Full text of Mid-Continent Banker : The Financial Magazine of the Mississippi Valley and Southwest : March 1977, Volume 73, No. 3

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The Financial Magazine o f the Mississippi Valley & Southwest

SALES/MARKETING ISSUE

MARCH, 1977

Special Section

For and About Directors

Lizzies' Promote Banks— Page 100
How to Put Directors
To W ork for Your Bank
IRAs Revisited— Page 104

Page 27

Responsibilities, Liabilities
Premiums Keep Doing the Job!

Facing Bank Directors
Page 29

TV Games— Pg. BG/36

Flatware— Pg. BG/30

Model Trains— Page BG/12

Board Meeting Agenda:
Key to Productive Sessions
Page 33

Incentives for Directors:
A Challenge for CEOs
Page 35

Nat l Assn, of Bank Directors
Selling ATM Services— Page 102

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Holds First Area Meeting
Page 44

They look to us for leadership and performance in areas like:

Data Processing
*lncluding On-Line Electronic Funds Transfer
Services —ChecOKard, for banking and buying
in the customer’s neighborhood —officer infor
mation systems and more.

r i i Investment Advice
\ © L k ^ 01^ 0*’0 Analysis-Com m ercial Paper
—C ertificates of Deposit —Federal
\ ¿ W Funds —Governm ent S ecu ritie s —
\ U Municipal Bonds

Management Reporting
Techniques
techniques for Economic Forecasting —Profit
Planning — Loan Review—Investment Analysis
C H E O ^^R D
ISSUING BANKS NAME

YOUR NAME

Retail Banking
Services

*BankAm ericard — ChecOKard — Marketing
Assistance and Planning

Trust Services
*Pension and Profit Sharing Plans —Personal
and Corporate Trust Services —Trust Depart
ment Feasibility Planning

International Banking
'Liberty is Oklahoma’s only Shareholder
member of Allied Bank International —
providing international banking assistance
for manufacturing, agricultural and energy
producing customers.

General Commercial
Banking Services
*Loan Participation — Credit Analysis —
Factoring.
These are just examples of how we provide
high performance service for three hundred and
eighty-six banks.

Shouldn’t we be providing the same kinds of services for your BANK?

(S fta ty w Jr

m LIBERTY

THE BANK OF MID-AMERICA

Liberty National Bank & Trust Company/P.O.Box 25848/Oklahoma City73125/Phone:405/231-6164/M emberF.QI.C.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

For once, at the First,
we suggest it’s good
to carry all your
eggs in one basket.

Your success is our tradition.

First
.
National
D

r t

t r d KANSAS CITY.

13dI UVMISSOURI
An Affiliate of First National
Charter Corporation

MID-CONTINENT BANKER for March, 1 9 7 7

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Member FDIC

Convention Calendar
March

March

Volume 7 3 Ho. 3

, 1977

FEATURES
27 DIRECTOR INVOLVEMENT:

Key element in bank growth!
29 A DIRECTOR’S POTENTIAL LIABILITIES

They come along with the honor and recognition

Robert W . Marshman

31 PROFIT PLANNING:

Little publicized aspect of bank management

R. Y. Empie

33 AGENDA ENABLES DIRECTORS TO BE KEPT INFORMED

B. M. Lamberson

A guide to conducting board meetings
35 'WHAT DO I DO FOR AN ENCORE?'

Jack Miner

A solution to CEO’s dilemma
Adapt one and put it to work for your bank
112 BOARD ROOM NEWS

Promotions, elections, earnings, retirements
123 LOUISIANA LEADS OFF CONVENTION SEASON

To meet in New Orleans’ Hyatt Regency April 2-4

DEPARTMENTS
6 THE BANKING SCENE 12 PERSONNEL
18 MORTGAGE LENDING
8 EFTS
14 COMMUNITY INVOLVEMENT 20 INSTALLMENT LENDING
16 BANK INVESTMENTS

23 NEW PRODUCTS

STATE NEWS
124 ILLINOIS
125 INDIANA
125 KANSAS

123 LOUISIANA
124 ALABAMA
124 ARKANSAS

125 KENTUCKY
125 MISSISSIPPI
126 MISSOURI

127 NEW MEXICO
127 TENNESSEE
127 TEXAS

UllllllllllllllllllllllllllllllllllllllllltlllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllilliliB^

Editors
Ralph B. Cox

Editor & Publisher
Lawrence W. Colbert

Assistant to the Publisher
Rosemary McKelvey

Managing Editor

MID-CONTINENT BANKER is published
13 times annually (two issues in May)
by Commerce Publishing Co. at 1201-05
Bluff, Fulton, Mo. 65251. Editorial, execu

tive and business offices, 408 Olive, St.
Louis, Mo. 63102. Printed by The Ovid

Bell Press, Inc., Fulton, Mo. Second-class
postage paid at Fulton, Mo.
Subscription rates: Three years $21; two
years $16; one year $10. Single copies,
$1.50 each.

Jim Fabian

Associate Editor
Daniel H. Clark

Assistant Editor
Advertising Offices
St. Louis, Mo., 408 Olive, 63102, Tel. 314/
421-5445; Ralph B. Cox, Publisher; Mar
garet Holz, Advertising Production Mgr.
Milwaukee, Wis., 161 W. Wisconsin Ave.,
53203, Tel. 414/276-3432; Torben Soren
sen, Advertising Representative.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

111.

April

92 A POTPOURRI OF MARKETING IDEAS

10 CORPORATE NEWS

March 20-22: National Automated Clearing
House Assn. Conference on Selling ACH Ser
vices, Dallas, Fairmont Hotel.
March 20-23: ABA Trust Operations and Auto
mation Workshop, Bal Harbour, Fla., Ameri
cana Hotel.
March 20-23: Bank Administration Institute
Corporate - to - Corporate Electronic Funds
Transfer System Conference, New York
City.
March 22-25: Bank Administration Institute
Personnel Short Course, BAI Headquarters,
Park Ridge, 111.
March 24-25: Robert Morris Associates Inter
national Lending: Techniques & Standards
Workshop, Washington, D. C., Hyatt Re
gency.
March 27-30: ABA Bank Trainers’ Workshop,
Chicago.
March 27-30: Robert Morris Associates Credit
Department Management Workshop, Kansas
City, Crown Center.
March 27-30: ABA National Installment Credit
Conference, New Orleans, Hyatt Regency.
March 27-April 1: ABA Community Bank CEO
Program, Port St. Lucie, Fla., Sandpiper
Bay.
March 30-April 1: Bank Administration In
stitute Workshop Series, Atlanta.
March 30-April 1: Bank Administration In
stitute On-Line Operation/Large Banks
Seminar, BAI Headquarters, Park Ridge,

Commerce Publications: American Agent
& Broker, Club-Management, Decor, Life
Insurance Selling, Mid-Continent Banker,
Mid-Western Banker, The Bank Board
Letter and Program. Donald H. Clark,
chairman; Wesley H. Clark, president;
Johnson Poor, executive vice president
and secretary; Ralph B. Cox, first vice
president and treasurer; Bernard A. Beg-

gan, William M. Humberg, James T. Poor

and Don J. Robertson, vice presidents;
Lawrence W. Colbert, assistant vice presi
dent.

April 1-4: Louisiana Bankers Association An
nual Convention, New Orleans, Hyatt Re
gency.
April 1-5: Bankers Association for Foreign
Trade Annual Meeting, Dorado Beach, P. R.,
Cerromar Beach Hotel.
April 2-5: Association of Reserve City Bank
ers Annual Meeting, Phoenix, Arizona Biltmore.
April 3-8: Graduate School of Bank Market
ing, New Orleans, International Trade Mart.
April 3-6: ABA Southern Regional Bank Card
Management Workshop, Orlando, Fla., Or
lando Hyatt House.
April 3-6: Bank Marketing Association Re
search Conference, Boston, Hyatt Regency
Cambridge.
April 4-8: Bank Administration Institute EDP
Audit Introduction I. a Short Course, BAI
Headquarters, Park Ridge, 111.
April 13-15: Bank Administration Institute
Managing Teller Operations, Kansas City,
Kan.
April 13-25: Bank Administration Institute DP
Project Management Seminar, New York
City.
April 14-15: Robert Morris Associates Com
mercial Loan Training Programs: Content
and Methods Workshop, Denver, Brown
Palace Hotel.
April 17-19: ABA International Personnel
Workshop, New York City.
April 17-20: Independent Bankers Association
of America Bank Ownership Seminar/Workshop, Las Vegas, Sands Hotel.
April 20-21: Bank Marketing Association Com
munity Bank Marketing Seminar, Panama
City, Fla., Bay Point Inn.
April 24-27: ABA National Marketing Con
ference, New Orleans. Hyatt Regency.
April 24-27: Bank Administration Institute
Southern Regional Convention, Dallas, Fair
mont Hotel.
April 24-27: Bank Marketing Association EFTS
Conference, Philadelphia, University CityHoliday Inn.
April 24-May 5: ABA National Commercial
Lending School, Norman, Okla., University
of Oklahoma.
April 27-29: ABA Governing Council Meeting,
White Sulphur Springs, W. Va., The Green
brier.
April 29-May 1: NABW Southwestern Region
al Conference, Austin, Tex., Austin Hilton
Hotel.
May
May 1-3: ABA Southern Trust Conference,
Atlanta, Omni International Hotel.
May 1-3: Independent Community Banks in
Illinois Annual Convention, Springfield,
Holiday Inn East.
May 1-4: Bank Marketing Association Bank
Librarians Conference, Boston,
Copley
Plaza.

MID-CONTINENT BANKER for March, 1977

You re looking for extra profits
Our ca sh letter an alysis can
uncover ’e m .

It’s surprising how much
potential profit is buried under
slow paper.
That’s why we’ve developed
an effective action program to
help you get things moving.
Our program includes
computerized cash letter analysis
... plus practical methods
for improving proof operations
and check collection.
Start us digging for those
profits—call 314-425-2404.

We’re with you.
M

E R c n r r n is

B R CK
Mercantile Trust Company N.A. • (314) 425-2404 • St. Louis, Mo. • Member F.D.I.C.
MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

The Banking Scene
By Dr. Lewis E. Davids
Hill Professor of Bank Management,
University of Missouri, Columbia

Make Way for ‘Crediscope’
" The 'Ralph Nader' types have, for some time, held that inac
curacy and a lack of objectivity exist in too many credit reports on
individuals. Further, as data banks expand, there is a growing need
to truncate as much useful information as possible in order to save
time and storage space/1

ANK LOAN O FFIC E R S who have
become conversant with the “com
mon-language” method of reporting a
customer’s credit history soon may have
to learn a new, but improved, system:
“Crediscope.” Why? The Fair Credit
Billing Act and the Equal Credit Op
portunity Act have raised questions
about whether the common-language
method of reporting is as precise as
could be devised in this age of com
puters and consumerism.
The “Ralph Nader” types have, for
some time, held that inaccuracy and
a lack of objectivity exist in too many
credit reports on individuals. Further,
as data banks expand, there is a grow
ing need to truncate as much useful in
formation as possible in order to save
time and storage space.
As a result of computerization, some
of the common-language numeric codes
—“usual manner of payment,” for in
stance—are difficult to program. Such
reporting usually is programmed to
show “latest and current” payments in

ACC
AJP
BKL
CCA

—
—
—
—

CLA —
DIS —
DRP —
JUD —
MOV —
PRL —

stead, which could differ somewhat
from “usual manner of payment.”
Beginning April 1, the Associated
Credit Bureau (ACB) will begin the
use of the Crediscope Form 2000,
which will permit interchangeable use
of the current common-language meth
od and of Crediscope. However, the

". . . the Crediscope Form 2000 . . . (initially) will permit inter
changeable use of the current common-language method (of credithistory reporting) and of Crediscope. However, the common-lan
guage method will be dropped . . . and Associated Credit Bureau
members then must use Crediscope only/1
common-language method will be
dropped by January 1, 1978, and ACB
members then must use Crediscope
only.
The Crediscope Form 2000 will have
spaces for an account’s present status,
and for listing past-due payments. The
form also will list the amount and num
ber of payments that are past due.

Account closed by consumer.
Adjustment pending.
Account included in Bankruptcy.
Consumer counseling account. Consumer has re
tained the services of an organization which is
directing payment of his accounts.
Placed for collection.
Dispute following resolution.
Dispute resolution pending.
Judgment obtained for balance shown.
Moved. Left no forwarding address.
Profit and loss write-off.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Form 2000 also will have an histori
cal section. On open or revolving ac
counts, there will be a 12-month pay
ment history, but for installment ac
counts the historical section will cover
the entire period the account has been
in force. Another section will show
whether or not the account has been
past due for 30 to 59 days, 60 to 89
days or 90 days or more.
What I feel is the most striking ad
vance offered by Crediscope is its
three-letter series of abbreviations,
which can explain unusual conditions
in regard to the subject of the credit
report. These abbreviations are listed
below.
Since these abbreviations will be in

RLD
RLP
RPO
RRE
RVD
RVN
RVP
RVR
STL
WEP

—
—
—
—
—
—
—
—
—
—

use after April 1, 1977, now is not too
early a time to become familiar with
them. Why not clip out the accompa
nying list and memorize the abbrevia
tions? Additionally, you may find it
beneficial to have whoever handles
your bank’s personal credit files work
the abbreviations into your own sys
tem! • •

Repossession. Paid by dealer.
Repossession. Proceeds applied to debt.
Repossession.
Repossession, redeemed.
Return voluntarily. Paid by dealer.
Returned voluntarily.
Returned voluntarily, proceeds applied to debt.
Returned voluntarily, redeemed.
Plate stolen or lost.
Wage Earner Plan Account (Chapter XIII of the
Bankruptcy Act).

MID-CONTINENT BANKER for March, 1977

A DAY IN THE TRANSIT DEPARTMENT.
The Transit Department is working late again.
United Missouri’s Transit Department works 24 hours a day
—five days a week, and 18 hours a day on weekends.
This enables us to give better service at lower costs.
It’s why you should send the coupon for our Rapid Transit
Item Profitability Schedule and other information.
Or better yet, ask about our 30-day trial of guaranteed better
service and better costs. You can phone collect.
You have nothing to lose, and profits to gain.

Correspondent Department
United Missouri Bank of Kansas City, N.A.
10th & Grand, Kansas City, Mo. 64141
(816) 221-6800
O Send me the Rapid Transit Profitability
Schedule.
□ I’m interested in your 30-day trial, too.
Name__________________;_____ ____ -__ .____.
Address___________________________________
City______________________________________
State_________ ;_______________ Zip_________

L___________________________________________________ J

UNITED MISSOURI RANK OF KANSAS CITY, N. A.
MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

E FTS

(Electronic Funds Transfer Systems)

Free Dinner Coupons
Come With ATM Use
A t Liberty, Louisville

On-Line ATM System Offered
To Banks in Three States
By Mercantile. St. Louis

L O U ISV ILLE—There’s a tasty reason
for customers of Liberty National to
patronize the bank’s ATMs through the
end of this month! Not only tasty, but
mouth watering!
Every customer withdrawing from
either his checking or savings account
gets a coupon that entitles him to treat
a friend to a dinner at one of 11 restau
rants in the Louisville area.

ST. LO U IS— Mercantile Trust has
announced that it is the first bank in
Missouri and one of the first in the na
tion to market a complete on-line elec
tronic banking machine system to banks
in Missouri, Illinois and Kansas.
According to Jerome J. Sandweg, fi
nancial services division vice president,
the system has the potential to provide
the same services Mercantile offers its
own Fingertip Banking c u sto m e rs
Ra-fwe.i
through use of plastic debit cards. Cus
FreeZ-ioM
ff«*siàm
j
■MjmM
bm#msfc&tfcs ■ tomers are able to conduct almost all
m r ss&
■*$m m **«*«&Ksm siìsm vì$*aa^
S8à«>
ss&
îi%iÿxtœ
w:
m personal banking transactions at the
v8'« p > , t$m^ > it s a v S säg&
na&gg<
k»afeù&
e«*
? « a ö fs o m S K S V - ■■* '
machines. Deposits, withdrawals, bal
'"X‘
' '
'
ance inquiries and transfer of funds
GmcHin§m<$
t,-"* >x' . ^
Savinm
|P§| §f§||;tì<S^>^4m
from one account to another can be
done 24 hours a day, seven days a
Liberty tre a ts
week.
Money Machin
Custom ers to
Since the bank installed its first au
gourm et H
tomated teller machine (ATM ) in No
dining!
vember, 1975, individual transactions
on its system have passed the million
mark. Volume is approaching 100,000
transactions a month, ranking Mercan
tile in the upper 5% nationwide in av
erage machine usage.
Fingertip Banking is a registered
trademark used to identify Mercantile’s
ATM program. Individual banks pur
Liberty
chasing the system would develop their
National
own marketing trade names. A bank
Bank
taking part in this program will be
provided with an on-line central infor
mation file (C IF ) installed on the
At the end of the first two weeks of bank’s premises and a Diebold ATM in
the promotion, participating restau
the bank’s outer wall.
rants reported excellent response and
Mercantile’s correspondents
have
bank officials estimated that the re been notified of the service, and pre
sponse would increase with the easing
liminary talks now are being held with
of winter weather conditions. One res interested banks. In addition, Mercan
taurant reported it had redeemed 105
tile will hold a spring seminar on the
concept of personal electronic banking.
coupons in the first two weeks. The
At that time, bankers may view the
redeemed coupons were worth $860
system in operation and gain additional
and an additional $1,800 in business
information on the new service.
was generated by those using the
coupons.
Firm's Staff Enters EFT World
Liberty’s newspaper ads were head
With Direct-Deposit Service
lined, “Liberty treats Money Machine
customers to gourmet dining!” The ad
TULSA— In a reported “first” for
explained that coupons for the 11 res
this city, 53 employees of Resource
taurants were dispensed by the ATMs,
Sciences Corp. (RSC ) have entered
one per transaction, and that the cus
the E F T world through Bank of Okla
tomer and his guest could enjoy two homa’s direct-payroll-deposit service,
dinners for the price of one by using
TransFund. In the past, employees tak
ing part in a direct-deposit program
the coupons.
had to use just one bank, but the new
Last fall, the bank conducted a simi
lar promotion featuring free movie service allows deposits to be made in
the bank of one’s choice.
passes.
js s ì ìì

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

RSC is a consulting engineering firm
with operations in 32 countries and 31
states, so as many as 20% of its em
ployees could be away from Tulsa on
any given payday, a spokesman says.
With Bank of Oklahoma’s new pro
gram, however, such employees are as
sured that their paychecks will be de
posited automatically in their accounts.
Under the program, RSC personnel
may withdraw funds from checking ac
counts, transfer funds to savings and
make a number of other transactions
at a Bank of Oklahoma TransFund
ATM on the RSC premises.
The service is less costly to custom
ers and banks, according to a Bank of
Oklahoma spokesman. Besides being
convenient, TransFund reduces check
ing charges—many Tulsa banks are re
viving checking-account service charges
— and participating firms benefit from
a reduction in cost of processing and
mailing payroll checks, the spokesman
adds. In addition, employees’ chances
of having checks stolen, lost or forged
are eliminated, and participants needn’t
wait in a long line on payday.
RSC employees in Houston and in
Orange County, Calif., are able to have
paychecks deposited directly in local
banks through Bank of Oklahoma’s cor
respondent agreements.

ACH System 'One of Best/
Says Ernst & Ernst Evaluation
WASHINGTON, D. C.—An evalua
tion of the control and consumer pro
tection features of the nation’s ACH
(automated clearing house) system by
Ernst & Ernst has turned up positive
results. Commissioned by NACHA—
the National Automated Clearing
House Association—the report found
the controls provided in the ACH sys
tem “to be one of the best we have re
viewed.”
NACHA engaged Ernst & Ernst to
perform an independent and objective
evaluation, which was conducted in
conjunction with ACH organizations in
Cleveland, Kansas City, Minneapolis
and New York. According to a
NACHA spokesman, “It is our opinion
the report confirms that ACH partici
pants may use the system with confi
dence since it is well controlled and
their interests are protected.”
Ernst & Ernst concluded that effec
tive protection to consumers from sys
tem errors and unnecessary information
storage is provided by ACH rules and
system features. The firm suggested
several areas where clarification or en-

MID-CONTINENT BANKER for March, 1977

We keep checks

from feeling lost,
returned,or
" ' rejected
Continental Bank’s check processing
exception rate is consistently lower than
Chicago and national bank averages.
Our people never stop working to
minimize annoying rejects, returns, and
lost items. And they really do a job.
Just take lost items for example.
Continental’s lost item rate per 100,000
checks processed is only 13.. .while the
national average is 29?
And this means our correspondents
save money by spending a lot less time
inquiring about problems.
Join the Continental Correspondents
who enjoy the advantages of our check
processing service. Call John Tingleff
at (312) 828-2191 to find out why it’s the
best in the business.
^National figure is taken with permission from the 1975 Bank Administration Institute Survey
of the Check Collection System. Continental Bank figure is as submitted to the Survey.

CONTINENTAL BANK

CONTINENTAL ILLINOIS CORPORATION

MID-CONTINENT BANKER for March, 197 7

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

a million-dollar ad agency. Mrs. Ozmer
has 20 years’ writing experience and
has authored a book on personal fi
nancial planning.

Millionth ATM Customer

Corporate
News
Roundup

John H. Schweitzer, officer in charge of Mer
cantile Trust of St. Louis' Gravois Banking
Center, congratulates Eleanore W ahby, the
center's millionth Fingertip Banking machine
customer. Mercantile Trust's first ATMs were
installed in the St. Louis area in November,
1975, and the bank now has 14 in operation
in that city. In addition, a bank spokesman
reports, the Fingertip Banking machines now
are approaching 100,000 transactions per
month.

hancement of system controls could be
made. Therefore, NACHA’s systems/
operations committee has formed a
special task force to evaluate the rec
ommendations for possible implementa
tion.
Inquiries concerning the report
should be directed to Charles H.
Chappas, Associate Director, Payments
System Planning Division, American
Bankers Association, 1120 Connecticut
Ave., N. W., Washington, DC 20036.
Copies of the report (publication
# 6 65800) may be purchased for $15
by contacting the ABA’s Order Pro
cessing Division at the above address.

• Associates C o m m e rc ia l Corp.
J. R. Meetze has been appointed re
gional vice president of the industrial
division of Associates Commercial Corp.,
Chicago-based c o m m e rc ia l financing
subsidiary of Associates Corp. of North
America. He will be responsible for
sales in several states, including Ala
bama and Tennessee.

• Walter E . Heller & Co. Robert J.
Abrahams has been promoted to senior
vice president, rediscount-consumer fi
nance division, Walter E. Heller & Co.,
Chicago. The firm is a subsidiary of
Walter E. Heller International Corp.
Mr. Abrahams heads the rediscounting
and consumer finance activities and has
been with Heller since 1960. He
formerly had co-owned a consumer fi
nance business in Chicago.

• Parker & Co. This Chattanooga,
Tenn., advertising, marketing and pub
lic relations agency was formed last
August to serve the banking industry.
According to a spokesman, its highly
specialized service was created spe
cifically for small to medium-sized
banks. Bill Parker and Marianne Ozmer
are the principals in the firm. Mr.
Parker formerly was an ad director of a
holding company and also treasurer of

LEVERT

Bill Parker and Marianne Ozmer are shown
at work at new advertising, marketing and
PR agency, Parker & Co., Chattanooga, Tenn.

TEMPORARY
BANKING
FACILITIES
FOR SALE
OR LEASE
MPA SYSTEMS 4120 RIO BRAVO

• Howard, Weil, Labouisse, Fried
richs, Inc. John B. Levert Jr., president
of this investment securities firm, has
been elected its CEO. He succeeds
G. Shelby Friedrichs, who continues as
chairman. Founded in 1946, the firm is
said to be the only full-service New
York Stock Exchange member firm
with its headquarters in New Orleans.
• Lawrenoe Systems, Inc. D. Theo
dore Berghorst, senior vice president,
Lawrence Systems, Inc., has been named
head of the Great Midwest Group of
the San Francisco-based collateral con
trol services firm. He was formerly Chi
cago regional manager and his new
duties include management of the Chi
cago and Toronto regions, which have
been combined. The Chicago region
comprises 13 states and the Toronto
region takes in eastern Canada.

EL PASO, TEXAS 79002

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

MID-CONTINENT BANKER for March, 1977

B A N K S C O M E IN

A L L S I Z E S ...

... and you’ll find detailed
information about every single one
in the North American
and International Editions of
Polk’s World Bank Directory
S WORLD BARK DIRICTORY

- L - P O

L I C

C O

publishers
P. O. Box 1340, Nashville, Tennessee 37202
Telephone 615/889-3350 Cable Address ENCYCOBANK

MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Banks Looking for Key Bank Managers
May Need Services of a Headhunter'
By PETER H. LAUER
President
Lauer & Holbrook, Inc.
Chicago

F YOU’R E among the growing num
ber of bank executives who have
found you can’t find key managers sim
ply by running an ad, then you’re
ready for a headhunter!
“Headhunter” is the popular term,
of course, for an executive searcher ex
perienced in finding candidates com
patible with your financial institution’s
management balance and the specifics
of the position description.
Banks seeking a replacement for a
key executive, or attempting to provide
for a smooth succession of top manage
ment, may not be able to find the right
person within their institutions. Some
times, banks will “reward” a promising
manager by pushing him or her into
unfamiliar territory, and soon they
have a “square peg in a round hole”
problem. By the time they recognize
the problem and select a qualified per
son, they may have lost a year to 18
months. In today’s competitive busi
ness climate, most banks cannot afford
that sort of “catchup” time.
Executive search firms use their
many contacts and industry sources to
locate prospective candidates. Initial
screening usually is done by phone,
without revealing the name or the cli
ent, unless it appears that the person
is a prime candidate.
Once the searcher has narrowed
down those who meet the position’s
general qualifications and are willing
to make a change, he conducts thor
ough personal interviews and screens
the backgrounds and references of all
final candidates. Only those interested
candidates who fulfill all requirements
of the position, both technically and
personally, are presented to the bank.
Another “bonus” gained from work
ing with an executive search firm is
that after the bank has decided on the
best candidate, the recruiter often can
be helpful in the delicate problem of
making a successful offer. Because of
the rapport existing before and during
the search, the executive searcher has
a unique relationship with the candi
date.
12

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

So, how do you locate the right
headhunter for your institution?
One of the best sources for finding
a reputable search firm is the Associa
tion of Executive Recruiting Consul
tants. The AERC is highly selective in
the admittance of members; they are
thoroughly screened; their clients are
checked as to satisfactory service, and
all of them have to adhere to a strict
code of ethics. A list can be obtained
by writing the AERC at 30 Rockefeller
Plaza, New York, NY 10020.

bers of the firm work together. This
often is more important than the socalled reputation of the firm itself. You
should have empathy with the recruiter.
This is true particularly when dealing
with a large firm in the profession.
4. Find out what kind of reports on
prospective candidates will be sent to
you, how many candidates usually are
presented and what happens if the
right person is not found within a rea
sonable period.
5. Does the firm or the particular
consultant really have enough time
available to do justice to the assign
ment?
6. The fee structure is very impor
tant. Most reputable search firms
charge 25%-35% of the expected base
salary of the successful candidate’s first
year’s remuneration. Some recruiters in
clude bonuses in this. In most cases,
the last invoice is adjusted to reflect the
total salary. In some cases, a fixed

” . . . A point that's important and often overlooked is to find
out who actually will perform the search and how members of
the firm work together. This often is more important than the
so-called reputation of the firm itself.”
It’s advisable to interview several
firms before deciding which one best
suits your needs. Here are some key
questions you ought to ask:
1. Do they have experience in a field
similar to where you want to look? For
example, if you are searching for a
trust officer, ask for specifics as to when
they last performed a similar search
and, if possible, for whom.
2. Most search firms will not be re
luctant to tell you who their clients are.
It would be a plus for you if some of
those banks are about your size and
have similar operating and investment
policies.
3. A point that’s important and often
overlooked is to find out w ho actually
will perform the search and how mem-

Mr. Lauer, a CPA, di
rected all financial and
personnel activities for
a major Chicago cor
poration before start
ing the e x e c u t i v e
search firm of Lauer &
Holbrook, Inc., in 1970.
He also has worked in
the treasury and controllership
areas
of
other important midwestern manufacturing
and service concerns.
Mr. Lauer received his MBA degree from the
University of Chicago, where he since has lec
tured frequently on professional topics and has
been on the Graduate School of Business facul
ty. Lauer & Holbrook belongs to the Associa
tion of Executive Recruiting Consultants, Inc.

amount is quoted. There are a few
firms who work on a time basis, and
they usually will give an estimate as
to time expected, which may vary be
tween 25%-35%.
7. It’s important to find out whether
the fee is renegotiable after a certain
amount of time has elapsed and the as
signment turns out to be more difficult
than originally contemplated. Also,
how are discontinuances of an assign
ment handled by the consultant?
8. As far as timing is concerned, it
might be well to find out what the
average search length has been in the
past. Good consultants should have
some statistics on this and, surprising
ly, many searches will average four to
six months with some search firms.
9. An interesting question might be
how much of the firm’s time is spent
on promotion or business development.
Most top firms operate on their reputa
tions through recommendations and re
peat business. Another interesting
question might be what percentage of
repeat business was obtained in the
past year.
Unlike employment agencies, execu
tive search firms work only for the em
ployer. Executive search firms develop
a basic knowledge of your business,
your objectives and your managerial
philosophy. Then they put that informa
tion to work for you.
You’ll find, I think, that headhunters
are just good business . . . like a good
attorney or accountant. * *

MID-CONTINENT BANKER for March, 1977

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I W

OUR CHILDREN HAVE KEPT THEIR 12-INCH RULERS...
but they’re watching as Mississippi’s ETV
network shows them how to “Go Metric”
with a series produced for PBS... one of
the increasing number of programs from
the Mississippi Center for Educational
Television that are being viewed nation
wide. We’ll bet you don’t know all the facts
about the good things w e’re doing in
Mississippi.

Find out m ore from
First National B an k...
^ ^ Jyo u ’ll be interested
in what you hear.

Jackson, Mississippi Member FDIC
MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Community Involvement
City's Livestock Industry Heritage
Spotlighted in Chicago Bank Display
HICAGO and the livestock industry
once were considered almost syn
onymous. To commemorate the era
when they were, the city’s Central Na
tional displayed for four weeks early
this year 27 portraits of prominent
cattlemen and agriculturalists. The por
traits once were housed in the historic
Stock Yard Inn and were loaned to the
bank by the Prince family, whose mem
bers were instrumental in founding and
rebuilding the stock yards and the inn.
Also on loan from the Prince family
is a 300-year-old grandfather clock that
stands 15 feet high, weighs over a ton
and once graced the lobby alcove at the
Stock Yard Inn. The clock has been
dusted off and its inner workings re
stored. After remaining silent many
decades, it’s chiming again in its new
surroundings in the commercial bank
ing department (it’s on loan to the bank
for an indefinite time). The clock dates
back to 1683, has a black oak base,
which features a carved head of Christ
bearing the inscription, “Worshipful
Master, 24th Sept., 1683” and flanked
by two cherubs. Above the head of
Christ is a British coat of arms en
circled by the French words: “Honni

soit qui mal y pense” (“Evil be to him
that evil thinks”). At the top of the
clock just above its dial stand four
carved monks, two of which hold ham
mers and remain stationary. The third
pulls a cord whenever the clock strikes
an hour, and the fourth monk moves
his hands in benediction with each tick
of the clock. On the clock’s face are
shown the time of day, the day of the
week, the date and the month.
The 27 portraits are of America’s
most famous cattlemen, in c lu d in g
Armour, Chisholm, Cudahy and Swift,
who pioneered the cattle industry and,
as Central National puts it, helped
shape America’s destiny. The paintings
are from the Stock Yard Inn’s Saddle
and Sirloin Gallery, which, at one time,
was the world’s largest portrait col
lection of men devoted to a single
industry. According to the bank, the
collection has been acclaimed both for
its artistic and historical value.
In addition to its work with the stock
yards and the inn, the Prince family
established the Live Stock National
Bank, a direct descendant of the Union
Stock Yards National Bank. These
banks, says Central National, pioneered
agricultural banking in Chicago. In
1965, Live Stock National was merged
with Central National, and, since then,
Central National has maintained a
prominent position in agricultural bank
ing. • •

It's a G ift:

Bank Gives Shot in Arm
To University's Campaign

This 300-year-old grandfather clock, which
once stood in Chicago's famous Stock Yard
Inn, now is on loan for indefinite time to
Central Nat'l, Chicago. It's on display in
bank's commercial banking department.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Parker Square Bank, Wichita Falls,
Tex., has given the advance midwestern development campaign of Mid
western State University, Wichita Falls,
a shot in the arm with a gift of
$16,425.
The money will be used by the
school to sponsor a series of annual
“Faculty Conferences on Professional
Excellence” on the university’s campus
as a part of a faculty development pro
gram. According to a school spokes
man, the two-day conferences will
focus on a different theme each year,
featuring lectures, seminars, group dis-

Dick Waggoner (I.), pres., Parker Square Bank,
Wichita Falls, Tex., presents check for $16,425
to John G. Barker, pres., Midwestern State
University, Wichita Falls, as Thomas Bond,
school v.p. of academic affairs, looks on. Gift
is to be used for sponsorship of faculty con
ferences on professional excellence.

cussions and workshops. Topics to be
covered will include innovative teach
ing techniques, motivation theory, fac
ulty/student evaluation, audio/visual
resources and research.
According to Dick Waggoner, bank
president, “Many people don’t realize
that learning is as much a continuing
process for faculty members as it is
for students. Faculty members spend
countless hours each year updating
their skills and keeping abreast of new
developments in their fields. Parker
Square Bank’s gift will allow the uni
versity to support those endeavors in
a positive way.”

Additional $650,000:

Minbanc Capital Corp.
Invests in Minority Banks
Minbanc Capital Corp., Washington,
D. C., has invested an additional
$650,000 in two minority banks: Con
solidated Bank, Richmond, and Ameri
can State, Tulsa.
Minbanc was created in 1972 by the
commercial banking industry to raise
money through sale of its own stock to
invest in minority-owned banks.
Consolidated Bank received $400,000, which it will use for construction
and expansion. It is said to be the old
est continuously existing black bank in
the U. S., with total resources averag
ing $26 million and capital of $2,213,000.
American State received the remain
ing $250,000 investment, which it will
use to build a new Main Office a few
miles from its present location in the
north Tulsa area. Established in 1970,
American State has resources averaging
$6 million and total capital of
$878,000.

MID-CONTINENT BANKER for March, 1977

Plea for Revitalized Business District

Bank Presents Bell to City

Receives Boost From Bank Ads
SURVEY was conducted several
months ago by First National,
Lincolnshire, 111., to determine what
types of businesses and professional
services were thought to be lacking in
the town by residents. That survey has
resulted in the beginning of a revitali
zation of the community’s business dis
trict.
“The idea began with the formation
of a chamber of commerce in Lincoln
shire,” says David A. Alford, bank
president and chamber of commerce
head. “Community and business leaders
realized that Lincolnshire lacked any
real order to its commercial develop
ment and, unless something was done,
residents would continue to shop else
where, thus hampering the commercial
potential of our town.”
A committee was formed by the
chamber of commerce to study the
problem, but the bank provided the
impetus—via ideas and funding—for a
survey.
What were the survey results? Cur
rent Lincolnshire services were inade
quate, said 97% of the respondents.
When asked what retail services they
would utilize, “grocery” led the list, be
ing chosen by 84% of those surveyed.
“Pharmacy” and “hardware” were next
highest, with 70% opting for each of
those choices. The two most-wanted
professional services the townspeople

of Lincolnshire wanted were “doctor”
(41%) and “dentist” (32%).
Once the results of the survey were
tabulated, the bank placed an ad in a
number of suburban newspapers telling
of the need for new business opportun
ities in Lincolnshire. And the ads so
far have resulted in a new dry cleaning
business, a butcher, a paint-wallpaper
store, an insurance agency, a pharma
cist and several manufacturers’ repre
sentative organizations. In addition,
two dentists, three attorneys, a phy
sician and an orthodontist have opened

Hang your
shingle here

Bank Contributes to Time Capsule

First Nat'l, Lincolnshire, III., sponsored ads
like this one to attract new business and
professional services to community.

