearings officer, counsel for the parties, including bureau staff, reached a proposed settlement. It then was presented to FIB Commis sioner Kuthy. According to Mr. Kuthy, the agreement made further proceedings before the hearings officer unnecessary. The bank not only proceeded to collect a large portion of its losses from the debtor, but also collected funds from individual directors. The board also agreed to initiate a review of directors’ responsibilities, institute sound lending policies, regularly report its progress to the F IB and disclose the settlement to its shareholders. In return, Mr. Kuthy dropped the cease-and-desist action and is issuing a bulletin to all state banks on combining loans for purposes of statutory-lending limits of a bank. While he precluded from identifying the bank or individuals because of banking-confidentiality laws, Mr. Kuthy indicates he would make the order available after eliminating names and other language to prevent identification of the parties involved. “This action,” says Mr. Kuthy, “was brought for the twofold purpose of dealing with a recalcitrant board, which, in my opinion, was not paying attention to its responsibilities, as well as sending a signal to all other banks and their boards that the bureau intends to pursue such violations of banking laws.” 32 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AmeriTrust HC, Cleveland, To Acquire Colorado HC AmeriTrust Corp., Cleveland, and Central Bancorp., Inc., Denver, have entered into an agreement whereby AmeriTrust would purchase a 92% equity interest in Central Colorado Co., a partnership that owns about 95% of Central Bancorp. The interest would be purchased indirectly from D. H. Baldwin Co. The agreement is subject to the approval of the Fed. In addition, since D. H. Baldwin Co. is currently in reorganization under Chapter 11 of the Bankruptcy Code, the agreement re quires approval of D. H. Baldwin, the bankruptcy court and certain equity and creditor groups. No changes in directors and man agement of Central Bancorp, are ex pected; in addition, management of the HC’s member banks would con tinue without change. AmeriTrust is the fourth largest commercial bank HC in Ohio with year-end 1983 assets of $5.8 billion. Central Bancorp, is a statewide HC with 19 banks and four more in various stages of organization. Its assets were $1.7 billion at year-end 1983. Closed KC Bank Reopens As Landmark Bank Republic Bank, Kansas City, closed June 18 by the Missouri commissioner of fin an ce, K en neth L ittle fie ld , reopened June 21 as Landmark Bank of Kansas City, a de novo subsidiary of Landmark Bancshares Corp., Brent wood, Mo. (a St. Louis suburb). Land mark Bank assumed the insured de posits of Republic Bank. Brick Porter is president, and John C. Craft is chairman. Mr. Porter is a partner in a law firm and chairman, Landmark KCI Bank, Kansas City. Mr. Craft is president, Landmark KCI Bank. The reopened bank, Landm ark Bank of Kansas City, has two locations, the main one at 1801 Grand Avenue and a facility at 3838 Main. • Ralph E . Sharpe has been ap pointed director, enforcement/compliance, Office of the Comptroller of the Currency; Roberta W. Boylan has been named director, legal advisory services; and Eric Thompson has been named director, legislative/regulatory analysis. Mr. Sharpe joined the OCC in 1978; Ms. Boylan in 1966 and Mr. Thompson in 1980. MID-CONTINENT BANKER for July, 1 9 8 4 Help Stamp Out Director Liability Risk With These Board-Related Manuals $26 C O R P O R A T E E T H IC S . . . W h a t Every CORPORATE ETHICS RISK MANAGEMENT B O A R D P O L IC Y ON R IS K M A N A G E M E N T . $20.00. T his 160-page manual provides the vital in fo rm a tio n a board needs to fo rm u la te a system to recog nize insurable and uninsurable risks and evaluate and p ro vid e fo r them . In cluded are an insurance g u id e lin e and che cklists to id e n tify and p ro te c t d ire c tors against various risks. B onus fea tu re : A m odel board p o lic y o f risk m anagem ent adaptable to the unique situ a tio n s at any bank. Every m em ber o f y o u r b a nk's board should have a co p y! RANK BOARI» $22 LOAN POLICY B $20 .50 Q U A N T IT Y PRICES 2 - 5 copies — $23.00 ea. 6 - 1 0 copies — $21.50 ea. tt hat livery Director Should Know About Conflicts of Interest The E ffe c tiv e B o a rd A u d it D ire c to r S ho uld K n o w . $26.00. S o cie ty is dem anding m ore disclosure fro m all businesses, in c lu d in g banking. Thus, bankers lite ra lly are fo rce d to rp-examine policies on types o f in fo rm a tio n th a t can be disclosed p u b lic ly . The board's disclosure p o lic y can be a m ajor fa c to r in the p u b lic 's ju d g m e n t o f a bank. The fa c t th a t a bank is w illin g to discuss . . . o r make p u b lic . . . any of its actions w ill encourage high stan dards o f co n d u c t by the bank s ta ff. T his m anual (over 200 pages) w ill help d ire cto rs probe "g re y ” areas o f business c o n d u c t so th a t d ire c to rs can establish w ritte n codes fo r th e ir o w n bank. THE B A N K B O AR D A N D LO A N P O L IC Y . $16.00. (F o u rth E d itio n ) R ecently o f f the press! T his revised and expanded m anual enables d ire cto rs to be a step ahead o f bank regulators by p ro v id in g c u rre n t loan and c re d it p o li cies o f num erous well-m anaged banks. These policies, adaptable to any bank s itu a tio n , can aid y o u r bank in estab lishing broad guidelines fo r lending office rs. B onus fe a tu re : Loan p o lic y o f one o f th e n a tio n 's m ajor banks, loaded w ith ideas fo r y o u r bank! Rem em ber: A w ritte n loan p o lic y can p ro te c t d ire c tors fro m law suits arising fro m fa ilu re to establish sound lending policies! O rder enough copies fo r all y o u r d ire c tors! Q U A N T IT Y PRICES 2 - 5 copies — $17.50 ea. 6 - 1 0 copies — $16.50 ea. T H E E F F E C T IV E B O A R D A U D IT . $22.00. T his 1 84-page m anual provides com prehensive in fo rm a tio n ab o u t the d ire c to rs ' a u d it fu n c tio n . It ou tlin e s board p a rtic ip a tio n , selection o f an a u d it c o m m itte e and the m ag nitu de o f the a u d it. It provides guidelines fo r an a u d it co m m itte e , deals w ith social re s p o n s ib ility and gives insights on en gaging an outside a u d ito r. It includes checklists fo r social resp on sibilitie s audits, a u d it engagement le tte rs and bank audits. N o d ire c to r can a ffo rd to be w ith o u t a c o p y ! B $16 C O N F L IC T S OF IN T E R E S T .$ 1 6 .0 0 . (T h ird E d itio n ) C o n flic ts o f Interests presents eve ryth in g d ire cto rs and o f f i cers should k n o w a b o u t the p ro blem o f " c o n flic ts ." It gives e xa m in e rs'vie w s o f d ire c to rs ' business relatio nships w ith the bank, exam ines eth ical p itfa lls in vo lvin g c o n flic ts and details positive actions fo r reducing the p o te n tia l fo r c o n flic ts . A lso in clud ed is the C o m p tro lle r's ru lin g on statem ents o f busi ness interests and sample c o n flic t-o fin te rest policies in use by oth e r b a ^ s w h ic h can be adapted by y o u r board. Q U A N T IT Y PRICES Q U A N T IT Y PRICES 2 - 5 copies — $13.00 ea. 6 - 1 0 copies — $12.50 ea. 2 - 5 copies — $13.00 ea. 6 - 1 0 copies — $11.50 ea. THE B A N K B O A R D LE TTE R 40 8 O live S t., St. Louis, MO 6 3 1 0 2 . . copies, Board P o licy on Risk M anagem ent $ . . copies. The E ffe ctive Board A u d it $ . . copies. Bank Board & Loan P olicy $ .. C o n flic t o f Interest $ copies, . . copies. C o rpo ra te E thics T o ta l Enclosed $ $ N a m e ...................................................................................................... T itle B a n k .................................................................................................................. Street ............................................................................................................... C ity , State, Z ip ............................................................................................. Q U A N T IT Y PRICES 2 - 5 copies — $19.00 ea. 6 - 1 0 copies — $18.00 ea. MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (Please send check w ith order. In M issouri, add 4.6% tax. 33 NO AC Indicates Wiser Technology Use Required in Banking Industry B nonbank companies to divest them selves of banking activities. “ If they were here