Dick Waggoner (I.), pres., Parker Square Bank,
Wichita Falls, Tex., presents institution's con
tribution to city's bicentennial time capsule to
Arthur Beyer, bicentennial commission ch. In
cluded in bank's contribution were a letter to
city's citizens of 2076 (year capsule will be
opened) telling of institution's growth, bro
chures detailing bank's services and instruc
tions for a gift: Last December 1, Parker
Square Bank contributed $50 to "Citizens of
Wichita Falls" account, to be withdrawn—
with interest—in 100 years for preservation of
area's historical heritage and to promote civic
awareness. (At 5 % , a bank spokesman notes,
the account would total $7,418 by that time.)

practices in the town.
The campaign has boded well for
First National, too, Mr. Alford notes.
“W e’ve received many compliments
from area residents and business lead
ers. On the other hand, some existing
businesses have expressed resentment
of the program and two actually have
closed their accounts with the bank.
But the positive response far outweighs
the negative. Many of the new busi
nesses have opened accounts with First
National, and we have provided much
in the way of financing them.
“Besides the benefit of new busi
nesses being added to the community,”
Mr. Alford notes, “the revenue from
sales tax in the town will help us,
rather than surrounding communities.”

MID-CONTINENT BANKER for March, 197 7

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

A replica of the Liberty Bell w as presented to
the city of Herrin, III., by Herrin Security Bank
recently. The bell is on permanent display at
the new City Hall in Herrin. The bell, made by
the I. T. Verdin Co., Cincinnati, w as on display
at the bank's lobby prior to the presentation.
Admiring the bell are (from I.) Herrin Mayor
John McVey; Charles Helleny, bank executive
vice president; Illinois Senator Gene Johns; and
then-lllinois Governor Daniel Walker.

W hat's Going On?

Community Activities Noted
On Bank's Bulletin Boards
Residents of areas served by First
Bank, South Bend, Ind., should have
a better idea of the activities going on
in their communities. The bank has
installed community bulletin boards in
its neighborhood branch offices.
According to a bank spokesman,
“First Bank always has been a com
munity-minded bank and has supported
the projects of many community, social,
civic and religious organizations. Un
derstanding the publicity needs of
these groups, First Bank decided to in
stall bulletin boards in its offices for
the display of materials promoting such
organizations’ activities.”
To be posted on a First Bank bulle
tin board, materials must represent non
profit organizations to which contribu
tions are tax deductible.

Keith L. Hamilton, v.p. and br. admin, super
visor, First Bank, South Bend, Ind., joins Mary
Cytacki, op. mgr., Lincolnway West Office, in
placing promotional poster on bank's com
munity bulletin board. Bank has installed
boards in neighborhood branches, furnishes
space to nonprofit organizations for promoting
community activities.

Bank Investments
Bond Market's Excellent Performance
In 1976 Noted by New York City Firm

OND MARKETS last year turned
in an excellent investment per
formance that was highly competitive
with stock market results, according to
Salomon Brothers, New York Citybased international investment banking,
market-making and research firm. In
fact, says the firm, the total return on
bonds in 1976 was the best since 1970.
Information on the 1976 bond mar
kets is contained in the “Annual Re
view of the Bond Market,” published
by Salomon Brothers. The report was
written by Henry Kaufman, general
partner and executive committee mem
ber; Richard I. Johannesen Jr., vice
president in charge of the bond market
research department; and Robert V.
Di Clemente, capital market analyst.
The total return for high-grade bonds
in 1976—which is measured by price
change plus interest income as a per
cent of starting value—ranged from

15% to 30%, depending on the bondmarket sector. This compared with re
turns of 8% to 17% in 1975.
Long-term “Baa” industrial bonds
last year, however, registered the best
total return— 45%. This was followed
by municipal bonds, where the returns
ranged from 30% for seasoned “A”-rated
electric revenue bonds to 21% for new
prime general-obligation issues. The re
turn for the high-grade corporate-bond
market as a whole was 18%, but bank
and finance company bonds showed
better returns of 21% and 22%, respec
tively.
By comparison, Standard & Poor’s
500 common-stock average yielded a
total return of 23%, and the return on
the Standard & Poor’s utility commonstock average was 30%.
“The fixed-income portion of the
equity market, preferred stocks, how
ever, outperformed many of the major

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sectors of the capital markets,” the au
thors commented. “For example, sea
soned £A’-rated preferred stocks showed
a total return of 34% and ‘A’-rated is
sues attained 26%.”
Over a longer period of time, per
formance of bonds versus stocks is just
about a standoff, according to the au
thors, who add, “Since 1969, long U. S.
governments,
high-grade
corporate
bonds and municipals of medium qual
ity and seasoned tax-exempt revenue
issues have attained an average annual
total rate of return of 7% compared
with 6% for common stocks.”
Noting that yields in nearly all debtmarket sectors were at cyclically low
levels at year-end 1976, the report
points out that the money and bond
markets were the most tranquil since
1972, despite several pronounced price
swings. Average monthly yield changes
for long governments and long-term
corporates, it continues, were only half
as large as in 1975 and extremely mod
est in the money-market sector.
The report compares yields on debt
issues with inflation rates by saying,
“With the exception of the very high
inflation periods in 1973 and 1974, the
new £Aa’ utility-bond yields have ex
ceeded the GNP deflator by 2% to 4%
since 1965, reaching a high for the pe
riod of about 4.5%” at one interval in
1976.
There were striking differences in
growth of the credit markets last year,
says the Salomon Brothers’ study.
“While the size of the money market
actually contracted, the intermediate
and long-term debt markets expanded
at a record-shattering rate.”
Total volume of outstanding selected
money-market instruments, including
Treasury bills, Federal Credit Agency
notes, commercial paper, bankers ac
ceptances, CDs and municipal notes,
contracted by an unprecedented $17
billion to $272.5 billion in the year.
This mainly was because of a continued
sharp fall of $20.8 billion in negotiable
CDs outstanding, the second consecu
tive yearly decline. Money-market in
struments went up by a record $61 bil
lion in 1974 and were $26 billion high
er the following year.
In contrast, the outstanding volume
of intermediate and long-term debt ob
ligations increased by a record $127
billion in 1976 to $998.7 billion. Ac
cording to the report, this was due
mainly to an unprecedented increase
of $59 billion in U. S. Treasury notes
and bonds and a record increase of
$9.3 billion in foreign bond issues in
the U. S. market. • •

U 4 .IFE CREDIT LIFE Insurance Company
16

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

MID-CONTINENT BANKER for March, 1977

W hat’s new in check designs?
Something very old. Antique
checks from Deluxe.
They’re based on a 107 year old
check we found in our archives.
And, from the parchment-look
paper, to the scroll-work border,
they’re authentic 1870’s.
They’re popular, too.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Customers all over have really
taken to the antique flavor of
these new Deluxe Checks. And,

.... .

fete-

&L 101 <
_fiw a

§-------

__wmnama

M U JJ5 & E National State Bank
11Your City, U.S.A. 12345

u: 23t,Sw*&?Bcl»; l 25*«S&7fl“‘

CHECK PRINTERS, INC.
S A LES HEADQUARTERS PO BOX 3 3 9 9 S T PAUL. MN. 55165
STRATEGIC ALLY LOCATED PLANTS FROM COAST TO COAST

as a special touch, they’re
available with either an engraved
American Eagle, or a personal
monogrammed initial.
Ask your Deluxe representative
about t he m. . . then start showing
your customers the 107 year old
newcomer from Deluxe,^Antique
Checks.

Mortgage Lending
Home Mortgages Must Be Tailor Made
To Fit Needs of Today's Families

HE TRADITIONAL home mort
gage and its method of repayment
over a 20- or 30-year period at a fixed
rate of interest is inadequate to meet
today’s housing needs, according to
Leon T. Kendall, president, Mortgage
Guaranty Insurance Corp. (M G IC ),
Milwaukee. This firm is described as
the nation’s largest private insurer of
mortgages.
This country now needs tailor-made
mortgages designed to meet individual
families’ varying requirements, Mr.
Kendall told the 32nd annual Senior
Executives’ Conference of Mortgage
Bankers at New York University. In
almost every area of business finance,
noted Mr.* Kendall, diversity is the
order of the day, with the exception of
the standard mortgage, a heritage of
the great depression.
Mr. Kendall outlined several innova
tions that would update the mortgage
as a “debt instrument.” They included:
• G raduated paym ents. They would
vary according to a home buyer’s in
come. Payments could start low and
increase as the homeowner’s income
increases. Such a mortgage might mean
payments on interest only for the first
five years.
• Interest-only loans. For a specified
period, only interest would be paid;
then, the principal would be repaid in
a “balloon” payment or the loan could
be renegotiated.

• R ate and term renegotiation every
five years. This could benefit the tran
sient home buyer or the person who
plans to change homes within that pe
riod.
• Permit sk ip p ed paym ents. For ex
ample, a seasonal worker could make
mortgage payments according to his
own income flow.
• O ffer a line o f credit. This would
enable the home buyer to borrow
against his increasing equity in his
home to meet major family expenses,
such as a college education or home
improvements, at economical rates.
In addition, Mr. Kendall suggested
sharing a house’s value increase with
the builder or lender. This could be
done in return for a lower down pay
ment and a lower interest rate.
Another suggestion was to separate
the land from the improvement and
amortize them on two different bases.
Lenders and mortgage bankers, said
Mr. Kendall, can no longer ignore pres
sure from home buyers and consumers
for a more flexible mortgage instru
ment, as well as increasing interest in
the subject by the federal government,
legislators and the news media. As ex
amples of government interest in
change, he pointed to a mortgage in
strument research study by the Federal
Home Loan Bank Board (F H L B B )
and bills recently introduced in Con
gress.

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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

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He added that the money crisis of
1974, along with double-digit-interest
rates, inflation in home prices, the cy
clicality of housing and the economy
and other forces, exposed the shortcom
ings of the present-day mortgage struc
ture.
As jüst a few of the weaknesses laid
bare, Mr. Kendall listed usury and
FHA ceilings, costly FHA origination
procedures, cumbersome foreclosure
procedures and restricted powers of
thrift institutions.
Mr. Kendall believes the demand for
housing by first-time home buyers be
tween 25 and 34 years of age will con
tinue for the rest of this decade and
beyond. In 1975, households in this
category totaled 13.5 million, he con
tinued, and by 1980, the number will
be 16.8 million.
The MGIC executive explained that
the trend toward flexibility of the mort
gage instrument presents both a chal
lenge and a threat to mortgage lenders.
"You face a conflict between stan
dardization and diversity,” he warned,
“between federalization of the mort
gage instrument and pressures in the
consumer marketplace for flexibility,
tailoring the mortgage instrument to
the needs of individual home buyers.”

Graduate School of Banking
Commissions Research Study
On Mortgage-Loan Topics
MADISON, W IS.—What would be
the advantages and disadvantages to
consumers and banks of having home
mortgages portable from lender to
lender? Is it feasible—legally, eco
nomically and operationally—to re
structure the mortgage instrument to
make it truly profitable? Does the con
cept of “mortgage portability” offer a
workable solution to some of the fi
nancial aspects of our nation’s “hous
ing problem”?
These and other questions will be
the subject of a research study that
has been commissioned by the Gradu
ate School of Banking, University of
Wisconsin.
Franz E. Fischer will conduct the
research. He is a faculty member of the
University of Wisconsin Extension and
the Society of Real Estate Appraisers.
The research has been funded through
the Graduate School of Banking’s edu
cational fund and guided by an ad
visory group of bankers and members
of the school’s faculty.
According to a school spokesman, the
study will be completed by August,
with the results published and made
available shortly thereafter.

MID-CONTINENT BANKER for March, 1977

Associates and banks:
financial partners, creatively working
together to help business grow.
Every day, there’s an opportunity to work with Associates.
Call us for information.

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Associates Commercial Corporation

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

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55 E. Monroe Street
Chicago, Illinois 60603
(312) 781-5888
A subsidiary of
Associates Corporation of North America,
ASSOCIATES ®a Gulf + Western Company.

Installment Lending

ready to step in and help. And at
Mountain States, you can’t go any
higher than him.” These commercials
have the recurring theme, “Indepen
dent, that’s our style. W e’re indepen
dent at Mountain States Bank.”
The commercials were created and
produced by Fred Arthur Productions,
Ltd., Denver, for the bank’s house
agency, Robert Jordan Associates. • •

Bank Boosts Installment-Loan Volume
By Emphasizing Simple Interest
S IM P L E-INTEREST-installmentloan campaign, started three years
ago at Mountain States Bank, Denver,
has been stressing availability of loans
to women and the advantages of being
an independent bank. Its success can
be measured by the fact that, according
to Vice President Robert E. Jordan, the
number of installment-loan customers
in 1976 increased by almost 800 over
the previous year, and installment-loan
volume went up 29% over 1975.
Mr. Jordan adds that all installment
loans are made on a direct basis; the
bank doesn’t buy dealer paper from
anyone.
The campaign is designed only for
radio; in fact, says Mr. Jordan, 90%
of the bank’s advertising budget is for
radio production.
The c a m p a ig n oriented toward
women has the theme, “Ladies wel
come . . . at Mountain States Bank”
and utilizes a 60-second spot in which
a woman’s comments are interspersed
with lines sung by a male vocalist to
guitar accompaniment. In one com
mercial, the woman remarks that the
easiest way for a woman to get a loan
at most banks is on the arm of her
husband. Then she adds, “Thank good
ness that isn’t true at Mountain States.”
After discoursing on how she believes
in the rights of an individual, she closes
by saying, “So, if you’ve been getting
the cold shoulder where you bank,
maybe it’s time you changed climates.

As for me, I found I got a much warmer
reception at Mountain States. And,
really . . . I think you will, too.”
Mr. Jordan says it’s difficult to esti
mate how many loans to women re
sulted from the radio campaign because
the bank already had a big female
clientele consisting of p ro fe s s io n a l
women, nurses, executives, etc. How
ever, he describes the oral response as
overwhelmingly favorable. He points
out that there were a lot of nuisance
phone calls for $25 and $50 loans for
various purposes, some not quite bank
able.
H o m e -im p ro v e m e n t and car-loan
commercials emphasize that a borrower
may prepay whenever he wishes with
out being penalized. In fact, each com
mercial is highlighted by a vocalist
singing at various times: “It’s interest
ing to find a bank whose interest de
clines with each prepayment you make.”
“Why sign a note for more than you
borrow . . . pay for today . . . not for to
morrow” and “Think what you could
do with the money you save just by
borrowing at Mountain States Bank.”
Commercials spotlighting Mountain
States Bank’s independence emphasize
that it’s “one of the last of the good ole
banks” and that its officers not only
have the authority to make decisions,
but also the know-how. If, for some
reason, there’s a problem they can’t
handle, says one commercial, “. . . the
‘pres’ himself is right there at all times,

BLANKET SINGLE INTEREST INSURANCE
for installment loans on:
Mobile Homes
RECREATIONAL VEHICLES
Snowmobiles
Boats and Motors
Travel Trailers
Motor Homes

HI-

.
r HYSICAL DAMAGE LOSSES

\N WAGENEN CO.
Minneapolis, Minn. 55402
-2261

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Federal Reserve Bank of St. Louis

For Higher Education:

Sources of Financial Aid
Are Reported by BofA
Sources of financial aid to help ease
the increasing costs of higher education
are discussed in a report by Bank of
America, San Francisco. “Ways to F i
nance an Education” takes a look at 21
sources of scholarships, grants and
loans to help pay for a college educa
tion.
Also detailed in the publication are
programs that combine work with
study. Special financial-aid programs
for graduate, women and minority stu
dents are outlined in the report.
According to “Ways to Finance an
Education,” the federal government is
one of the largest sources of financial
aid. Basic Educational Opportunity
grants, for instance, pay $400-$ 1,400
yearly, and other grants allot more to
students unable to afford college costs
without aid.
State governments offer much aid,
the report shows. California, for in
stance, arranges a number of scholar
ships for undergraduates and graduates
through the Student Aid Commission;
some schools offer their own scholar
ships, fellowships, grants and loans
funded by their own budgets or by
private donors. Some schools, the re
port says, allow students to delay tui
tion payments.
“Ways to Finance an Education” in
dicates that the private-aid boom of the
’50s is over, but that business organiza
tions, professional associations, labor
unions and community organizations
are good sources to be considered for
educational aid. Private lenders, the re
port shows, continue to play a major
role through the federal government’s
student-loan program.
Other hints provided by the publica
tion include how to cut costs once fi
nancial aid has been obtained. Also
part of the report is a timetable to help
students plan for financial assistance.

MID-CONTINENT BANKER for March, 1977

N ow is the tim e
to expand
home improvement
loan volume.
Here are six reasons why...
I C S t h e world's leading insurer of home im
provement loans,believes current econom
ic conditions provide an excellent climate
to increase your HIL volume and profits .
Stable Diversification. Consumer HIL demand conm tinues to grow and the timing is perfect for in
creased loan activity in this category. Loan volume
in other categories such as autos, boats and rec
vehicles is adversely affected by possible energy
shortages and inflationary price increases.

Higher yield. Your profits are being squeezed by
0 spiraling costs and can be offset by a high yield

home modernization plan. An ICS program assures
that your gross income will be higher than that re
ceived from FHA auto and mobile home loans. Let
us demonstrate how an ICS insured program will
provide a dramatic increase in profits on a pri
vately insured portfolio compared to FHA coverage.
100% Credit Protection. ICS insured home im^provement loans enjoy 100% credit protection.
And we include every unpredictable default . . .
such as layoffs, recession, strikes, bankruptcy and
divorce. Other loans, by comparison, put the entire
burden of risk on you.

Unlimited Marketing Opportunities. Every home
f improvement loan provides the opportunity to ef
fectively cross-sell all banking services. The home
owner is a ready-made and growing audience for
promotions that provide useful and innovative
home modernization ideas. Since 1954, ICS has
accumulated a wide variety of effective home im
provement promotions that are offered exclusively
to our more than 1100 client banks.

Increased home modernization activity. There
^ couldn't be a better time to emphasize home im
provement loans. Because of inflation, people are
more involved in do-it-yourself projects and are
constantly aware of needed improvements. Also
high mortgage rates make HIL more feasible from
an economic standpoint.
Community Service. The home owner is the "back^ bone" of the community. There is no better way for
your bank to make a constructive contribution to
community service than the active promotion of
programs for financing the maintenance and im
provement of property!

6 reasons why now is the time to expand your home
improvement loan volume. Call or write William F.
Schumann, President, for personalized ideas applied to
your situation. As the world's largest home improve
ment loan insurance service company, our expertise will
help you achieve your profit goals.

IN S U R E D C R E D IT
B S E R V IC E S 1

Visit our hospitality suite
at the Hyatt Regency during the
ABA Instalment Credit Conference
in New Orleans, March 27-30.

307 N. Michigan Avenue
Chicago, Illinois 60601
312/263-2375

America's No. 1 insurer of home improvement loans.
MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

lo st buildings begin
ith a foundation.
mrs begin at your
bottom line;

^re you hesitant to undertake
new building program because of the
)otentially negative effect this can have on earnings?
)on’t be. We plan and build from data which indicates that new or
f-emodeled financial facilities can contribute significantly to earnings at an
accelerating rate...from the day of grand opening and for years to come.
get a better bottom line because we plan, design, and build financial buildings
ike businesses...not buildings. Actually, the last thing we do is design and build
building. There's not another firm in your city, or in the country that can offer
>ur up-front consultation services... and back them up with a building guarantee
ike ours. Simply stated: we’ll build it right... on tim e... and within budget.

i' o u

/e can make that statement because we’ve been in this business for 63 years
ind have planned, designed, and built or remodeled more than 6,000 buildings,
/e’ll be glad to discuss our past and your future. We
lave a man in your area.
Bank Building Corporation
1130 Hampton Ave.
St. Louis, MO. 63139
Please send information about how
you can help build my business.
MC-377

Address.
C ity -----

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Federal Reserve Bank of St. Louis

State.

We'll build you a business.

iwmKir

New
MOSLER SERVICE

...as excellent as the
equipment it supports.

and
Services

• Auto Owners Guide. Here’s a give
away that should be a natural for a
bank’s installment loan department: an
auto owners guide and service record.
Created by St. Louisan Stephen Corey,
it consists of two sides: On one side
is a chart of recommended services
and suggestions as to when to have
such services done and on the other
side blank spaces for the motorist to
keep a record of mileage and dates
when these services are performed. The
chart, on sturdy cardboard, measures
13/2 x 4/i and folds in the middle to fit
into an auto’s glove compartment.
W rite: Stephen Corey, 6258 Rhodes
Ave., St. Louis, MO 63109.
• American Sign & Indicator Corp.
A visual sign display using both words
and pictures has been introduced by
American Sign & Indicator Corp.,
Spokane, Wash. Called Unex, the sys
tem has models for both indoor and
outdoor use and can be operated by
one of several computer-controlled con
soles—the Mark 400 desk console and
the portable Mark 50. The Mark 400
is programmed using a keyboard simi
lar to a typewriter. A TV-like screen on

the console allows the operator to check
messages and create graphics. Its com
puter memory can store more than 100
pictorials for future recall, according
to the manufacturer, and the Unex
panel can be programmed to display
messages automatically for up to a
week in advance. Write: American
Sign & Indicator Corp., 2310 North
Fancher Way, Spokane, WA 99206.

• Mosler. Mosler Safe Co., Hamilton,
O., has published a brochure that de
scribes the firm’s total service-support
efforts. It describes the Mosler national
service organization, which includes
field offices and personnel strategically
located within a short distance of most
Mosler customers; service technicians
who use vans described as mobile
service shops that can handle routine
service or equipment in s t a lla tio n s ;
emergency 24-hour service that’s avail
able from all Mosler service centers;
and a training school for new service
personnel located at Mosler head
quarters in Hamilton. For a free copy
of the service brochure, write: Mosler
Safe Co., Department PR-083, 1561
Grand Boulevard, Hamilton, OH 45012.
• Diebold, Inc. Now available from
Diebold, Inc., Canton, O., is a fullcolor, eight-page booklet on the “Stock
200” safe deposit sections now available
in a larger selection of sizes and con
figurations. The booklet discusses the
delivery speed and flexible numbering
system of the Diebold Stock 200 safe
deposit sections and provides diagrams
of typical sections. Also shown are
color photos of Stock 200 installations
and diagrams of Unitized Safe Deposit
sections for vaults eight feet high. In
addition, the brochure covers optional
features available, including U. L.-listed
locks, key trays or drawers and pull
shelves for installation between safe
deposit box sections. Write: Public Re
lations Department, Diebold, Inc., Can
ton, OH 44711.

MID-CÒNTINENT BANKER for March, 197 7

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Section 409(a) of ERISA states:
"Any person who is a fiduciary with respect to a plan who
breaches any of the responsibilities, obligations, or duties
imposed upon fiduciaries by this title shall be personally
liable to make good to such plan any losses to the plan re
sulting from each such breach . .
(Emphasis supplied)' 1?

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

"We should include our
pension plan fiduciaries in our
D & O coverage. Let's call M GIC
for a rider."

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

No sooner said than done.
Offering this extended coverage option demonstrates how
quickly MGIC responds to the specialized requirements of
financial institutions.
Passage of ERISA created this need for additional liability
protection for your directors or officers who are considered
fiduciaries of your institution's pension/employee
benefit plans.
MGIC provides it—easily available as an endorsement to the
MGIC Directors' and Officers' liability policy.*
The policy also provides individual coverage, up to policy
limits, for each person, each year. It recognizes your desire
to select counsel, subject to MGIC's consent. And, at its
option, MGIC can advance you money for costly fees. MGIC
coverage also includes bank trust officers, which ERISA
legislation makes more important than ever.
In today's business climate, the need for adequate
management protection is growing. Isn't it worth a few
minutes to get a thorough analysis of your D & O coverage
from your local insurance broker or MGIC representative?
Directors' and Officers' Liability Protection from MGIC.
One more sound reason why we say, there is no substitute
for experience. MGIC experience.
*Not available in Texas

MGIC

Because experience pays.

M GIC Indemnity Corporation, a Subsidiary of M GIC Investment Corporation, M GIC Plaza, Milwaukee, Wl 53201
Phone: 800-558-9900; in Wisconsin, 800-242-9275

A H eller participation loan
keeps your custom ers’ interest
in your bank.
When a good customer or prospect comes
to you with a loan request largerthan you
may be willing to provide, you don’t have to
lose him.
A bank/Heller participation loan gives you
the leverage to maximize your customer’s
credit availability. You provide his
normal banking functions, retain his
deposit balances and generate
interest income from your portion
of the loan, typically 30% to 50% .

Heller assumes responsibility for all administrative
and supervisory details, plus keeps you close to
the situation with periodic examination reports.
Heller has been exercising this kind of financial
creativity for over a half-century with banks of all
sizes. Today, Heller is not only the most
experienced, but very likely, the best in the
business of participations.
Contact the Heller office nearest you
today. Your customers and prospects are
too important to lose.

Walter E. Heller & Company 105 W. Adams St., Chicago, III. 60690
New York • Boston • Philadelphia • Baltimore • Syracuse •Detroit* St. Louii.
Charlotte • Kansas City • Denver* Atlanta • Miami • Birmingham
New Orleans• Houston • Dallas• Phoenix* Los Angeles • San Francisco
Portland • San Juan P.R. Heller services also available through Heller
Companies in Canada and twenty other countries around the world.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

MID-CONTINENT BANKER for March, 1977

INVOLVEMENT:

A Key Element in Bank Growth!
IR EC TO R involvement is the key
to bank growth, says Harry B.
Brock Jr., chairman, Central Bancshares
of the South, and CEO, Central Bank,
both located in Birmingham, Ala.
Mr. Brock knows what he’s talking
about. He opened Central Bank in
1964 with $1 million in capital and 11
employees. Now he presides over a
$1 billion institution employing more
than 1,900 people, with earnings ex
ceeding $11 million annually.
Mr. Brock’s success formula requires
each director to make a five-part pledge
to the bank: (1 ) He must commit all
the business he controls to the bank;
(2 ) he must devote one day per month
to the solicitation of bank business; (3)
he must agree to underwrite any ad
ditional capital requirements needed by
the bank; (4 ) he must agree to meet
with the loan committee weekly in ad
dition to regular monthly directors’
meetings; and (5) he must commit
himself to help any bank customer who
calls on him for assistance.
“I don’t think anybody should serve
on the board of any bank unless he’s
willing to do business with that bank,”
Mr. Brock says. “Some director candi
dates balk at such a requirement, but
we would have ruined our whole team
effort had we ever compromised on
that rule.”
Mr. Brock terms the one-day-permonth requirement a “wonderful com
mitment.” It isn’t too much to ask, he
says, and the commitment serves as a
guarantee that the director will accom
pany officers when they call on pros
pects.
The commitment on the part of di
rectors to underwrite capital might
seem like a small matter, but it’s a
good thing to have if the bank is an
ticipating good growth in the future,
Mr. Brock says. This means that every
director-candidate must be financially
responsible and able to invest funds in
bank capital in the future. “W e ask
that no director own more than 5%
> or
less than 1% of the bank’s stock,” he
says. “When an increase in capital is
needed, we ask directors to invest in
proportion to the stock already owned.”

Central Bank’s loan committee is
deeply involved in extensions of credit,
Mr. Brock says, which means that its
directors are deeply involved in the
important business of the bank.
Contrary to popular belief, Mr. Brock
continues, most bank directors serve
because they want to obtain a liberal
financial education. “It’s not the pres
tige factor as much as it is a desire to
leam,” he says. “A bank can be a clear
ing house of information for the entire
business community.”
Part of this learning activity, Mr.
Brock says, is seeking board approval
of loans prior to the fact, not after. To
do this, each loan application is pre

Directors Prepare to Sell
All directors affiliated with Cen
tral Bancshares of the South at
tended a meeting recently to learn
about a new business development
program. Lead bank of the HC is
Central Bank, Birmingham (see story
this page).
“Directors have traditionally been
advisers to a bank’s management
team, but when we started our bank
we made the directors promise to
take a more active role,” said Harry
B. Brock Jr., CEO of the HC. “If
they are to be directors, they have
to go out and solicit new business
as well as advise.”
According to William B. Lewis,
director of sales traimng and com
munications for the HC, Central
Bank was one of the first major
banks in the nation to actively en
courage its directors to bring in
new business.
The HC’s year-long program, en
titled “Production 77,” posits the
idea that Central’s directors are pro
ducers of new business. The tone
of the meeting was keyed to classic
motion pictures, each of which was
made by a dynamic director, such
as D. W. Griffith and John Ford.
Last year, a similar program re
sulted in $37.4 million worth of
new personal and commercial check
ing accounts, CDs and trust ac
counts. This year’s goal is $3 million
higher.

MID-CONTINENT BANKER for March, 1977

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Federal Reserve Bank of St. Louis

sented to directors and they are ap
prised of its merits. This enables the
directors to learn to determine if a loan
should or should not be granted. This
procedure is important, he says, be
cause, if approval comes after the fact,
directors tend to feel that they consti-tute a rubber stamp board. “This sense
of participation and education is what
makes our directors so eager to serve
on the loan committee,” he says.
Directors are asked to help the bank
get business for any customer as long
as it doesn’t interfere with the director’s
own business, Mr. Brock says.
A strong director policy requires
strong leadership on the part of the
CEO, according to Mr. Brock. A di
rector can’t be expected to make sales
calls on his own; he should be in the
company of the CEO or other senior
officer. And he needs guidelines, since
he has not been trained as a banker.
Mr. Brock says the practice of ask
ing directors to turn names of their
firms’ vendors over to the bank is a
good way to form a list of prospective
bank customers. Vendor lists should be
turned in by directors at least annually
because they are subject to frequent
change, he says.
It’s up to bank management to pro
vide the kind of services that help di
rectors in their selling efforts, accord
ing to Mr. Brock.
And it’s important that a bank price
its services intelligently, he adds. Com
mercial accounts, which usually are the
most profitable, should not be forced
to subsidize services provided for lessprofitable customers. The best cus
tomer should receive below-prime in
terest rates and the bank can afford to
do this if it isn’t trapped into offering
loss-leader services to its marginal cus
tomers. This kind of thinking has been
responsible for bringing in new com
mercial accounts that have enabled Cen
tral Bank to maintain its growth rate,
Mr. Brock says.
Another service to benefit customers
is extended banking hours, Mr. Brock
says. From a 2 p.m. closing, five days a
week, Central Bank went to an all-day
banking schedule, including Saturday
27

Educational Program Set Up
For Bank Directors by ABA;

" I don't think anybody should serve on
the board of any bank unless he's willing
to do business with that bank. Some di
rector candidates balk at such a require
ment, but we would have ruined our
whole team effort had we ever compro
mised on that rule."— Harry B. Brock Jr.

hours. The bank also adopted a policy
of closing only on major holidays, cut
ting down considerably on the 15 holi
days it had formerly observed.
Still another service Central Bank
offers its customers is accounts receiv
able financing. “When I first started in
banking, accounts receivable financing
was a dirty word,” Mr. Brock says. “It
was the thing you did short of going
bankrupt.”
According to Mr. Brock, this service
brings in some of the best business a
bank can have, provided proper audit
procedures are maintained. “Why let
the accounts receivable financing cus
tomer take his business to New York
when you can handle it right at the
bank?” Mr. Brock asks.
Another popular service introduced
by Mr. Brock is cash management. He
insists that a bank can make money
with this service, provided the pricing
is on target. Mr. Brock tells of one
account Central Bank has that formerly
maintained a million dollar balance.
When the firm hired an aggressive
treasurer, it was necessary for the bank
to provide cash management services.
Now the account balance is zero, but
the firm remits a considerable monthly
fee for the service. “That fee goes
straight to the bottom line,” Mr. Brock
says. “You don’t have to put up a re
serve for it and you don’t have to pay
postage to get it.”
Another innovation adopted by Cen
tral Bank is frequent luncheons in the
bank’s private dining room for highbalance commercial customers. Mr.
Brock hosts these luncheons and their
purpose is not to get business for the
bank, but to introduce businessmen to
each other, give them an opportunity
to talk about their businesses and ex
plore the possibilities of establishing
business relationships with one another.
Mr. Brock has been hosting these
luncheons for more than 12 years and
values them because they enable him
to meet with every major customer of
the bank every six months. “If the bank
tried to sell itself at these luncheons,”
Mr. Brock says, “we’d soon run out
of guests.”
Central Bank recently adopted a
new director call program that has been

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Federal Reserve Bank of St. Louis

Includes M anual Seminar

termed “different” from the usual pro
gram. First, a record is kept of the new
business brought in by directors. A
scoreboard hangs in the board room
with each director’s name on it. As a
director’s participation results in new
business, he receives credit on the
scoreboard.
Second,
directors
are
awarded trading stamps in proportion
to the amount of new business they
bring in. Mr. Brock says the popularity
of trading stamps is phenomenal.
Mr. Brock sets a premium on the fact
that directors establish yearly quotas of
the new business they expect to bring
to the bank.
Looking toward the future, Mr.
Brock says a bank must be careful not
to become overloaded with directors.
But, at the same time, it must have
good director talent in the wings to
succeed present directors. Central Bank
maintains a young executives board,
composed of budding business talent
from the community. These people are
often related to directors of other Bir
mingham banks and serve as junior of
ficers of their firms.
The young executives are entrusted
with many of the duties and responsi
bilities of senior board members. Mr.
Brock’s theory is that, by the time the
bank needs these people as senior di
rectors, they will have advanced in
their firms to the point where they can
bring their firms’ business to Central
Bank.
The young executives are expected
to bring their personal business to the
bank, participate in board meetings and
devote a day a month to bank business
solicitation. They also are expected to
own stock.
In return, they receive a financially
oriented education and the prestige
that goes with a board affiliation at a
relatively early age.
Mr. Brock has proved that directors
can be a bank’s best friend if they are
provided with the type of leadership
that encourages them to contribute ac
tively to bank growth. • •

WASHINGTON, D. C .—A new edu
cational program for bank directors
received final approval last month at a
meeting of the ABA’s Bank Directors
Program Task Force. Under sponsor
ship of the ABA’s Community Bankers
Division, the five-member task force
started its work last July on developing
a new bank directors educational pack
age that incorporates a working man
ual and seminar program.
A working manual is the core ele
ment of the educational package, but
it’s designed to be used by itself as a
ready reference for bank directors.
Major chapters of the booklet cover the
many aspects of a director’s job, in
cluding an overview of “The Business
of Banking,” “The Board,” “Functional
Responsibilities,” “Legal Responsibili
ties” and “The Director’s Accounta
bility.”
A field test of the complete educa
tional program was held January 25 in
Charleston, W. Va. Forty bank directors
from 16 banks took part in the pilot
project held by the ABA in cooperation
with the West Virginia Bankers Asso
ciation. The seminar is a 15-hour pack
age set up in modules so that it can be
offered as a series of short sessions or
can allow for a one- or two-day pro
gram. During the seminar, directors
may participate actively in discussing
cases covering a wide range of func
tions, including: analysis of bank cap
ital, evaluating bank management, bank
personnel, board vacancies and policy
matters.
The manual and seminar program
will be ready in April.
Money Management:

Trust C o . Bank, Atlanta,
Gives 'Educated Lunches'
Personal money management prob
ably is a confusing topic to many peo
ple. In an effort to shed light on basic
money matters and to answer individ
ual consumer questions, Trust Co.
Bank, Atlanta, sponsored a series of
“educated lunches” for interested con
sumers.
Held during the lunch hour and last
ing 30 minutes each, the seminars cov
ered the topics of “Budgeting— It’s Not
as Scary as It Sounds”; “How to Estab
lish Credit and Apply for a Loan” and
“Estate Planning.”
The public was invited to the classes
and merely had to bring lunches— soft
drinks and coffee were provided free
by Trust Co. Bank.

MID-CONTINENT BANKER for March, 1977

What Are the Potential Liabilities
Of Being a Bank Director?
EW POSITIONS in a community
carry such obvious recognition and
honor as that of being a bank director.
Along with that recognition, however,
goes a great deal of responsibility, along
with some liabilities. The manner in
which bank directors assume their re
sponsibilities will greatly affect a bank’s
success.
The specific objective of this article
is to talk about the potential liabilities
men and women assume when they be
come bank directors. To accomplish
this, I’ll deal not only with theory and
possibilities, but also with facts and
actual examples.
Most of my firm’s research is de
veloped by our own staff. However,
where several industry comparisons are
desirable, we obtain the professional
services of an outside consulting firm.
Just recently, we purchased such a
study from a consultant. This consul
tant reported to us some rather startling
findings related to problems expe
rienced by senior bank managements.
For example, when comparing the
percentage of lawsuits filed against
bank officers and directors with officers
and directors in other types of indus
tries, it was found that the banking
industry, at the present time, has the
highest claim frequency of all cate
gories.
This report revealed that, during the
past six years, over 20% of all banks
have suffered one or more directors
and officers claims and that there’s a
direct relationship between the fre
quency of these claims and a bank’s
profitability.
The study showed that 50% of all
claims against officers and directors are
still open and awaiting trial. Thirty-six
percent were settled by litigation; 10%
were dropped by claimants, and just
over 3% have been tried, but are being
appealed. When there’s such a high
number of cases awaiting trial, it can
readily be seen why it’s so hard to pre
dict the total potential liability that can
be imposed eventually on bank direc
tors. Some of these cases stay on the
books for eight or 10 years before
they’re settled.
The management consultant also
brought up interesting figures showing
the average cost for attorneys’ fees in
defending a D&O claim to be $205,000.
When the average payment is added

By ROBERT W. MARSHMAN
Vice President/Marketing
Scarborough & Co.
Chicago

to the defense cost, the total would be
more than $1 million per claim.
Several years ago, this same consul
tant predicted loss ratios would be
more than 20% or 30%, but in 1975 he
predicted underwriters would expe
rience loss ratios of 100% on D&O lia
bility insurance, and his latest (1976)
report predicts loss ratios of over 125%.
W ho m akes th e claim s and why?
Bank directors and officers—as well as
those of all kinds of businesses— are
finding there’s a tremendously in
creased potential for personal liability.
Although stockholder suits are the
cause of approximately 40% of all suits
brought against directors and officers,
unhappy bank customers (either alone
or in class actions), government agen
cies and citizens’ groups are the cause
of over 50% of all claims.
Now let’s discuss some actual cases
involving suits against bank directors:
• A suit charges former directors
and officers of a bank with conflict of
interest, self dealing and dereliction of
duty. The suit was filed by current of
ficers and directors of the insured bank.
• A suit alleges fraudulent breach
of contract and requests damages from
the defendant bank based on termina
tion of a Master Charge contract.
• Action was taken by a state charg
ing the defendant bank and its trust
officers with the unauthorized practice
of law.
• There’s a class-action suit against
a financial institution alleging fraud in
computation of interest on a 360-day
basis instead of a 365-day basis. As

Mr. Marshman gave
the talk on which this
article is based at
the midwestern region
bank director-manage
ment workshop held
February 11 in St.
Louis by the recently
formed National Assn,
of Bank Directors. Mr.
Marshman is a direc
tor of NABD.

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yet, directors and officers have not been
named. However, it’s likely that such
action will be taken in the near future.
• An insured bank had a branch
that was burglarized over a weekend,
and safe deposit box customers’ val
uables were taken. A suit has been
filed by various box renters for more
than $2 million charging the insured
bank and its directors and officers with
gross dereliction of duty and negli
gence, fraud and breach of warranty
in failing to provide adequate insurance
coverage and protection for the facility.
• There’s a derivative stockholders’
suit involving a large bank. The charge
is that directors and officers improperly
lent money to an individual and his
corporate affiliate.
• A suit filed by a stockholder of a
bank demands information in connec
tion with substantial loans that were
written off and probably will be written
off in the coming year. It can be an
ticipated that action will be filed
charging directors and officers with lia
bility and gross dereliction of duty in
the lending operation.
These are all actual cases of directors
being sued or likely to be sued. I want
to cover some more areas that should
be of interest to bank directors. For
instance, one reason for electing a new
board member is for the new business
he can bring to the bank. This, in it
self, possibly could lead to a conflict
of interest and resultant suit.
Establishment of a bank’s overall
lending policies and investment policies
are, of course, part of a director’s
duties. However, if there’s a sizable loss
to the bank as a result of directors’ de
cisions, they may become involved in
litigation. What directors do today,
based on facts at their disposal, will be
judged tomorrow in light of subsequent
events and changing times.
Another major area of concern, I be
lieve, is with insider transactions. The
FD IC adopted regulations aimed at
curbing abuses that might occur in
transactions between insured state non
member commercial banks and insiders
of those banks. Although insider loans
are not necessarily wrong, they should
be looked at carefully and approved by
the full board of a bank whenever pos
sible. The potential for wrongdoing in
this area greatly increases the possibil
ity of liability and has caused many

". . . when comparing the percentage of lawsuits filed against
bank officers and directors with officers and directors in other
types of industries, it was found that the banking industry . . .
has the highest claim frequency of all categories

losses during the past several years.
Starting this year, thè Federal Trade
Commission is naming both the cor
poration and its directors in its com
plaints against interlocking directors
between S&Ls, commercial banks and
savings banks. The Justice Department
and various state regulators are in
vestigating interlocks even with nonfinancial institutions.
The Comptroller of the Currency has
announced establishment of a national
bank surveillance system. This is an
early-warning system designed to effect
appropriate and timely decisions by di
rectors, examiners and the Comp
troller’s office. As a result, there may
be an increase in cease-and-desist
orders and, of course, directors can be
made a party to these proceedings.
The Employee Retirement Income
Security Act of 1974 (ER ISA ) has
created serious liability exposures. Many
bank directors serve on boards whose
banks service ERISA programs. A re
cent survey by the International Foun
dation of Employee Benefit Plans
showed that 95% of the respondents felt
that ERISA had greatly increased their
personal liability. Provisions and in
terpretations of the “prudent expert”
concept are not only a little fuzzy, but
will have to be interpreted through
court decisions.
A recent proposal by the Comptroller
regarding sales of credit life insurance
by banks would prohibit any national
bank or its directors or officers from
acting as agents for these sales and
accident and health insurance sales un
less all income is credited to the bank
or its wholly-owned subsidiary.
There still are quite a few banks
that pay this commission or service
fee to individual directors or officers. I
believe there’s the possibility of tre
mendous personal liability to directors
of a bank that allows these commis
sions to go to individuals rather than
to be retained by the bank—especially
if the full board of directors and all
stockholders don’t know about it.
If a bank suffers a large internal
fraud or embezzlement and if the bank
doesn’t carry a blanket bond with suffi
cient limits to cover the loss fully, di
rectors again may become personally
liable. Let me digress and speak about
these large internal fraud losses in bank
ing throughout the U. S.
In 1964, reported cases of fraud and
30

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embezzlement in all financial institu
tions totaled only $20 million. How
ever, by 1976, the total amount had in
creased to more than $200 million, and
the number of cases rose from 2,800 to
over 10,000. This alarming and dra
matic increase in internal fraud not
only has been a cause of bank failures,
but also the cause of many suits against
directors.
As banks grow, of course, more cap
ital is needed to back that growth.
Many banks are having a difficult time
trying to raise new capital through
sale of stock in today’s market. Di
rectors are not free from potential lia
bility in this area. When they’re forced
to make the market for their own stock,
they may be subject to legal action
later if the stock is sold at a price rela
tive to book value or relative to earn
ings that are well above the ratio of
other banks whose share prices are set
by market forces.
The December Bank B oard L etter
had an interesting comment about un
compensated directors. The article said
that a number of banks don’t compen
sate their directors, and these banks
are likely to be family held institutions.
The question was raised in the article
. . . if a director serves without com
pensation, but is subject to a judgment
predicated on an unlawful act during
board service, is such judgment an
ordinary and necessary business ex
pense? According to the Internal Rev
enue Service, it is not. T he Bank Board
L etter went on to say that in the case
referred to, the director not only was
not compensated, but he also was
forced into bankruptcy.
T he next question is, “Can you afford
the risk?” I believe the answer is yes,
providing, of course, that when a per
son is elected to a bank’s board, he not
only learns as much as possible about
his duties and responsibilities as a di
rector, but also protects himself from
personal liability through all reason
able avenues, including insurance pro
tection.
Some directors have told me that the
indemnification agreements they have
with their banks are sufficient. These
don’t go anywhere near far enough.
First of all, there may be cases where
it’s against the law for the bank to
indemnify a director, and then even
if the bank did indemnify him, there’s
always the possibility of a derivative

action being brought against that di
rector by stockholders.
The most common and most widely
used protection is with a directors and
officers liability insurance policy. This
policy basically is written on an all
risk basis, protecting the bank’s direc
tors and officers from loss involving
alleged negligent acts, errors or omis
sions while directing or managing the
bank’s affairs. The coverage is not only
for judgments, but also pays defense
costs. There are few exclusions in most
D&O policies, the major one being from
dishonesty and self-dealing losses.
There’s what we call a bank exten
sion endorsement to the D&O policy.
This endorsement provides coverage to
a bank director when he is serving on
the board of another corporation at
the direction of his own board. There
have been more and more suits in this
area, and I believe it’s quite important
for a bank to make sure its own D&O
liability policy provides this extension
endorsement.
Many companies—including Scar
borough— also are starting to put on
another exclusion in this coverage so
that they will not be liable for any loss
as a result of foreign or domestic po
litical contributions or as a result of
payments, gratuities or any other favors
to or for the benefit of any full- or parttime domestic or foreign governmental
or armed services official or agent.
There also are several different types
of policies available that protect a bank
director from liability while handling
his bank’s own pension and welfare
plans.
There’s coverage available to bank
trust departments. This coverage pro
tects the insured not only from poten
tial losses as a result of ERISA, but for
any act, error or omission arising out
of trust department operations. These
policies can be extended to include di
rectors, officers and employees in case
they are sued as well as the bank as a
corporate entity.
We still find that many banks don’t
have complete protection in their com
prehensive general liability policies for
losses involving libel and slander suits.
Banks should make sure their liability
policies have a “personal injury” en
dorsement added to them for this pro
tection. Even above that, officers and
directors should make sure they’re pro
tected from libel and slander suits
brought against them by their bank’s
own employees.
With these various specialized cov
erages, bank directors can protect them
selves from liability in most cases, but
of equal importance is the need to
know as much about bank directors’
duties and responsibilities as possible.
The National Association of Bank Di
rectors can be a big help! • *

MID-CONTINENT BANKER for March, 1977

P r o f it P l a n n i n g :
Little Publicized Aspect of Bank Management
P R O D U C T IV IT Y always starts in
A someone’s mind. The challenge to
management is to get the minds
throughout an organization to focus on
improving productivity. Failure to do
so means, at worst, that employees will
use their minds to actively block im
provement— or, at best, to passively
maintain the status quo. And maintain
ing the status quo is a losing position.”
These are the words of an American
Management Association president.
In a sense, managing and profit plan
ning are synonymous. Because a busi
ness really can’t stand still, it must
move in some direction, and manage
ment is responsible for deciding the
direction in which the business is to go
and making certain it stays on course.
Profit planning can be interpreted in
various ways. In almost every banking
seminar some mention of the technique
is made. So, it’s appropriate to define
the terms to eliminate erroneous ideas
about the topic.
For an opener, have you written a
profit plan for your bank? If not, have
you ever seen a full profit plan?
Profit planning is a little-publicized
aspect of bank management, something
considered to be in the realm of a “secret
weapon” by those using it. It is well it
should be so considered, for it is that
powerful!
Greater profit can be planned if you
have an involved, committed, working
group organized toward doing the right
things to achieve their goal.
W hat are we thinking about when
we consider profit planning? W e are
talking about a management technique
— the basic functions of management
that each CEO is charged with: plan
ning, organizing, controlling, motivat
ing, reviewing. These can, for the most
part, be wrapped up into a package
and that package is your management
style.
It can be a whole series of little
packages that say, “Be here at 8 a.m.
sharp each morning and I will tell you
what I want you to do.” Or the oppo
site—“Let’s get our heads together and
decide why our bank exists. How should
we approach the problem? Who will
accept the many responsibilities in
volved? How well do we believe we are
able to accomplish the goals we set?

By R. Y. EMPIE
President
Stock Yards Bank
Oklahoma City

How are we going to periodically
check on ourselves to determine our
progress?”
The whole thing is based on people
efforts— organized people efforts—bank
wide. Your people efforts must be or
ganized.
It’s always been an acknowledged
fact of life that there is a great variance
in what people do and what they can
do— their potential.
A great void exists in the ability to
measure this variance, but we some
times subjectively describe this area
in terms of industriousness, initiative,
creativeness, eagerness, etc. Nonethe
less, the variance exists, and the cata
lyst that moves a person from a so-so
attitude to a dedicated, striving attitude
is motivation. Motivated people pro
duce outstanding results.
When we talk about profit planning,
we are talking about engaging the best
efforts of all the people in our bank,
focusing them on the important things
to be accomplished. And the payoff is
dramatically improved profits. Motiva
tion is deceptively simple in concept,
but it’s the most difficult thing I do as
CEO. And I consider it the most im
portant thing.
A number of basic concepts must be
accepted before embarking on a project
such as this. To begin with, you must
recognize that changes are always
threatening to engulf us, whether or
not we initiate them. For instance, is
your bank on top of the Consumer
Credit Protection Act, the Occupational
Safety & Health Act, the Equal Em-

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ployment Opportunity Act, the Real
Estate Settlement Procedures Act, the
Bank Secrecy Act, flood control require
ments, the Bank Protection Act, elec
tronic fund transfer systems and many
other changes?
Growth potential exists in abundance.
Find a five- or ten-year-old bank di
rectory for your trade area and look at
the size of the banks back then. If you
had dreamed such growth was in store,
you would have approached things dif
ferently! Tremendous growth has been
experienced by the banking industry
and this growth becomes most notice
able when viewed over a span of years.
People efforts make your bank what
it is. Every position in your bank is
critically important and you depend on
people who are different in their indi
vidual effectiveness to fulfill these po
sitions. Some are more ambitious, en
ergetic, skillful, more organized than
others, and there are great differences
in their attitudes and feelings of re
sponsibility. They expend differing
amounts of enthusiasm and willingness.
Motivated people rank superior in all
of these personal attributes.
You must believe that people are
capable of being far more than what
they seem to be, and that one of your
responsibilities as CEO is to help these
people develop to their fullest po
tential.
Let’s start with the conviction that
opportunities for improvement are
everywhere. If you are convinced of
this, and are accepting the premises of
change, growth, motivation and par
ticipative management philosophy and
are curious, I will detail our bank’s
profit planning efforts.
W e started out six years ago with a
simple plan and have gradually refined
and extended it into a more complete
effort. Anyone beginning such a plan
should work hard to cultivate the un
derstanding of all the people involved.
In my case, we all learned together and
that was good.
Although our planning efforts in
volve everyone in our bank, I work di
rectly only with the senior officer group
—marketing,
commercial,
personal
banking, support and financial control.
Between our meetings, they carry the
process into each area of their respon-

sibility. This involvement and com
munication back and forth throughout
the bank is critical to maximizing ben
efits.
As I solicit the involvement of the
head of the support division, for in
stance, I expect him to solicit the
involvement of tellers on issues that
concern them. For instance, at the bank
level, we consider our employee turn
over to be excessive and wish to estab
lish an objective to reduce turnover by
half. Each division head takes this back
to his staff group and poses the ques
tion: What should we do about reduc
ing turnover? They come up with plans.
The tellers, for instance, may express
dissatisfaction with some aspect of their
work, elimination of which may reduce
turnover.
These ideas are taken back to di
vision staff meetings where they are
incorporated into support division ob
jectives and plans of action. These ideas
flow up and down the organization lad
der.
Keep in mind the purpose of the
process—to obtain involvement and
understanding of the problems and
challenges of the bank at each person’s

organization level, eliciting suggestions
and enlisting committed support.
Let’s back up to step one of our
bank’s profit planning effort, which is
a mind-stretching session where we
pose the question of what our bank will
be like five to 10 years ahead. Merely
extending growth trend lines will
startle some—even exhilarate them— as
space requirements, new types of skills,
the customer base and profit levels are
contemplated. You naturally come
around to speculating about what we
should be doing now to prepare for
future growth.
With everyone’s mind loosened up,
step two is a discussion of the question
of the purpose of the bank. If you want
to try an interesting experiment, pose
this question to your top people on an
individual basis. You will most likely
conclude that something needs to be
done right away, for, without a purpose
that is consciously articulated and made
central to every action taken in your
organization, you can hardly expect a
unity of effort or a strong thrust for
achievement among your staff people.
The bank’s purpose for existence
must be accepted by your staff as valid

and convincing. If some personnel be
lieve the bank exists only to make
money for its stockholders, they can
hardly be expected to energetically
identify with that purpose. Their po
tential will be forever untapped.
If they believe it exists principally to
provide jobs for people, they can hard
ly be expected to feel the same re
sponsibility for improved performance
that top management feels.
If they believe the bank exists pri
marily to provide depository services
to customers, they can hardly be ex
pected to innovate the many services
aggressive banks now provide.
If our people are to think of our
banks as we think of them, it is im
perative that we generate dialogue and
arrive at a common understanding—in
writing—of the true purpose of the in
stitution.
Each organizational group subse
quently discusses the same question.
For example, the tellers discuss what
the purpose of tellers is. The accounting
department discusses why an account
ing department is necessary. All use
the bank’s purpose as a guide to arrive
(Continued on p ag e 38)

First Annual Conference

agement, University of Missouri-Columbia; “A Legal Report on the Bank Di
rector’s Expanded Responsibilities and
Increased Liabilities”—Andrew Kramer,
attorney-at-law, Seyforth, Shaw, Fairweather & Geraldson, Chicago; “A Di
rector’s Look at a Bank’s New Con
sumer
R e s p o n s ib ilitie s ”— Maurice
Mann, president, Federal Home Loan
Bank, San Francisco; and “What a Di
rector Should Expect From Manage
ment”—William
Bowen,
president,
Commercial National, Little Rock. Also
planned for that day is a panel discus
sion on “The Inside Director and the
Management Function,” with Pat
Moore, president, American State,
Thomas, Okla., as moderator. A question-and-answer period will close the
first business session.
At 6:3 0 p.m. April 14, there will be
a banquet at which Allen Stults will
discuss “The Future of the Bank Di
rector From the Regulatory Point of
View.” Mr. Stults is chairman, Ameri

can National, Chicago.
On April 15, these topics are on the
program: “An Outside Director Looks
at the Bank Board”—Eugene Rossides,
director, Sterling National, New York
City; “The Bank Director—Where Does
He Stand?”—Paul Nadler, professor of
banking and finance, Rutgers Univer
sity, New Brunswick, N. J.; and “A Job
Ahead,” Jerome D. Twomey, chairman
of NABD and president, Sterling Na
tional, New York City. A panel is
planned on “The Outside Director and
the Management Function,” with Mar
tin Sterenbuch, NABD counsel and at
torney-at-law, Washington, D. C., as
moderator. Also on the April 15th pro
gram will be group discussions on
“What Are the Needs of Bank Direc
tors?”
Further information and/or registra
tion forms may be obtained by writing:
National Association of Bank Directors,
Post Office Box 5021, Springfield, IL
62701.

O f New Bank Directors' Group
To Be Held April 13-15
N EW ORLEANS—The new Na
tional Association of Bank Directors
will hold its first annual conference
April 13-15 at the Fairmont Roosevelt
Hotel here. It will be opened with a
cocktail reception, “Night in the French
Quarter,” from 5-6 p.m. April 13.
The April 14th business session will
begin at 9 :3 0 a.m. with the NABD
president’s address by James W ebb Jr.,
chairman, Nashville City Bank. Other
topics to be discussed that day are:
“Expanded Responsibility of the Audit
Committee”—Martin F. Mertz, partner,
Peat, Marwick, Mitchell & Co., New
York City; “Selection, Evaluation and
Utilization of Bank Directors”—Lewis
E. Davids, Hill professor of bank man

WEBB

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MID-CONTINENT BANKER for March, 1977

By B. M. LAMBERSON
Vice Chairman
Commerce Bancshares, Inc.
Kansas City

IR EC TO R S are entitled to and
D
should be informed of everything
of any importance that goes on in their
bank. With that in mind, we at Com
merce Rancshares designed a compre
hensive agenda and we insist that all
affiliate bank managements follow it in
conducting their board meetings.
Within the framework of our stan
dard agenda, each bank’s management
should prepare its own agenda, listing
special items to be considered or dis
cussed and, to the extent possible,
these agenda should be mailed to di
rectors prior to each meeting, ideally,
a week in advance.
An agenda has value because it keeps
the meeting on the track. If the chair
man is businesslike in his approach, the
agenda keeps the meeting from degen
erating into a general bull session.
The first item on our agenda is call
ing the meeting to order and approving
the minutes of the last meeting. Some
banks prefer to mail copies of minutes
to directors for leisure reading, elim
inating the need for the secretary to
read them at the next meeting. Correc
tions can still be made prior to ap
proval.
The next order of business is a re
view of the comparative statement of
condition. In the case of our standard
comparative balance sheets and chart
of accounts, a comparison is made be
tween the most recent month and the
same month a year previous. Also, a
comparison of earnings for the current
month is made with those of the same
month a year previous and a compari
son of earnings for the year-to-date is
made with the same period the pre
vious year. In both the balance sheet
and profit-and-loss comparisons, a col
umn is provided to compare the actual
results with the budget or profit plan.
If we see that we are straying too far
from our profit plan, a monthly review
provides time to make policy changes,
take corrective action or do whatever
the circumstances dictate.
In compliance with the requirement
of at least one regulatory agency, our
directors review monthly a liquidity
analysis that is made a part of the
board report.
The next item is a review of all pur
chases and maturities of securities

since the last regular meeting. In re
porting securities transactions to di
rectors, it is important to indicate
whether the security is rated or nonrated. If it is rated, the rating should
be noted, as should the maturity, cou
pon, yield and name of the issuing en
tity. In too many cases in recent years,
managements have reached for yield
only and wound up with poor-quality
securities. Knowledgeable d ir e c to r s
should exercise some restraint on man
agement if they see a situation of this
nature developing.
It’s worthwhile to have directors re
view all new accounts opened with
balances of $1,000 or more, together
with a list of accounts closed if the
balances have averaged in excess of
$1,000.
In large banks this may be a cum
bersome report, but it doesn’t take long
to scan a list and doing so makes a di
rector more knowledgeable about who
is doing business with the bank.
As part of the report of accounts
opened and closed, we have monthly
recaps to show the exact number of the
various types of deposit accounts on the
books, compared with the same day one
year previous, so we can see at a glance
the numbers of checking, savings and
CD customers we have at various
points in time.
W e request bank managements to
give directors reports of the number
of new business calls made by the var
ious calling officers. This is not as im
portant to the directors as it is to man
agements of affiliates. Since this is con-

MID-CONTINENT BANKER for March, 1977

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Mr. Lamberson gave
the talk on which this
article is based at the
m idw estern region
bank director-manage
ment workshop held
February 11 in St.
Louis by the recently
formed National Assn,
of Bank Directors. He
serves as an advisory
director of the assn.

sidered to be a desirable program, bank
managements would be embarrassed to
report little or no activity. The practice
tends to put pressure on management
to show performance.
Next on the agenda is review and
approval of all loans or increases in
loans by $1,000 or more since the last
meeting. This is a requirement of all
regulatory agencies. Loans are the life
of any bank and the bank will either
prosper or suffer, depending on the
quality of its loan portfolio.
Depending on the size of the bank,
there may be discount committees that
include outside directors. Meeting fre
quency varies from daily to monthly,
but a review of all loans made since
the last meeting is included in the
board meeting even though the loans
may have been approved at various
intervals during the month by the dis
count committee. To look at every loan
of $1,000 or more is rather cumber
some in larger banks. W e have been
told by some regulators that they will
be satisfied if they are provided with a
list of all loans made of $1,000 or more,
together with a list of loans increased
by that amount. This eliminates the
need to actually look through thousands
of advances made by a bank’s consumer
credit department or charge card op
eration.
Directors should look at the larger
advances and commitments, together
with any concentration of risk, whether
it be in a large volume of small loans,
all secured by the same type collateral,
or receivables generated by a credit
card operation.
Almost equally important to the re
port of loans made is the report of
loans considered and disapproved. This
information is important to directors in
their evaluation of management and it
should be of assistance to directors in
their relationship with the business
community. Lines of credit established
or renewed should be reviewed at each
meeting.
A review of liabilities under letters
of credit issued, transactions in foreign
currencies, as well as positioning of
securities in trading accounts in bond
departments is equally important.
These are high-risk areas of the larger
banks and directors are entitled to have

an opportunity to review the risks in
volved.
It is important that bank manage
ment be asked to disclose to directors
any loan participations they have
bought or issued to others. I have
known instances where bank manage
ments have issued loan participations
both up and downstream—upstream to
correspondents and downstream to de
positors who have money to invest.
There is nothing wrong with this prac
tice, but it is something directors should
be aware of and something over which
they should hold control.
In years gone by, especially in areas
generating many cattle loans, it has
been common for bankers to personally
endorse loans of customers and pocket
an interest spread from their upstream
correspondents. Directors are entitled
to know the terms of any participation
arrangements so they can be sure no
conflict of interest exists on the part
of lending officers.
Another important consideration is
a review of delinquent accounts. This
will give directors a good idea of the
condition of the bank’s loans and the
collection efforts being made, or, in
some cases, lack of effort by lending
officers.
A word of caution: W e have found
that lending officers tend to cover up
weak or substandard loans by renewing
them. In many cases, renewals are
justified, but in others the lending of
ficer is kidding himself and his directors
by postponing an inevitable loss. We
don’t like surprises and prefer that our
lenders have the courage to tell us
when they have a problem and not
keep burying it by granting extensions.
For that reason, directors should have
some knowledge of the weak credits in
the bank that are being kept alive by
renewal. This is an area at which ex
aminers look closely and sooner or later
those loans show up on the reports of
examination and will be brought to the
attention of directors. By then, in many
cases, it is too late to take corrective
action.
At each monthly meeting, we like
our managements to review with di
rectors any progress being made to
get payments or additional collateral on
loans carried on the classified list. W e
have our own loan review staff at the
HC level and we classify some loans
that are not classified by examiners. It
is this list that we want reviewed each
month, putting the burden on manage
ment to explain to the board what it
is doing to get the loans up to accept
able standards.
Management should reveal and dis
cuss with directors any assets repos
sessed and collateral taken by fore
closure. Review should be made of a
plan of disposition. W e have a policy

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Federal Reserve Bank of St. Louis

that no one in our firm, including di
rectors, is eligible to buy any assets
taken in settlement of debts, particu
larly where the bank intends to go after
the borrower for a deficiency judgment.
In light of the business climate we
have operated under in the last few
years, we recently adopted a code of
conduct for our firm. It spells out ex
actly what is expected of our people
and we have had no adverse reaction
to it. In fact, we have found it to be a
refreshing experience.
All of our officers are expected to
furnish our HC auditor with a full dis
closure of their financial affairs, par
ticularly side ventures they may be in
volved in that would in some way con
flict with the performance of thenduties.
Each month our directors are given
an analysis of our reserve for loan losses
and although this is somewhat of a tax
consideration and a judgment that is
hard for a layman to make unless he
has the benefit of a report by the
bank’s controller or tax accountant, it
is an important item in the balance
sheet of every bank. As a director, I
would like to know that my bank’s bad-

Training School Opened
To O ut-of-State Bankers
By La. Bankers Assn.
The Louisiana Bankers Association
has announced that the Louisiana
Banking School for Supervisory Train
ing (L B S ST ) has been opened to rep
resentatives of banks outside the state.
The school’s fifth session has been slat
ed for May 15-20 at the University of
Southwestern Louisiana, Lafayette.
The L B SST faculty includes Michael
Mescon, regents’ professor of human
relations and chairman, Management
Department, Georgia State University,
who conducts a session on motivation.
Orlando Behling of Ohio State Univer
sity lectures on job satisfaction and
performance appraisal. Mr. Behling
also is associate editor of Personnel
Administration magazine.
Also on the L B SST faculty is Ber
nard Bienvenu, Management Depart
ment head, University of Southwestern
Louisiana; Irving Lane, Louisiana State
University, Baton Rouge; Joseph Joyce,
former vice president in charge of per
sonnel
administration,
Philadelphia
Fed; Lewis C. Picard, executive vice
president, Guaranty Bank, Lafayette;
and Hartie Spence, vice president,
Louisiana Bank, Shreveport.
Registration fee for the 1977 session
is $225, which includes room, meals,
tuition and materials. For registration
information, write LBSST, Box 17390,
Baton Rouge, LA 70893.

debt reserve is at least equal to the in
dustry average.
A section of our board report in
cludes a list of all indebtedness to the
bank of every director, officer, employee
and any business they may be affiliated
with. Overdrafts exceeding $100 since
the last regular meeting are reviewed
and approved.
Teller differences are reviewed rou
tinely unless patterns develop or dif
ferences are excessive. This may indi
cate to directors that a tightening of the
bank’s procedures and audit control
would be in order. In our firm, we not
only have an outside national account
ing firm audit our affairs, we have an
in-house staff doing likewise. The inhouse staff report should be brought to
the attention of directors together with
management’s response to the audit.
As required by regulatory authorities,
reports of examination should be made
available to directors for review to
gether with related correspondence.
Most banks make the report of exami
nation available to directors at times
other than a regular board meeting so
they can look it over carefully at their
leisure and perhaps initial it to indicate
they have read it. Reports of examina
tion are important to directors and
quite often provide early warnings of
dangerous trends developing in a bank.
These warnings should not be consid
ered lightly.
At least annually, bank management
is required to review with directors the
various types of insurance coverage in
force. Coverage should be adequate
and in keeping with the formulas pre
scribed by regulators. Bank manage
ment should make full disclosure to
directors as to the method of handling
credit life or general insurance in the
bank, indicating the volume written,
commissions generated and a full re
port as to how the commissions were
divided if they were received by indi
viduals or entities other than the bank.
At least annually,
management
should review with directors any
thoughts it has about title changes,
salary adjustments, major reassignments
of responsibility or anything of impor
tance having to do with bank adminis
tration. Fringe benefits in most banks
are an important cost item, and no
major changes should be made or new
benefits provided before they have
been reviewed and approved by di
rectors.
Bank officers should report any law
suits pending against the bank to di
rectors, together with an estimate of
the seriousness of the suits. This might
occasion an appearance of bank coun
sel, if he is not a director.
Some bank managements make di
rector’s meetings interesting by asking
(Continued on p ag e 46)

MID-CONTINENT BANKER for March, 1977

W hat Do I Do for an Encore?'
A Solution to CEO's Dilemma
T TH E END of each year, as the
CEO reviews his business progress,
he hopes to find satisfaction in having
accomplished his growth goals. He is
then faced with a new year. What
should he do for an encore? It’s norma]
to continue with the same policies, pro
cedures and plans that have been fol
lowed in the past.
As competition for his business mar
ket becomes more active, he may find
that although a record of growth con
tinues, his market share is diminishing.
The business-as-usual program is not
enough. He must search for new ideas
to obtain stronger support.
There is a powerful, influential,
prestigious but unused force that can
be enlisted to assist in maintaining the
continued year-in-year-out growth of
any bank. This latent force is its di
rectors. If they can be motivated to
seek business opportunities and new
accounts for the bank, their combined
and continuous efforts can produce
phen om en al results in growth and
profits. A yearly “encore” will be as
sured.
In “The Corporate Director” (written
in 1966 by J. M. Juran & J. Kieth
Lauder, and published by the Ameri
can Management Association) the au
thors state, “What motivates a busy
man to join someone else’s board?
There is a well-informed school of
thought which contends that the main
motivations in being an outside director
are nonfinancial. This school lists such
nonfinancial factors as:
• Broadening his own executive de
velopment.
• Associating with industrial and
community leaders, widening his circle
of contacts and his knowledge of what’s
happening in the economy.
• Enhancing his prestige.
• Performing a quasi-public service.
• Meeting new challenges and un
dergoing new experiences.”
Comments and excerpts from “Board
Life” (published in 1974 by the Ameri
can Management A s s o c ia tio n and
written by Robert K. Mueller) are en
lightening, as follows: “It has been
said that directors in general are the
most underpaid and underutilized peo
ple in modern organizations. There are

By JACK MINER
Senior Associate
Prestige Suites Associates
St. Louis
three general classes of director com
pensation: real income, psychic income
and perquisites, commonly referred to
as ‘perks.’ Perks include club and as
sociation memberships, when a social
club or association is in any way useful
to a director. Recent emphasis on ex
ecutive and director health has spawned
the locker room, private gymnasium
and sauna. With women’s liberation a
force on the horizon, capital appropria
tions of these facilities may have to be
duplicated. Some alert board chairmen
provide office space and secretarial help
for directors at headquarters.
“Many perks which are enjoyed by
the top management also are available
to directors. These may include execu
tive dining rooms; private office bars
and washrooms; contract barber and
shoeshine services; messenger and valet
services; chauffeurs; private secretarial
help; phone, mail, telex, library and
photographic services and almost un
limited interior decorating service for
offices.”

The author has had 32 years’ ex
perience in directing the efforts of
architects, interior designers, con
tractors and others in the creation
of modern banking quarters. Most of
those years were spent with Bank
Building Corp. of America, where he
served as senior vice president and
national director of sales. Recently,
he left that firm to form his own
company, Prestige Suites Associates,
St. Louis.

MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

In a recent study of director activity
conducted by Prestige Suites Asso
ciates, approximately 500 CEOs of fi
nancial institutions were surveyed. A
“Director Activity Report” has been
published by Prestige Suites Associates
documenting survey results. The fol
lowing conclusions are listed in the re
port:
• The majority of institutions have
not associated their directors with any
strongly identified new business pro
gram. The directors certainly have not
been viewed as a “super” sales force
for new customers and for promoting
desirable business opportunities.
• A majority of directors do not
make a significant contribution to
achieving new business goals.
• Although a great majority of CEOs
want greater director involvement in
new business, they do not want more
involvement in other aspects of op
erations.
• A large majority (approximately
three out of four), when asked to con
sider the possibility of greater involve
ment of directors in service and growth
objectives of the institution, answered
in the affirmative.
• This study revealed a general lack
of full utilization of boards of directors.
In the majority of institutions, the
board appears to be an “audience to
performance” and not an active, useful
tool for profit.
• The unusually high response to
this survey (35%), when compared to
a national average for similar studies
(7%), indicates a belief that this in
fluential group (the directors), could
be used to greater business advantage.
It must be obvious that the environ
ment in which people work has a direct
influence on their behavior, attitude
and quality of decisions. Quoting from
“An Introduction to Environmental
Psychology,” written in 1974 (IttlesonProshansky-Rivlin and Winkel, pub
lished by Holt-Reinhart & Winston,
In c.), “Designers and architects have
long known that the form and appear
ance of a building influence certain be
haviors that take place within it . . .
man consciously designs environment
to accommodate a wide range of hu
man behaviors. Designers . . . create
35

" In these times when every form of incentive is looked at as
possible taxable income, there are few ways in which such
tangible appreciation can be shown, but ways must be found if
director 'sales' efforts are to be stimulated

environments which they believe are
conducive to the purpose of the insti
tution. The built environment does
more than attempt to accommodate
existing human needs; it can with var
ious degrees of success influence and
change behavior. Stimulus (the en
vironment) acts . . . to produce a
given behavior, mood or attitude (in)
subtle ways and these aspects of the
designed world do indeed affect (if
they do not . . . determine) the way
people respond. The conclusion here is
simply that the design of interior space
influences people on many levels.”
From “Public Places and Private
Spaces,” written in 1976 (by Albert
Mchrabian; publisher: Basic Books,
Inc., New York C ity ): “Environmental
psychologists have been challenged to
develop a succinct, comprehensive
method to describe differences in indi
viduals’ reactions to places. Environ
mental psychologists can tell you, for
example, whether people who gather
to socialize in a given living room will
tend to be subdued, stiff, noncommital
or anxious to leave, or whether they
will tend to be outgoing, friendly, re
laxed or eager to remain and have a
good time.
“People’s reactions to all environ
ments fall into one of two main cate
gories, ‘approach’ or ‘avoidance.’ Ap
proach behavior means that a person
attempts to enter into communication
with others by establishing eye con
tact, smiling, nodding, greeting, help
ing someone with a package or starting
a conversation. Avoidance behavior is
just the opposite: Others are ignored,
eye contact is avoided, physical dis
tance from people is increased, the
body is turned away from them, and
conversational attempts are rebuffed.
But approach and avoidance mean
more than just physically moving to
ward or away from an environment.
These terms are also used to character
ize behavior in environments from
which a person cannot physically re
move himself.
“A further generalization about ap
proach is that approach behavior, or
an environment that causes approach,
is usually a positive or desired sort of
thing. It is fair to say that most peo
ple most of the time want to create en
vironments that cause approach be
havior but don’t always know how to

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Federal Reserve Bank of St. Louis

go about it. The many failures in en
vironmental design—in most cases in
tuitively selected by the individual
himself—can be attributed to . . . no
tions and traditions which fail to draw
on psychological facts to fit persons,
their personalities and their many di
verse daily activities to places. Once a
person has inadvertently committed
himself to a partially effective living
or working space . . . the individual
is hesitant to risk additional expense
and effort for elusive gains. And this is
why, as in many other realms of life,
people continue to live with what is
only partially satisfactory, discouraged
by the cost, effort and the risks of
drastic experimentation with change.
People’s feelings or emotions are what
ultimately determine what they do and
how they do it. . . . Environments can
cause in us feelings of anger, fear,
boredom, pleasure or whatever and
do so regardless of how we think we
should feel in such environments; and.
furthermore, that these feelings will
cause us to behave in certain ways re
gardless of how we think we should
b e h a v e . A particular environment
causes certain emotional reactions in
a person. These reactions, in turn,
cause the person to approach or avoid
the environment to a greater or lesser
degree.”
Quoting from a talk given by Robert
Y. Empie, CEO, Stock Yards National,
Oklahoma City: “An organization runs
on motivation and on conviction and
morale. The greater the motivation, the
stronger the conviction; the higher the
morale, the greater will be the ac
complishment of goals. People have to
believe in what they do. They have to
care, if we are to have a commendable
level of achievement.
“Directors must be m otivated and
unified in their conviction and determi
nation to exert a maximum effort to
ward the growth goals of their institu
tion.”
How can directors be motivated?
Just like any other employee—hy
com pensation. However, more dollars
may be nearly useless to the director.
There are other factors, i.e., comradery
within the board, pride of accomplish
ment and satisfaction in contributing to
the success of the institution. But these
factors have always been present.
There’s a compensation that never

fails in any level of employment. This
most potent of motivators is prestige
recognition. When one has devoted
time and energy to a worthy cause,
this type of recognition will inspire a
desire to do more. For maximum effect,
prestige recognition should be a con
stant, continuing reminder of the es
teem in which the recipient is held by
his associates.
In these times when every form of
incentive is looked at as possible tax
able income, there are few ways in
which such tangible appreciation can
be shown, but ways must be found if
director “sales” efforts are to be stim
ulated. One highly visible form of
prestige recognition can be in the per
sonal offices and surroundings where
creative activity is conducted. The fa
cilities and environment furnished to
the director tell a continuing story of
appreciation better than most other
methods and is nontaxable to him while
deductible to the institution.
A director probably will not feel
obligated to do more for an institution
unless he feels there are a recognition
and appreciation for what he has al
ready done. Inasmuch as creativity,
enthusiasm and dedication are mental
qualities, they will be directly influ
enced by the environment providing
the stimulus (or lack of it) for such
activity.
Productivity of environment may be
achieved in prestige recognition of di
rectors through facilities provided for
their use.
The board room is, hopefully, the
place where productive, innovative and
creative business planning is conduct
ed. Not much challenge or creativity
will be stimulated in sterile or mediocre
rooms. A traditional or minimal treat
ment in furnishing is a lost opportunity
to influence attitudes of board mem
bers.
At a minimum, some institutions
might want to limit the director in
centive to refurbishing the boardroom.
Changing the table and chairs and
using some imaginative decorating, car
pet, planters, etc., might be all the
motivation desired at this time.
A simple illustration of important en
vironmental concern involves directors’
chairs. Why are they always alike? Ob
viously, directors are not the same
when it comes to height, width, weight,
age, sex or chair material preference.
Some are of a restless nature (perhaps
a swivel base), some are loungers (a
comfortable slouch chair), some want
to sit straight (with back support),
some like fabric seats, others enjoy fine
soft leather. Some are smokers with a
smoker’s needs. Others are not and
would like to remain so.
The physical wants and needs of
each director should dictate the type

MID-CONTINENT BANKER for March, 1977

Call frank
You can trust Frank X. Henke.Ml to provide you with the most reliable and
competent advice possible regarding trusts and estate planning.

As President of Fourth National Corporation and Executive Vice President
of Fourth National Bank, Frank is well versed in every aspect of banking.
Recognized as an expert in organizing and developing holding company
operations, Frank is also called upon as frequent advisor on acquisitions.
He has guided the trust department he heads into a position as one of
the fastest growing in the Southwest.
If your customers need advice,
you know who to
trust. Call Frank.

MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

™9

of comfort in which many hours are
spent. Physical discomfort can surely
set up a “block” to mental exercise.
Chairs should belong to the individual
and be identified by a name plate. Of
course, colors and a modicum of ma
terial similarity would harmonize with
the area decor.
Boardroom decor, furnishings and
equipment should cause the directors
to regard meetings with pleasurable
anticipation. The design, utility and
quality of the room should be the in
spiration for excellence. In creating
such an environment, any attempt to
substitute low grade for quality will
defeat the purpose and waste both
money and opportunity.
In medium-sized cities, where there
are no fine downtown club/conference
room facilities, there is a ready made
opportunity to provide the director with
a maximum motivation program: a
well-planned and furnished directors’
conference/lounge where he may bring
a business associate for discussion and
refreshment. This kind of recognition
is highly visible to all directors’ peers.
New-business opportunities gained
by the bank through this prestige-rec
ognition program can be identified in
each individual effort; therefore, the
return on the investment can be mea
sured.
There is also a fringe benefit of the
directors’ lounge program: Increased
earnings will occur, but they can’t be
measured.
Additional incentives providing di
rector recognition and motivation are
library and study, private office with
secretarial service, card room, sauna,
etc. The list can be short or long, as
may be justified through increased
earnings potentials. The object of these
programs must be to increase oppor
tunities for service by the bank, result
ing in higher earnings for employees
and stockholders.
Prestige recognition of directors by
the bank brings a personal satisfaction
to them. It will unify them into a com
petitive, active super sales force, seek
ing and developing new business pro
grams. * *

Profit Planning
(Continued from p age 32)
at a purpose that’s complimentary to
the bank’s purpose.
Step three is a discussion of the defi
nition of the bank’s identity. W e dis
cuss the significant aspects about the
bank—what it is now and what it can
become.
W e structure into our agenda such
questions as:

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Federal Reserve Bank of St. Louis

• What are our services? Listing
them on a blackboard is helpful.
• What are our markets? This is
good for considerable discussion.
• What will be the market growth
for each service? This is a good ques
tion to play around with.
• What is our market position for
each service?
• Who are our competitors? This
may cause some alarm if explored fully.
• Where are our best opportunities?
A good topic for mind-stretching.
• What are our people’s strengths?
Everything else depends on this.
• What are our major problem
areas?
• What changes may affect our fu
ture?
• What about our physical capabili
ties?
• What about our financial capabili
ties?
• What changes might we consider?
• What areas are most promising
for us?
Such discussion can be exciting. Par
ticipation enriches one’s job. It is a form
of organizational development for the
group. It becomes a fundamental busi
ness identification on which the bank’s
future can be created.
W e may confirm a past identity, but
most likely something new will de
velop: a new identity strong enough
and motivational enough to combine
talents throughout the bank to new
heights of achievement.
Conceptualizing a purpose and an
identity are fundamental toward unify
ing the staff. In the same manner, it
is fundamental that the CEO gain
strength and confidence from knowing
who he is and why he’s where he is.
When there’s a unified understanding
of the basic posture on the part of the
staff, the CEO ’s leadership effective
ness is enhanced, and when the people
he is leading participate in building
this common understanding, they will
automatically become more committed
to active, open-minded support of the
CEO ’s leadership.
Step four is to develop overall ob
jectives. These can be only the product
of mutuality, and participation in ar
riving at a determination is the prov
ince of all our top people. It is hard
work, for it requires diagnostic thinking
and it means we go back to the drawing
board many times. Our purpose and
identity are in the forefront with an
understanding of who we are and why
we are here. W e are then able to think
through and articulate what we want
to become.
The time frame of our objectives can
be six months, one year, five years, or
some other period. Formulation of ob

jectives will be a personalized effort of
each bank’s management, and each will
be unique.
As an example of what may be con
sidered, these are the objectives formu
lated by our bank for a given year:
• To raise the standard of compe
tence of our people to render services
to our customers’ satisfaction.
• To acquire additional funds.
• To control our lending operation.
• To evidence our community re
sponsibilities.
• To provide a comfortable liquidity
posture in these days of economic un
certainty and financial stress.
• To improve our internal systems,
programs, strategies.
• To improve our staff working
climate.
• To have financial results for the
year of $755,000 (we exceeded this
figure by $70,000).
Note that we placed financial results
last. We consider them a natural by
product of the measure of achievement
of the other goals.
A means of measurement is deter
mined for each objective. Some mea
surements are automatic. Some are ar
rived at with great difficulty. But there
must be a scorecard and an “agreedupon-in-advance” measurement of how
achievement is to be determined.
I have just enumerated the topical
portion of our objectives. The complete
objective contains a means of measure
ment. For example, our objective on
community responsibility reads, in full:
To evidence our community responsi
bilities by:
• The bank being involved in a
leadership capacity in at least one
significant area-improvement program.
• Each officer being involved active
ly in some community or civic activity.
• The bank increasing its financial
contribution to community organizations
by 10%.
When the management group has its
objectives in clear focus, in writing,
agreed to by all involved, it is ready
for a test of its validity.
With as much self-honesty as I can
generate, I try to answer these questions
for each objective:
• Is this my expression of the bank’s
objective or is it a consensus of our
top people?
• Did I talk too much?
• Did I listen enough?
An organization runs on motivation,
on conviction, on morale. The greater
the motivation, the stronger the con
viction, the higher the morale, the
greater will be the accomplishment of
the bank toward meeting its goals.
People have to believe in what they
do. They have to care if we are to

MID-CONTINENT BANKER for March, 1977

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No doubt about it, bank directors and officers
are going to court in increasing numbers to de
fend themselves against lawsuits brought by
bank stockholders, depositors and third parties
One defense, of course, is to conduct your busi
ness in a manner which completely avoids law
suits. Unfortunately, no bank can be certain it
has the answer on how to do this. The best solu
tion is coverage by D & O Liability Insurance
through Scarborough.

On the S p a
Suits Rise. Firms
Scramble to Increase
: ttsurance for Directors

Coverage through Scarborough protects the
bank’s Directors’ and Officers’ personal assets in
cases involving alleged wrongful acts while man
aging or directing the bank’s business affairs.
Coverage includes damages, judgements, and
defense costs.

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MID-CONTINENT BANKER for March, 197 7

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Federal Reserve Bank of St. Louis

have a commendable level of achieve
ment.
A next step is to structure the orga
nization into the functions necessary to
achieve the objectives. One means of
doing this is the creation of a func
tional organization chart.
Preparation of such a chart often
brings about a completeness of the
thought processes. Some important ob
servations often become apparent. For
instance, as we attempt to place people
in the many functional areas, we may
conclude that far too many diverse re
sponsibilities are assigned to a given
person. W e may conclude there is an
obvious need for more supervision than
the previous arrangement called for. It
also might point out inadequate man
power resources.
Much criticism has been directed to
ward organizational charts. This criti
cism invariably stems from a misappli
cation or misunderstanding of the criticizer’s place in the scheme of things.
It must be understood that any orga
nization plan is restrictive as, in a sense,
all guidance is restrictive.
But, if people are to pull together
rather than work at cross purposes, a
harness is needed. Restriction—in a
constructive sense— is needed.
The development of an understand
ing of the bank’s purpose and objective
among the entire staff can be thwarted
when an organization chart places limits
on thought. An ever-present danger
exists that an organization chart may
create a blockage in the total communi
cation process that is so important to
any smoothly-run organization.
Some people even seize upon an or
ganization chart to provide them im
munity from interference as they domi
nate their own area.
The dangers, therefore, inherent in
an organization chart are such that in
our case it is used only as a vehicle in
arriving at an understanding where
basic functional responsibilities lie and,
at that point, set aside so we can move
right into position-responsibility de
scriptions and standards of performance.
Thus, great sensitivity to any misuse of
the organization chart must be main
tained.
After this, we transfer our attention
to each individual in the form of a
position-responsibility description.
Probably the first and most basic re
sponsibility any manager or supervisor
has is to develop his own positionresponsibility description. If someone
else has to do this for him, he is cer
tainly not the person for the job. This
is not to say there will not be need for
clarification and monitoring to avoid
overlap or missing areas. Of course,
there will be adjustments—refinements

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Federal Reserve Bank of St. Louis

when analyzed collectively—but the
basic feel for a position should be best
understood by the person filling that
position.
He should struggle with developing
an understanding of the purpose of his
position—why it exists. He should be
able to develop and understand the
multiple duties and responsibilities he
must assume.
In the same manner, he should initi
ate his own performance standards—
statements of the conditions that will
exist when a duty or responsibility has
been satisfactorily performed.
A job description defines responsibili
ty—what is to be done—while a stan
dard of performance specifies how well
the job is to be done. Performance
standards should contain everything a
boss might conceivably wish to criti
cize a subordinate about and everything
the subordinate may wish recognition
for— a mutual understanding of what is
to be expected. They should meet the
needs of both parties: self-criticism
rather than boss-criticism and motiva
tion through recognition.
Next is the development of plans of
action and a reporting system. Taking
our objectives one at a time, our man
agement group brainstorms and decides
on the plans of action that will help
achieve our objectives.
These may include programs such as
in-house training, in-plant banking and
review of salary administration.
Or they may be system changes, such
as quality control system installation
and development of key account and
customer profitability analysis systems.
In the loan area, revisions of loan
policies are called for. For the market
ing officer, a marketing plan is needed.
W e also work out revisions of our man
power development, physical facilities
and financial plans, and when a con
sensus is obtained that these are the
things that must be done, the division
of responsibility is usually self-evident.
At that point, a reporting timetable is
established to report status, progress,
accomplishment, etc.
The pinpointing of responsibility is
another critical aspect of organizing to
achieve objectives. Each step is vital,
and it’s hard work.
Finally, there is the preparation of a
budget. This is a much more meaning
ful exercise now because everyone has
a picture of what needs to be accom
plished, what special programs need to
be inaugurated, what new skills and
functions we think are advisable, what
new emphasis needs to be placed on
internal control. The budgeting system
now has substance.
It’s more than a numbers game. W e
now understand how and why, and,

with this background, the numbers be
come sub-goals. The budget profit—or
the bottom line— then becomes profit
as a result of planning rather than as
a result of analysis, and thus we have
“profit planning.”
If you are looking for a system of
profit planning for your bank, I can
assure you that this process works and
that there is no patent on it. It’s yours
for the doing! * •

Loan Policy/Implementation
Program Available to Bankers
From Continental Illinois Nat l
CHICAGO— Continental Bank now
offers a program to assist banks in
structuring, implementing and monitor
ing their loan policies.
The program, available to banks
nationwide, consists of cassette tape re
cordings of presentations made at a
December seminar at Continental and
printed materials. It was developed
after consulting with regulatory authori
ties. Materials cover the four essential
components of loan policy: director
responsibilities, management responsi
bilities, lending procedures and loan
review.
Printed materials include a compre
hensive outline for preparing a loan
policy, including checklists of loan
standards and documentation, a sample
loan policy document drawn from the
outline, a loan policy function chart
and lists of desirable and undersirable
loans.
Continental bankers presenting in
formation on the tapes include John B.
Tingleff, vice president and head of
correspondent banking services in the
bank’s commercial department; Frank
Fitzgerald and Donald J. Howe, loan
administration; Roberta Skelton, com
mercial-metro Midwest; Paula Boldt,
international banking; Thomas Elyea,
Larry Frowick, Ralph Abelt, Steven
Rothenberger and J. Terrance Franke,
correspondent banking.
“It is becoming increasingly apparent
to bankers that the quality of a bank’s
loan portfolio is one of the most signifi
cant factors differentiating an outstand
ing bank from a mediocre bank,” says
Mr. Tingleff. “Structuring a loan policy
requires a great commitment of time
and analysis, and we planned both the
seminar and the packaged materials to
assist banks in coping with this difficult
task.”
Information on the program may be
obtained by writing Jeanne Czarnecki,
Production Manager, Educational Ser
vices Division, Continental Bank, 231
South LaSalle Street, Chicago, IL
60693.

MID-CONTINENT BANKER for March, 1977

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Federal Reserve Bank of St. Louis

A t D eposit Guaranty N ational:

Upward Trend for Nation’s Economy
Foreseen by Symposium Speakers
CONTINUING UPWARD TREN D
for the economy was forecast by
two speakers at the 1977 economic
symposium sponsored by Deposit
Guaranty National, Jackson, Miss.
About 1,000 Mississippi business lead
ers were present.
ARA President W. Liddon McPeters
said that the basic direction of the
economy this year promises to be one
of continuing growth in output and
employment.
“There are two somewhat obvious
keys to the strong course of expansion
that portends in 1977,” said Mr. Mc
Peters, president, Security Bank, Cor
inth, Miss. “As we enter this year, the
consumer has more real money to
spend than at the beginning of 1976.
Second, business inventories, for the
most part, will have to be built up to
satisfy consumer spending this year.”
According to Mr. McPeters, large
flows of savings into banks and other
financial intermediaries have been tak
ing place over the past year or so.
However, he continued, when the ef
fects of inflation are taken into account,
it’s found that the real value of savings
balances per household didn’t move
ahead of the 1973 level until the latter
part of 1976.
“But the ground we gained in dis
posable income and savings these last
three years is real,” he continued, “and
people now have money to spend. That
was not the case this time Tast year, al
though business had anticipated strong
consumer demand.”
He believes if the economy really is
going to get on track and create a base
for long-term growth, a second stage
in the economic recovery must take

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Federal Reserve Bank of St. Louis

Pictured at top of page are five speakers at
1977 economic symposium sponsored by De
posit Guaranty Nat'l, Jackson, Miss. L. to r.,
they are: Bert Lance, director, Office of Man
agement & Budget, Washington, D. C.; W. Lid
don McPeters, ABA pres.; Jo Foxworth, pres.,
Jo Foxworth, Inc.; John J. Stephens, v.p.,
Internat'l Paper Co.; and Edward F. Ryan, ch. &
CEO, Merrill Lynch Government Securities, Inc.

place: Business must begin spending
billions of dollars to replace old, wornout equipment with new, more produc
tive capital equipment. This must be
done, Mr. McPeters believes, by people
who have confidence in our economy
and are willing to risk their careers,
their businesses, possibly their financial
security on the future growth of our
economy.
He said the key to sustained growth
in the economy will depend on the
government and the private sector pur
suing independent, but complementary,
national economic goals to be achieved
over several years. This, he said, is the
very point made recently by the ABA’s
Economic Advisory Committee. At the
request of the incoming Carter Admin
istration, this committee considered the
question of whether fiscal stimulus
would be needed in 1977 to accelerate
Pictured at podium during Deposit Guaranty's
economic symposium are Herman Hines (I.), ch.
of bank, and John P. Maloney, pres., Deposit
Guaranty Corp.

the pace of expansion in the economy.
The committee recommended a per
manent tax cut across the board, but
it pointed out— correctly, in Mr. Mc
Peters’ opinion—that such stimulus
must be part of an overall long-term
economic strategy. ABA President Mc
Peters said he was encouraged to see
that the new administration’s recently
announced economic package includes
such a permanent tax reduction.
According to Mr. McPeters, an in
formal survey of the ABA’s Economic
Advisory Committee made just two
days before the seminar indicated that
bank economists generally agree that
the proposed $30-billion fiscal stimulus
spread over two years won’t place un
due inflationary pressures on the econo
my.
The ABA president also discussed
the unemployment problem, saying
that too little attention has been paid
to the fact that the present level is only
partly the result of recession and slow
economic recovery. Pragmatically, he
suggested, it may be that potential
job creation in both the public and
private sectors cannot reduce unem
ployment below the 5% or 6% range
without adding substantially to infla
tion. Further reductions may await the
effects of long-term programs to im
prove the job skills of various groups
in the labor force.
According to Mr. McPeters, there
are at least five factors making business
somewhat skittish about the future:
1. Although interest rates currently are
at much lower levels than had been ex
pected four or five months ago and
credit is readily available, business gen
erally is holding off from using this in-

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MID-CONTINENT BANKER for March, 1977

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Federal Reserve Bank of St. Louis

expensive source of funds to finance
new production equipment and facili
ties. 2. Inflation over the last several
years has greatly increased the cost of
new equipment, and prospective rates
of return on investment have been re
duced by increases in initial cost as
well as in increases in cost of mainte
nance and operation. 3. Corporate
profits have recovered from the 197475 slump, but on an after-tax basis,
they are only modestly above their
1974 level. 4. During the past several
years, the business community has ex
pressed rising concern about mounting
costs of government regulation and di
version of time and effort to burden
some compliance procedures and away
from productive activities. This has
added to operating costs, fueled infla
tion and dampened investment incen
tives. 5. The environment in which
business operates has been unpredicta
ble, and predictability is needed.
Merrill L yn ch Outlook. Edward F.
Ryan, chairman and CEO, Merrill

Lynch Government Securities, Inc.,
New York City, told his audience that
his firm’s outlook—assuming the nation
sticks with fairly sensible policies— is
for sustained, if moderate, growth for
a prolonged period, with inflation un
der reasonable control and sufficient
funds available to keep the economy
moving. All that sounds favorable for
the stock market, he continued, and
Merrill Lynch market analysts, while
expecting some fairly wide trading
swings for a while, foresee the funda
mental bull market reasserting itself,
with the likelihood that it can keep go
ing perhaps for the rest of the decade.
According to Mr. Ryan, Merrill
Lynch economists, as of the day of the
symposium, expect a gradual rise in
most interest rates throughout 1977,
although it’s conceivable that the pres
ent low levels may be stretched out for
some time, with the expected upturn
delayed a quarter or two. Merrill
Lynch believes the bank prime rate
may rise from the present 6%-6/4%

Duties, Responsibilities, Liabilities
O f Directors Outlined at Conference
By ROSEMARY McKELVEY
Managing Editor

F D ELEG A TES to the midwestern
region bank director-management
workshop held last month in St. Louis
didn’t leave it with a much greater
comprehension of their duties than be
fore, it was no fault of the National
Association of Bank Directors, sponsor
of the workshop. The NABD was
formed late last year to inform, educate
and represent both inside and outside
bank directors and thus to increase
their effectiveness and value to their
institutions. The St. Louis meeting was
attended by about 200 bank officers
and directors from seven states.
Speakers at the regional workshop
were able to pack into one day discus
sions of such subjects as how directors
can best serve their banks and repre
sent them to their communities, what
bank directors must know to make de
cisions and what potential liabilities
face bank directors. A panel discussion,
led by Ben A. Parnell Jr., chairman,
Bank of Springfield, Mo., was held on
“Duties and Responsibilities of Bank
Directors.”
Articles based on two of the talks
appear elsewhere in this issue. They
are bylined by B. M. Lamberson, vice
chairman, Commerce Bancshares, Kan

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Federal Reserve Bank of St. Louis

sas City; and Robert Marshman, vice
president, Scarborough & Co., Chicago.
Directors were advised by James V.
Baker, executive vice president, Fidel
ity Bank, Oklahoma City, to devise a
strategic plan that ensures the present
and future success of their institutions.
They really have two responsibilities,
according to Mr. Baker: 1. Hire a CEO

range to perhaps 7%-7/2% by the end of
1977, Treasury bills from around 4/4%
to, say, 5/2%-6% and top-rated corporate
bonds from around 7/4% to the 8/4%81% range.
Bert Lance, Georgia banker who
now is director, Office of Management
and Budget, in Washington, D. C., also
spoke at the symposium and was intro
duced by Mississippi Governor Cliff
Finch. Other speakers included John
J. Stephens, vice president and group
executive, wood products and resources
group, International Paper Co., who
discussed the “Outlook for Industry”;
and Jo Foxworth, president, Jo Foxworth, Inc., whose topic was “The Eco
nomic Effects of Today’s Changed
Woman.”
The morning session was presided
over by Herman Hines, chairman, De
posit Guaranty. A panel discussion was
moderated by Charles R. Arrington,
the bank’s executive committee chair
man. John P. Maloney, president, D e
posit Guaranty Corp., presided at the
luncheon. * *

and work with him to achieve corpo
rate responsibility, 2. Fire that CEO
when he can’t get the job done. He
said that directors must see that their
banks’ affairs are planned, organized,
led and controlled and that if a bank
is inert, that means it has a sluggish
board.
Written policies are a must, Mr.
Baker emphasized, and everything must
be in writing—not just loan policies.
Policies on investments, operations,
management, etc., should be written,
he advised.
Mr. Baker gave his audience this
definition of a bank’s purpose: a profit-

Pictured at National Association of Bank Directors' midwestern region bank director-manage
ment workshop last month are, I. to r.: Peter A. Reilly, NABD e.v.p.; Jerome D. Twomey, NABD
ch.; James V. Baker, e.v.p., Fidelity Bank, Oklahoma City, workshop speaker; and James A.
Webb Jr., NABD pres. Mr. Twomey is pres., Sterling Nat'l, New York City; Mr. Webb, eh., Nash
ville City Bank.

MID-CONTINENT BANKER for March, 1977

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Federal Reserve Bank of St. Louis

able creation and sale of superior fi
nancial services to enable current and
future customers to meet their needs.
He also gave this advice: “People
will do what you expect if you will
inspect and reward.”
In a spirited and often humorous
talk, Frank Pesveyc, director, Midlantic
National Bank/Raritan Valley, Edison,
N. J., said a major purpose of bank di
rectors is to explain the banking in
dustry to the public. A director, he
said, has five duties: 1. He must help
management by allowing it to make
use of his expertise. 2. He must devote
enough time to serve effectively on
committees to which he’s appointed.
3. He must help young employees of
his bank to improve their skills by
taking the necessary training. 4. He
must help his bank improve its public
relations. To do this, he must know his
bank thoroughly and the “why” of its
policies so that he can explain them to
his friends, business acquaintances, the
public in general. This also includes
talking to legislators. 5. He must help
directly to increase his bank’s business.
This involves selling on his part.
Mr. Pesveyc listed six principles of
selling: 1. Be not of faint heart. 2. Talk
to the right people—in banking, this
means everybody. 3. Watch your lan
guage. Use language people under
stand. 4. Be enthusiastic. 5. Use show
manship. 6. Ask ’em to buy.
Written policies also were referred
to—this time in connection with com
plying with the new consumer protec
tion law—by another conference speak
er, Paul J. Pfeilsticker, vice president/
consumer lending, Continental Illinois
National, Chicago. He advised banks
to designate particular officers to see
that the banks’ written policies and op
erations comply with the new law. He
suggested that persons designated as
compliance officers at banks obtain
copies of the Comptroller of the Cur
rency’s examination manual, which is
being revised. Drafts are available now,
and Mr. Pfeilsticker said he doesn’t ex
pect many more changes to be made
before the completed manual is ready
early this spring.
In addition to the formal talks and
the panel discussion, the conference
featured group discussions divided ac
cording to states.
The conference was closed with a
talk by NABD President James A.
W ebb Jr., chairman, Nashville City
Bank, who described future plans of
the organization and also exhorted his
listeners to join NABD if they were not
already members and to get others to
come in, too.
Peter A. Reilly, NABD executive
vice president, opened the conference
and introduced Jerome D. Twomey,

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Federal Reserve Bank of St. Louis

NABD chairman, who is president,
Sterling National, New York City. In
turn, Mr. Twomey introduced the var
ious speakers. • *

enough money back into the com
munity.
Serving as a bank director is a timeconsuming, somewhat exasperating ex
perience with considerable liability, but
it can be thoroughly enjoyable! * *

Graduate School of Banking
Receives College Accreditation

Comprehensive Agenda
(Continued from p ag e 34)

department heads to make in-depth re
ports on their activities. This gives mid
dle management visibility with directors
and affords directors the opportunity to
evaluate bank personnel. At the same
time, it makes it possible for directors
to be more knowledgeable about the
operating departments of the bank. Re
ports of this nature can be rotated and
staggered throughout the year to lend
variety to the agenda and stimulate di
rector interest.
Anything left to be discussed at a
board meeting should be brought up
under old or new business.
Giving directors so much informa
tion that they might become confused
and not focus on the important deci
sions to be made should be avoided, es
pecially if it imposes on a director’s
time to the point that he gets fidgety
and wants to get away to his own busi
ness.
Capital expenditure budgets are im
portant. Cash-flow projections, operat
ing results of the various profit centers,
along with marketing and advertising
plans, are worthy of review.
A director’s relationship to the own
ership of the bank is important and
should, to some extent, determine his
involvement in the management affairs
of the bank. Many directors are from
independent unit banks and own sub
stantial amounts of stock. In those in
stances, they not only have the right,
but the duty, to select bank manage
ment, set salaries and perhaps even be
directly involved in the lending func
tion before the fact rather than after.
In other ownership situations, partic
ularly HCs, the directors are, in a sense,
representing the owning entity and may
not be expected to get deeply involved
in the decision making process. There
is always the risk that directors owning
no stock in the bank on whose board
they are serving will take what we call
a “chamber of commerce” approach to
lending the bank’s money or will insist
upon raising a bank officer’s salary one
day, only to ask that same officer for a
loan at preferential rates the next day.
Contributions should be reviewed by
directors. In our HC, the concern is
not that managements will give the
bank away; but, as managers of profit
centers, they will be so intent on show
ing good results that they will not put

MADISON, W IS.— Completion of
the Graduate School of Banking, which
is held on the campus of the University
of Wisconsin here, could pay off with
college credits for bankers pursuing a
degree. The school has received college
credit recommendations from the Amer
ican Council on Education (A C E ).
Those successfully completing the
Graduate School of Banking’s threeyear curriculum now may request that
the college or university of their choice
grant credit for the achievement. ACE’s
Project on Noncollegiate Sponsored
Instruction evaluates educational pro
grams of business and industry. The
project’s aim is to increase access to
higher education and academic degrees
by helping people get academic recog
nition for learning acquired in nontraditional ways.
Credit recommendations for the Grad
uate School of Banking presently fall
into three major areas: management,
finance and economics. Specific aca
demic courses offered by the school
include business policy, commercial
lending, management of financial insti
tutions, investments and macroeconom
ics. Approximately one semester of col
lege credit, or 14 semester hours, has
been recommended for the program.
Those interested in additional infor
mation on the school or procedures for
pursuing academic credit may write
The Graduate School of Banking, 122
West Washington Avenue, Madison,
W I 53703.

St. Louis Union Trust
Announces New Index Fund
ST. LOU IS— St. Louis Union Trust
has announced that it is making a new
index fund available to its clients. The
index fund is a concept of closely par
alleling the price performance of vari
ous stock indexes.
According to a bank spokesman,
“Professional investment management
has experienced a number of changes
over the past few years as a result of
stockmarket volitility and passage of
the Employee Retirement Income Se
curity Act (E R IS A ). For the past six
months, St. Louis Union has conducted
an intensive study of index-fund tech
niques, using a $25-million theoretical
fund consisting of 250 of the largest
companies in Standard & Poor’s 500
Stock Index, equal to 93% of the mar
ket value of those stocks.”

MID-CONTINENT BANKER for March, 1977

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You be the judge. Match The Value Line Survey against any
other investment survey you’ve ever used, seen or heard about.
Which gives you more? Which does more for you? Compare them
in any way you like.
If Value Line doesn’t come out ahead— way ahead—simply return
the material we’ve sent you for a full refund. But keep the valuable
64-page book, Investing in Common Stocks, just for taking part in
the test.

Special Invitation
You are invited to receive the complete Value Line Investment
Survey for the next 10 weeks for only $29—about half the regular
rate—if no member of your household has had a Value Line
subscription in the last two years.
You take no risk. If you’re not completely satisfied with the Value
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in Common Stocks. To accept this special invitation, fill in and mail
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What You Receive
So that you can test The Value Line Investment Survey in a
meaningful way, this special invitation brings you everything that
our regular full-term subscribers receive, including.. .

1. Ratings &Reports
Every week you receive new full-page Reports on about 125
stocks, which update and replace the corresponding Reports in
your Reference Service (it takes less than a minute to remove the
old and put in the new). During a 13-week cycle, new Reports like
this are issued on all 1600 stocks. The Reports include price/
volume charts and 22 series of vital statistics going back 15 years
and estimated 3 to 5 years ahead.

2. Investors Reference Service
(available separately for $45). You receive, as a bonus, our latest
full-page Reports on each of more than 1600 stocks under
continuous review by Value Line. These come to you fully indexed
and loose-leaf bound for your immediate use and will be
systematically updated by new Reports in the weeks ahead.

3. Selection &Opinion

( This is a sample full-page report of one of the 1600 stocks \

Every week this 12-page section clearly and concisely presents
Value Line’s view of the Business Prospect, Stock Market, and
Advisable Investment Strategy. Plus specific Stock Selections, vital
Information for Option Writers and Buyers, and the Value Line
Averages.

regularly reviewed by Value Line, reduced from 8 V4” x 11” /

PITTSTON

4. Summary of Advices
Every week, for EACH of 1600 stocks under review, this 24-page
section shows the current ratings for relative future Price
Performance and Safety, together with the Estimated Yield, P/E
ratio, estimated long-term Appreciation Potential, Beta, and latest
earnings and dividend data.

5. Investing in Common Stocks
This little "classic” by Arnold Bernhard, Value Line’s founder and
research chief, packs a remarkable wealth of guidance into just 64
pag es.. . . revealing methods of stock evaluation and portfolio
management that took decades to develop. This book is YOURS TO
KEEP, no matter what you decide about the Value Line Survey.

$100,000 in cash prizes will be awarded.

CURRENTPOSITION

BUSINESS: Th« Pittston Company engages in
coal mining (1975 output: 18.6 milion tons),
petroleum distribution and trucking-warehousing.
S ........................ I U S. Trucking Corp. (100%
Inc. (85%). In 1975. 76% of
urgical coal (about 79% in ex27.»

103.2

HMlgAl

420

105

065
.067
069
19
392

3095 265.4
350 310

1.03

067
069
.071
096
20

.73

.067
069
.071
096
20

«illion tons of coal will be delivered. Subequent shipments will be at a rate of 10.9
nill ion tons per year.
' The basic starting price is $2.05 per ton
higher than the Oct. 1976 price to the
-Japanese. Although the details are not yet
available, increases in Pittston’s costs will be
passed along in accordance with price escala
ron stipulations.
4104 1400 40'r of the scheduled shipments are sub
420 IISOO set to annual price and tonnage negotiaions. The price of the remaining 60*7 can be
renegotiated every three years.
These con tract term s constitute a hedged
position. The deliveries that are price fixed
' )lus escalation) for three years represented
1.19
bout one-third of Pittston’s output (18.6
million tons in 1975 and probably some 2
million tons less this year). H ie price in
crease is very small relative to the changes
since 1973. With so much volume committed
price for three years, Pittston manage
.071
ment must doubt that a seller’s market in
196
.20
metallurgical coal is just around the comer.

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Federal Reserve Bank of St. Louis

. Aufl (O)O

xobably less than

Whether you take advantage of this introductory offer or not, you
are invited to enter Value Line’s “Invest in America” Stock Market
Contest. You assume no risk or obligation. Just send a postcard
with your name and address (only one entrant per household) to:
Contest Editor, P.O. Box 5131, New York, N.Y. 10017.
Please allow 6 to 8 weeks for acknowledgement.