today, they would marvel at this wonderful tech nology,” Mr. Cairns said, speaking of congressmen. “Perhaps they would realize that the human mind that could envision this technology could also find a way around any legal barrier they could create if the reward is great enough . . . and it is.” But not all members of Congress would be attending NOAC, said Mr. Cairns, so it is up to bankers to com municate that “we cannot return to a safe, easy world where banking fees were nonexistent or nominal, a per son’s signature was as good as his/her bond, and banking was the unique pre serve of bankers. ” Throughout his speech, Mr. Cairns reminded the operations/automation p erson n el of the im portant role they’ve come to play in banking and the need for them to be more disci plined. When he is inducted this Octo ber as the ABA’s new president, Mr. Cairns noted early in his speech, he will become — at age 46 — not only the ABA’s youngest president in his tory, but also the first to come up through operations, not the lending or retail side of banking. He suggested that his election as ABA president would not be as much a reflection of his personal attributes as a reflection of the crucial role operations have come to play in banking. One congressman who did turn up at NOAC was Senator Jake Garn, (R.Utah), chairman, Senate Banking Committee. Technology is changing so rapidly, Senator Garn said, that the time for the next legislative step in deregulating financial institutions is now. No longer does it make sense to regulate financial institutions under laws written 50 years ago, he said. Adding that he was not going to pre side over a Senate Banking Committee that does nothing, Mr. Garn assured bankers he will continue to push for as broad a bank deregulation bill as possi ble. Although he has hopes such leg islation could pass yet this year, he said he still will be around in Congress for at least another two years to continue to push for the next step in the dereg(Continued on page 36) 34 MID-CONTINENT BANKER for July, 1 9 8 4 IL L E D as the world s largest ex hibition of banking technology, the ABA-sponsored national opera tions and autom ation co n feren ce (NOAC) in mid-May seemed designed to convince bankers that more intelli gent use of technology — not just more technology alone — is required to cure banking’s major problems. Don Hollis, senior vice president, First National, Chicago, and executive committee chairman, ABA operations Speakers at ABA's national operations and and automation division, started the autom ation conference in W ashington, D.C., were (from I.): Don Hollis, s.v.p., First four-day co n feren ce held at the Nat'l, Chicago; John S. Reed, vice ch., Citi Washington, D. C., Convention Cen bank, New York City; and James G. Cairns ter with a speech detailing banking’s Jr., ABA pres, elect/pres., Peoples Bank of poor productivity record d espite Washington, Seattle. attempts to automate. ‘Most of us expected automation to development; however, too often, de improve efficiency; the numbers don’t velopment projects in banking are in bear us out,’ Mr. Hollis said. “Accord itiated w ithout b en efit of m arket ing to the (U. S.) Bureau of Labor, our validation, according to Mr. Hollis. “Given increased competition, the average annual increase in productiv ity is essentially flat. We can’t use the banking industry can’t afford false excuse that all service industries have starts,” said Mr. Hollis. “Hence, fo low productivity rates. For example, cused market research should be a pre the labor-intensive communications requisite to project initiation.” industry leads with an average annual James G. Cairns Jr., ABA presidentincrease of 5.7%, and this industry has elect/ presiden t, Peoples Bank of been heavily unionized and regulated. Washington, Seattle, noted that tech Even more embarrassing, bureaucrats nology is on the verge of becoming a reponsible for regulatory compliance “banking product in and of itself” showed higher productivity gains: rather than just a vehicle for product delivery. But he urged bankers not to 2.1% versus 1.3% .” The banking industry has had some succumb to the temptation to focus on “real successes’’ in improving produc what is technically possible rather than tivity and in its efforts to automate, on what is necessary from customers’ said Mr. Hollis, and there have been viewpoints, or is profitable for the mitigating factors in banking’s poor bank. productivity record. For example, “The point I want to stress today is banks have had to offer new products that the winners in this process — and and services in response to consumer the losers — will be determined by demand and competition. Deregula how well they tailor technology to the tion has squeezed profit margins for markets they serve,” he said. “Success banks, further eroding their ability to won’t be guaranteed by simply being make prod uctivity-en h ancing im on the edge of change.” provements. But the challenge for Mr. Cairns said he wished he could banks in the future is clear, said Mr. take members of Congress on a tour of Hollis. the exhibit area so they could see the “We must use technology to simul banking industry’s current state of taneously increase productivity and technology. provide new customer services,” he “Maybe they would realize what it said. “Improvements that deliver only (technology) cannot do — as well as one of these benefits no longer are what it can do — and the promise of appropriate. In fact, such projects may what it will do in the future,” said Mr. erode our relative competitive posi Cairns. “Some in Congress have been tion.” distracted by the idea of a moratorium Teamwork and joint involvement on nonbank banks, and some have could yield more creativity and faster been tempted by the idea of forcing https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis m %. : ForAbur Bank, Nothing Less W ill Do. Arrow Business Services offers you Kittinger, including the Georgian Series pictured here. And Baker, Gunlocke, Steelcase, Knoll...the who’s who of office furnishings. All the prestige names display their best in our Memphis showroom, complete with accessories, carpet, window and wallcovering. Arrow’s staff of ten experienced bank https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis designers can make your bank a stunning and workable showcase from the executive offices to the customer, operations and data processing areas. Give us a call for a professional, costeffective proposal to meet your bank’s building and furnishings needs. We offer the best, and we know you expect nothing less. HRROI42 BUSINESS SERVICES, INC. r an affiliate of Midland Bank & Trust 3050 Millbranch, Memphis, Tennessee 38116 901/345-9861 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis WE BROKE RANKS TO GO A STEP AHEAD. “Me too” correspondent service was never our intent! In 1980, when United Oklahoma Bank committed to correspondent banking, we did it with verve, dedication and innovation. We approached it from a different perspective, looking first at the need of our customers and creating products and services to fill those needs. The need for a bankcard source that would share more generously in the profits while letting each bank control its own custom er base. The need for “behind the scen es” home financing to let banks compete with the S & L’s and mortgage companies. The need for a director’s exam service that would not only look at your books, but at the cost efficiency of your operation as well. Apparently, “building a better mouse trap” still works, because in only 4 short years, United Oklahoma Bank has become the state’s second largest correspondent. Why not jo in the bank that steps out of the ranks to help you step ahead of your competition. United Oklahoma Bank “ W e 'r e committed to Correspondent Banking (405)232-1261 1217 S. Agnew Oklahom a City, Oklahom a 73108 MEMBER FDIC FOR YOUR DIRECTORS — TO HELP THEM HELP YOU N o . 51 B U D G E T IN G , F O R E C A S T IN G a n d P L A N N IN G Every bank m ust know WHERE it is going and HOW to get there! Manage ment should “ map the course,” but directors should play a role in estab lishing goals. This m anual su p p lie s d ire cto rs w ith tools they need to steer bank policy in the best direction. Chapters help directors establish “ m issio ns” statem ents, trace stages of a plan ning process. Details HOW to per form financial planning, how to plan for new services . . . how to “forecast.” CONSUMER Lending Policy Techniques used by su ccessful banks are included, along w ith sour ces of inform ation and a bibliography of references. Price — $31.00 2-5 copies $27.50 ea. 6-10 copies $26.00 ea. N o . 