■---T h e 1973-1975 corporate earnings surge i
unlikely to be repeated in the near future.
Pittston’s non-coal activities are too small t
affect corporate results appreciably. Nor ca:
we visualize enough increased steelmaker de
mand to provide a sizable boost in coal
profits for the next J 2 months. Thus, PCO
stock prices will do well to match market
averages in the year to come. Howevi
placement cost reporting probably won’t hurt
share performance. We estimate that such
bookkeeping will cut 1976 profits by but 10*7
and will not menace “cash flow” at all.
End-of-decade capital appreciation poten
tia l is fairly good (slightly below that of the
average common stock). Pittston’s mine
development program can provide sub
stantially more production capacity in 197981. Thus,
<
"
even though profit per ton may n<
grow, net income can be boosted enough t

----------------

JThcY&lueLine Investment Survey
ARNOLD BERNHARD & CO. INC. • 5 EAST 44th STR EET, NEW YORK. N.Y. 10017
□ Begin my special 10-week trial to The Value
Line Survey (limited once to an. household every
two years) and send me the Investors Reference
Service and the booklet "Investing in Common
Stocks" as bonuses. My check or money order for
$29 is enclosed. (Trial subscriptions must be
accompanied by payment.)
□ I prefer one year (52 weeks) of Value Line,
plus the bonus, Investors Reference Service and
the booklet, “ Investing in Common Stocks" for
$285. (There are no restrictions on this offer.)
□ Payment enclosed □ Bill me for $285
GUARANTEE: If dissatisfied for any reason, I
may, under either offer, return the material within
30 days for a full refund of the fee I have paid.

43NS01
SIGNATURE
NAME (please print)
ADORESS

APT. NO.

CITY
STATE

ZIP

Not assignable without subscriber’s consent. Foreign
rates on request. Subscription fees are fully tan-deduct
ible. (NY residents add applicable sales tas.)

BG/1

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

The
Bank

FEDERAL SIGN
Division Federai Signal Corporation

P e rfo rm a n c e . . . has m a d e us th e le a d e r
Our products, program design, service and fle x ib ility

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Federal Reserve Bank of St. Louis

S A L E M C H IN A C O M P A N Y
S A L E M S IL V E R S M IT H S
S o u th B ro a d w a y E x te n s io n
S a le m , O h io 4 4 4 6 0

B G /3

Our portrait
ram :" ^ p
uces
new customers
„Jnari

“Any banker in the country
loves to see prospects walk in
the door— well that’s what the
Olan Mills portrait program did
for us. We are very pleased.”
Tom Maxwell
President
Bank of Cannon County
Woodbuny, Tenn.

|p<;

■*

S om e marketing experts
claim it can’t be done — that
is, for the prospect to come to
you rather than you going after
him.
Well we can show you how to
get them to com e in the door
by the droves. Our bank
marketing program of giving
away Free portraits (in
beautiful color) to customers
and prospects has proved to
be one of the m ost successful
programs yet.
Here’s how it works. Olan
Mills representatives will work
out a schedule for your bank to
give away beautiful color
portraits to custo m ers and
prospects. They will help you
plan, organize and advertise

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Federal Reserve Bank of St. Louis

-t H I

the program. They will take the
pictures and send a follow-up
team to show proofs.
And the beauty of it all — it
doesn’t co st the custom er a
dime. Your only obligation is a
nominal charge for advertising
materials.
Call us today. We’ll send a
representative to see you.

Additional information on
The Olan Mills Family Portrait
Plan is available from Olan
Mills Bank Marketing Division,
c /o Jo e Trivett, 1 1 0 1 Carter
S treet, Chattanooga,
Tennessee 3 7 4 0 2 . Telephone
( 6 1 5 ) 6 2 2 - 5 1 4 1 , ext. 2 1 3

Bank Marketing Division

BG/4

“Now I’ve Got
My Own Moody’s”
Read why m ore and m ore banks are buying m ore and m ore M oody’s.
Seems that more and more of Moody’s subscribers are
buying extra copies of Moody’s Bank & Finance Manual
and Bond Survey. The reason? Economy.
Bankers tell us that not having a copy of the Bank &
Finance Manual and Bond Survey for each executive is a
classic example of “penny wise and pound foolish.” That’s
because having too few Moody’s wastes time. Investment
people have to chase down a copy when they need it and
have to tell customers they’ll call back with needed data.
They have to wait while someone else finishes his work
with Moody’s. And on and on with one more time and
money-wasting story after another.
If your bank already subscribes to the Bond Survey, you
get a 47% discount on each additional subscription. Also
you can purchase Volume I or II of the Bank & Finance
Manual separately.
Getting extra copies of Moody’s Bank & Finance Manual
and Moody’s Bond Survey is as simple as using the coupon
below. Do it now, while the idea is fresh in your mind. The
sooner you act, the sooner you’ll start saving time
and money.

/Maliak iA
M oody’s Bank & Finance M anual covers over 10,000 institutions.
Volum e I covers banks, trust com panies, savings and loan associations,
fed era l cred it agencies. Volum e II covers insurance, finance, real
estate, and investm ent com panies. Many o f the largest receive Full
M easure Coverage which gives you expanded data including 7-year
incom e accounts and statem ents o f condition, average annual figu res
and financial ratios. P rice includes twice weekly updating in M oody’s
News Reports. Volume I o r II may be purchased separately.
M oody’s Bond Survey is a weekly publication. It includes M oody’s
Ratings and covers all m arket segm ents: governm ent, corporate, public
utility, tax exem pt, pollution control, industrial revenue, banks and
finance, international bonds, p referred stocks and com m ercial paper.

FBG-1

M oody’s Investors Service, Inc.
99 Church Street
New York, New York 10007
Name
Please enter my subscription to the Bank & Finance Manual. (Check appro
priate box.) □ Send me a subscription to Volumes I and II of the Bank &
Finance Manual at $300. □ Send me a subscription to Volume I only at $200.
□ Send me a subscription to Volume II only at $200. □ Bill me.
□ C heck enclosed.
Please enter my subscription to the Bond Survey. (Check appropriate box.)
□ M y bank is already a subscriber to the Bond Survey. Enter my subscrip
tion at $250. □ My bank does not subscribe. Enter my subscription at $475.
□ Bill me. □ Check enclosed.

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Federal Reserve Bank of St. Louis

T itle Company

Telephone

Address
City

State

Zip

Please Include Sales Tax Where Applicable

B G /5

A U T O M A T IC C O IN W R A P P E R

T U B U L A R C O IN W R A P P E R

Especially designed for machine filling . . . a real time-saver.
Packed flat. Instant patented “ Pop Open” action with finger
tip pressure. Denominations identified by color coding . . . 6
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R A I N B O W C O IN W R A P P E R

B G /6

Ideal for packing currency, deposit tickets, checks, e t c .. . . do not break
or deteriorate with age. Size 10 x % inches and made of strong brown
Kraft stock with gummed end for ease of sealing. Packed 1000 to a carton.
D E A L E R

. l . DOW NEY COMPANY

•

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Federal Reserve Bank of St. Louis

C O L O R E D B ILL S T R A P
Entire strap is color coded to identify denomination. Printed
am ount appears on top and bottom of package. Extra wide
for marking and stamping. Extra strong stock for safe delivery
and storage. Pure dextrine gumming.

B A N D IN G S T R A P S

S E E

t h e

F E D E R A L B ILL S T R A P
Package contents clearly identified on faces and edges by
color coded panels with inverted and reverse figures. Made
of extra strong stock to assure unbroken deliveries. Only pure
dextrine gumming used.

D U Z I T A L L C O IN W R A P P E R
Extra wide . . . extra strong. Designed for areas where halves
are wrapped in $20.00 packs . . . “ red bordered window” for
ease of identification. AcconTmodates $20.00 in dollars, $20.00
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K W A R T E T C O IN W R A P P E R
Wraps 4 denominations in h a lf size packages. A miniature o f
the popular "Automatic Wrapper” . . . 25c in pennies, $1.00 in
nickels, $2.50 in dimes, $5.00 in quarters.

Color coded for quick, easy identification. Red for pennies . . .
blue for nickels . . . green for dimes . . . to indicate quantity
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O L D S T Y L E C O IN W R A P P E R
Basic coin wrapper in extra strong kraft stock. Printed in 6
different standard colors to d iffe r e n tia t e denominations.
T rip le d e s ig n a tio n th ro u g h colors, p rin tin g and letters.
Tapered edges.

Amounts and denominations autom atically in d ic a te d by
patented “ red bordered windows” . A m o u n ts in windows
always in reg is ter. . . eliminates mistakes. Accommodates
all coins from lc to $1.00.

Y O U R

S E N D

F O R

F R E E

S A M P L E S

HANNIBAL, M IS SO U R I

•

DEPT. F

TO: ALL BANKS & SAVINGS & LOAN ASSOCIATIONS
“A UNIQUE PROM OTIO NAL P R O G R A M ”

WITHOUT COST TO YOU
The Bel-Air Company proposes to offer to your customers and your potential customers a “ 8 x 1 0 ” natural
color portrait o f their family. This program is designed to improve customer relations and add new
accounts. We provide advertising material plus trained personnel, you only furnish the location.

□
□

THE BEL-AIR COMPANY
2 6 0 6 Dixie Highway
Louisville, Kentucky 4 0 2 1 6
Please contact me, I’d like to discuss a portrait program.
Please send me additional information on your program.

R'ÄMEAND TITLE-------------------------------------------------------INSTITUTION NAME
ADDRESS
CITY

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

'
STATE

ZIP

PHONE
BG/7

Super Marketing.
w gam r
I

■
■

M M K

_______ j

F in a n c ia l in s titu tio n m a rk e tin g is
n o s m a ll-tim e o p e ra tio n .
Y o u r n e e d s a r e g r e a t . You n e e d
d iffe re n t ty p e s o f p ro m o tio n s to m e e t d iffe
r e n t m a r k e t in g o b je c t iv e s . T r a in in g p r o
g r a m s . I n c e n t i v e c a m p a i g n s . P r e m iu m
p ro m o tio n s . C o n tin u ity p r o m o tio n s . M a il
o rd e r p ro m o tio n s. And m o re .
T h a t 's w h e r e S & H F i n a n c i a l
P ro m o tio n s c o m e s in .
W e’re th e o n ly firm in th e b u sin e s s
th a t o ffers a fu ll-ra n g e o f fu ll-se rv ic e b u sin e s s

d e v e lo p m e n t p ro g ra m s . . . e x c lu s iv e ly fo r
fin a n c ia l in s titu tio n s .
And b e c a u s e w e 're S & H , w e h a v e
th e m o t i v a t i o n a l e x p e r t i s e , t h e n e a r - b y
w a reh o u sin g , a n d th e b ra n d -n a m e m e r c h a n
d is e to g u a r a n te e you a p r o fit
Financial
a b le p ro g ra m .
Promotions
T h in k
3003
€. Kemper Rd.
o f u s a s th e o n e
Cincinnati,Ohio
45266
p la c e to sh o p fo r
Phone (513)771-5590
super m arketing.

PwJ

New Account Acquisition Programs • Staff Training and Business Development Programs * Loan
Generation Programs • Credit Card Programs • Continuity Programs • Branch Openings

B G /8

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Don’t Overlook Your Stockholders
As a Source of New Business!
They Can Be Put to Work for Your Institution!

TO CKH O LDERS seldom are used to their full
potential as prospective customers and public re
lations ambassadors.
Why? Because of lack of communication between
stockholders and bank management. This results in
stockholders knowing little about their financial in
stitution. They are not aware of the services offered
by their bank in some instances; thus, they unwitting
ly take their business elsewhere! The bank loses their
business by default.
Directors of banks are uniquely positioned to help
their institutions avoid this pitfall. As stockholders
(and, thereby, representatives of all stockholders),
they can readily appraise the bank’s stockholder
communication situation. Also, as voices of manage
ment, directors can recommend and support actions
—through the advertising and public relations de
partments—if a bolstering of stockholder communica
tion is in order.
Many stockholders do not become customers of
their bank because they have never been “sold.”
Most banks score shockingly low in the area of stock
holder-customer conversions, despite the fact that
virtually every stockholder needs the services of the
bank in which he or she invests.
One reason stockholder-bank communication is
wanting is that it hinges primarily on a single item:
an impersonal financial statement. This means of
communication offers the stockholder little or no hint
of the services the bank provides or how these ser
vices could be of assistance in the stockholder’s per
sonal or business affairs.
Few banks make it easy for a stockholder to be
come a customer. This fact, plus the reluctance of
people to change their banking habits, combine to
keep stockholders from moving their business from
just any bank to the bank in which they have in
vested their funds. Yet a simple invitation on the
part of the bank asking for the stockholder’s business
could produce results for banks interested in solicit
ing business from stockholders.
Few bank managements take the time to investi
gate the potential business stockholders can generate.
They just assume that all stockholders naturally bring
their business to their bank—as directors are expect

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

ed to do. But such is not the case!
Banks often overlook the broader base of stock
ownership. At one time, bank stocks were held large
ly by sophisticated financial specialists. Today’s stock
holder mix includes younger (and less sophisticated)
investors and women, who may know little about
banking and thus have little opportunity to become
customers.
Even when banks strive for better communication,
they seldom “humanize” ties with stockholders. Thus,
because of this impersonal feeling, there’s no good
selling climate.
Another reason banks hesitate to promote aggres
sively in stockholder markets is the fear of criticism:
They feel stockholders may charge that promotional
advertising uses money destined for dividends. Stock
holders should receive a subtle explanation in this
area: Dividends depend on earnings and the more
customers a bank serves, the more growth it experi
ences. Hence, stockholders can increase the value of
their investment and returns by banking where their
investment is.
Banks can gain in various ways by promoting ser
vices to stockholders. First, they can gain a sizable
new market, depending on the number of stockhold
ers on the rolls. Most banks earmark considerable
sums to pay for advertising to woo the stranger, but
devote little funds to “selling” their stockholders,
who are already friendly to the bank.
Second, stockholders represent an elite market for
bank services. They usually have above-average in
comes and need bank services.
Finally, a stockholder who is kept informed about
his bank can be an effective public relations ambas
sador. With banking under ever-increasing attack,
such ambassadors— equipped to discuss the bank’s
merits in personal, corporate and government circles
—are a valuable asset.
Banks can take advantage of stockholder opportu
nities with a modest effort and expenditure. Here are
a few suggestions:
• They can put more personal touches into stock
holder relations by “humanizing” the bank by the
tone and language of stockholder communications.
(Continued on next p ag e)

BG/9

Stockholders should be spoken to as
people, not computer numbers! Stock
holders should be among the first to
learn about new bank services so they
can take advantage of them and spread
the word to their contacts. Each time a
dividend check is mailed, include a
folder describing a service or comment
ing on some aspect of the bank.
• They can help stockholders get in
volved with the bank by encouraging
attendance at annual meetings, thereby
enabling bank management to develop
personal contacts with stockholders.
This means annual meetings must be in
teresting and informative so the stock
holder will not be turned off. It takes
work, but it can pay off in a greater
feeling of involvement on the part of
the stockholder.
• They can encourage stockholders
to keep and increase their holdings in
the bank by reminding stockholders fre
quently that the bank constitutes a fine
investment. Stockholders should be kept
informed of the bank’s growth plans
and what such growth means to them
in the way of dividends. Banks can
make it easy for stockholders to ac
cumulate more stock by offering some
form of dividend reinvestment program.
Such a program is a sound investment
for stockholders and it’s a steady source
of new capital for the bank.

• They can maintain steady promo
tion of bank services via newsletters
mailed with dividend checks. These
newsletters can include informative and
human-interest news items about the
bank and its personnel plus an article
about a new service. Services usable by
out-of-town stockholders should be spot
lighted. They include checking, savings,
trusts, loans, real estate, etc.
• They can invite stockholders to
visit the bank. Once a prospect is inside
the door, he’s much easier to sell! Stock
holders might not live close to the
bank; thus, they cannot be expected to
drop in all the time. Invite stockholders
to bank functions, such as dedications
of new quarters, openings of exhibits,
etc. This provides opportunities for
face-to-face encounters between stock
holders and bank management.
Stockholders should be treated as
valuable prospective customers. They
should be kept posted about new ser
vices. They should receive mailings and
be informed about bank advertising pro
motions. They deserve the same con
sideration as the general public!
In communicating with stockholders,
emphasis should be on simple, pleasing
—and economical—materials. There
should be a good reason for every com
munication and the purpose of the com
munication should be explained—and

the effect it can have on the bank’s
profits should be noted.
Stockholder response to selling at
tempts can be measured. Simply note
the number of stockholder accounts at
the start of any given year, then com
pare the number with figures a year
later. Or, when stockholders are offered
booklets, copies of speeches, etc., count
the requests received.
If stockholders are made to feel im
portant to their bank, they will regard
the bank as a fine investment—the only
place they would think of banking.
That’s a pretty good dividend to re
ceive from a minimal investment of ef
fort! * *
New Share Draft Program
Offered to Credit Unions
A pilot share draft program for credit
unions is to be offered by the Midwest
Association of Credit Unions and Mer
chandise National, Chicago. The pro
gram is an outgrowth of a bank and
credit unions working together to pro
vide improved service to consumers.
The new service, which enables
credit union members to pay bills,
make purchases or obtain cash in a
manner similar to the use of checks,
will begin when approval has been ob
tained from regulators.

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BG/10

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Federal Reserve Bank of St. Louis

CREATE AN
INTERNATIONAL
i t i NC IDENT

T h is line of s a v in g s sta rte rs from In tern atio n al S ilv e r
o ffe rs all th e in g re d ie n ts n e e d e d
for s u c c e s s fu l o n e-tim e a n d co n tin
uing in c e n tiv e p ro g ra m s. T h e s e fe a tu re d istin c tiv e
p a tte rn s in fla tw a re a n d a tre m e n d o u s a sso rtm e n t
in silv e rp la te h o llo w a re a n d p e w te r h o llo w are. E a c h
b e a rin g th e fa m o u s In tern atio n al tra d e m a rk , a d d e d
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Federal Reserve Bank of St. Louis

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BG/11

Trains Used by Loop Bank
To Get New Retail Accounts
Shoppers Snap Up 2,700 Sets for Christmas

HAT D OES a financial institution do to attract
retail accounts when it’s located in the heart
of Chicago’s Loop, where financial institutions are
on practically every corner and they’re all fiercely
competitive?
If the financial institution is Central National,
Chicago, its management decides to mount a pre
mium promotion that offers model train sets to the
public for less than $20 in exchange for a new or
add-on savings deposit of $250 or more.
The train incentive promotion was the first pre
mium offered by Central National in four years;
therefore, to make as big a splash as possible in the
Windy City, Central selected trains for their proved
track-record with other financial institutions.
Starting last September, the bank began adver
tising its offer under the theme, “L et Your Money
Ride.” Advertisements appeared in newspapers, on
radio and in buses on selected routes, emblazoning
the offer throughout the city. In addition, statement
stuffers and direct mail were used to publicize the
promotion.
Savers were invited to “come aboard the Central
National Express. . . . Be on the right track to fi
nancial security. . . . Be a railroad tycoon and a
smart saver, too! Engineer your savings to earn
maximum bank interest with a deposit of $250 and
get this prized electric train set for a fraction of its
retail cost!”
The 49-piece HO set included a locomotive and
five freight cars, a power pack transformer, oval
track layout, snap-fit buildings and a set of signs.
Deposits had to remain in the bank 180 days for
the depositor to qualify for a train set.
Objective of the promotion, according to John A.
Fisher Jr., vice president, was to increase deposits
and open new accounts as well as enhance the
bank’s image as a retail-oriented institution.
As is usually the case, the trains did a creditable
job for the bank. More than 1,600 new accounts
were opened and almost 1,000 add-on deposits were
made during the three months the promotion ran.
More than 2,700 train sets departed from Central
National and depositors left a total of $1.3 million
in exchange for them. Although only $250 was nec
essary to qualify a depositor for a train, the average
deposit was close to $500.
According to Mr. Fisher, only two of the train
sets were returned due to malfunctioning and few
of the new accounts had been closed as of January

B G /12

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

18. Within a month after the close of the promotion,
growth in the new accounts had become evident.
Customers making qualifying deposits could pick
up their train sets (just in time for Christmas
giving!) at the bank’s “Central Station,” a booth lo
cated in the lobby. Clerks sporting engineer’s caps
handed out the sets.
Mr. Fisher said the promotion was successful
enough to encourage management to consider an
other premium offering in the future.
Another bank cashing in on the use of electric
trains was Boatmen’s of Jefferson County, Pevely,
Mo., near St. Louis.
The train set was similar to the one offered by
Central National, but the terms were different: All
it took was a $100 deposit in either savings or check
ing or an add-on to an existing savings account and
the train could be purchased for $17.50.
The three-month promotion resulted in a 14% in
crease in the number of checking and savings ac
counts. A bank spokesman termed the promotion an
unqualified success.
The bank’s advertising included a full-page in
sertion in the local newspaper calling on savers to
“put back some real excitement this Christmas sea
son with a genuine Bachmann electric train.” Each
of the 54 pieces in the set was illustrated in the ad
to give prospective savers a good idea of what they
received in the train set. • •

Joseph G. Lutz, ch. & pres., Central Nat'l, Chicago, stands
ready to assist! bank clerks distribute HO electric train sets
offered to savers prior to Christmas holidays.

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Federal Reserve Bank of St. Louis

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Downhill Slide of U. S. Postal Service
Poses Problems for Financial Marketers
ONG-TERM trends for postal ser
vice could drastically affect the way
financial marketers deal with their cus
tomers, according to John Jay Daly,
president, John Jay Daly Associates,
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were presented in an article in the Jan
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Chicago.
Facts affecting the future of the Post
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cording to Mr. Daly:
• Mail volume has leveled off and is
expected to decline dramatically soon.
• The distribution base of the Postal
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• There is strong social pressure for
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• Technological changes, such as

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• Employment is down but operat
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• Large users are seeking alternative
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A Senate report recently stated that
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Mr. Daly says the financial commu
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and the solution. Almost half the ser
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financial transactions such as bills, pay
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which will hasten the time when the
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Among the courses open to financial
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customers and serve present ones,
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• They can encourage Congress to
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Federal Reserve Bank of St. Louis

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Federal Reserve Bank of St. Louis

board should . . . police itself (and) openly
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BG/15

Customer Contact:
Growth Key in a Changing Market
Three Training Methods for Contact Personnel
By LINDA JOHNSON, Director, Training & Customer Services, United Bank, Madison, Wis.

OOKING at the future of banking, one can see
more changes taking place at a more accelerated
rate than at any other time in banking history. Elec
tronic funds transfer systems, aggressive bank hold
ing companies, increased competition from savings
and loan associations and credit unions and more
mobile and educated consumers all contribute to a
changing market.
One factor remains constant, however. As Peter
Drucker wrote in 1964, “The customer is the busi
ness,” and whether you’re selling vacuum cleaners
or bank services, customer satisfaction is still of
prime importance to the growth and maintenance
of your business.
In banking, who has the most contact with your
customer base? Without exception, the teller group
and the customer service people meet the most cus
tomers the greatest number of times every day. Yet,
this same group is often one of the lowest paid, the
least trained and most likely has the highest turn
over rate in your organization. These representatives
of your bank need information and guidance quickly
in order to be representatives of which you can be
proud. That’s why it is important for you to analyze
and incorporate training procedures that will make
your customer contact group more effective at
handling customers, not just the money they deposit.
I have had the opportunity to view many cus
tomer contact groups and their effectiveness with
customers. The following training approach is used
in total by some banks, in part by others and not at
all by a few. In banks that use all or some of the
training procedures, three positive factors were ap
parent: (1 ) A concerted effort was made by cus
tomer-contact people to satisfy the customer, (2 ) a
sense of teamwork among employees was evident
and (3 ) job satisfaction was at a higher level.
With a customer-contact group displaying these
and other positive characteristics, your bank could
develop the competitive edge it needs in this changing
market to retain existing customers and bring in new
business. Read ahead and decide for yourself wheth
er these three suggested training measures can help
you meet your bank’s marketing objectives.

Show your customer contact group that they are
indispensible to the efficiency and growth of your
hank.

BG/16

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Do expensive advertising campaigns work? They
can be effective as far as bringing a customer in the
door the first time, but the time, effort and money
will go for nothing if the bank doesn’t follow up
with friendly and informative service during the
long-term account relationship. Look at your own
bank’s figures: How many new checking accounts
were opened last year? How many checking accounts
were closed? The exact ratio varies from bank to
bank, but nationwide figures tell us that for every
10 new customers coming in the door, nine old cus
tomers go out the door. The majority leave because
of dissatisfaction with the service.
Satisfied employees result in satisfied customers.
The truth of this idea is brought out by Leonard
Berry, a well-known bank marketing expert: “If em
ployees, whose actions impact on the customer, are
to be exceptionally motivated, they must have a job
worth being exceptionally motivated for. A sense of
high purpose and involvement in the job, pride in
the company, respect for management are results
that can only be earned, and only over time . . .
Effective internal marketing contributes to effective
external marketing.”
How can the customer-contact group be effective
ly motivated? W e believe the answer lies not in
huge pay raises across the board or pep talks at

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BG/17

infrequent meetings, but in extensive
training. The training information falls
into two broad categories:

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BG/18

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

The overall marketing strategy of a
bank is formulated in the upper eche
lon of management. Often, however,
little or none of the reasoning behind
the final program is communicated to
the customer-contact level. Says Mr.
Berry, “It is not enough that customer
meeting personnel have been told they
are to be friendly to customers. They
must also understand why it is im
portant, why it is absolutely imperative
that the customer be served satisfactor
ily at the time.”
Include your customer-contact group
in each analysis of the reasons why
the bank is doing business the way it is,
why a certain package of services has
been put together to sell to customers.
You will instill a sense of high purpose
in them. Being included will make them
want to smile, want to tactfully handle
customer complaints, want to inform
people of the benefits of additional
bank services. Your employees in that
crucially important customer-meeting
function will be working with you, not
just for you, to meet the bank’s overall
objectives.
2. Training beyond routine transac
tions. Obviously, the correct handling
of money and check orders is important
to your bank’s efficiency. Most of this
type of training can be handled in an
on-the-job framework with an expe
rienced customer-contact person “show
ing the ropes” to a new employee.
But why not go beyond the mini
mum requirements? One hour every
month spent in a morning meeting—
covering such subjects as the functions
of the trust department, basic reason
ing behind consumer loans or the work
ings of the security system—is time
well invested. And there’s no need to
spend a lot of money on outside train
ing programs and materials; with a
little imagination and participation
from the other areas of the bank, your
internal resources are more than suffi
cient to provide a comprehensive view
of your bank. Other sources of training
support are check suppliers, some of
which offer free training on cross-selling
bank services and the telephone com
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dio-visual aids dealing with proper tele
phone procedures.
One area of training often over
looked is human relations. In the po
sition of customer service, where a
major function is handling complaints,
there is always the risk that an atti
tude will develop that the customer is
unpredictable, fickle, stupid, short
sighted, stubborn and generally bother
some. By providing some insight into
the motivations behind your customer’s
actions, you will enable your customer-

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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

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BG/19

contact group to cope better with an
angry or uninformed customer and
learn something in the process.
Show your customer-meeting people
that you truly value their contribution
to the bank; that you respect their in
telligence; that you realize their ca
pacity to absorb knowledge on all sub
jects relating to the overall bank struc
ture, and you will gain their respect
and participation. People do what’s ex
pected of them— so expect a lot and
give them the input necessary to do an
outstanding job.

Teach your employees how to handle
day-to-day problems tactfully—how to
solve the problem without losing the
business.
Banks formerly dealt only with the
very wealthy segment of the popula
tion or those people in big business.
Now, however, banks are for everyone.
Your bank has probably increased
its services to meet the needs of the
sm all consumer by offering checking
accounts, savings accounts, small car
loans, safety deposit boxes and at least
one bank credit card. You’ve also prob
ably taken steps to be more available
to that small consumer by installing
drive-up and walk-up windows, in
creasing banking hours and even in-,
stalling 24-hour teller machines.
But it’s not enough to be available.
All banks are available. And it’s not

enough to offer a wide range of ser
vices. All banks do. W hat the customer
is really looking for in this computer
ized business world is someone who
can give him personal friendliness, con
cern and empathy. These qualities can
only come from your customer-contact
group.
Help your employees to think each
transaction and service through from
the customer’s point of view. This is
developing empathy for the customer:
understanding what’s really bothering
him when his checking account is
charged for an overdraft, explaining
the mechanics of a service in terms that
he will understand, avoiding such cus
tomer-angering procedures as trans
ferring his telephone call three times
when he needs a question answered.
It’s important to train your people
to solve these day-to-day problems
quickly, easily and tactfully. An un
happy department store customer can
always return the merchandise, but an
unhappy bank customer is going to
take his money elsewhere. And no mat
ter how smoothly your bank’s internal
operations are functioning, errors do
occur in the long-term relationship. A
mark of your bank’s success is how well
you handle the problems when they
happen.
Here are some basic guidelines de
signed to help your employees to be

effective at customer contact:
1. Listen attentively and patiently
to the customer—hear him out. This
is effective because: (1 ) he will ap
preciate the personal concern shown
him by an attentive banker, and (2 ) he
will drop hints in the course of the
conversation regarding his other finan
cial needs, providing a basis with which
to cross-sell other services. An integral
part of listening is smiling at the cus
tomer; it’s the best way to communicate
interest and empathy.
2. Respond to questions. Instead of
saying, “I don’t know,” when someone
asks a question you can’t answer, it’s
better to say, “I don’t know, but I’ll
do everything I can to find out for
you.” Once again, the purpose is two
fold: (1 ) the customer will be pleased
by the personal attention he’s getting,
and (2 ) you will increase your own
knowledge of banking services when
finding the answer.
3. Remain calm with an angry cus
tomer. Every person who has worked
with the public has had to deal with
an angry customer who took it out on
the employee. The main thing to keep
in mind when this happens is that you
shouldn’t take it personally. It helps to
remember that, to the customer, you
are th e bank, and it’s the bank he’s
angry with, not you. So listen to the
customer with an understanding look

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BG/20

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

neottve Dmage

The same can be said about bank
ticipation in learning about bank ser
on your face; say to him, “I can under
vices is to ask employees to jot down
services. It’s important to explain the
stand how you feel,” and in most cases
technical part of a bank service (this
questions when they arise during the
he’ll calm down and might even end
course of business transactions. Later,
is where service knowledge plays its
up apologizing.
they can consult with their supervisor
part), but it’s also important for the
When a customer is upset about a
employee to point out the benefits of
or someone knowledgeable about the
mistake he thinks the bank has made
service in question. A broad base of
the service to the customer. Travelers
with his money it often turns out that
checks mean convenience and peaceservice knowledge can be developed
it was the customer’s mistake in the
of-mind; a bank credit card means
and the customer-contact person can
first place. But who’s wrong and who’s
move on to the next step in cross
prestige; a savings account means se
right is irrelevant; what really matters
selling.
curity; bank-by-mail means comfort.
is whether your customer stays your
This is the next step: Present th e
Showing the customer w hat’s in it fo r
customer after a problem comes up.
him to use another bank service is the
4.
Take the time to explain the ser services in term s o f benefits. Many
most effective way to convince him to
studies have been conducted on why
vice completely to the customer when
buy it. When he leaves your bank, he
people buy the things they do. The
opening an account. This can be diffi
isn’t taking home his car loan papers,
research shows that no two people buy
cult, especially when everyone has de
a product or service for the same rea
he’s taking home the benefits of the
cided to open an account on his lunch
sons; sometimes people don’t even
car loan (and the car) as he perceives
hour that day and there are lines of
know why they bought something. But
them.
impatient people waiting. But it’s im
Customer retention increases as the
we all have one characteristic in com
portant to explain the service at the be
mon: W e don’t buy the product or ser
number of services used grows. People
ginning of the account relationship;
develop a greater feeling of trust in
vice p er se, we buy the benefits we
otherwise, the customer will be back
their financial institution when it meets
will receive from that product or ser
two weeks later, and three weeks later,
vice.
all their money needs; they are also
and four weeks later, asking questions
more likely to take a broader view of
Take a television set as an example.
that shouldn’t have come up in the
the situation if an «rror should occur,
It’s not the box with the moving pic
first place. Spending five extra minutes
tures in it that someone buys; it’s the
instead of moving their money to an
at the account opening will save you
enjoyment, the relaxation, the gather
other bank in anger.
and your bank hours of problem-solving
ing of news that the consumer pur
By training your customer contact
time later.
chases. He hasn’t taken home the prod
group to know the bank’s services,
Remember, your customers don’t
uct, but rather the benefits he perceives
match the services to their customer’s
come to you because they understand
from the product.
needs and effectively point out the benyour services and interest rates better
than those of any other bank in town.
They come to you because they feel
that you understand them better than
anyone else.
Help your employees provide that
“extra” in personal concern and em
pathy the customer is looking for. You
will see results—not only with regard
to your bank’s growth, but your em
«¿a
ployees’ personal growth as well.
Teach employees to cross-sell ser
vices in terms of benefits to the cus
tomer.
As banks face increasing competi
tion, not only from other banks but
also from other financial institutions,
they are looking for ways to effectively
increase and retain their business.
Cross-selling has taken on added im
portance because the easiest, most ef
fective way to increase business is
through selling additional services to
^existing customers.
Before moving into the finer points
involved in cross-selling, it is important
Push buttons located at each tellers window, when acti
that the employee kn ow th e services.
vated, Indicate when teller Is free. This chimes and Illuminates
Your personnel must feel comfortable
NEXT PLEASE with an arrow pointing to direction of teller.
CustomAlert, through a thorough market study of Banks
with their service knowledge; other
and Savings and Loans, has found the simplicity of direc
wise, they will avoid selling oppor
tional assist far superior to that of complicating numbers
and embarrassing "Super Market Lights" over teller windows.
tunities for fear they will be asked
Your customer, once alerted, easily seeks out the vacant
questions they can’t answer. Also, the
window at first glance. Our satisfied users will testify to the
resulting customer approval In aiding In his banking business
employee must be convinced that the
through efficiency and security.
services are valuable or he will never
The newly Introduced model RC-2 Is completely remote
control and requires NO INSTALLATION. You simply plug
be able to convince the customer.
Into a convenient 110v outlet and hand each teller their
Informing your custom er-m eeting
Individual operator — that's It. Maintenance free operation
Is achieved by transforming to low voltage.
people of the services available at the
For additional Information write:
C u S tO IT IA lf i r t
bank is part of the internal training
977 N. MAIN ST.
function. One way to encourage par
ORANGE, CA 92667

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

The
Finishing
Touch"
for your
teller traffic system.

BG/21

efits of the services to that customer,
you will accomplish these important
objectives:
• You will increase your business
from existing customers.
• Satisfied customers whose financial
needs are being met by your bank will
become your best source of word-ofmouth advertising. People are looking
for advice and accurate information on
handling their money. When they find
out that your bank really makes the
effort to match their needs with good
services and important benefits to them,
they will put their trust in you and
their money in your bank. Your bank’s
growth depends on its trained, effec

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Your customer-contact group is the
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effectiveness is more directly related
to customer satisfaction than any other
factor. Make the most of the oppor
tunity to retain your customers, crosssell other services to them and bring
in new business by training your cus
tomer contact people to maximize the
opportunities presented to th em daily
by your customers.
With a knowledgeable and friendly
group of tellers and customer service
people, your bank can make the
changing market work positively for it.

C I P A I C
O

0 113 111

Ad Termed 'Deceptive'
Financial institutions are facing
close scrutiny of their advertisements
by consumer agencies. And the
agencies are quipk to blow the
whistle when they detect deception
on the part of the institution.
Recently the New York City de
partment of consumer affairs classi
fied a bank’s premium ad as decep
tive because the ad failed to inform
the public that anyone desiring ad
ditional items of the featured Comingware premium would have to
pay a nominal sum for each item in
addition to making a minimum de
posit.
The bank did not admit to any
wrongdoing, claiming that the omis
sion was not deliberate; it did agree
to correct the discrepancy in future
advertising.
A spokesman for the bank said
the discrepancy had been corrected
prior to the agency’s charge of de
ception. However, the damage that
the agency’s charge did to the bank’s
credibility will be difficult to erase.
The bank spokesman says its pre
mium advertising is cleared by legal
departments at both the bank and
its advertising agency. In the future,
the spokesman said, outside attorneys
will be asked to pass on advertising
copy.