101 D IR E C T O R S . . . S e le c tio n Q u a lif ic a t io n s , E v a lu a tio n a n d R e tir e m e n t. This 42- page manual answers key questions concerning director selec tion, retention and retirement. Special section: the prospective director and how he should be expected to co ntri bute to the bank’s success. Includes a rating chart. Manual also contains a section posing questions that a prospective d irector should ask him self before he accepts a bank board post. Another section deals w ith the sen sitive nature of director retirement. Age can be a guide but not an over riding fa cto r in this decision. A M a n u a l fo r D ire c to r s , M anagem ent and I __-j.v .,-. D ffir a r fi No. 220 A N IN V E S T M E N T G U ID E F o r th e B a n k D ir e c to r This 192-page manual discusses the merits of directors paying closer attention to investment policies. Poorly thought-out-and-executed in vestment policies can place a bank’s capital in jeopardy, particularly during a period of rising interest rates. Should the board “ intrude” upon man agement prerogatives of the CEO in the administration of the investment port folio? No, says the author, However, a written policy, structured around the bank’s deposit and loan “ mix,” can be comforting during rising or falling interest rates. As an aid to management and the board, the author presents numerous in vestment policy statements presently in use by recognized well-run banks. Price — $10.00 Price — $26.00 2-5 copies $8.00 ea. 6-10 copies $7.50 ea. 2^5 copies $23.00 ea. 6-10 copies $20.00 ea. N o . 2 1 0 M A X IM IZ IN G C O R R ESPO N D EN T BANK R E L A T IO N S H IP S D irectors aren’t “ born correspon dent experts, but you can help them catch up in a hurry, and it’s profitable for you to do so. This 100-page manual covers all facets of correspondent banking. Clearings and flo a t analysis . . . loan particip a tion s . . . lines of c r e d it. . . foreign exchange, etc. This manual also helps directors APPRAISE correspondent services — to make certain you receive m axim um service at a com petitive price. The manual also discusses several federal regulations, including the con strain ts imposed on “ insider” bank lending by FIRA. A MUST for every bank director. Price — $16.00 2-5 copies $13.00 ea. 6-10 copies $10.00 ea. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis No. 230 - C O N T R A C T S W IT H B A N K E X E C U T IV E S In many banks, salaries, bonuses and fringe benefits of top manage ment are covered by contracts. Since many contracts extend fo r periods of five years they call for careful con sideration. This 48-page manual discusses the role of the board’s Com pensation C om m ittee in determ ining the nature of such c o n tra c ts . The a u th o r suggests th at “ perform ance” can and should be the key in rewarding the executive. Charts and w orksheets are included to help the com m ittee arrive at “ fair and e quitable” pre requisites as m otivating factors for the bank executive. An aid to w riting a NEW contract or in REVIEWING existing contracts. Price — $12.00 2-5 copies $9.00 ea. 6-10 copies $8-.50 ea. N o . 2 4 0 — C O N S U M E R L E N D IN G P O L IC Y Bank directors don’t get involved in lending, but they do help formulate con sumer-lending policy. Therefore, they must be familiar with the dramatic in creases in personal bankruptcies and new policies called for. This 208-page manual includes an array of consumer loan policies in force at various-sized banks; provides checklists of topics on installment-credit policy, pro cedures and policy components; model application forms; Federal Reserve reg ulations; cost analysis of consumer op erations, plus a bibliography of reference materials. Price $26.00 2-5 copies $22.00 ea. 6-10 copies $20.00 ea. Please Send These Management Aids: The BANK BO ARD LETTER 5 1 ________ copies $ ___________ 1 0 1 ________ copies $ ___________ 2 1 0 ________ copies $ ___________ 2 2 0 ________ copies $ ___________ 2 3 0 _______ copies $ ____________ 2 4 0 _______ copies $ ____________ (In M issouri add 4.6% tax) 4 0 8 O liv e S tr e e t S t. L o u is , M O 6 3 1 0 2 Name __________________ Bank __________________ Address ________________ Tax $ ___________ C ity ___________________ TOTAL $ ___________ S ta te _______________ Zip _ ulatory process. Admiral Bobby R. Inman, C EO , Microelectronics & Computer Tech nology Corp. (MCC), Austin, Tex., who has been labeled the nation’s “su per-com puter czar,’ described the problems he’s had getting his new cor poration off the ground and the prom ise it holds for the future. The United States is rapidly losing its lead in tech nology, Admiral Inman said, but he added he believes MCC and other technology-sharing consortiums that he expects will spring up within a num ber of American industries will help the nation to retain its edge. More rapid spin-offs of pure technology into profitable products and services are needed in the U. S., he said. During a press conference that fol lowed his address, Admiral Inman said that at least two of the 122-person re search staff he has assembled in Austin have backgrounds in the financialservices industry. He said he did not believe any technology-sharing con sortium that might be established within banking would concern itself with pure research such as MCC has, but rather would develop applications of technology for the industry. John S. Reed, vice chairman, Citi bank, New York City, said banking must become a “paperless, interac tive, service business’ if it is to sur vive. Nothing guarantees banking’s survival, he said, and banking appears to be at an historic crossroads that will determine whether it succeeds or fails. Am erican consum ers will not be “poorly served” if banks fail to provide the services consumers want, he said. “There will be suppliers who will supply those services even if banks don’t ,” said Mr. Reed. A bank’s lending relationship with its custom er “no longer pays the freight,” and banks must find other services to offer that generate new sources of income, according to Mr. Reed. He lambasted bankers for al ways looking outside their industry for new technology to solve problems in areas fundamental to banking’s exist ence, but cautioned those in his audi ence not to forget about people in their drive to stay abreast of technology. Technology that banking utilizes must meet some human need, he said. Nearly 230 exhibitors with products and services covering the entire spec trum of electronic banking displayed their wares at NO AC. In addition to the general sessions, there were more than 30 individual workshops divided into the following general categories: em erging bank serv ices, m icro com puters, productivity, payment 36 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis systems and services and operations/ systems management. — John L. Cleveland, assistant to the publisher. State Conventions (C ontinued fr o m page 22) media. New Mexico bankers also heard from Jack Jackson, an American Air lines executive for 23 years, who com pared deregulation of the airlines to deregulation of financial institutions. O ne of the most critica l item s addressed by New Mexico bankers this go-round was whether to open mem bership in the state association to non banking institutions — in this particu lar case, request for membership by one of the largest S&Ls in the state. By a vote of almost five-to-one, the request was turned down and the deci sion made not to open full membership to nonbank facilities. The specific re- N e w M exico G overno r Toney A n a y a addresses New Mexico Bankers Association convention. quest by the S&L institution was for full-voting membership. The final vote was taken on the last day of the convention, but not until after the voting members had dis cussed the issue for more than an hourand-a-half at a meeting the previous day. At the convention windup, New Mexico banking and insurance execu tive Jack Daniels took over as presi dent of the NMBA for 1984-1985. Mr. Daniels serves as chairman, Moncor Bank, Hobbs. For the past three years he has been chairman of the NMBA legislative committee and has served on the ABA government relations council. E lected president-elect was Bill Robertson, president, Citizens Bank, Las Cruces. Mr. Robertson has been Citizens Bank president/CEO since 1974 and also serves as president/ CEO, Amador Bancshares, Inc., the bank’s one-bank HC. Before convention adjournment, the NMBA passed a resolution endors ing banker participation in the New Mexico Business Development Corp., a development organization estab lished by the State Legislature shortly after Governor Toney Anaya took office. Initially, the state tried to raise funds for the new corporation strictly from within state boundaries, but only recently got SEC approval to solicit stock-subscription sales from outside the state. • • Michigan ICHIGAN Bankers Association m em bers have been in tro duced to a comprehensive, five-year strategic plan for the association that includes studying the feasibility of allowing participation by representa tives of nonbank financial institutions. The plan was unveiled at the MBA’s 99th annual convention in June at the Grand Hotel, Mackinac Island. New MBA President Robert W. Sherwood, chairman/president, National Bank, Hastings, emphasized the MBA has no plans at present to invite participation by nonbanks such as S&Ls and credit unions, but does plan to study the feasibility of such a program. He called the new strategic plan — developed under the administration of his predecessor, Loren C. Adgate, president/CEO, First Security, Ionia — a historic milestone for the associa tion, but added that it does not repre sent “radical” thinking. The plan, in fact, largely is based on more than 200 responses to a sevenpart questionnaire distributed to toplevel executives at the MBA’s 345 member banks. Some bank HCs re sponded on behalf of all their affiliates. A steering committee headed by Mr. Adgate, with assistance of the Detroit office of Arthur Young & C o., analyzed results of the survey and based the strategic plan on the following six key assumptions: • Intrastate banking will occur with in one year. • W idespread interstate banking will occur within three to four years. New technologies will assume in creased importance at that time. • The num ber of in d ep en dent banks will decrease, but community banks can be viable. • Competition will intensify, with nonbanks, S&Ls and banks competing for overlapping market segments. • The public is unaware of the need M MID-CONTINENT BANKER for July, 1 9 8 4 M ONEY PLACE New Michigan Bankers Association officers for 1984-85 are (from I.): Donald J. Smallcombe, treas.; Lyle McKinley, 2nd v.p.; Daniel R. Smith, 1st v.p.; and Robert W. Sherwood, pres. for expanded powers; banks face en trenched interests in seeking to gain them. • Many important segments of the public do not view banks as sufficiently supportive or innovative with respect to economic development. Objectives outlined in the strategic plan call for maintaining the MBA as the “preeminent banking association in Michigan.” While the member sur vey uncovered strong support for the MBA and its activities, Arthur Young & Co. reported the association also may need to seek new sources of rev enue and alter its management struc ture and systems to accommodate a wider diversity of member interests. The consulting company recom mended that the MBA continue to work to consolidate industry lead ership in the state, including the “possible merging of existing industry associations and/or development of cooperative arrangements with orga nizations having similar interests.” P r e s id e n t ’s S p e e c h . In his final speech as MBA president, Mr. Adgate referred to the member survey and strategic plan as partial fulfilment of two promises h e’d made when he assumed the MBA presidency. He re called that he’d promised he would work hard to uncover and meet mem ber needs and to bring about greater industry unity. The possibility and advantage of greater industry unity were demonstrated in the compromise the MBA had worked out on the “ter ribly divisive’’ in trastate banking issue, Mr. Adgate said. Legislation based on the MBA compromise is being considered by the state legisla ture. Debate on intrastate banking had shown that bankers in the state have fewer differences than they imagined and that most differences that do exist MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis can be worked out in calm discussions behind closed doors. “We should have gone behind those closed doors before we did,” he said. Mr. Sherwood, stating that the strategic plan was not meant to be “written, distributed and put on a shelf,” pledged to follow instructions in the plan. He also pledged to work to reform what he called Michigan’s “out moded” usury laws. New O fficers. MBA officers elected A shared automated teller machine (ATM) network, now available exclusively through First American National Bank. For further inform ation, con tact: Tom Runnels, Senior V ice President First A m erican National B an k o f Nashville First A m erican Center Nashville, Tennessee 37237 N EW O RLEAN S IS FAB U LO U S! And so is The Hotel Monteleone. W e ’re the French Quarter’s largest and finest hotel, a block from Bourbon Street excitement and a short stroll to Jackson Square, the fabulous riverfront, and the historic St. Charles Ave. streetcar. We specialize in giving Tour Groups a customized taste of this unforgettable city. Four generations of Monteleone family ownership have meant comfort, charm, and individual attention to our guests. Call us T O LL FR E E — 8 0 0 -5 35-9595 or T W X 8 1 0 -951-5092. David Green and Associates, in New York (212) 687-0990 and in Washington (202) 797-7540 37 to a 1984-85 term in addition to Mr. Sherwood are: first vice president, Daniel R. Smith, president, First of A m erica Bank C orp., Kalamazoo; second vice president, Lyle McKin ley, president, Citizens National, Cheboygan; and treasurer, Donald J. Sm allcom be, chairm an/president, First National, Three Rivers. G u est S p e a k e r s . Possibilities for further banking-industry deregulation were discussed by a number of guest speakers invited by the MBA. Silas Keehn, president, Federal Reserve Bank, Chicago, said the times “cry out” for further deregulation of banks. He said the banking industry is now at against further deregulation, Lee E. Gunderson, partner/national director, banking-industry relations, Arthur Young & Co., New York City, urged bankers to “take a page” from their opponents’ book. Mr. Gunderson is a former ABA president. “ They have b een com ing to Washington in droves,” Mr. Gunder son said, referring to banking’s legisla tive opponents. Unless bankers meet with their legislators and explain the problems of the banking industry, he said, “we re going to live with the sta tus quo.” R obert M acD onald, president/ CEO, ITT Life Insurance Co., Min- neapolis, spoke of the “tremendous potential” for partnerships between banks and insurance companies if the deregulatory process continues. Banks have credibility with consumers while insurance companies have the exper tise in insurance that banks need to succeed, Mr. MacDonald said. Differ ences between the two industries are eroding because consum ers in creasingly are refusing to make the dis tinction between them. “The competition is here whether we like it or not,” he said. “Unless we unite, we could be swept aside by these new financial giants.” • • Banks' Employees Are Focus O f Statewide Ad Campaign A LTHOUGH the Texas American New Michigan Bankers Association Pres. Robert W. Sherwood, ch./pres., National Bank, Hastings, chats with political col umnist Jack Anderson (r.) during Michigan convention. Mr. Anderson was convention speaker. a crossroads, during which it will be determined whether Congress begins re-regulation, takes a pause in the de regulation process or takes advantage of the current “opportunity” to con tinue deregulation of banks. Mr. Keehn said he believes Con gress now is in the process of discover ing that the “toothpaste is already out of the tube” and that re-regulating banks offers as many difficult choices as continuing to deregulate. The “mo mentum of the market” is too great to impose the “cooling-off period” that some in Congress would like, he said. Speaking in behalf of C. Todd Con over, Comptroller of the Currency, who was unable to attend the MBA convention, James Boland, deputy comptroller for industry and public