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BG/22

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Directors & Officers liability insurance
can help you a lot. Just pick up the
newspapers these days. You’ll find
hundreds of stories of suits arising from
attempted mergers, price-fixing
accusations, anti-trust actions, or alleged
corporate waste.
As a result, a lot of companies,
including many on the Fortune 500 list,
have turned to American Home and
National Union for D&O help. We
underwrite mere of this insurance for
our own account than anv other U.S.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

company. We were one of the first to
offer it. Many others have started, and
then stopped, but we continue to offer
D&O coverage, with the same expertise.
Whether you’re a non-profit organiza
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We welcome inquiries from any
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BG/23

Shared S&L POS Network Planned
By Eight St. Louis-Area Institutions
BANK LAN E SIGN ALS, PLAQUES
A R C H IT EC T U R A L L E T T E R S
AND L E T T E R -L IT E S

Ask for free catalog today!
LA K E SH O RE M A RKERS
E R IE , PA. 16512

HIS MONTH will see the initiation
of what has been termed the first
application of a communitywide fi
nancial customer service between sev
eral financial institutions and a major
food chain in a metropolitan area of the
Midwest.
The service will enable S&L custom
ers to make deposits and withdrawals at

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BG/24

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

any of 45 Schnuck’s supermarkets in St.
Louis, St. Louis County and St. Charles
County. The network will be shared by
eight S&Ls in the St. Louis area.
Name of the service is Money-Matic
and more than 150,000 plastic account
cards are expected to be issued by the
end of this month. Cards are available
at no cost to any holder of a passbook
account at participating associations.
All card holders are issued PIN num
bers, which must be used by the cus
tomer to complete any transaction.
Deposits and withdrawals made at
the stores are transmitted to the desig
nated S&L by a direct line. Total time
necessary to enter a deposit or check an
account balance for a withdrawal is less
than six seconds.
Although supermarket courtesy desk
employees will handle all deposits and
withdrawals, each S&L is completely
responsible for its customers’ transacactions. Supermarket employees will not
have access to any S&L customer’s ac
count information.
A minimum transaction involves $25.
There will be no maximum on deposits,
which may be made by check or cash,
but withdrawals will be limited to $200
per day and are payable in cash only.
Customers will receive a duplicate de
posit-withdrawal slip for all transac
tions.
The supermarkets will not incur any
additional costs for the service because
S&Ls are paying the full cost of equip
ment and in-store operation as an ad
ditional service for their customers.
Money-Matic is operated by Remote
Service Unit (R SU ) Corp. and is autho
rized by the Federal Home Loan Bank
Board and the Missouri Savings and
Loan supervisor as a service corporation
to operate remote service units in re
tail establishments in the St. Louis met
ropolitan area.
Participating S&Ls represent more
than 40% of the S&L business in metro
politan St. Louis. Participants include
Bohemian Savings, Community Federal,
Economy Federal, Hamiltonian Federal,
Jefferson Savings, Lafayette Federal,
Northwestern Savings and Public Ser
vice Savings.
The service will be available at all
hours the supermarkets are open, which
presently is 14 hours per day, six days
per week.
Customers will receive savings state
ments monthly or quarterly showing de
posit and withdrawal transactions. The
statements will be similar to those is
sued to checking account customers by
commercial banks. * •

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Federal Reserve Bank of St. Louis

This unitized approach is unique and effective. Let us show
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Paterson, N.J. 07 5 0 3

Big Plans Bring Big Results
At New York Branch Opening
A nd You Don't Have to Be F irst With a Facility!

NE WAY to stay big is to think big! That’s the
philosophy of the people at Bowery Savings,
New York City.
The institution’s management decided to estab
lish a branch on eastern Long Island last year,
taking advantage of a new banking regulation that
permitted financial institutions to open one new
branch per year anywhere in the state.
Of course, Bowery wasn’t the only institution
with an eye toward operating a profitable branch
in Suffolk County, but, as the state’s largest savings
institution, it decided to think big so it would stay
big.
The following marketing objectives were set for
the month-long opening celebration for the new
Bay Shore Branch last summer :
• 15,000 new accounts in 30 days.
• From $15-20 million in new deposits in 30
days.
This was a pretty tall order, considering that
Bowery’s competition was establishing branches in
the same county, actually securing what were con
sidered to be the best locations and opening their
facilities before Bowery’s was ready.
But Bowery didn’t run with the crowd. Instead
of selecting a site on the north shore, the area of
densest population, it elected to build on the south
shore, in a large shopping center. Instead of open
ing its new branch in March, when all the other
new branches were conducting grand opening
events, Bowery opened in late June, after all the
hoopla of the other openings had died down.
The institution had some big guns up its sleeve,
namely the services of Joe DiMaggio, the ex-New
York Yankee, as its spokesman, and the services of
the Financial Promotions Division of Sperry &
Hutchinson Co., the firm that has handled all the
gift campaigns the Bowery has sponsored in recent
years.
As an initial step in planning the marketing blitz
for the new facility, Bowery and S&H undertook
a research project: An illustrated brochure featuring
90 gift selections was prepared and shown to some
300 qualified prospects in the south shore area to
pre-test the drawing power of the gifts. A total of 68
gifts in four categories was selected and four-color

BG/26

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

brochures picturing the gifts were prepared as part
of the grand opening materials. One million copies
of the brochure were printed and distributed via
local newspapers and by Person to Person Inc., a
personal service organization whose staff hand-de
livered 50,000 copies to railroad commuters, offices,
stores and selected targets in the facility’s trade area.
An advertising blitz was launched via newspaper
and radio. The ads featured Mr. DiMaggio, who in
vited the public to visit the new branch and pick a
gift from the 68 name-brand products on display.
The branch was crowded virtually from the first
hour, according to a Bowery spokesman. Traffic was
channeled through stanchioned aisles and extra help
was brought in to handle the business generated by
the crowds.
Depositors could preview the gifts from a mer
chandising display on the bank floor. The gifts were
displayed behind a pilfer-proof plexiglass screen.
In order to qualify for a gift, a deposit of at least
$250 was required. Twenty gifts were available for
those depositing from $250-$999; 20 gifts were of
fered to those depositing between $1,000 and
$4,999; 24 gifts formed the collection for those de
positing $5,000 or more; and four gifts were avail
able to those depositing $10,000 (in two $5,000
accounts).
After making deposits, customers were directed

Customers sign up for sweepstakes at grand opening of
Bowery Savings Bank's new Bay Shore office on Long Island
last summer. More than 75,000 people entered sweepstakes.
Bank took in $28 million in new deposits.

Now, at a Special LOW Price . . .
T h is
A

-V o lu m e M a r k e t in g L ib r a r y

T h r e e

a n u a ls

L Y

$ 2 5 .9 5

1. H ow to F lan , O rganize & C ond u ct B an k Anniver

96 pages, 16 illustrations; starts by telling you

saries. . . . T h e com plete guide to procedure w hen

premium term s and the history of incentives, roams

holding a form al opening, an open house, any

through such topics as trade area studies, tying in

kind of bank celebration; 166 pages, m any illus

w ith current events, getting new business from old

trations; 12 chapters starting w ith “F irst Things

customers, m otivating staff m em bers and conclud

F irst,” ranging through “Add a L ittle Pizazz and

ing w ith a series of six case histories of actual bank

O om -pah,” concluding w ith “E x p ect the U nexpect

promotions th at obtained exceptional results.
R eg u lar P ric e : $10.95

ed”;

eight

appendices

containing

actual plans,

budgets, programs used by banks in actual ce le
brations; a com pletely factual, step-by-step howto-do-it book now in its second printing.
R eg u lar P ric e : $16.00

M O N EY

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G U A R A N T E E —If

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2. H ow to W rite B an k P u blicity and G e t I t P u b

f o r f u ll r e f u n d .

lished. . . . T h e com plete guide to procedure in
w riting pu blicity releases and how to prepare them
so th at new spaper and m agazine editors w ill use
them ; 61 pages; 12 chapters w ith titles such as
“Constructing the News Story,” “Placing the News
Story,” “H andling

‘Sticky’

Situations,”

“D ealing

w ith News M edia”; another com pletely factual,
step-by-step how -to-do-it manual.

Please send us by return mail:
— copies, Bank Celebration Book @ $16 each
— copies, Bank Publicity Book @ $5.25 each
— copies, How to Plan an Incentive Campaign @ $10.95 each
— SEND A LL THREE BOOKS AT THE LOW PRICE O F $25.95
□ Check enclosed............................

R eg u lar P ric e : $5.25

Name ............................................. ............

3. H ow to P lan , O rganize and C ond u ct an In cen tiv e
C am paign. . . . M id-C ontinent

MID-CONTINENT BANKER
408 Olive St., St. Louis, Mo. 63102

Title ............... ............

.......................................................................................................

new est

Street ....................................................................................................

how -to-do-it m anual; a com plete guide to proce

City, State, Zip ..................................................................................

dure in evolving an effective incentive cam paign to
sell bank services and/or increase bank deposits;

(Please send check with order. In Missouri, add 4/ 2% tax.)

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Banker’s

Bank

BG/27

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VISIBLES

to the institution’s gift center, where
part-time college students handled the
distribution of gifts.
Additional traffic was drawn to the
bank by a sweepstakes prize display
featuring a sailboat, color TV, stereo,
CB radio and a bike. About 75,000
people entered the sweepstakes. In ad
dition to the main sweepstakes prizes,
the bank offered weekly prizes of 10
$25 gift certificates and daily prizes
of five $5 gift certificates, all redeem
able in nearby stores.
When the smoke cleared from the
month-long grand opening event, 18,500 new accounts were on the books,
considerably more than the expected
15,000. The objective in new deposits
had been from $15-20,000,000, but it
turned out to be $28 million! The pro
jected requirement in gifts had been
from 12-15,000 units, but actual dis
tribution was 17,500 units!
The bank had agreed to swap de
fective gifts for 60 days after the pro
motion closed, but not one complaint
was received.
By thinking big, the people at the
Bowery proved that it’s possible to
carve a large slice of new business out
of an over-banked area! • •

RESULTS?
WE ARE SAVING
BANKS
18% to 31%
A YEAR IN
OPERATING
COSTS. . .
THAT’S WHY
OVER 200
BANKERS WILL
RECOMMEND US.
For detailed case histories,
call 214/ 241-9444 or write:

hjb
Howard J . Blender Company
2695 Villa Creek Drive
Suite 240
Dallas, Texas 75234
BG/28

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Must Reading (or Every Director and O fficer!
These Three Board-Related Books
(Including Revised Edition of Conflicts of Interest)
C o n flic ts
o f In te re s t

C o n flic ts o f In te re s t
.hr

««if

iwtimwu :

R e s p o n s ib ilit ie s
*mti&k

o f B a n k D ir e c t o r s

C o m p o s it io n
a n d C o m p e n s a t io n
o f B a n k B o ard s

(1) C O N FLIC TS O F IN T E R E ST FO R
D IREC TO RS AND O FF IC E R S O F
FINANCIAL IN STITU TIO N S $6.25
. . . The new, revised edition includes
everything directors and officers should
know about the topic: Presents the
problem of “conflicts,” gives examiners’
views of directors’ business relationships
with the bank, examines ethical pitfalls
involving conflicts, conflicts in trust de
partments, details positive actions for
reducing potential for conflicts. Other
important data are the Comptroller’s
ruling on statements of business interest
of directors and principal officers of
national banks and sample conflict of
interest policies in use today that can be
adapted by your board. N ew m aterial
includes F D IC regulation on insider
transactions.
QUANTITY PRICES

2-5
6-10

$5.50 ea.
$5.25 ea.

11-25
over 25

$5.00 ea.
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(2) R E SP O N SIB IL IT IE S O F BANK
D IREC TO RS $4.95 . . . Written by
Raymond Van Houtte, president &
CEO of Tompkins County (New York)
Trust Co., this book is “right” for to
day’s problems. Due to the economic
influence banks have on their commu
nities, the rapid growth of holding
companies and the ever-growing “con
sumer” movement, directors must know

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Federal Reserve Bank of St. Louis

what is expected of them and the bank
they serve in terms of responsibilities
to depositors, shareholders and the pub
lic. Responsibilities examines recent
court decisions, investment return, con
tinuity of management, long-range
planning, effects of structural changes
—HCs, branching, mergers—on com
petition, and more.
QUANTITY PRICES

2-5
6-10

$4.50 ea.
$4.35 ea.

11-25
over 25

$4.20 ea.
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author, Dr. Lewis E . Davids, editor of
The BANK BOARD Letter. This book
will give the reader an insight into the
variety of occupations represented on
bank boards; the number of inside and
outside directors; frequencies of meet
ings; salaries paid. Also included are
many tables, showing retirement ages
for directors, per-meeting and annual
fees, highest paid directors, etc. De
signed to help you make comparisons
and put your board structure and fees
in proper perspective.

(3) COM POSITION AND COMPEN
SATION O F BANK BOARDS $4.25
. . . A statistical analysis of bank boards
based on comprehensive surveys by the

QUANTITY PRICES

2-5
6-10

$3.85 ea.
$3.60 ea.

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THE BANK BOARD LETTER
408 Olive St., St. Louis, Mo. 63102
Send These Books:
................................

copies, Conflicts of Interest

................................

copies, Responsibilities of Bank Directors $

................................

copies, Composition & Compensation

Total enclosed

Name .................................................................... Title ...........
Bank ..............................................................................................
Street

...........................................................................................

City, State, Z ip .............................................................................
(P le a se s e n d c h e c k w ith order. I n M isso u ri, a d d 4%% ta x.)

B G /29

Flatware Holds Own as Incentive;
Boosts Savings Accounts by 30%
First Alabama, Montgomery, Nets $14 Million

E SP IT E the great variety of incentives being
premiums given away to begin a continuity promo
tion and tracking the retention of participating ac
used by financial institutions to gain new cus
counts.
tomers and deposits, an old standby, stainless flatware, is “hanging in” as a proved deposit generator.
To reach these goals required a good supplier, a
One of the most recent success stories with tradi
good offer, good records and a strong promotion, Mr.
tional incentive promotions is that of First Alabama
Boyd said.
Bank, Montgomery, which has just completed a year
The process of setting up the program began by
interviewing suppliers and obtaining samples of sin
long promotion featuring the 1776 pattern of stain
less flatware supplied by Salem China Co.
gle-item and continuity premiums.
After 10 months of the promotion— March through
According to Mr. Boyd, these samples were taken
December, 1976—the major goals relating to new ac
to a large shopping mall where a team of interview
counts and deposits were exceeded with a 30% in
ers conducted a customer preference survey. Shop
pers were asked this question: “If you were purchas
crease in new account openings and nearly $14 mil
lion in deposits, said James K. Boyd Jr., senior vice
ing a large appliance and, because of that purchase,
president-marketing.
you were given the opportunity to buy any item on
this table at a reduced price, which item would you
The $14 million represents just the deposits made
select?”
to get the flatware, he added.
After the shopper made his selection, the inter
But exceeding incentive promotion goals is noth
ing new to First Ala
viewer
turned
over
bama. It did well with
cards showing the prices
previous p ro m o tio n s
of each item as suggest
featuring flatware, china
ed by the premium sup
and cookbooks.
pliers. After seeing the
Late in 1975, an in
prices, the shopper was
crease of $5.5 million
asked if he wanted to
in regular savings and
change his mind.
Free 5-piece setting w hen you save $25 at
time open accounts was
The purpose of this
First Alabam a. Come in and get the details.
budgeted for the bank
procedure was, first, to
see which items were
for 1976. The market
most liked and, second,
ing department consid
ered the use of a pre
to determine if pricing
mium to be the most
was a consideration in
their choice. The inter
effective way of insur
views were continued
ing that this goal be
reached, In addition to
until the proportions of
age, sex and racial quo
the $5.5 million savings
tas reflecting the popu
deposit increase, the
lation of the Montgom
goals for premium pro
ery marketplace were
motion included an in
reached.
crease in account open
A few days later,
ings, a sell-through or
the three most popular
liquidation of the pre
items from the first sur
mium cost, more than
R rs t#Aola
b a m a Bank
f M ontgom ery **
vey were returned to
$12 million participa
the mall and the entire
tion to cover costs of

PAINLESS
STAINLESS.

BG/30

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

TODAY There’s Only ONE
WORKING
APPRAISAL SYSTEM!

WHAT

D EP R EC IA T ES

ON A MOBILE HOME?

For years mobile homes have been sold on a turn-key, instant
move-in basis so that it has become totally confusing to all
segments of the industry with regards to what causes
depreciation.
Goodies such as furniture, decor packages, appliances,
etc., all depreciate rapidly, as anybody knows. A two
year old couch has no real market value, yet if it orignally sold in a mobile home, many industry people have a
hard time accepting the simple fact that the couch has
depreciated.
Goodies, for some time now, have rep
resented about 25 — 40% of every mobile home deal and
must be properly allowed for in appraising a used mobile
home deal.
Mobile Homes (Houses) have very little depreciation
today and in fact some are actually appreciating in value.
After all, if a home is properly maintained, why should a
2 X 4 in a mobile home wear out when it doesn't in a
stick built house? Most mobile homes today, once loc
ated, are never moved so if they are properly blocked and
maintained, they should not "wear out" and therefore
are holding their values.
Many other factors such as site improvements, condition of
unit, geographic area, and demand do also affect the sales
values, both up and down. By using the UniComp appraisal
system (book and valuation worksheets) all of the individual
factors of a mobile home deal can be determined.

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Federal Reserve Bank of St. Louis

UniComp's mobile home appraisal system, which has been in
use nation wide since 1975, works much like conventional
real estate appraising. The system consists of a UniComp
trade-in guide on the values of used mobile homes and an
appraisal valuation worksheet. The two simple, but basic
steps to use are as follows:
S t e p l: On site inspections which determine the exact
items included in the deal, condition of home,
extra improvements such as Add-a-rooms, site
improvements such as awnings and skirting, etc.,
and consideration of the site location or area.
This first step does not require an "expert" on
mobile home values, but instead a person who
can look the home over and fill out the work
sheet itemizing all the above items.
Step 2: Valuation determination is handled at the office
by any person who is checked out and exper
ienced in using the book. Once the appraisal
worksheet is completed, then the values of each
segment of the deal such as house, furnishings
and site improvemets are clearly visible.
The most important two factors achieved by Real Estate app
raisals are on site varification and a truly disinterested third
party for values. The UniComp appraisal system accompli
shes these very important checks or balances on the day to
day flow of deals.
There is a correlation of original prices and used unit values.
As in the case of site built housing, there is a relationship of
values to original prices. Two houses of 1500 sq. ft. when
new, with one a top quality custom built home and the
other a economy built tract type house, would certainly have
different values as the years go by. Likewise, two differently
built mobile homes of the same size will not have the same
values when used because of differing qualities of construct
ion.
The original price does reflect the relative quality level of the
mobile home and is the reason a value guide is so very nec
essary in setting values on used units. No person, regardless
of the years in the industry, can accurately remember the
literally 10's of thousands of models built each year, so a
value guide is imperative to any truly good appraisal system.
FO R F U L L IN FO RM A TIO N W R IT E :

UNITED COMPILATION, INC.
POST OFFICE BOX 227
GURNEE, ILLINOIS 60031
TELEPHONE AREA (312) 336-0030
PR ICIN G AND A P P R A IS A L S P E C IA L IS T S FO R T H E
M O B ILE HOM E, R E C R E A T IO N A L V E H IC L E , M A R IN E
AN D A U TO IN D U S T R IES .

process was repeated. Results of the
second survey indicated that the most
preferred item was Salem’s stainless flatware.
A price of $3.75 per unit was deter
mined, based on the basic cost of the
unit and building in a small profit mar
gin, handling costs and taxes.
It was decided that not only the first
unit would be offered free, but the
eighth unit. It was felt that this extra
incentive would encourage customers to
go beyond the usual eight-place setting
of flatware, thus extending their par
ticipation in the continuity promotion.
A minimum deposit of $25 to a sav
ings account was required to get the
first free unit as well as to purchase
subsequent units. Past experience indi
cated that higher deposits would be
made, but the low requirement was
considered an inducement for broad
participation on the part of the public,
Mr. Boyd said.
Included in the offer was the oppor
tunity to buy 73 pieces of flatware and
a chest with a deposit of $1,000 or
more to a regular savings, time open ac
count or a CD. The 73-piece unit was
priced at $49.95, but Mr. Boyd feels
now that the price could have been set
$10 higher with no negative effects.
Customers making qualifying de
posits were given certificates by tellers
that carried the amount of the deposit.

The customer was instructed to take the
certificate to a redemption center, enter
her name and account number and turn
the certificate in to receive her flatware.
Personnel at the redemption center
asked customers if their accounts were
new or existing and entered this in
formation on the certificate. Thus, the
certificate became the primary research
data source.
When a customer received her first
place setting, she received a participa
tion card listing all available units of
flatware. Each time a place setting was
received, a notation was made on this
card. The cards served as reminders to
customers of how many units they had
received as well as how many other
units were still available.
The program was launched in March,
1976, to take advantage of tax refunds
being received by customers at that
time. The promotion was carried out in
three phases, Mr. Boyd said. Phase one
was the introductory period, extending
through May. During this period, the
theme of the promotion— “painless stain
less”—was established. The “painless”
moniker referred to the use of a tax
refund to start the collection, eliminat
ing the need for customers to dig into
their savings for funds.
Phase two was a reminder mini-cam
paign that ran for three weeks begin(C ontinued on p ag e B G /3 8 )

a 5-character
m essage center!
Words change or
travel. W ith time
and tem perature.
Now even the smaller financial institu
tions can afford a message center display
fo r a d v e r t i s i n g or p u b l i c s er v ic e .
Daktronics Venus 500 has 32 columns of
lamps with seven 15-watt bulbs per column
for displaying 18” high characters. Flash
on as many as 16 words of five letters, or
less, plus time and temperature or run a
traveling message of up to 16 words of up
to 16 characters each. (The word “ Con
g ra tu la tio n s” is shown traveling in the
photo.) Plus time and temperature
M essa ge s are p ro gra m m e d f r om a
desktop keyboard console that lets you
see the message on the screen before it
appears at the message center.
At far less investment than our standard
10-character display.

DAKTRONICS
INC.

Write for literature and prices—
D A K T R O N IC S, INC.
B ox 229- J B ro o king s, SD 57006
T e lep h o n e 6 0 5 /6 9 2 - 6 1 4 5

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

W e design the function first and then
encase your operation in a building
that reflects the Bank's commitment to
the strength and progress of the com
munity.

IBBC

11054 SO. MICHIGAN AVE.

CH ICAGO, ILL. 60628

PHONE: 312/568-1030

8111-B NO. UNIVERSITY

PEORIA, ILL. 61614

PHONE: 309/692-2625

Dual Control Countersignatures Urged
To Protect Dormant Savings Accounts

SAVINGS account customer of an
eastern financial institution com
plained to the bank’s president that she
had checked the balance in her account
and had found that someone had forged
her name to a withdrawal slip in the
amount of $10,500.
Subsequently, one of the bank’s tellers
volunteered admissions to management
that for a period of two years she had
been withdrawing funds from several
inactive or dormant savings accounts.
The money had been wagered at near
by race tracks. The teller cooperated in
a review of the mishandled accounts
and the loss was found to be in excess
of $60,000. The teller had been em
ployed by the institution for three years.
A recent Loss Prevention Bulletin of
Scarborough & Co., Chicago-based in
surance underwriter, cautioned financial
institutions to watch dormant accounts.
Oscar W. Jones, director, Loss Pre
vention Services at Scarborough, ad
vises the exercise of proper dual control
over dormant accounts. Such control in
cludes keeping account statements from
tellers and bookkeepers when they are
ready for delivery to depositors, keep
ing nondeliverable account statements
under audit control and including dor
mant accounts in the institution’s direct
verification program.
If these regulations are not observed,
Mr. Jones writes, serious internal con
trol weaknesses are being permitted
that could result in major losses.
Financial institutions should check to
make sure they are taking the necessary
precautions against embezzlement of
dormant accounts, Mr. Jones writes.
Dormant accounts are a frequent
target for the would-be embezzler. The
knowledge that many of these accounts
will never be claimed often tempts
personnel to “raid” them through the
use of forged checks and withdrawal
tickets. Special controls are needed,
Mr. Jones writes, to protect against these
situations.
These include dual control of signa
ture cards, counter-signatures on all
withdrawal tickets and continuous audit
of all transactions in the separate
ledgers or computer printouts to which
these accounts should be transferred.
Mr. Jones also writes that continued
concealment and growth of dormant ac
count defalcations have been made
possible by alteration of account state
ments prior to their delivery to de
positors.
Statement balances can be raised

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

and withheld deposits can be entered.
Any employee who can gain access to
the same statements month after month
can perpetrate this scheme, he writes.
For example, a teller may misap
propriate a dormant account customer’s
reactivating mailed-in deposit, inter
cept his statement and make a false
entry thereon to conceal his theft; or
a bookkeeper may forge and negotiate
a check outside the institution and in a

similar manner remove the item from
the statement and destroy it.
These possibilities illustrate the ab
solute need for adequate safeguard of
depositors’ statements and canceled
checks and withdrawal tickets during
their monthly preparation and while
they are awaiting delivery to depositors.
Monthly rotation of employees pre
paring statements constitutes the best
safeguard against this exposure, Mr.
Jones writes.
Direct verification of dormant ac
counts should occupy the most promi
nent place of importance in the various
audit and control programs available
to an institution, he writes. • •

BayBanks Consolidated Statement Accounting soft
ware gives you complete capabilities in new N.O.W.
accounting, based on nearly four years of user
experience.
This multi-bank, multi-branch, single-statement
banking system also handles Checking, Statement
Savings, Passbook Savings, Notice, Club, Cash
Reserve, Transfer and Overdraft accounting—all
under a single account number. One pass of the
Master File executes all personal and/or business
customer multi-functions. The system produces a
wide variety of operating and management reports to
provide the kinds of information and control you need
to run a modern bank.
Over 60 banks with deposits ranging from
$5 million to $900 million are using it today.
Get all the details. N.O.W.
Call George Waggoner (collect)
at 617-899-2222
for literature or a demonstration.

BayBanks Data Services
295 Weston Street
Waltham (Greater Boston), Mass. 02154
BG/33

Prepare N O W for Annual Meetings

Booklets That Aid (1) Bank Management
• How to Prepare for Kidnap/Extortion
Threats. 4-page study, outlines security
precautions to take at the bank and at
home, sample “alert” system, action to
take during and after threat. No. 114, 3
copies for $1.
• So Your Husband Is a Bank Director.
2 pages. Outlines for the bank director’s
wife the “sensitive” nature of her hus
band’s directorship. Stresses the confiden
tial nature of the banking business; dis
courages bridge-table gossip! No. 115, 3
copies for $1.
• A Code of Ethics. 4 pages. Sample
policy statements by two banks, covering
personal conduct of officers, inside and
outside the bank. Example: sets criteria
for conflict of interest, political activity,
outside interests, trading in bank stock,
gifts and entertainment that can be ac
cepted by officers. No. 116, 3 copies $1.
• Capital Adequacy. 4 pages. When does
a bank have enough capital? Should a
bank resist supervisory pressure to increase
capital? Should a committee of board mem
bers keep abreast of capital requirements
for their bank? These and other questions
discussed. No. 117, 3 copies for $1.
• The Bankers’ Handbook. Considered the
most complete and definitive reference
source covering current practices. It places
the money knowledge of 90 of the country’s

(2 ) Bank Directors
(3 ) Bank Stockholders
THREE NEW STUDIES

• Risk Management for Bank Directors.
An outline of what bank directors should
know about risk management in order
to adequately protect their bank and
themselves in light of their position of
fiduciary trust. No. 140, 3 copies for $1.
• Bank Ethics and the Board. A hypo
thetical case study called “The Water
gate Bank,” which outlines various un
ethical practices engaged in by a “fic
titious” management. Problems are
presented; questions asked; and poten
tial solutions offered. No. 141, 1 copy
for $1.
• What Every Director Should Know
About Employee-Stock Ownership Plans
( ESOPs). Ever since the Employee Re
tirement Security Act (ERISA) became
law in 1974, a tremendous amount of
publicity has been given to pensions,
particularly the use of ESOPS. What is
an ESOP? Is it for your bank? This
study poses some questions and an
swers. No. 142, 1 copy for $1.

pendent accountant engaged to conduct
an opinion audit, (2) to an internal bank
auditor who wishes to make his work more
effective and (3 ) to a bank director who
wishes to compare procedures followed by
his bank with the modem methods out
lined. No. 121, $32.

leading bankers at the fingertips of the
banker or businessman, in a concise, ana
lytical style. In it are the answers to most
of your questions about banking—easy to
use. 11 major sections—in 87 chapters.
1230 pages. No. 120, $30.00.
• Bank Audits and Examinations. This
study, written in non-technical language,
is designed to be helpful (1) to an inde

• What Every Bank Director Should
Know About Bank Counsel. A pithy dis
cussion of the advantages and disadvan
tages of a bank maintaining full-time coun
sel, and whether that counsel should be an
elected director. The counsel-director re
lationship is also covered—a vital relation
ship in these days of complicated legal
maneuvering. No. 129, 3 copies for $1.
• Management Policies for Commercial
Banks. 2nd edition by Howard D. Crosse
and George H. Hempel. Substantially re
vised edition dealing with major policies of
liability and asset management in banks.
Includes examples of major policies and
the relationship of policy makers and the
issuing of policy. Examines lending prac

tices, personnel, marketing management
and portfolio management and capital
structure. No. 131, $15.95.
• Management Succession. 8-page study.
This has been termed the number one
problem in banking. Directors have the
legal duty to staff their banks and this
publication provides invaluable aids to as
sist directors in this area. Includes a com
prehensive checklist for management de
velopment. No. 133, $1.
• Bank Stock Prices. How the price range
of a bank’s stock should be determined is
discussed in this four-page study. The pros
and cons of high and low stock prices are
examined so directors can determine where
to set the price of their bank’s stock. No.
134, 3 copies for $1.
• What Every Bank Director Should
Know About Public Relations. A veteran
journalist and PR man describes what PR
is and how a message can be relayed to
the public: how the good works of your
bank can be publicized. Includes an ex
ample of a deposit-building program that
worked; also describes how the bank’s
personnel were “sold” on the program,
thus insuring its effectiveness. No. 135, 3
copies for $1.
• What Every Director Should Know
About Personnel Management. One im
portant aspect: evaluation of employment
policy . . . the director should understand
this. Also, each bank should have a re
cruitment policy and a general policy with
respect to the role of fringe benefits. No.
139, 3 copies for $1.

• Commercial Problem Loans. A study
that makes a significant contribution to
improving lending skills by filling a
void in the loan department’s litera
ture. The problem loan is identified in
detail and a program of supervision is
outlined. The volume includes a 41page chapter on collecting problem
loans and a case study of a fraud that
brings all the points discussed into full
play. Also included are a complete
sample credit file and a hypothetical
credit policy statement. ' Published in
1974. No. 137, $18.

Order by Number Using Coupon on the Opposite Page
BG/34

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Federal Reserve Bank of St. Louis

Be a Step Ahead of Bank Regulators!
Examiners expect banks to have Written Loan Policies

Send TODAY for your copy of the revised and enlarged edition of The Bank
Board and Loan Policy, a 40-page manual that discusses the reasons for a bank
having a written loan policy. Included are current loan and credit policies of
four well-managed banks that can aid your bank in establishing broad guidelines
for its lending officers. A written loan policy can protect directors from lawsuits
arising from failure to establish sound lending policies!

C h eck B o x N o. 1 1 3 , $ 4 .2 5 p e r co p y

O T H E R M A N A G E M E N T -D IR E C T O R M A N U A L S
• Bank Directors and Their Selection,
Qualifications, Evaluation, Retirement. 24
pages. Answers key questions concerning
director selection, retention and retire
ment. Special section: the prospective di
rector and how he should be expected to
contribute to the bank’s success. No. 101,
$2.85 per copy.
• Bank Shareholders’ Meeting Manual. 60
pages, 8% x 11". Designed to aid directors
of state-chartered banks, this book dis
cusses conflict of interest, minority rights,
fuller disclosure, voting of trust-held se
curities, preparation of stock purchase and
stock option plans, also capital notes and
debentures.
The manual also is helpful in updating
annual shareholders’ meetings at a time
when stockholders are becoming more in
sistent on receiving meaningful information
at annual meetings and in annual reports.
No. 102, $7.75 each.
• A Model Policy for the Bank’s Board
of Directors. 24-pages, reviews typical
organizational chart, duties and responsi
bilities of managing officers and various
standing committees, loan, investment and
collection policies, and an outline of a
suggested investment policy. No. 103,
$2.85 per copy.
• Annual Review for Officer Promotions.
4-page study, contains 12 point-by-point
appraisals of officer performance and
potentials. No. 104, 3 copies for $1.
• Check List of Audit Procedures for
Directors’ Examination. 23-part outline en
compasses review of major audit cate
gories. Special 4-page study. No. 105, 3
copies for $1.
• Bank Board Policy and the Preroga
tives of Operating Management. Special
study focuses on utilization of skills and
knowledge of “outside” directors; should
the board do more than merely set
policy?; who should operate the bank—the

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

board or management? No. 106, 3 copies
for $1.
• The Board of Directors and Effective
Management. Harold Koontz, 256 pages.
Critical look at directors’ role: functions
and responsibilities, decision areas, control,
relationship of success to more productive
management. No. 107, $13.50 per copy.
• Deferred Compensation Plan for Direc
tors. Explanation of an important IRS
Ruling that will allow your directors to
collect directors fees after retirement, thus
offering substantial tax savings. No. 108,
3 copies for $1.
• A Business Development Policy. A plan
for the small bank in setting up objectives
and establishing responsibilities in the of
ficer staff for getting new business, holding
present business. No. 109, 3 copies for $1.
• SALES: How Bank Directors Can Help.
Detailed outline of a program that has
developed more than $40 million in new
business for a holding company chain in
the Southeast. No. 110, 3 copies for $1.

S E E O P P O S IT E P A G E F O R

• Planning The Board Meeting (Revised
edition). This 64-page booklet provides
some workable agenda, suggestions for
advance planning and also lists type of re
ports a board should receive monthly and
periodically. It emphasizes the need for in
forming the board as quickly and concisely
as possible. An excellent supplement to
plans your bank already has. No. I l l ,
$4.50 per copy.
• Policy Statement for Equal Employ
ment Opportunity. 4-page study, contains
suggested Equal Opportunity Program
aimed at preserving a bank’s eligibility to
serve as federal depository. No. 112, 3
copies for $1.

O TH ER

T O P IC S

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Enclose check payable to
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Name ..............................................................
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Home Video Game Brings in $10 Million
G et an Odyssey
HomeVideo Gam e
when you save a t
H ie F irst. S Q Q 95

As Pre-Holiday Incentive in Chicago

HAT’S a good way to get more
than $10 million in savings de
posits? Try offering a TV game that en
ables people to hold hockey play-offs
and tennis tournaments and determine
the neighborhood smash champion—
all in their living rooms!
The game is called the Odyssey
Home Video Game. It’s being used as
premiums by banks and thrifts and
the institutions are reporting good re
sults.
First National, Chicago, offered the

games last fall. John K. Tomick, di
rector of product promotion, said no
other premium has pulled more new
customers for the bank.
Sales exceeded 15,000 over the threemonth period the games were offered.
About half the customers and almost
half the deposits involved were new to
the bank. On peak days, more than 40
games were sold at $39.95, plus tax, to
people depositing $250 in new or exist
ing savings accounts.
The bank used Chicago Black Hawk

.A wm4 f
im
j

! ! ■

____ ...... I 1—2»
The First Nijtional BankofChicago Chicago’s Bank

GUIDE YOUR CUSTOM ERS TO THE
FASTEST SER V IC E A V A ILA B LE WITH

HIGH IN TEN SITY
DRIVE-IN SIGNS

CUSTOM ERS A U TO M A TICA LLY
SIGN AL TH EIR A R R IV A L WITH

DRIVE-IN A LER T
Pleasant chime sounds when car passes
over electronic detection area, alerting
tellers who may be away from drive-in
window. Customers receive fast service.
Tellers operate more efficiently. Also
counts cars.

A C T R O —L IT E SIGN S immediately attract
and direct drivers entering the facility. The
extraordinarily brilliant O P EN /C LO SED or
R E D /G R E E N message even pierces direct
sunlight. Stainless steel or statuary bronze
finish. Easily installed and maintained.
Versatile mounting. Immediate delivery.
Satisfaction Guaranteed!

A rlin g to n Hts., III. 60004 • (312) 398-0633

810 East Crabtree

S IL L C O C K S
IS

REA D Y
E

YO U A R E

Send for sam ples, literature and
complete details from
The TO TA L S E R V IC E
P L A S T IC CA RD COM PANY
•
THE SILLCO CKS-M ILLER COMPANY
310 Snyder Avenue
Berkeley Heights, N. J. 07922
N.J. 201-665-0300 • N.Y. 212-695-0440
BG /36

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

star Tony Esposito in its print ads,
which bore the legend, “Nice Save,
Tony.” Ad copy included the follow
ing: “Chicago Black Hawk Tony Es
posito makes some spectacular saves
everytime he’s on the ice. But even
‘Tony O’ can’t beat the save you can
make at The First National Bank of
Chicago.”
Ad copy continued with information
as to how customers could qualify for
an Odyssey game.
They were informed that the game
connects easily to any TV for three ac
tion-packed games in one. “Host your
own hockey play-off series. Hold family
tennis tournaments. Or determine the
neighborhood Smash champion,” the
ad said.
TV and radio spots were also used;
Total media advertising and promo
tional expense for the promotion was
about $250,000, considered to be a low
sum when compared to the number of
accounts and deposits generated, Mr.
Tomick said.
The game was selected, Mr. Tomick
said, because it was felt it would be
just the thing for Christmas gift giving.
The bank beat everyone else to the
punch, Mr. Tomick said, by offering
the games early in the shopping season.
Sales peaked during the October in
terest payment period and again just
prior to Christmas. Sales averaged 212
units per day during the 15-week pro
motion.
According to Mr. Tomick, the Odys
sey game was chosen primarily because
it offered more features for the price
relative to comparable models. It was
also felt that the game’s manufacturer,
Magnavox, was a reputable firm with
the most experience in both home video
games and servicing financial institu
tions, he said.

Newcomer Center Aids New Arrivals,
Is Source of New Business for Bank
N E F F E C T IV E way for a financial
institution to attract new business
is to organize a newcomer center. A
well-managed center enables a bank or
thrift institution to beat its competitors
to the punch by soliciting newcomers
before they make their moves!
Hancock Bank, Gulfport, Miss., has
such a center. Its purpose, besides
generating new business, is to make it
a simple matter for families moving to
the Gplf Coast for the first time to be
come acquainted with the area and the
bank even before they arrive.
The department, managed by Mrs.
Carolyn Dabbs, who is also manager of
the bank’s women’s department, sup
plies a copy of the daily newspaper to
the newcomer’s old address before the
move is made. It also supplies new
families with a newcomer kit, which
includes facts of life about the Gulf
Coast, a sampling of living costs, street
maps and a Mississippi drivers license
manual.
The department also provides per
sonal counsel for the myriad details

facing newcomers. “Help in selecting
realtors, decorators, baby sitters, doc
tors and the like takes away the feeling
of being a total stranger when moving
into an area,” says Mrs. Dabbs.
Also included in the newcomer’s kit
is an analysis of schools, church pro
grams, a guide to cultural and recre
ational facilities, a list of shopping
centers and a profile of local service
organizations.
Of course, the newcomer is made
aware of Hancock Bank’s services and
pre-arrangement of bank services is of
fered to facilitate the newcomer’s move.
This service includes handling of check
ing and savings account transfers, in
formation and assistance with resi
dential mortgage financing, transfer of
credit files, pre-approval of credit to
facilitate establishment of a new line of
credit, charge-card account transfer and
the establishment of credit accounts at
major stores.
Once the newcomer arrives, the bank
conducts personal mini-tours to famil
iarize the newcomer with the area.

In 1976, Manufacturers Hanover
Trust becam e Number One in
Auto Loans in the New York
area.
And we have the ad campaign that
got them there.
The

ANYCAR

Call or write for details:
Edward C. Simmel Assoc., Inc
RO. Box 49307
Los Angeles, CA 90049
(213) 476-6587

FOR SALE OR LEASE
Available for immediate delivery. Instant
modular drive-in teller units. Ideal for ex
pansion or to establish a remote drive-in.
Prebuilt ready to install on your site— re
quires only electrical hookup. Includes all
equipment needed'— electric heat and air
conditioned, conduit for alarm and phone.
Write for brochure of other sizes and
models available, up to full branch build
ings.

FINANCIAL PRODUCTS, INC.
P.O. Box 1035
Eau Claire, Wisconsin 54701
Phone: 715/835-8160

YOUR MUSICAL
SIGN...
That is exactly what the Town
Crier carillon offers your fi
nancial institution. The beauti
ful sounds of bells is a unique
gift to your community — one
to be treasured for years to
come. But it is also a totally
different kind of sign— a
musical sign th a t makes an
im pression without ever
being seen. No matter where
your Customers are, the
W e stm in ste r Chimes an.d
hour strike reach them daily.
Concerts of favorite music are
an added reminder of your com
m unity involvem ent during
special celebrations.TheTown
Crier carillon is a distinctive
way to make your voice heard
constantly at a very minimal
cost. Call Jim Livingston col
lect at (513) 221-8400 for
complete details on the Town
Crier program available now
from the I. T. Verdin Company.

ip#########*######################*##*

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

BG /37

'M em o ry Stub' H elps Prevent O v e rd ra fts

Flatware
(Continued from p ag e B G /3 2 )

An Odyssey Collection of checks with a new "memory stu b "™ has been introduced by John
H. Harland Co., Atlanta, for customers preferring three-to-the-page checks but who dislike
carrying the oversize checkbook around with them. The system permits the account holder to
detach checks for use when shopping. A small memory stub sandwiched between the check
stub and the check is designed to remain attached to the check until it is filled out. The memory
stub is then detached and placed in a pocket in a carrying case provided with the system.
The memory stubs are numbered and can be matched with the check stubs and the entry
transferred from the memory stub to the check stub at the account holder's convenience.

—Your Corporate
Image
—Your Services
—Your Identity

ning in late September.
Phase three was a two-part closeout
of the offer. Newspaper ads announced
the ending of the free place setting
portion of the offer. This was followed
by a multi-media closeout program in
corporating a special offer that enabled
customers to purchase as many place
settings as they wished at $3.75 per
emit with a deposit of $50. This permit
ted customers to complete their sets and
helped to deplete the bank’s stock of
flatware. These sales were helpful in
liquidating the cost of the units given
free earlier in the promotion, Mr. Boyd
said.
At the end of the first 10 months of
the promotion, customers had deposited
$13.9 million to get the flatware. It’s
known that 48.5% of all deposit^ made
to get the premium were made to new
accounts, enabling the bank to experi
ence a 30% increase in such accounts
over figures for a year previous. This
has resulted in an increase in regular
savings and time open accounts of more
than $8 million, Mr. Boyd said.
At the conclusion of the promotion, a
complete analysis of participation will
be made.

all new

FliiOnlic
the Bright Light
time/temperature
Action Center
without bulbs

UPGRADES PRESENT T E LLE R S
TO NEW P R O D U C T IV IT Y ,
T R A IN S NEW T E L L E R S TH E R IG H T W A Y ,
RECRUITS TOP JOB C A N D ID A T E S ,

You've Got to see it to Believe it!
In '76 — new freedom from light bulbs
and freedom from service problems! No
more burned out bulbs that reflect your
bank poorly to the public. For bicen
tennial 1976 — accurate time with tem
peratures displayed either in C ° or in F °,
or both alternately! The left to right pre
cision movement of each numeral adds
to the attention gaining aspect of the
entire display. It operates on a fraction
of the electric power required by an
incandescent sign. FlipOmatic presents
your public service image more bril
liantly, more legibly and much more
reliably than any bulb lighted display
ever could. For full information and
color brochure enclose your business
card in envelope to personal attn. of
Ed Griffin, Marketing Manager.
B G /38

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Exclusive FlipOmatic

6 KEY SUBJECTS

Solid state electronics control metal
discs that are flipped to expose their
fluorescent yellow or black surfaces.
A b rillia n t circle of reflected fluor
escent light covers entire area of
each disc — instead of a single
glowing filam ent from a bulb. Sun
light poses no problem o f fade out
as experienced w ith incandescent
displays during peak tra ffic hours.

THE TELLER'S JOB
DEALING AT THE COUNTER
DEALING ON THE PHONE
HANDLING THE "DIFFICULTS"
"THIS IS A HOLDUP"
THE OFFICE FAMILY-TEAM

PIONEERS AND LEADERS
IN SIGN CONTROLS SINCE 1932
Box 850, Danville, Illinois 61832
Ph: 217/442*0611

D A T A F IL M S (Charles Palmer)
2625 Tem ple St., Los Angeles 90026
( 2 1 3 - 3 8 5 -3 9 1 1 )

LISTED IN NEW A B A F IL M G UIDE.
Available in all formats — 16mm Reels,
8 m Cartridges or Video Cassettes.
Rentals can include auto-projector.
Ask for free literature
and 25-page Leader's Guide

The conventional automated tel er machine is exactly that—a
machine. An independe nt, self-contained automated teller.
Each machine has its own intelligence system, which accounts
for almost halt the cost of an ATM. And the typical ATM is
offered in only one design, so you may have to buy more—or
le s*—ATM than you need
You need more than $ machine. You need The System .The
Teiler-Matic System -s e network of automated customer
terminals, ail operated by a single intelligence source. This
sharing of intelligence also means shared intelligence costs,
making it possible to reduce the cost per terminal drastically
compared with the conventional ATM. Arid because ."ife;1 ■
System has built-in versatility, it offers you a wide range of
design and application options.

American-Standard Company

Harr Iton, Ohio 4 5 0 1 2

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

You need more than a machine. You need an automated te fer
■ s te m versatile enough to adapt to your individual require
ments and advanced enough to meet your future needs. That’s
the idea behind The System.
Consider application flexibility. Teiler-Matic offers a fully
secured customer terminal for exterior and remote locations
For lobby and other secured locations, you can get a nonsecure terminal and save the cost of unneeded security features
Consider cabinet styling flexibility You can choose from
one of Telier-Ma tic's standard cabinet designs, or provide your
own customized cabinet to coordinate with a particular interior
design theme.
Consider future expansion needs. With The System, you can
start with only one or two terminals—plus an intelligence
module—and plug in additional terminals as you need them.
Each intelligence module will operate up to six customer ter
minals. And conversion of the entire system to on-line opera
tion is simple and economical.

New American
Safe Deposit Boxes from Mosler
let you be all things to all people.
Maybe we
need m ore boxes,
m aybe less . . .
Because American is modular,
you can choose the
exact box size assortment
your customers prefer.

Order modules as
you need them. And if you
need more boxes
at another location,
you can move them.

¡¡¡SS

YOUR
WORRIER

How fast
can we get th em ?

f o y ^ lo ly a oW o
American uses
10 % " wide modular
units—3 units
are equal to a
standard B width. j
No rentable
inches are wasted.

10 2 7

t 10 3 7

10 2«

1 10 3 8

1 0 2%
( 10 3 4
T
y1 -

1 £

t 10 4 %
1e 32
f -) £
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10 3 3
t 10 4 3
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2 11 - : 1:
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t 0 34
F t 044
y y -, -

1047

t r

1054
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\^ 1 0 S 1
1

SS«...............
ïfI
1 0 4 $ LJ 10 5 2
^£1 - ■'£
~ r-

.........

1, 0 ft 5
*c f l

1 o 4 «fy

American
instant numbering
speeds delivery
because you don’t wait
for engraving.

^Me
1

1 0 3 5 ( 1 ,t ft 4 ft
f - - —

YOUR
CONSTRUCTION
CREW

If
1)>.................... li
if

...

10 3 0
t 1040
T ' y F £) -

} } y
f 10 4 1
\ 1 0.1 1
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10 4 6

..._

YOUR
_ _ CUSTOMERS

!
*t
r: !

t
Can we
afford th em ?

YOUR
BUDGET MAN

YOUR
SCHEDULER

Your Mosler representative
has a very competitive
figure for you.
And complete details about
American safe deposit boxes.

Mosler
YOUR
MARKETING
MAN

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Mosler has assembled a
complete kit of sales aids to
help increase box rentals.

An American-Standard Company
H am ilton, O hio 45012

Furry, Feathery Friends
Flood Financial-Land
Foraging for Funds
Spokes-Anima Is Identify Institutions
By JIM FABIAN, Associate Editor

HAT DO Hubert and Elbert have
in common?
For one thing, they’re names of ani
mals— Hubert is a lion and Elbert is a
mountain goat.
For another thing, they’re spokesanimals for financial institutions!
And for a third thing, their names
and images are becoming household
words in their cities of domicile.
But these are not the only financial
institution spokesmen from the animal
world. Rabbits, owls, parrots—practical
ly anything—are being utilized to make
advertising and public relations unique
for financial institutions.
Financial marketers have found that
animals make good spokesmen for
their institutions. They not only readily
identify their sponsor in advertising,
but they can take part in public events
and thus attract extensive free publicity
in the media. They can also be mer
chandised in the form of stuffed ani
mals that make a hit with young peo
ple. There seems to be no end to the
uses an appealing spokesman from the
animal kingdom can be put to.
Hubert the lion is spokesman for
Harris Trust, Chicago. According to
the people at Harris Trust, Hubert is
the bank’s star salesman. He is part of
virtually every aspect of the bank’s pro
motional activities, from window dis
plays to premium offers.
According to independent surveys
conducted at regular intervals in Chi
cago, Hubert is identified with Harris
Trust by better than 90% of the people
interviewed in the bank’s trade area.
Hubert has been working at Harris
Trust for a long time—since 1956. He
came on the scene at the time Harris
decided to expand into all phases of re
tail banking. The object of employing
Hubert was to transform the public’s

impression of the bank from one of a
businessman’s bank to a warm and hu
man place, where every customer, re
gardless of the size of his account,
would be welcome.
As developed by the bank’s adver
tising agency, Hubert was a logical
evolution from the regal lion that had
been part of Harris Trust’s seal since
its founding.
Hubert, with his spectacles and ur
bane and likable manner* was an in
stant hit, according to a human bank
spokesman. His first appearance was
in newspaper ads. He was soon put to
work in TV commercials, asking people
to bring their money to the bank. It
wasn’t long before people, when mak
ing their deposits, whispered to tellers,
“Hubert sent me!”
As a premium, Hubert is the focus
of what is considered to be one of the
nation’s most successful bank premium
campaigns, now in its sixth year.
A 28-inch plush-pile doll replica of
Hubert was offered last fall to customers
who opened savings accounts with $200
or more or added that much to an

Metropolly, macaw mascot at Metropolitan Bank, Chicago, samples $100 bill held by then bank
Pres. William O. Kurtz. Mr. Kurtz retired recently.

MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

existing account. About 190,000 of
these dolls have been distributed to
Chicago-area customers since the pre
mium was introduced in 1971. The
1975 campaign is estimated to have
brought in 11,000 new customers and
added $25 million in savings.
Hubert’s image has literally saturat
ed Chicago, as it appears on coffee
mugs, tee-shirts, watches, golf balls and
towels.
Hubert is the recipient of hundreds
of fan letters and snapshots, many from
school children. The bank has de
veloped a Hubert coloring book that
traces the evolution of the Harris lion
from the bank’s original 19th century
telegraphic code to the present cartoon
creation.
In 1971, Harris Trust adopted a real
lion and appropriately named it Hu
bert. It is said to be the first zoo animal
to be sponsored by a corporation.
Elbert the bighorn began working
for First National, Denver, in 1975.
For more than a year, the bank’s mar
keting department had been on the
lookout for a spokesman for the con
sumer banking department, which had
only recently been fully developed and
was less well-known than the corporate
side of the bank.
When Elbert was suggested by the
bank’s advertising agency, he seemed
to fill the bill. As a bighorn, Elbert
would represent the bank that had
been predominant in Colorado and the
Rocky Mountain region since its found
ing in 1860. Not only is the bighorn
the state animal, it is close to the heart
of most Coloradans. Elbert’s name is
part of the state’s tradition— Mt. E l
bert is the highest peak in the state.
The bighorn has characteristics
which First of Denver believes it shares
—it’s strong, sure-footed, agile, but
cautious when necessary. Most impor
tant of all, it’s not afraid to take its
competition head-on!
The bank chose an animated version
of Elbert so the bighorn could talk—

Hubert, Harris Trust
animated lion, perch
es atop stylized lion
that is part of Chi
cago bank's logo.

H A R R IS
BAN K
Maate K M O M w a i Hrnmm S y « « *

and say things no human could get
away with, serious or humorous. He
could wear skis or cowboy boots or
tennis shoes and play any number of
roles. And he could change subtly to
meet changing market conditions.
Since his introduction, Elbert has ap
peared in virtually all of the bank’s
consumer advertising. His first major
effort was to star in the bank’s “Green
ing of the Platte” promotion, an ecol
ogy-related program to beautify an
area through tree-planting. The promo
tion won a Gold Coin Award from the
Bank Marketing Association.
Denver took to Elbert with great
good humor. Customers of the bank be
gan asking about him; kids wrote him
letters. Within six months Elbert had
built an almost 80% awareness in the
local market.
Of course, Elbert wasn’t at all bash
ful. In costume, a man-sized Elbert
conducted the Colorado Philharmonic,
skied in a professional slalom race,
pitched the first ball in a pro baseball
game, played basketball with the Den
ver Nuggets, led parades, hosted a par
ty at the Denver Zoo for his real life
counterpart and made appearances
state-wide.
A stuffed doll version was offered as
a premium for savings accounts and
soon Elbert dolls became a valued lo
cal commodity due to a tight distribu
tion policy on the part of the bank.
The six-week promotion resulted in
“thousands of accounts” bringing in
“millions of dollars,” according to the
bank. Perhaps the most telling result
is the fact that all 11 affiliates of First
of Denver’s HC opted to conduct Elbert
doll premium promotions last year.
When Elbert was first presented to
bank management, the marketing de
partment stated “W e will have fun
with Elbert, but never make fun of
him.” That’s just what has occurred,
88

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

and now the bank’s marketing people
contend there’s nothing more fun than
success!
Coast Federal Savings, Los Angeles,
helped make a name for itself by fea
turing a brown Belgian hare in its TV
advertising for many years. Eventually,
the rabbit was retired after 15 years’
service. One of the reasons the live
rabbit was retired was that he couldn’t
say anything. All Buck Bunny could do
was pick up coins in his mouth and
deposit them into a bank and spell out
the thrift’s name in alphabet blocks—
which are pretty good tricks for a rab
bit, even in Los Angeles!
Recently, when the institution was
searching for a new advertising gim
mick, attention was repeatedly focused
on the old rabbit. Even though Buck
hadn’t been around for a long time, a
market survey revealed that 46% of
those surveyed still could identify the
rabbit with Coast Federal. They could
also recall what Buck had done in the
way of tricks on the TV commercials.

Life-size Elbert the bighorn makes friend for
First of Denver at bank-sponsored event.

A few could even sing the song that
was on the commercial’s soundtrack!
This was too good to pass up, so
Buck was brought back on the scene,
only this time he was an animated car
toon rabbit—one that could talk. Al
though it’s too early to tell how the
new Buck will go over with the public,
it’s a pretty sure thing that a new gen
eration of Los Angelenos will become
familiar with him, since his likeness
will be appearing on TV, billboards,
point-of-purchase materials and news
papers in a $200,000 promotion!
It’s a far cry from a rabbit to an owl,
but the latter has been peering at the
citizenry of Cincinnati for a couple of
years, courtesy of Central Trust. As
have other bank spokesmen, the owl

DAY and NIGHT BAN KS 1
never take time out.
(They never close.)

THE CENTRAL TRUST COMFANY
Member; The Central Bancorporation, Cincinnati, Ohio

Central Trust's owl peers at Cincinnatians to
promote ATM service.

has made a name for itself (even
though it doesn’t have a name, as
such) by appearing on tee-shirts and
billboards, in newspaper ads and TV
commercials.
But now the Central Trust owl has
a new job— representing a regional
ATM and check guarantee interchange
currently comprised of Central Trust,
Covington (O .) Trust and First Nation
al, Middletown, O.
Although the network was first an
nounced in October, 1975, the carica
ture owl was born in February, 1973,
when his job was to publicize Central
Trust’s Day and Night Banks, a 24-hour
ATM service.
Recognition of the owl as spokesman
for Central Trust’s automated banking
services was developed and continues
to be augmented through a variety of
media and promotional activities, ac-

MID-CONTINENT BANKER for March, 1977

them everything they need at one time. Checks. Commercial deposit
tickets. Rubber endorsement stamps. And money bags. It’s all there
in Harland’s Business Account Group (B.A .G .), and it’s a great way to
get off on the right foot with new business custom ers.
All B.A .G . merchandise is produced or stocked at your Harland plant, so
service is speedy. Your custom ers will have everything they need without delay.
And, not only will B. A.G. make a happy customer, it will also save you
money. How? Because the costs of the deposit tickets, money bags and
rubber stam ps are passed on to the custom er in one debit.
To find out more about the B.A .G . program, just talk to your
Harland Sales Representative.

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

RO. Box 105250, Atlanta, Ga. 30348

cording to the bank. The bird has ap
peared in TV commercials, lauding
particularly the “night owl” aspect of
ATM services. He has also been used
heavily in print media, often donning
a special costume to adapt to a particu
lar audience or situation. He has
dressed as a football player when ap
pearing in the Cincinnati Bengals fact
book or other publications during the
football season. His agility has extend
ed to the baseball diamond, hockey
arena or tennis court as the occasion
warranted.
Other costumes and poses have
varied according to the particular mes
sage. For instance, he has “flipped” (on
his branch) over Day and Night banks,
and has worn a rainhat while urging
customers to avoid banking in the rain
( the bank service will be available
whenever the downpour stops).
Central Trust offered a stuffed owl
as a savings premium during the
Christmas shopping season in 1973. It
was available for $2 to customers de
positing $200 or more in a savings ac
count. It was also available for $3.95
without a deposit. With 5,000 stuffed
owls distributed more quickly than an
ticipated, the promotion came to a pre
mature end a week before Christmas.
This past spring, the bank distrib
uted 10,000 owl tee-shirts in six busi
ness days to those depositing $100 or

Second-g e n e r a t io n
Buck Bunny works
for Coast F e d e r a l
Savings, Los Angeles.

more in a savings account. Other owl
items include magnets and adhesiveback owl appliques.
Since the inception of the Owl Net
work, all owl items are made available
to participating financial institutions.
The owl symbol appears on all debit
cards used in the network, as well as
on the network’s terminals. Customers
are encouraged to look for the “sign of
the owl” when they need ATM ser
vices.
Another bird, a 42-inch-tall parrot,
recently became the newest staff mem
ber of Metropolitan Bank, Chicago.
“Metropolly,” a 10-year-old macaw,
lives in a tall cage in the bank’s lobby.
Metropolly was added to the staff
to serve as a spokesman in bank adver
tising and promotional materials and

also to appear at area schools to assist
in lectures on money management and
basic economics.
The bank expects the parrot to add
fun and interest to a normally dry sub
ject like economics. In addition, it can
be an entertaining focal point to bank
customers. Metropolly is expected to
tour children’s wards at area hospitals
and is available on a select basis to lo
cal community groups for parades and
open houses.
The bird’s previous experience in
cludes starring in several product pro
motions and advertisements, the latest
being a TV commercial with entertain
er Mitzi Gaynor. With a life-span of
75 years, the 10-year-old parrot is ex
pected to be active at the bank for
some time.
The bank came uo with the idea of
purchasing Metropolly after a media
campaign featuring a parrot had been
prepared by the bank’s advertising
agency. “Since the campaign featured
a parrot, we felt we should find the
real thing and put him to work for the
community’s benefit,” a spokesman
said.
Financial institutions contemplating
engaging representatives of the animal
kingdom as spokesmen had better se
lect their candidates soon—only a lim
ited number of species have not yet
been spoken for! • •

Bank Barely Able to Keep Up W ith Demand for Toy Bears

OR SEVERAL W EEK S late in 1975
and early in 1976, there was a “run”
on Crocker National branches through
out California, but those who were de
scending on the bank were seeking
stuffed bears, not their money. In fact,
they were standing in line to open or
add to savings accounts just so they
could obtain the cuddly little toys.
The whole thing started just before
the Christmas season of 1975, when
Crocker National’s promotion depart
ment came up with “Sunny the bear.”
The 17-in-tall animal was available—
one to a customer—to each person who
opened a new savings account with
$300 or more or added at least that
amount to an existing savings account.
The bank obtained the bears from
Animal Fair, Chanhassen, Minn.
What followed was almost unbeliev
able. It even made the wire services
and was reported around the country.
It seemed everyone wanted one of the
bears, which were advertised across the
state via TV commercials and news
paper ads. The stuffed bear used on TV
was animated, sat in the chair of the
90

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

bank’s chairman and “talked.” How
ever, the commercial made it clear that

1 F ree.

Withloveftom CrockerBank.

¥iurs five with a s300savings deposit

This newspaper ad helped introduce Crocker
National's Sunny the bear to public. So many
people wanted him that branches that ran out
tried to wheedle bears from those that still
had reserves.

the bears being offered by the bank
could not talk.
According to Angela Bohning, then
in charge of new accounts at the
Palos Verdes Branch, customers who al
ready had accounts insisted they should
get a bear, and one man who had a
$50,000 savings account threatened to
take out the entire amount unless he
got a bear.
“We tried to tell them just to with
draw $300 and open another account,”
says Mrs. Bohning, “and some of them
did. Mothers would come in with two
or more kids in tow and each child
wanted a bear, of course. But it was
one account, one bear, no more and no
less, so they had to open two or three
accounts.”
To add to the difficulties, a bear
shortage developed, and the “top brass”
let it be known that there must be a
strict accounting for each bear.
“It got so that we had a bear count
at our branch at the end of business
every day,” says Mrs. Bohning. “The
tellers had to balance their bears before
they balanced their drawers. W e finally

MID-CONTINENT BANKER for March, 1977

the truck was accompanied by an
armed guard.
To attest to Sunny’s popularity, Mrs.
Bohning points out that one woman
came in with a teddy bear she had
bought at a department store. She said
her son wouldn’t have anything to do
with it because it didn’t look like Sun
ny. She wanted to trade it in on a
Crocker bear, but the bears were all
gone.
Although the bear promotion ended
early last year, the outcry for them con
tinued for weeks. * #
• Bank Marketing Association. Pro
ceedings from the association’s 1976
Teller at Crocker Nat'l, San Francisco, is pic
tured with Sunny the bear, stuffed animal of
fered as premium at Crocker banks throughout
California late in 1975 and early in 1976.
Bears were so popular they had to be locked
in vaults at night at some branches (UPI
photo).

had to appoint one of the assistant man
agers as ‘the bear man/ He was in
charge of bears. He would count them
and then lock them up in the vault at
night.”
As the bear shortage became worse,
various branches tried to get more bears
from others that still had reserves. The
Palos Verdes Branch even sent a pickup
truck to an office in Orange County for
a supply. No one would say whether
A Bear Boosts a Bank

A six-foot rabbit named Harvey has gained
fame on stage and screen. In Elgin, III., a sixfoot koala bear caused a stir. The man-sized
koala really w as Richard Hughes, v.p., Elgin
State, and he w as kicking off the bank's holi
day promotion, which consisted of offering a
free stuffed toy called "Koko Koala" to per
sons depositing $250 or more to a new or
existing savings account or to a new checking
account. Mr. Hughes wore the koala costume
while he distributed fliers about Koko Koala
to motorists and shoppers downtown and out
side the bank building. Elgin State also dis
tributed koala lollipops and buttons to area
residents to give added emphasis to the
stuffed-bear promotion, which, according to
Mr. Hughes, the bank hopes to make an an
nual event.

MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Bank Planning Conference form the
basis of a new BMA publication en
titled “Planning Can Make the Differ
ence in Your Bank’s Future.” The 92page book contains edited texts of pre
sentations made at the conference, held
in Chicago. Major topics include plan
ning for increased bank earnings, plan
ning for profitability and financial ob
jectives, analyzing the strengths and
weaknesses of your bank versus its
competition and integrating marketing
planning into the corporate plan.
Copies are available at $15 each to
BMA members. Write: BMA, 309 W.
Washington St., Chicago, IL 60606.

How
profitable
can
Christmas
dubs
be?
Send for The Unidex
Report’s fascinating new
research findings which prove again that Christmas Clubs
can significantly increase your cross-selling opportunities.
That’s right. Customers who maintain Christmas Clubs
are more likely to use your other services than those who
don’t. A national sample clearly shows that these customers
are 17.7% more likely to have an installment loan in the
institution where they maintain a Christmas Club account.
And there’s much more. The complete service pattern will
really open your eyes. It’s a totally factual map to your future.
And one you can profit by.
Read how in The Unidex Report on Christmas Clubs.
Send for your copy today. Just write: John H. Guinan,
President, Christmas Club a Corporation, P.O. Box 20,
Easton, Pennsylvania 18042.

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a corporation
P.O. Box 20
Easton, Pennsylvania 18042

A dapt one and put it to work for your bank!

F ree...this fram ed Renoir reproduction

Money Box' Multi-Service Program

(or any o f 5 other special selections
from The A rt Institute o f Chicago)

Offers Checking-Account Alternative

A P T U R I N G C H E C K I N G AC
COUNT customers is the intent of
the “Money Box Account” promotion
of Houston First Savings. The program
is an EFT-based package offering a
variety of services.
Billed as a money-management pro
gram, “Money Box” offers five basic
services to customers that “fill the gap
left by the no-interest checking ac
count,” says a Houston First spokes
man. The following is what the pro
gram offers its participants:
• Monthly bills may be paid by tel
ephone from the account, which earns
daily interest. This, says the S&L
spokesman, saves time and money spent
on bookkeeping and writing and mail
ing checks, and the phone call can be
made any time of the day. The new ac
count balance, payments and deposits
are totaled for the customer at the con
clusion of the pay-by-phone transac
tion.
• Funds may be transferred be
tween the “Money Box” account and a
bank checking account via a telephone
call.
• Participants receive a plastic Pres
tige card that can be used to withdraw

The Money Box Account.
Because your checking account
doesrft pay interest.

up to $200 in cash at over 2,500 loca
tions throughout the country. The card
has been hailed by S&L officials as the
first step in establishment of a plasticcard base for E FT .
• Customers may make deposits,
cash checks, withdraw cash and trans
fer funds via the S&L’s Mosler 24-hour
“Money Box” ATMs.
• Account holders become members
of the institution’s First Club and re
ceive monthly statements showing
records of all transactions: the size of
each transaction, who was paid and
when. First Club members receive 15
free financial services and discounts
from local merchants, in addition to a
quarterly publication, First Club News.
Besides the benefits to customers,
Houston First officials say, participating
merchants profit from the “Money Box”
program, due to guaranteed funds to
pay the customer’s bills, convenience,
accurate payment records, a reduction
of paper work, fewer items to be mailed
(and lost in the mail) and no service
charges to the merchant. • •

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

tute. At the same time, she continued,
the bank helped bring in much needed
members and funds to the institute.
Also participating in the promotion
were Hyde Park Bank, Chicago, and
First National, Highland Park, 111.

38 First-Days:
Paintings Offered:

Presidential Inaugurations
Examined by Lobby Exhibit

Bank Helps Art Institute
Gain Family Memberships
LaSalle National, Chicago, recently
completed a civic-minded premium
program that resulted in 2,228 new
memberships for the city’s art institute.
Anyone depositing $100 or more in
a savings account and taking out a
family membership in the Art Institute
of Chicago at the regular $30 fee was
entitled to one free framed reproduc
tion of six works from the institute.
Artists represented were Winslow
Homer, Claude Monet, Perre Auguste
Renoir, Joan Miro and Hans Hofmann.
Both reproductions and memberships
were touted as ideal Christmas gifts.
The offer closed on Christmas Eve.
Susan McGuire, bank spokeswoman,
said the promotion was of value to the
bank because its image was enhanced
through association with the art insti

Large newspaper ad featured reproduction of
Renoir painting, one of six offered savers de
positing $100 at LaSalle Nat'l, Chicago, and
taking out $30 family membership at Art In
stitute of Chicago.

The tale of 38 first-days has been
told by a lobby exhibit at Frost Na
tional, San Antonio. The bank featured
a Smithsonian Institution exhibit of the
inaugurations of the 38 American presi
dents.
The showing was a retrospective look
at inaugurations— their more human
side as well as the swearing-in cere
monies. A number of interesting aspects
of the inaugurations were highlighted,
including roles played by first ladies
as the oath of office was administered
to their husbands. First ladies’ ball
gowns were shown, and observations
of Presidents-Elect, such as James
Madison’s comment, “I’d rather be in
bed,” added human interest to the dis
play.
The public was invited to view the
exhibition during regular banking hours.

MID-CONTINENT BANKER for March, 1977

Home-Improvement Market Nailed Down
By Bank's Free-Hammer Promotion
OCKINGHAM NATIONAL, Har
risonburg, Va., succeeded in nail
ing down the home-improvement-loan
market in its area with a premium pro
motion featuring “a home-improvement
loan and a hammer to go with it.” A
free hammer was offered as an incen
tive to prospective loan applicants.

At Rockingham National
Bank,w ell supply the tools

tohelpyounail down
homeimprovements.

Ahomeimprovement
loananda hammer
togowithit.
Rockingham
National Bank

During a three-week period from
mid-May to early June, the campaign
was advertised in print and on radio
and television. One TV and radio ad
featured a man singing the folk song,
“If I Had a Hammer,” and leading
into a conversation with a neighbor
about home-improvement loans.
Rockingham National ordered 138
hammers for the promotion and gave
them all away; the number of new
loans made during the campaign to
taled 204.
According to Tom Brightman, Rock
ingham National’s director of market
ing, “Home improvement loans are
profitable for three reasons: They are
large in dollar value; they entail lower
administrative costs than other loans;
and they involve ready collateral. Our
hammer campaign allowed a creative
approach to print, radio and TV and
used an inexpensive item that easily
differentiated Rockingham National
from others. The hammer has lasting
advertising value, too, because it places
an often-used item with our identity on
it in the borrowers’ homes.” * *

CBs Popular as Premiums;
'Slanguage' Aid Offered
There’s little doubt about the fact
that CB radios have been a popular
self-liquidating premium at financial
institutions during the past year.
Island Federal Savings, Long Island,
N. Y., offered CB radios with antenna
for $53, plus tax, with a qualifying
$1,000 savings deposit. First National,
Minneapolis, included CBs in a recent
msmmtrmf

sim&mmoL

nXWS&l5 i

mmmmmm.

premium promotion. The model offered
could be installed in the customer’s
auto and was available for $80, merely
for opening a new checking account
and applying for either the bank’s ATM
entry card or its package of bank ser
vices.
A CB-related premium entitled “How
to C B” is now available in record,
8-track tape or cassette form from Pick-

How much new business
does your present
Christmas Club generate?
If your present Christmas Club isn’t attracting as many
new customers as you would like, maybe it’s outlived
its usefulness. If that’s the case, why not look into an
attractive and practical Christmas Club program from
Rand McNally. You’ll find that they have all the innova
tive ideas, materials and know-how needed to help
you organize, promote and get the most out of your
Club... including some cost-saving features you can’t
afford to overlook.
A nam e you know,
a com pany you should know m ore about

Rand M?Nally
Financial System s Division
P.O. Box 7600 / Chicago, Illinois 60680 / (312) 267-6868
10 East 53rd Street / New York, New York 10022 / (212) 751-6300
206 Sansome Street / San Francisco, California94104 / (415) 362-4834

MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

wick International, Woodbury, N. Y.
It presents 500 CB terms for quick onthe-road reference and shows customers
how to use the “slanguage,” as CB lingo
is termed. It also includes information
on how to use a CB in an emergency
and how to select the type of CB
equipment to meet a given situation.