affairs, said it will be public interests, not special interests, that will dictate the future course of financial-service deregulation. The deregulation debate in Washington, D. C., has degener ated into a turf battle, he said, and he urged bankers to elevate the level of the debate. Citing what he called “hardball lob bying” by banking-industry opponents 38 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis L network of banks in Texas covers urban, suburban and rural markets, these banks have begun a statewide advertising campaign whose theme is, “You deserve a special kind of banker. ” The program stresses “the professional superiority of the people at Texas American banks.” This one ad campaign for all Texas American banks (TAB) was created by Brouillard C om m unications, New York City, a division of J. W alter Thompson, also of New York City. TAB retained Brouillard last January 1 to represent Texas American Bancshares, headquartered in Fort Worth, and its 27 banks across the state. The campaign was adopted, according to Robert W. Scott, senior vice president at Brouillard, after his firm’s creative and account people spent four weeks in Texas interviewing senior manage ments of the HC and all its banks. Mr. Scott says that regardless of the geographic dispersion of Texas Amer ican banks, Brouillard found that the one thing all the banks have in com mon is a “special” group of bankers — bankers with a particular style of doing business, a motivation to serve, a sen sitivity to customer problems and a dedication to finding solutions to those problems. As Mr. Scott puts it, “It is these qualities — not the banks’ products and services — that make Texas Amer ican different from other Texas banks — and why customers like to do busi ness with Texas American bankers. This is what we have captured in the ‘You deserve a special kind of banker’ campaign.” Basically, the campaign tells the public that Texas American customers are special, and the banks’ employees are special. Individual banks are able to use parts of an “umbrella” campaign to produce materials for specialized ads in their own markets. Mr. Scott says the target audience for TAB’s campaign is up-scale profes sionals and middle-market Texas com panies. For instance, one four-color ad shows a green-clad physician saying, “For my practice, I need a special kind of banker.” At the bottom of the ad copy appears the theme, “Texas Amer ican. A special kind of banker.” Another ad pictures an obviously Texas American. A special kind of banker. I “For mybusiness, This is one in series of ads being used by Texas American Bancshares of Fort Worth's 27 banks located across Texas. Theme of ad campaign is "You deserve a special kind of banker." Ads stress "professional superior ity of the people a t Texas A m erican banks." MID-CONTINENT BANKER for July, 1 9 8 4 successful and attra ctiv e woman architect, who also says, “For my busi ness, I need a special kind of banker.” Again, ad copy ends with the theme, “Texas American. A special kind of banker.” The campaign broke March 15 with radio spots, print ads and outdoor bill boards. TV commercials began airing March 19, and color magazine ads be gan appearing in statewide publica tions in April. Various ads are appear ing in markets across the state where Texas American banks are located, in cluding Dallas, Fort Worth, Houston, Austin and west Texas. Naturally, says Mr. Scott, research will be playing an important role in measuring the return on TAB’s adver tising investment. The research firm of Yankelovich, Skelly & White currently is conducting benchmark attitudinal research among TA B’s target audi ences to measure existing awareness and perceptions. Brouillard s plan is to conduct follow-up tracking research late in 1985 to measure increases in awareness and changes in perceptions. He also says the new campaign is expected to run for quite some time, evolving as Texas American evolves. However, the campaign’s foundation — the “special” Texas American bank- MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis er — will not change, says Mr. Scott, because of TAB s com m itm ent to attracting, growing, training and keep ing the best people possible. This is the first statewide campaign for Texas American banks since they underwent a name change a year and a half ago, points out Ann Quinn, the HC’s marketing director. “One reason we changed the names of all our banks to the common Texas American name,” Ms. Quinn explains, “was to realize economies of scale in advertising, and this is our first major effort toward that end.” • • • Manufacturers Hanover Corp. and Manufacturers Hanover Trust, New York City, have elected Robert E. Allen, executive vice president/corporate administration and finance, Amer ican Telephone & Telegraph Co., to their boards. • David L. Chew has been named senior deputy comptroller for policy/ planning, Office of the Comptroller of the Currency. He succeeds Doyle L. Arnold, who resigned May 1. Since 1981, Mr. Chew had been executive assistant to the Secretary of the Treas ury and had been responsible for the secretary’s immediate office and staff. For (aster service on BANK CREDIT INSURANCE CALL THESE SPECIALISTS Harold E. Ball • Carl W. Buttenschon John E. King • Milton G. Scarbrough 1 800 527-5511 - - (§) INDUSTRIAL LIFE INSURANCE COMPANY P .0. Box 660274, Dallas, Texas 75266-0274 A member company of U Ij q j LI Republic Financial Services. Inc D e s ig n e d fo r th e b u s y e x e c u tiv e — The n atio n ’s newest and m ost com prehensive Financial In stitu tion s Directory is now available. M cFadden’s new Savings D irectory when com bined w ith its Am erican Bank Directory becomes a handy 3-volume directory of Am erican Financial Institutions. Each listing contains: city, population, m ailing address, m em berships, phone numbers, top o ffice rs/title s, financial data and much more! C O M P L E T E D IR E C T O R Y — A m e ric a n F in a n c ia l In s titu tio n s — Yes, I want all the n atio n ’s top financial in s titu tio n s in one com plete directory: □ Send m e _______ copies of the current AFI @ $180 ea. □ Enter standing order for each Spring AFI @ $145 ea. □ Enter standing order for each Spring AFI @ $130 ea. and stand ing order for Fall American Bank Directory @ $75 ea. (plus shipping and handling) S A V IN G S D IR E C T O R Y — A m e r ic a n S a v in g s D ire c to r y — Yes, I want to add th is volume to my library to include savings and loans, m utual sav ings banks, m ajor credit unions and money market funds. □ Send m e _______ copies of the current ASD @ $75 ea. □ Enter standing order for each W inter ASD @ $60 ea. □ Enter standing order for each W inter ASD @ $60 ea. and stand ing order for Fall American Bank Directory @ $95 ea. (plus shipping and handling) □ SEND ME MORE INFORMATION P L A C E Y O U R O R D E R T O D A Y ! Mail to: McFadden Business Publications, 6195 Crooked Creek Rd., Norcross, GA 30092. COMPANY NAME ADDRESS STATE ZIP 39 Respondent Banks (C ontinued from , page 16) information for which they were totally dependent on upstream correspon dents in the past. “Correspondent banking will con tinue to be involved with buying and selling participations, but continued deregulation will require more in volvement in the interpretation of reg ulations as they affect country banks. “I see the future of correspondent banking as one of diversification. The emerging deregulated banking en vironment will bring about new needs/ areas for which country banks will need additional support programs and services from correspondents.” Senterfitt Receives Nod As ABA President in '85, President-Elect in 1984 Banking Scene (Continued fr o m page 6) Donald T. Senterfitt, vice chairman, Sun Banks, Inc., Orlando, Fla., has received the ABA council’s nod to head the association as its president for the 1985- 86 term. Mr. Senterfitt was nominated as president-elect for 1984’85, an action that practically guaran tees he will serve as president the fol lowing term. Predictions M ade • “As deregulation allows new ser vices, ‘b ig -b roth er’ correspondent banks must be in position to help with implementation of ideas and services. ” • “Correspondent banks will con tinue to evaluate deposit accounts of respondents to see if the services they are providing are being paid for by deposits. In the future, respondents will be paying for these services in cash rather than in balances. Correspon dent banks will be working harder in rural areas to situate themselves for interstate banking. ” • “C orresp on d en t banking will have its place in the future, but rela tionships with respondents will lessen because of deregulation and popula tion differences.” • “Within 10 years, the bankers’ bank in our state, owned by indepen dent banks, may be the only fully com mitted source of correspondent ser vices.” • “Small banks are relying more on consultants than on correspondents for services. My bank is a client of a marketing firm, an investment firm and an operations consultant. We clear through the Fed, so have little use for correspondent services except in the area of safekeeping securities, wire transfers and loan participations.” • “I anticipate that major corre spondents will become direct competi tors.” • “I expect to see some reduction in the number of banks offering conven tional correspondent service. Those that remain will be much more com petitive. User banks will be more de manding and will be more willing to shop around for services.” — Jim F a bian, senior editor. 40 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. Senterfitt won the bid as presi dent-elect over Bill Rodgers, chair man, Security Bank, Blackwell, Okla., who also was in the running for the office. Nominations for the 1984- 85 ABA officers were announced recently, fol lowing ther association’s annual spring meeting. The complete slate of nominations for the 1984- 85 term includes the fol lowing: For president — James G. Cairns Jr ., currently ABA president-elect, and president, Peoples National of Washington, Seattle. For president-elect — Mr. Senter fitt. F o r ABA cou ncil chairm an — C. Robert Brenton, currently ABA president, and president, Brenton Banks, Inc., Des Moines, la. For treasurer — Harry R. Mitiguy, currently ABA treasurer, and president/CEO, Howard Bank, Burlington, Vt. It’s usual for ABA treasurers to serve two terms. Elections will be held during the ABA’s annual convention, which is set for October 20-24 in New York City. Mr. Cairns is serving on the ABA’s executive committee, board of direc tors and the ABA council. He is a past chairman of the payment systems poli cy board and a former member of the governm ent relations council. He joined the bank in 1963 and has been president since 1979. afield. As I read Mr. Conover’s words, I couldn’t help but wonder if — given the conservative mind set of bankers — bankers in North Carolina took him seriously. I wonder if we ll be seeing Wachovia Bank, Winston-Salem, or North Carolina National, Charlotte, changing their charters. Any widespread conversion of bank charters to unitary-thrift HCs prob ably would prompt a rapid change in regulations. Readers may recall that a year or so ago, Walter Wriston re marked that CitiBank, New York City, perhaps ought to give up its charter. He did not mention at the time what type of charter might be more attrac tive, but it is important to note that Mr. Conover was not the first top banking representative to suggest that switching charters might be an attrac tive proposition. Thrifts N ot Restricted Thomas P. Vartanian, a form er general counsel of the Federal Savings & Loan Insurance Corp., has been quoted as saying that the “unitary thrift would not be subject to the Federal Reserve Board’s restricting bank HCs. He said the S&L HC would be free to engage in any activity not expressly forbidden, to make any investment it wished and to have a controlling interest in almost any com pany anywhere in the world. Can bankers be blamed for wonder ing aloud whether the grass is greener on the other side of the fence? Of course, the world rarely is as neat or as wonderful as we’d like it to be. As I said, if banks started switching their charters to avoid federal regulation, we’d see regulators rapidly closing the unitary-thrift HC loophole. Another problem with switching charters is that bankers would find themselves being regulated by agen cies decidedly unsympathetic to them. The Federal Home Loan Bank Board (FH LBB) consistently has taken posi tions favorable to S&Ls; bank regula tors traditionally have stood up for the institutions they have responsibility for. Maybe the devil bankers know is better than the one they don’t. Yet one wonders if even unsym pathetic regulators would be as bad as the constraints bankers currently have to labor under, especially considering the entry of new competitors into the MID-CONTINENT BANKER for July, 1 9 8 4 Nothing Reaches Your Financial M arket Like United States Banker Every banking institution with assets o f $ 5 0 ,0 0 0 ,0 0 0 or more is covered. T h a t’s 9 0 % o f the market. Senior officers in commercial banks, sav ings & loan associations, savings banks, insurance companies, credit unions, invest m ent and finance firms all read United States Banker. The in-depth analysis o f current financial issues makes U.S. Banker essential reading for these leading ex ecutives. For a complete media file, or for a per sonal subscription, return the coupon or call Peggie Heidel at (203) 661-5000. MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis r --------------------------------------------------------------------------------- 1 EH Please send a media file and current issue. EE Enter my subscription—One Year $24 (20% saving). Name Title _ Company. Address . City_____ _State. .Zip. Telephone ________________________________________ Return coupon to: United States Banker One River Road, Cos Cob, CT 06807 L-------------------------------------------------- ----------------------4 41 banking field. When the FH L B B low ered capital requirements of S&Ls and created paper capital to inject into the battered thrift industry when the thrift capital position deteriorated below 3%, no one seemed to ask whether such policies were good for the indus try or society. Bank regulators would have closed hundreds of commercial banks under similar circumstances. Marketing studies show that the general public perceives institutions with the word “bank in their title to be preferred to such words as “build ing and loan,” “cooperative” or “sav ings and loan.” Other studies have shown that when individuals have asked where they bank, frequently they say they “bank” at S&Ls or at credit unions. Banks may take great pride in their reputations for caution and stability, but the public tends to lump all finan cial institutions into a homogeneous pile. Pride aside, would bankers be any less bankers or financiers if their institutions’ charters were those of uni tary thrifts? Who but they would know the difference? • • R E G E N C Y B a n k in g C a re e r S p e cia lists Financial Placem ents is built on a history of strong relationships b e tw e e n b a n k e rs and B an k N ew s' publications. You can benefit from these rela tionships — plus the more than 65 years of bank-related experi ence of these two m en — by using our specialized em ploy m ent service. RECRUITERS, INC. For Banking Personnel or a New Banking Position Call us! W e can help find the right person or the right position. F IN A N C IA L PLACEM ENTS a division of BANK NEW S 912 Baltimore Kansas City, MO 64105 816-4 2 1 -7 9 4 1 42 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • American Bank Directory .................................... 39 Arrow Business Services, Inc.............................. 34A Bank Administration In s titu te ............... 23 or S/13 Bank Board Letter ............................... 14D, 33, 35 Boatmen’s National Bank, St. Louis ................. 48 Bronner’s Christmas Decorations ....................... 28 Centerre Bank, St. Louis ................................... 14B Christmas Club a Corp............................. 26 or S/16 Commerce Bank, Kansas City ............................. 5 Continental Bank, Chicago ......................... S/3, 45 Cornerstone .......................................................... S/4 Financial Placements .......................................... 42 First American National Bank, N ashville............ 37 First Interstate Bancorp, Los Angeles ......................... 24-25 or S/14-S/15 First National Bank, C in cin n a ti........................... 7 First National Bank, St. Joseph ......................... S/5 First National Bank of Commerce, New Orleans 23 First National CharterBank, Kansas City . . . . 24-25 First Oklahoma Bancorp, Oklahoma City .. S/7, 45 First Wisconsin National Bank, Milwaukee 14B-14C Fourth National Bank & Trust Co., Wichita . . . . 3 Frost National Bank, San Antonio ..................... S/9 Grimm & Co., W. T................................................. 17 Hagan & Associates, Tom ................................... 42 Industrial Life Insurance Co.................................. 39 Innovision, Inc...................................................... 14A Liberty National Bank & Trust Co., Oklahoma City .................................................... 2 Mantra, Tordella & Brookes, Inc........................... 47 Mercantile Bancorp, St. Louis ........................... S /l Midland Bank & Trust Co., M em phis................. 43 Missouri Encom, Inc........................................... S/12 Monroe Business Systems ............................. 10-11 Monteleone ............................................................ 37 North Central Life Insurance Co.......................... 2-3 from Mgt. Trainee to President call on the banking specialists Security Bancorp, Inc.......................................... 14A Carol Park Diane Evans Wilson Premium Corp............................................. 31 Judy K lin t We changed our name SER VIC E is the same A L L FEE PAID N A T IO N W ID E A ffilia tio n s Tom Cannon Associate Index to Advertisers Regency Recruiters, Inc......................................... 42 816/842-3860 Mike Wall M anager • 1102 GRAND AVE. KANSAS CITY, MISSOURI 64106-2387 BANK POSITIONS Real Estate Loan — KS-MO-IA $30K Commer. Loan — KS-MO-NE-IA $30-$40K President — rural MO-IA $45K Operations— MO-KS-NE $30K Instl/Comml Ln — MO-IA-KS $25K Exec. V.P. — KS-MO $30-$40K Loan Review— MO-IA $22K Additional positionsavailable in midwestern states for experienced junior and senior bank officers. TOM HAGAN & ASSOCIATES of KANSAS CITY P.0. Box 12346/2024 Swift North Kansas City, MO 64116 816/474-6874 SERVING THE BANKING INDUSTRY SINCE^ 7 0 Union Planters National Bank, M em phis........ S / l l United Missouri Bank, Kansas City ................... 29 United Oklahoma Bank, Oklahoma City .......... 34B United States Banker .......................................... 41 EX EC U T IV E VICE PR ESID EN T $40 million Northeast Missouri bank desires executive vice president with thorough knowl edge of operations and credit. Attractive agri culture community. Salary commensurate with experience. Contact: Kathryn Jacobs, Palmyra State Bank, P.O. Box 311, Palmyra, MO 63461. Phone 314-769-2001. NOTICE O F PUBLIC SALE Notice is hereby given that at 10:00 a.m . on Thursday, August 16, 1984, at the office of F irst Com m ercial Bank, N .A ., Second Floor, Capitol and Broadway Streets, Little Rock, Arkansas 72201, the following person al property will be sold at public auction, to-wit: (a) 3,457 shares of common stock of the Bank of Glenwood, Glenwood, Arkan sas, which constitutes approximately 86% ownership of the stock of said Bank, (b) 12,550 shares of common stock of Pike County Bank, Murfreesboro, Arkansas, which constitutes 78% ownership of the stock in said Bank. For information concerning the Bank stock to be sold, contact Melvin Sullivan, P.O. Box 38, Grannis, Arkansas 71944 or call 1501-385-2331. For information concerning the terms of the sale, contact Wallace Cunningham, Execu tive Vice P resid en t, F irst Com m ercial Bank, N .A ., Capitol at Broadway, Little Rock, Arkansas 72201 or call 1-501-3717092. MID-CONTINENT BANKER for July, 1 9 8 4 Brokerage service from the bank you already take stock in. You met us as Memphis Bank & Trust, and came to know us as the bank that offered you more correspondent services from a more experienced staff. Now we have a new name to reflect the whole area we serve, Midland Bank & Trust, and a new service to help you grow with us. « e t V O ^ c^ W à S ’ U' 7 ie ïS ’ A ^•rrvefS ^ ru tte d . -\\\ûes ecU i® e S A '\niot«'atV° ’" ^ eSan ¿ -T l0 lfC . U ^ \ > ^ ° ur asanÄ « * eat - «H D - ¿ ^ c ^ teSV° Take advantage of the Bankers Investment Exchange, from the same correspondent bank department you’ve always been able to take stock in. Give Lynn Hobson, Gus Morris, Jim Newman, Ron Ireland or Tom McKelroy a call,toll-free, at 1-800/238-7477. In Tennessee, 1-800/582-6277. MID-CONTINENT BANKER for July, 1 9 8 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 43 Preventing Another Continental Discussed at Bank M eeting ONTINENTAL Illinois National of Chicago’s problems highlight the need for tougher enforcement of the law by bank regulators, according to Donald E. Lasater, chairman/CEO, Mercantile Bancorp, Inc., and chair man, Mercantile Trust, both in St. Louis. Mr. Lasater made his remarks at Mercantile’s 29th annual correspon dent conference at the Clarion Hotel, St. Louis. “We need stop orders with teeth in them ,” Mr. Lasater said, referring to what he perceives as a need for bank regulators to act sooner and more ty net the federal government had erected for the $40-billion Chicago bank “raises your hackles and it raises my hackles because it looks like a dual standard.” While government cannot stand by and let banks the size of Continental Illinois fail, it can attempt to prevent them from pursuing policies that got Continental Illinois into difficulty. Personnel at the Chicago bank had acted “as if there were no tomorrow,” he said. “No one institution can be so smart as to run faster than everyone else for so long,” Mr. Lasater said. Panel fields questions from audience at annual Mercantile Trust correspondent confer ence in St. Louis. From I.: Richard Johannesman, e.v.p.; Eugene Leonard, s.v.p.; and John H. Bl ixen III, s.v.p. Not pictured is Robert Blomquist, v. ch., moderator. vigorously to force corrective mea sures at problem banks. He went on to say he was not advocating nitpicking oversight by bank regulators, but that in light of the Continental Illinois de bacle, some degree of over-regulation may be a burden bankers must bear. The worldwide banking system is too volatile to permit another Continental Illinois situation, he said. Mr. Lasater had just returned from the International Monetary Confer ence in Philadelphia, where, he said, problems of Continental Illinois had been a topic of concern among bankers from all over the world, not just the United States. Permitting Continental Illinois to fail could have created a genuine worldwide “disaster,” Mr. Lasater said, but he conceded the safe 44 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Not only had Continental Illinois’ problems created doubts about the soundness of the banking system, they had assisted the cause of those in Con gress who have advocated greater con trol over banks, according to Mr. Lasa ter. A version of a bill sponsored by Rep. Fernand St Germain (D ,R .I.) and Chalmers Wylie (R,Ohio), HR 5 7 3 4 , would close the nonbank loophole, but also would exem pt thrifts from restrictions imposed on banks, he said. Mr. St Germain indi cated recently that new language elim inating those provisions giving S&Ls advantages over banks would be in serted into HR 5734. During his speech, however, Mr. Lasater cautioned bankers to be care ful about how they pressed for the clos ing of the nonbank loophole lest they get more legislation than they bar gained for. “This is the start of re-regulation,” he said, referring to the St GermainWylie bill. “This is going backward. With some minor disagreements, a panel of Mercantile’s experts had — prior to Mr. Lasater’s talk — pre sented a generally rosy picture of the economic outlook for the remainder of the current election year. The entire Mercantile correspondent conference, in fact, had a “Campaign ‘84” theme with red, white and blue decorations in the rooms where the meetings were held. The agenda for the conference was printed on a form that looked like a ballot. The Mercantile panel consisted of Eugene Leonard, senior vice pres ident; John H. Blixen II, senior vice president; Richard Johannesman, ex ecutive vice president; and Robert O. Blomquist, vice chairman, and panel moderator. Panelists’ economic fore casts were strongly influenced by the elections this November. “Election years generally are pretty good to the e co n o m y ,’’ said Mr. Leonard. “In the postwar period, there have been only two years in which there were recessions in an elec tion year. Those are pretty good odds. ” Panelists generally foresaw little likelihood of a recession in 1984 or ear ly 1985. Salvage efforts at Continental Illinois mean the Federal Reserve is pumping new money into the econ omy, said Mr. Blixen. This “bubble” of money, he continued, should preclude the idea of a recession in 1985. He projected a slowing of the annual rate of Gross N ational Product (GNP) growth to 3% and an increase in the annual rate of inflation to about 6% by year’s end. Mr. Johannesman said the basic, underlying trend of interest rates still is upward, and there will be no signifi cant change until substantial efforts are made to reduce the federal deficit. He projected that the prime interest rate could be hovering around 131/2% by the end of the year. Mr. Blixen pro- MID-CONTINENT BANKER for July. 1 9 8 4 W m m . gggîSiP mm l ml M Ê ra^ÄßSi®0 | ÿ « m M Ä Ä ,« ~ 40$llr0M& • \ V. An8SS®AER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis i ¡1-1 Í i - F t l i j 7j » Division ' " <! I ' ' ~ ' /^ ¡á 0 jected a prime rate in the neighbor hood of 14% by the end of the year with still further increases possible early in 1985, followed by a period of moderat ing rates. Mercantile also gave bankers at tending the conference an opportunity to make projections of their own about econom ic and political events. An overwhelming 95% of the bankers in the audience said they foresee a vic tory for Ronald Reagan in November. A year-end prime rate in the 10.5%-to15% range, with 13% most likely, was projected by bankers. The Dow Jones Industrial Average probably would be around 1,200 at the end of the year, bankers indicated, although forecasts ranged between 800 and 1,400. — John L. Cleveland, assistant to the publisher. School Children Avid Supporters O f Statue of Liberty Renovation LMOST lOO years ago, school chili dren across America contributed funds to help pay for the erection of the Statue of Liberty in New York harbor. This year, school children again are being encouraged to participate in raising funds, but the goal this time is to help pay for renovation of the famous statue. Liberty National, Okla homa City, is in the forefront of that encouragement. Liberty National launched its Statue of Liberty renovation campaign in m id -F eb ru ary . It will con tin ue through July 4. “Grass-roots support is growing, M em b ers of firs t g ra d e c la ss a t O k la h o m a though most of it is not yet harvested, ” C ity school w ro te , produced a n d p resen te d says Linda Moore, vice president of a p la y a b o u t th e S ta tu e of L ib e rty in an the bank and coordinator of its fund a tte m p t to ra ise fu n d s fo r th e re n o va tio n raising effort. Ms. Moore has made co o rd in a te d b y L ib e rty N a t'l, O k la h o m a C ity . presentations to many schools and organizations in the bank’s trade area. Liberty National is matching every She also has supervised the mailing of dollar contributed by school children several hundred campaign kits to and their projects, up to a total of schools in response to requests. $25,000. As of March 31, school proj A num ber of local schools have ects were responsible for more than announced participation efforts. One $8,000 in contributions. student at an elementary school re The bank also is contributing speci ported that a miniature of the statue fied amounts for each use of certain has been constructed at the school; services of the bank from the time of another school is cond ucting a the campaign launching through July “readathon” in the first through fifth 4, such as: $10 for each new auto grades to raise money. installment loan, $5 for each new IRA, Civic groups also are participating, $3 for each m arket-rate checking and a grandmother sent in $7, repre account, $2 for each new market-rate senting a $1 donation for each of her investment account, $1 for each new or grandchildren. Another unique con existing customer who signs up for tribution was receipt of a check for $98 direct deposit and a nickel for each from Jack Conn, chairman, Oklahoma ChecOKard deposit made. • • State Sem i-C entennial celebration and retired chairman, Fidelity Bank, • Brian W. Smith has resigned as chief Oklahoma City. His contribution was counsel to the Office of the Comptrol $1 for each year the statue has stood “as ler of the Currency to become a part Am erica’s welcoming co m m ittee.” ner in the Washington, D. C ., office of The statue celebrates its centennial in a New York City law firm. Mr. Smith joined the CofC in 1982 following ser 1986. The goal in the Liberty campaign for vice as general counsel/corporate secretary, MasterCard International. Mid-America is $100,000 by July 4. N ationally, some $230 m illion is Prior to that, he served on the legal needed to restore the statue and Ellis staffs of American Express Co. and CIT Financial Corp. Island. A Digitized for 46 FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis EFT Switching Network Set By First NBC, New Orleans First National Bank of Commerce, New Orleans, plans to implement an electronic switching network to pro vide E F T interchange capability to corresp on d en t banks throughout Louisiana, Mississippi and Alabama. Principal thrust of the network will be to provide ATM interchange ser vices among financial institutions and to establish a system that would be capable of switching transactions. September is the start-up date. Members of the network will have a variety of options, including issuing cards and allowing customers to use ATMs installed by other members. Membership is not limited to institu tions with their own computers nor to those with ATMs in place. Members with their own ATMs can choose to retain their existing name or adopt the Exprès’ Banque name of the First NBC network. Related service options the bank plans to provide include card prepara tion and issuance and consulting ser vices for banks new to the ATM arena. The switch eventually is expected to extend into areas beyond ATM s, according to First NBC. Goldstein Named V. Ch., Mid-America Payment Jerry Goldstein, senior vice president/planning, Mercantile Bancorp., St. Louis, has been selected as the new vice chairman of MPX (Mid-America Payment Exchange). Marvin Smith, vice president, Boat men’s National, St. Louis, was named treasurer and was appointed to the MPX executive committee. MPX, an electronic funds transfer organization, resulted from a merger of three ACHs headquartered in Little Rock, Kansas City and St. Louis. It’s owned by 2,000 financial institutions in seven mid-western states. Bank Puts CD Rates on TV A video rateline service has been started over cable TV by American National, Midwest City, Okla., on an experimental basis. The service carries late informa tion about interest rates the bank is paying on m oney-m arket deposit accounts; six-month, one-year and 18-month CDs; and 18-month IRAs. The service operates on a continuous basis and is available to more than 10,000 homes in the bank’s trade area over cable channel 24. MID-CONTINENT BANKER for July, 1 9 8 4 The fastest service in the Precious Metals and Foreign Currency industry has been a tradition of M.T.B. for over 30 years. Now, MTB, appointed by the United States Treasury Departm ent as an Official O lym pic Coin Distributor, c a n g ive th e sam e g re a t service on th e Full lin e o f O ly m p ic G o ld & Silver C oins That m eans: • NO INVENTORY NEEDED • NO MINIMUM ORDERS • WHOLESALE PRICES • IMMEDIATE DELIVERY - 24 HOURS IF REQUESTED! All Coins come encapsulated in original Government Packaging. THAT’S MTB’S OLYMPIC SPEED Your b a n k c a n TURN A PROFIT, SATISFY A CUSTOMER, AND SUPPORT THE HOME TEAM w ith just o n e p h o n e call. TOLL FREE CALL (800) 221-5240 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis or 212-912-6280 Luis Vigdor MANFRA, TORDELLA & BROOKES, INC. O N E W O R L D TRADE CENTER - SUITE 33 31 N EW YO RK, N.Y. 1 0 0 4 8 (cm https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Boatm en’s Ted Smothers. Operations Assistance Overline Assistance. Loan Participations. Investments. Boatmen’s Vice President Ted Smothers working with Bob Menz, Chairman and President o f The First National Bank o f Highland. Whatever your correspondent needs, Boatm en’s has knowl edgeable people to assist you. Call Ted Smothers. He can help. Correspondent Banking Division THE BOATMEN'S NATIONAL BANK OF ST. LOUIS 314- 425-3600 M em ber FDIC
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