C u t e . . . a n d a W in n e r!

In 'Beanfown':

BMA's April Conference
To Examine Bottom Line

OUR SU PER TIN LIZZIE
gets instant attention. Ideal as a
prize a t opening of m ain office,
drive-in, or branch. Used in parades
instead of a float. A great car loan
and savings incentive. Fine to give
aw ay in coop eration w ith local
retail promotions. Hundreds of dif
fe re n t uses m ade by banks and
th rift firms each year. Price, $ 6 7 0 .

Please place your orders early.
A m erica’s B est P rom otio n al V alue
Steel frame and body. Length 6 8 ”. Width 3 4 ”. Wgt. 2 0 0 pounds. Pneu
matic tires. Gasoline engine, 3.2 HP. Top speed 17 MPH. Parts always
available. Standard color scheme red, black, and gold.

BOB TUCKER ASSOCIATES
Box 1222
Port Arthur, Tx. 77640

“Marketing Research and the Bot
tom Line” is the title of the 10th an
nual marketing research conference of
the Bank Marketing Association. The
event has been scheduled for April 3-6
at Boston’s Hyatt Regency Cambridge
Hotel.
This year’s conference has been
geared toward new and experienced
bank marketing researchers. More than
25 prominent research professionals are
slated to discuss the latest “hot” topics,
while providing updates on new and
established research areas, especially
as they relate to bottom-line decision
making.
The program has been structured
with three general and 15 specialinterest sessions and includes a “Basics
of Bank Marketing Research Course,”
which is targeted at junior market re
searchers and bank marketers with
limited research experience. That course
will cover project planning and prob
lem delineation, data collection, ques
tionnaire design and data preparation,
data analysis and managing the re
search function. In addition, the BMA
has scheduled a three-part community
bank research module.
A Mid-Continent-area banker who
will address the conference is Jerry S.
Wayt, president and CEO, Citizens
Banking Co., Anderson, Ind. His topic
will be “A - A = NG.” Serving as program
chairman is Stephen A. Haley, vice
president, Huntington National, Co
lumbus, O., while Donald A. Rauschen
berg, director of marketing research,
Harris Trust, Chicago, serves as pro
gram co-chairman.
Registration fee for the conference is
$235 for BMA members and $335 for
nonmembers. For more information,
write Don Hoss, Director, Education
Department, Bank Marketing Associ
ation, 309 W est Washington Street,
Chicago, IL 60606.

“Since 1958”

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

MID-CONTINENT BANKER for March, 1977

W hich of these
correspondent bankers
would you choose?

N am e: Ted Smothers
N am e: Harold Smith
Transit Operations. . . 2 years
Bookkeeping. . . 3 years
Tellers. . . 6 years
A rm y Service. . . 3 years
Bond Department. . . 6 months
Business Development. . . 2 years
Metropolitan Division. . . 2 years
Correspondent Division. . . 27 years
Total Banking Experience. . .
45 years

Data Processing. . . 1 1 years
Banking Division. . . 1 year
Correspondent Division. . .
3 years
Total Banking Experience. . .
14 years
Hobbies. . . Fisherman, Khoury
League Baseball and
Soccer Coach

Hobbies. . . Hunter, Outdoorsman,
Collector of Indian
Artifacts

Som e big differences, right?
N ot really. Both have a common denominator called
“back-up by Boatmen’s.” That’s right. They can
draw on the knowledge of data processing technicians,
marketing strategists, bond experts or whatever
specialist it takes to assure correct and valid answers
and programs to any unique situation you may
encounter.
Call Harold Smith or Ted Smothers, whichever you
choose, and let them show you what we mean with
“back-up by Boatmen’s.”

MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

THE BOATMEN'S
NATIONAL BANK

OF ST. LOUIS

100 North Broadway, St. Louis, Mo. 63116 / 314 425-7500
95

Light Note Struck During Remodeling
With Colorful Cartoon Characters
WO CARTOON CHARACTERS—
“Citizens
Superintendent”
and
“Citz, the Progress Watchdog”— are
helping Citizens National, Decatur, 111.,
and its customers get through a 20month remodeling program in as light
hearted a vein as possible. These color
ful hard-hatted figures are used on all
signs and bank publicity and are in
cluded in striking graphics on walls of
the bank’s temporary quarters. The lat
ter are in a former drug store located
next to the bank building. The tempo
rary area, which eventually will be
come part of the remodeled bank
building, has been imaginatively de
signed to facilitate a smooth operation
and create customer interest in the
building program.
The Bunce Corp., St. Louis, is under
contract for the project space planning,
design and construction management.
Because most of the banking func
tions are operating side by side in the
temporary lobby, the creative graphics
and signage minimize confusion and

Weput
apremium
on service.

interruptions by showing customers
where each department now is located.
According to a bank spokesman, the
graphics are particularly helpful in
guiding customers to the safe deposit
area, which is located away from the
main lobby.
The imaginative design scheme also
provides a pleasant environment for
employees and creates interest in the
project among customers. Instead of
“playing down” the remodeling, the
construction characters cleverly empha
size the building project and the tem
porary nature of the bank’s facilities.
As a bank official puts it, “Our employ
ees and customers are extremely excit
ed about our remodeling and seem to
enjoy the progress of the job. The way
the temporary quarters were designed
has been an important part of making
the project fun.”
William Barnes III, chairman, points
out that bank customers believe the
project is very much their project and
are always anxious to know more about
it. To keep customers up on the proj
ect’s progress, the bank has implement
ed a customer-information program,
which includes displays and sketches
depicting the remodeling area.
The most difficult task seems to be
that of communicating the project’s
scope to the public. More than 52,000
square feet of space on several floors
of the bank building and adjacent
high-rise structure will be completely
renovated by April, 1978. Part of the
two buildings’ exteriors also will be re
furbished during the project, which
was begun last September.
Because nearly every department
will be enlarged or moved, the work

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ation, always delivers on time,
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receives the personal
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make sure you get what you
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96

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

"Citizens Superintendent" (r.) and "Citz, the
Prog ress Watchdog" (I. above stairway) point
w ay to temporary location of safe deposit de
partment at Citizens Nat'l, Decatur, III., during
bank's remodeling program. Two cartoon graph
ics are being used throughout bank's tempo
rary location to give customers directions to
various departments.

This happy, hard-hatted cartoon figure—"Citi
zens Superintendent"—is being used to direct
customers of Citizens Nat'l, Decatur, III., to
various departments during bank's 20-month
remodeling project. Here, he indicates new ac
counts department.

is being scheduled in two phases: In
the first phase, the main bank building
is being remodeled while operations
continue in the adjoining building. In
November, 1977, operations will be
moved back to the remodeled area
while the adjoining space is renovated.
The construction team scheduled the
project to minimize disruption, requir
ing various departments to relocate
their operations only once during the
job. The demolition also is being
phased so that construction activity is
isolated from the bank’s ongoing op
eration, virtually eliminating dust and
noise. The commercial loan, trust, farm
and other executive offices, along with
an employees’ cafeteria, were moved
in one day into a building formerly
occupied by the telephone company,
across from the bank’s parking garage.
The entire teller line, customer ser
vices, installment loan and deposit con
trol were moved in one weekend, thus
clearing three floors for construction.
Before undertaking the project, Citi
zens National’s leadership listed sev
eral requirements that had to be met:
temporary quarters that would be at
tractive and efficient, without spending
large sums of money; main bank func
tions to remain in the immediate area,
free from noise and dirt and convenient
for customers; and maintenance of high
morale among employees and custo
mers during the project.
As Mr. Barnes says, “We would like
everyone to enjoy the project and really
feel involved in what’s going on. Judg
ing from our customers’ response to our
temporary quarters, we’ve succeeded
so far.” ° •

MID-CONTINENT BANKER for March, 1977

B C stl ï '

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works worldwide

M W HFWI

In the world of international banking, effectivene,.
requires transacting business across the ocean as quickly as across the street. It also requires being up-to-theminute on trading techniques and knowing what makes
world trade successful. To serve your customers' needs
yoùr bank needs a correspondent bank with interna
tional efficiency, experience, and expertise to back you
up. That’s where the Whitney can helpi We make intern atio n al-an d co rresp o ndent-b anking just a little

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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

*Mt RiCi Shfr

f? K

Light, Humorous Radio Commercials Tell Bankers Message
ADIO COMM ERCIALS that are
light and entertaining? Such adjec
tives ordinarily aren’t used to describe
banks’ advertising efforts. However, the
Missouri Bankers Association is blanket
ing the state with commercials created
first, of course, to get messages on bank
ing across, but designed to do so in a
humorous way.
According to Roy Schumacher, MBA
public relations director, the associa
tion’s public relations committee— after
considerable study—felt that the com
mercials a majority of banks are using
are the “heavy-handed-service-type,”
but the MBA’s should have a new kind
of treatment. Therefore, the MBA
turned to Fred Arthur Productions of
Denver, described by Mr. Schumacher
as the leading producer of light and
humorous radio spots. This firm has
produced similarly stylized spots for a
number of banks throughout the coun
try “with marked success.”
Here’s an example of one of these
MBA commercials (readers should bear
in mind that they are written for the

ear, not the eye, and probably don’t
seem as effective when read as when
they’re heard):
Music: Child playing violin. Poorly.
First sp eaker: (Paul Lynde type)
Our daughter wanted to take violin
lessons in the worst way. Which meant
we had to buy her a violin. Which we
really couldn’t afford at the time. So,
I went down to our bank . . . and they
said they’d be happy to do whatever
they could to encourage the child and
help further her musical career. And
they promptly loaned us the money.
Music: Up for few seconds . . . then
under for. . . .
First sp eaker: I thought I’d never
forgive them for that. . . .
Music: Continues under announcer,
progressively improving. . . .
Announcer: If there’s one thing your
bank believes in, it’s the future of this
country. And that means encouraging
those who will be responsible for it.
So, whether it’s to help pay for a musi
cal instrument, or start a savings pro
gram for a college education, futures

begin right down the street. At your
bank.
Music: Violinist has now become
quite accomplished and finishes with
great flourish to tumultuous ovation.
First sp eaker: Bravo! Encore! Didn’t
I always say she’d make it? Like I told
those guys at the bank. . . . “You’re
investing in a virtuoso, gentlemen.”
(Fade) Bravissimo!!!
Announcer: This message presented
with the good wishes of your Missouri
Bankers Association.
The 420 radio spots were aired dur
ing January and February and will be
broadcast again in April. The five
different commercials are being heard
across the state, with a combination in
cluding the larger city stations plus
the Missouri Network of 52 stations
serving outstate Missouri. The spots
run during “drive” time—normally 6:308 :3 0 a.m. and 4-6 p.m.— to catch the
car radio listeners and some of the din
nertime audience. The spots run two
weeks on and two weeks off during the
three months.

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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

MID-CONTINENT BANKER for March, 1977

The station schedule is: KM OX and
KSD, St. Louis; KW TO, Springfield;
KMBZ, Kansas City; and the Missouri
Network.
Commercial costs, both production
and time, on the four major stations
and the Missouri Network are under
written by the MBA. The latter reports
receiving some complimentary tele
phone calls from various bankers. An
example is this exerpt from a letter sent
by George H. Pfister, president, Man
chester Bank, St. Louis: “I think it is
well done and certainly very timely in
view of competitive factors at work in
our industry. I would hope that such
programs telling about the business of
banking are expanded and continued.”

chase a higher-priced or related item,
something that built up much good will
toward the bank among local shop
keepers.
An added benefit of the promotion
was what it did to educate people in
the bank’s area on CDs. Many cus
tomers now come in the bank, the
spokesman notes, and request CDs by
name, whereas in the past only “pass
book or savings plans” were the sub
ject of inquiries. * •

time deposits increased 16% and 27%
of the customers had no previous rela
tionship with State Bank. Of the total
dollar-volume brought in during the
campaign, 61% was new money.
Arrangements were made with local
merchants who already had been cus
tomers of State Bank to purchase the
items needed for the campaign. Many
customers qualifying for a premium
would visit the merchant to pick up a
gift and, in many instances, would pur-

—

Largest Gain in CD Sales

HIBBARD & O'CONNOR

■

In 6 Years Is Result
Of Gifts Campaign
C D -RELA TED premium promo
tion, “Extraordinary Gifts for Ex
traordinary Savers,” by State Bank,
Freeport, 111., has brought about re
sults that are, well, extraordinary. In
its 90 days’ running time, the campaign
resulted in the largest net gain in time
deposits the bank has had in more than
six years!
State Bank has, for the past several
years, been active in the use of pre
miums and has found them to be ex
tremely helpful in attracting new de
posits, a bank spokesman says. And
only top-quality, “good image” mer
chandise is offered. With that consider
ation in mind, the “Extraordinary Gifts”
campaign was undertaken.
The program offered four- and sixyear CDs at 6 /2% and 7%, respectively.
These CDs normally would be offered
at 7% and 7 /2%, but the J£% difference
was multiplied by the number of years
to maturity of each CD, resulting in a
difference of $150 plus the legal $10
premium charge for a $5,000 account;
$300 plus $10 for a $10,000 account;
and $600 plus $ 1 0 for a $20 ,0 0 0 ac
count.
Gifts offered during the campaign
were targeted at the over-40 age group
and were categorized according to the
size of the CD. Premiums for a $5,000
deposit included a Structo Gas Grill,
which is manufactured in Freeport.
Other most-popular items, according to
the bank spokesman, were RCA X L
15" color TVs, Amana microwave ovens
and Wards CB radios. A Hawaii vaca
tion was offered with a four- or six-year
deposit of $100,000, but State Bank,
as had been anticipated by officials,
had no takers for that premium.
During the 90 days of the promotion,

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INVESTMENT BANKERS
AMD ¡SUBSIDIARY COMPANIES

MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

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TEXAS 770C2

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I
99

Financial Institutions Rely on Lizzies
To Attract Attention, Promote Good W ill
HINGS can be more pleasant around
a financial institution because of the
presence of Lizzie. Lizzie can attract
a good deal of attention and fun to a
bank, a thrift—any financially oriented
enterprise.
Is Lizzie a gimmick to promote an
automated teller machine? Or a spokes
person used in advertising?
No, Lizzie refers to a miniature auto
mobile, more properly referred to as
“tin lizzie” or even “super tin lizzie.”
A tin lizzie is a scaled down version
of a 1910-era auto. The car weighs in
at about 220 pounds, comes with a steel
frame and body and sports molded
fiberglass fenders and running boards.
Motive power comes from a four-cycle

By JIM FABIAN
Associate Editor
gasoline engine. Lizzies come in black
finish (what else in 1910?) with redand-gold trim. Top speed is about 17
mph. The cars are manufactured by
Crue-Cut Manufacturing & Distributing
Co., Kansas City.
Financial institutions making use of
tin lizzies have found that the little
autos can serve in many ways—such
as parade floats, backdrops for period
photographs, prizes in drawings. New
uses for lizzies are being dreamed up
almost every day.
Nederland (Tex.) State Bank bought

Adventures With Lizzies
A distributor of tin lizzie autos who likes to show people how to
have fun with the little cars is Bob Tucker of Bob Tucker Associates,
Port Arthur, Tex. However, he says, bankers come up with some
funny ideas of their own, too!
Mr. Tucker says most of his customers can’t resist driving the
miniature autos as soon as they arrive. One of his banker customers
didn’t quite get the hang of the vehicle before he drove it into a
lamp post! Fortunately, the man was not injured and replacement
parts for the vehicle were readily obtainable.
Another banker used his bank’s tin lizzie to try to temper an
associate’s soberness. He asked the dour associate to drive the tin
lizzie down to the local post office each afternoon to pick up the
bank’s mail! The associate endured the humiliation of jamming his
lanky frame into the little car every day. He sat straight as a poker
as he negotiated the streets of the town. But he apparently kept his
demeanor intact, as he never cracked so much as a smile!
One bank had just installed a tin lizzie in its lobby when a Texas
rancher came in and spied it. He immediately cranked up the car’s
engine and started driving the vehicle around the lobby! The distraught
banker quickly opened the bank’s double doors and motioned the
rancher to take off. He did, and the banker sent the rancher a bill for
the car and ordered another for the bank’s use!

100

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Federal Reserve Bank of St. Louis

a tin lizzie and raffled it off. According
to former bank executive John W.
Bailey, some 100 boxes containing entry
blanks for the drawing were posted
throughout Nederland. Anyone who
wanted to register for the drawing
could do so once a day in any of the
100 locations in participating stores,
where managers rejoiced over the boost
in traffic. Entrants were encouraged to
visit as many stores as they could as
often as possible to obtain entry blanks.
After six weeks, some 6,000 entries
were placed in the drawing box and
a large crowd came down to the bank
on the day of the big event to witness
the tin lizzie drawing.
To promote the drawing, the lizzie
was entered in a local parade. Its occu
pants were the bank’s president and his
daughter. The bank’s name was lettered
on both sides of the car to assure
maximum publicity. The car proved to
be an inexpensive parade float, accord
ing to Mr. Bailey.
Another tin lizzie was used by Mr.
Bailey at his present institution, Central
Bank, Beaumont, Tex., to introduce the
bank’s new name and location. The
giveaway hinged on the arrival of the
10,000th customer to use the bank’s
drive-up facility. Publicity and adver
tising about the lizzie giveaway height
ened interest in the bank’s new build
ing, Mr. Bailey said. But this time,
instead of the bank president appear
ing in the little car, an attractive young
woman was hired to show off the lizzie.
On high traffic days, the auto was
driven around the parking lot of a
shopping center to draw attention to
the drawing.
It took only three weeks for the
10,000th account to show up at the
drive-up. The 10,000th person drove up
right behind the chairman’s wife, who,

MID-CONTINENT BANKER for March, 1977

Our new address is simple to remember

"THETALLEST
OKLAHOMA"
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Visit us on your next trip to Tulsa
We want you to see what we be
lieve to be the finest banking
facility in the great Southwest.
A banking fa cility d e sig n ed
and constructed to make bank
ing easier for our custom ers,
o u r e m p l o y e e s , and our
friends like you.
Bank of Oklahoma — now in
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BANK OF
OKLAHOMA
Bank of Oklahoma Tower
P.O. Box 2300
Tulsa, Oklahoma 74192

New: (918) 588-6000

MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

as the 9,999th customer, almost upset
the bank’s giveaway plan!
Mr. Bailey said he feels the results
of promotions featuring tin lizzies can
be measured in improved public image
for sponsoring institutions on the part
of customers.
“The tin lizzie is cute, attention
getting, imparts a light atmosphere to
any promotion and can be effective
over an extended promotion period,”
he said.
Calcasieu Marine National, Lake
Charles, La., used a tin lizzie as a give
away in connection with the opening of
one of its branches. Entry blanks were
distributed to the bank’s commercial
customers and the public was urged to
visit these businesses in order to pick
up their entries. According to Philip R.
Price, vice president and marketing
director, demand for the entry blanks
was so great that merchants ran out
and had to call for more.
More than 3,000 people showed up
for the bank’s grand opening and some
30,000 entry blanks went into the hop
per for the drawing.
“The exposure of our new location
and its facilities . . . has resulted in
more than expected increased business,”
Mr. Price said.

The bank bought a second tin lizzie
for use in parades, school athletic
events and other public relations activi
ties.
First State Savings, Watertown, Wis.,
used its tin lizzie to liven up its office
for the holidays. It arranged for a
Santa to sit in the driver’s seat and the
car was trimmed with garlands.
The car will be displayed at each of
the thrift’s branch offices throughout
1977 for four-to-six-week periods. It
will be used in press release photos.
During the summer, it will appear in
parades in the various towns in the
thrift’s market area. The car is hauled
from location to location by a trailer.
It is expected that a driver dressed in
a turn of the century motoring coat
will be employed to drive the auto in
parades.
Future plans for the lizzie include
visits to nursing homes and hospitals
in First State Savings’ trade area, ac
cording to David J. Block, vice president-maketing.
First National, Wauwatosa, Wis., is
celebrating its 70th anniversary this
year and it will use a tin lizzie to
garner publicity for the event. The
major activity planned for the little
car is a lobby photo-taking display.

Bank customers will be encouraged to
dress in 1907 outfits and have their
photos taken in the car. In addition to
calling attention to the bank’s anni
versary, the photo display will bring the
public into the bank where individuals
will be made aware of the bank’s ser
vices.
American National, Shawnee, Okla.,
has been using a tin lizzie as an adver
tising tool. Staff members drive the car
in various parades. As the car fades into
the distance, parade watchers can’t
help seeing a canvas cover over the
rear-mounted spare tire emblazoned
with the bank’s slogan: “W e’re here to
help!”
The bank also uses the car as a
babysitter for children of bank cus
tomers. Parents merely park their kids
around the vehicle, which bears a sign
“children welcome!”
Belleville (111.) National Savings used
a tin lizzie to promote the opening of
a drive-up facility. The public was in
vited to submit estimates of how long
it would take to drive the vehicle from
the main office to the drive-in. The
person guessing the time down to the
closest second won the car. A local
beauty queen drove the lizzie during
the trip between the two offices. • *

Buttons' New Household Word in KC
/

As First Charter Starts ATM Service
UTTONS” has become somewhat
of a household word in Kansas
City due to the vigorous marketing ef
forts of First National Charter Corp.
affiliates, First National of Kansas City
and Leawood National.
Last September, 50 teaser billboards
went up in the Kansas City area, bol
stered by a newspaper advertising cam
paign. Both media played upon the
curiosity of the public with phrases
such as “Push Our Buttons,” “Does
Buttons Ever Sleep?” “W e’re Popping
Our Buttons” and “Who Is Buttons?”
This last phrase was the question many

Teaser billboards like this made Kansas Citians
wonder what or who Buttons was.

102

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Federal Reserve Bank of St. Louis

>r
I'm Buttons

^ H e lk
[

Kansas Citians were asking when the
mystery was solved in October with the
multi-media release of details about
Buttons.
It was then that the perplexed public
learned that Buttons, the PersonalTouch Teller, was an automated teller
machine (ATM) offering 24-hour bank
ing services. The word “Buttons” re
lates to the communications keyboard
of the Diebold TABS 550 ATM unit
used by the banks.
According to a Charter spokesman,
the Buttons/Chartercard program was
undertaken by First National and Lea
wood National to extend the availabil
ity and convenience of financial services
and to enhance their competitive retail
positions in the marketplace. Research
indicated that ATM services would be
well received by the customers and
prospective customers of both banks.
The desirability of offering Buttons at
other Charter affiliate banks is now be
ing considered.
By opening a savings or checking ac
count, customers receive a free Char
tercard (bank debit card) and personal

THE PERSONAL TOUCH TELLER.

PERSONAL
TOUCH
r a n k in g

FirstNationalRink
Bank

___

Newspaper ad introduced Buttons to public as
name of ATM service provided by First Nat'l
and Leawood Nat'l, KC affiliates of First Char
ter Corp.

identification number (PIN) that provide
access to the four Buttons locations,
three of which are available 24 hours
a day.
Services include cash withdrawal,

MID-CONTINENT BANKER for March, 1977

with smiling face, arms and oversized
shoes, is used in newspaper, TV and
other promotional materials. The car
toon approach humanized Buttons, also
permitting him to introduce himself in
TV commercials and promote the Per
sonal-Touch Banking services.
The newspaper ad introducing But
tons invited the public to stop in at
any of four locations to receive a dem
onstration of Buttons. Chartercard re

quest forms were available at each lo
cation and were included in newspaper
ads and direct mail campaigns.
Two of the four units are located at
First National’s downtown headquar
ters, one in the south lobby and an
other in the east lobby. A third unit
has been installed at the bank’s Loma
Vista Facility. The fourth ATM is lo
cated at Leawood National’s Watts
Mill Facility. • •

Let our
billion dollar
organization
help your bank
profit. Call
John Hixon (205/832-8343),
a member of our correspondent
banking team.

"Buttons" ATM unit in south lobby at First
Nat'l, Kansas City. Another unit is in east
lobby and offers 24-hour access.

deposits, funds transfer between ac
counts and loan payments. Customers
can request their account balances and
send messages to the banks to note ad
dress changes, request additional de
posit slips or checks, or request infor
mation about other bank services.
On November first, following a threeweek demonstration period, Buttons be
came operational using real money.
According to a Charter spokesman, the
transaction volume on a per-machine
basis after three months exceeds the
national average.
A caricature of Buttons, complete

First Alabama Bancshares, Inc.
Affiliate Banks

ABA Marketing Conference
T h e 1 9 7 7 A B A N a tio n a l M a r k e t
in g C o n fe r e n c e w ill b e h e ld A p ril
2 4 - 2 7 a t th e H y a tt R e g e n c y H o te l,
N e w O rle a n s.
Se ssio n s a re d e sig n e d to in c lu d e
sm all c o m m u n ity b a n k s lo o k in g fo r
w ays to s tre tc h th e ir lo w -b u d g e t
m a rk e tin g d o lla rs, as w e ll as fo r
la rg e m u lti-b a n k H C s in te re s te d in
s e ttin g u p m a jo r c o rp o r a te -m a rk e tin g
fu n c tio n s.
S e ssio n s o f g e n e ra l in te r e s t w ill
in c lu d e le g is la tiv e a n d re g u la to ry
issu es, p ro d u c t p la n n in g , a m a rk e t
in g a p p r o a c h to c a p ita l a c q u isitio n ,
m a rk e tin g e q u a l c r e d it o p p o rtu n ity ,
h o w to h a n d le N O W a c c o u n ts , c o st
an aly sis
an d s e r v ic e p ro fita b ility ,
a n a ly z in g A T M a n d C B C T lo ca tio n s
a n d a g e n e ra l p a n e l d iscu ssio n on
EFTS.
In fo rm a tio n is a v a ila b le fro m B e r t
A u er, a ss is ta n t d ire c to r, m a rk e tin g
d iv isio n , A B A , 1 1 2 0 C o n n e c tic u t
A v e ., N . W ., W a sh in g to n , D C 2 0 0 3 6 .

First Alabama Bank of Montgomery, N.A.
First Alabama Bank of Birmingham
First Alabama Bank of Huntsville, N.A.
First Alabama Bank of Tuscaloosa, N.A.
First Alabama Bank of Dothan
First Alabama Bank of Selma, N.A.
First Alabama Bank of Gadsden, N.A.
First Alabama Bank of Athens, N.A.
First Alabama Bank of Baldwin County, N.A.
First Alabama Bank of Guntersville
First Alabama Bank of Hartselle
First Alabama Bank of Phenix City, N.A.
First Alabama Bank of Mobile County

R rsy U ab am a

MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

103

Lessons From North of the 49th Parallel
OW W OULD you like to have
opened 75,000 Individual Retire
ment Accounts (IRAs) representing
over $250,000,000 in a period of five
years?
Impossible?
Not really. But then again, it didn’t
happen here in the United States. It
happened to one of our banking
neighbors north of the 49th parallel,
Bank of Nova Scotia.
The bank’s investment management
facility, Scotiafund, which handles IRA
marketing and processing, has had a
solid record of success in IRAs, a record
that we bankers in the States might
peruse to see what ingredients led
Scotiafund to capture 21% of Canada’s
IRA market. And let’s analyze its ap
proaches to determine where Scotiafund’s marketing decisions concur with
marketing decisions made by U. S.
banks that have deemed their IRA
efforts “successful.”
Although Canada operates under a
different tax law, there are no important
qualitative differences in Canada’s IRAs
and IRAs in this country. What is dif
ferent is that Canada’s program went
into effect in 1957, but according to
David Scott, Scotiafund president, “it
took a few years for IRAs to catch on.”
A few years indeed! About 13 as a mat
ter of fact.
In 1960, three years after the pro
gram’s inception, Canadian financial
entities had $38 million in IRAs. (In
mid 1976, some 15 months after the
inception of the U. S. program, de
pository institutions held $1.4 billion
in IRAs.) In 1970, 13 years after the
IRA starting date, Canadian financial
institutions held $225 million in IRAs.
But during the next five years the pro
gram grew rapidly, and by year-end
1975 posted a dollar volume of $1.3
billion.
There were two reasons for the
growth, according to Mr. Scott. One is
that many middle-income Canadian tax
payers began to look to sheltering their
hard-earned dollars as tax rates in
creased. Secondly, it took some time
for the people to become educated to
IRAs.
In looking at the IRA situation in
this country, I feel we can assume that

104

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Federal Reserve Bank of St. Louis

By GEORGE M. MORVIS
President
Financial Shares Corp.
Chicago

the latter is quite correct. Even though
our U. S. program has accelerated
much, much faster than Canada’s (we
also have a greater potential market),
the overwhelming majority of the esti
mated 40 million U. S. people who are
eligible for IRAs simply do not yet
understand the program.
When we questioned Mr. Scott about
Scotiafund’s marketing approach to
IRAs (by the way, it didn’t go after
the IRA market until 1970), he boiled
it down to these salient points:
• No media a d v e r tis in g . Since
Scotiafund was a late entrant into
the IRA market, and many other fi
nancial entities, including the life in
surance people, had made the public
aware of the existence of IRAs via paid
mass media, it decided against media
advertising. Mr. Scott insists Scotiafund
wouldn’t have used mass media even if
it were an early market entrant because
the research it conducted early on re
torted claims that the advertising di
rected the purchaser to the institutions
placing the ad.
• Personal selling and staff training.
Scotiafund’s principal medium for train
ing was structured staff meetings. The
staff presentations “were simple and
punched home a worthwhile message.”
They also encouraged ideas from em
ployees on how to improve the pro
gram.
• P o in t- o f- s a le material. It was
heavily used, and because Canada is a
branching country, it was designed
with regional appeal. It used a lot of

POS signs, buttons and booklets every
where. An incentive was even created
to get employees to wear the pin-on
lapel buttons. (A cash incentive was
tied to each person assigned to a pin.)
Results: 81% average participation for
wearing the pins during a two-month
test period.
• A manual. “The Answer Book,”
used to “excite the interest of the first
time reader,” contained all of the in
gredients of a well-done piece: com
plete, understandable answers that were
easily accessible. The bank also used
printed IRA “calculators” as handouts.
Potential customers, therefore, were
able to instantly and easily caculate
their IRA investment, return and taxsheltered income.
• A specially designed computer
processing system and a well-planned
system of employee communication, in
cluding periodic newsletters and a tollfree WATS line from branches to the
IRA Information Bureau, were estab
lished. Said Mr. Scott, “This telephone
is a real confidence booster for the guy
on the firing line. It costs us money, but
it helps us do a better job.”
Mr. Scott also pointed out that the
bank experienced a good deal of busi
ness from the tax-free rollover market
and designed its calling program and
other sales efforts to meet the particu
lar needs of that market. Rollovers now
account for 20% of Scotiafund’s total
IRA volume.
Let’s turn stateside. I think we can
see that those banks that have felt suc
cessful with IRAs have employed many
of the same marketing tactics as our
Canadian friends. Many of us are al
ready familiar with the well-publicized
IRA marketing efforts of Lincoln First
Bank, Rochester, N. Y., and Philadel
phia Savings Society (both utilizing
staff training and personal selling in a
big w ay), so I’ll turn to a few banks
that have established good IRA track
records through some well-balanced
marketing efforts.
Daniel Johnston, officer in charge,
Wachovia Bank’s IRA effort, said that
even before entering its program, a
comprehensive marketing plan was
undertaken. Both the market potential
and the competition situation were

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105

analyzed, with p a r t ic u la r attention
given to deposit patterns and sale
structures. It was found, for example,
that insurance companies presented the
strongest competition because of their
demonstrated success in selling Keogh
plans, the availability of a sales-oriented
force, advanced knowledge of policy
holder’s occupations and IRA eligibility,
experience in selling pension plans to
small businesses and corporations and
consumer appeal of “no penalty” with
drawals of cash value of insurance plans
( remember, these have no tax benefits).
However, the Winston-Salem, N. C.,
bank did feel it could compete effec-

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106

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Federal Reserve Bank of St. Louis

816 421-7941

tively with insurance companies, es
pecially with the IRA rate offered by
such companies, a rate that simply is
not competitive.
The bank also decided to define
specific market segments and pinpoint
marketing approaches to those seg
ments. Among the segmented markets
defined were management groups of
small-to-medium-sized businesses; at
torneys, accountants and other profes
sionals; individual small businesses;
personnel officers; and the general pub
lic. With the exception of the latter
two, almost all of the segmented groups
were “sold” in three ways: personal
calling, direct mail and customized ads
in selected trade publications (i.e.
farm-oriented IRA ads in farm publi
cations within the m arket). Mr. Johnson
also indicated that employee training,
a good operational system and a central
IRA information telephone number for
bank employees to call, should they
have an immediate question, helped the
bank exceed its 1976 IRA goals.
Len Shannon, senior vice president,
Central Rancshares of the South, Inc.,
Birmingham, Ala., assigns heavy em
phasis to personal selling, education,
staff training and “packaging” for its
IRA efforts.
Central’s packaging approach con
sists of no service fee; supplying of
year-end tax reports; automatic de
ductions from checking or another
savings account (helps cross-sell other
savings accounts); and free checking,
either with a $75 per-month automatic
deduction or $1,000 lump-sum pay
ment. Mr. Shannon indicated that even
though the first-year results were
deemed a success based on ABA sur
veys, the HC itself was nevertheless
“disappointed.”
This disappointment caused the HC
to hire an insurance consultant to re
view its sales literature and simplify
the sales approach. The HC now has
an IRA sales flip chart to assist staff
training personnel. Part of that flip
chart is a simple formula that immedi
ately shows the potential customer
what he can expect from his IRA. In
addition, the HC supplies each customer
with a postcard that can be sent to the
Social Security Administration to re
quest a status report of his personal
social security benefits. Mr. Shannon
said this tool is very helpful and a
bank’s district social security office
would be able to supply the information
on how a bank might go about arrang
ing for this free service.
A small Ohio bank, Ohio State, Dayton, utilized its entire budget (which
was less than $4,000) to develop a
professionally done sound/ slide presen
tation and accompanying brochures

(one for IRA and one for IRA rollovers
and an operations manual). The bank
then blitzed the Dayton market (after
utilizing the audio/visuals for employee
training) and made presentations at
trade associations and civic clubs as
part of seminars they sponsored for ac
countants and small business owners
and in corporate offices or a potential
IRA customer’s home. The printed ma
terial was utilized as a handout at these
presentations and at the new accounts
desk, it was also used as rack literature
and was included in selective direct
mailings. The results were some 200
IRA accounts signed up during the
first year! For a $ 15-million bank,
that’s a better-than-average share of
market.
It’s quite obvious—whether it be
Canada or the United States—that em
ployee training, communication and
personal selling are the keys to the IRA
strategies that succeed. It’s a lesson for
many of us, but one that should also
be tempered with plenty of thought
before committing marketing dollars.
I feel that nearly all banks should
offer IRAs as part of their range of
services, but all banks shouldn’t m arket
IRAs. It all depends on what you find
in your market.
Recently a banker whose bank was
located in a downtown office building
of a major U. S. city and had no
branches, said that his IRA research
indicated that 95% of his potential
market (the office building in which
the bank was housed and surrounding
office buildings) consisted of companies
with pension plans. He couldn’t see
spending time dwelling any further on
IRA nor diverting any dollars to a wide
spread marketing effort. He’d “sell” his
customers via direct mail and use pointof-sale materials. Beyond that, the IRA
for his bank didn’t appear to be a
product “on which to expend a lot of
time and marketing dollars.” Makes
sense! * •

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MID-CONTINENT BANKER for March, 1977

Sylvia Porter Offers Financial Advice
To ATM Users at 1st of Evanston, III.
URING A R EC EN T promotion at
First National, Evanston, 111., cus
tomers who deposited $300 or more in
a savings account and signed up for
ATM services were able to get free fi
nancial advice from Sylvia Porter. The
bank offered volumes one and two of
Doubleday’s Sylvia P orters M oney
B ook as premiums during the cam
paign.

completed application to use the bank’s
ATM services.
The objective of the promotions, says
Mr. Scott, is to not only sustain savings
growth but to sell the “First Reserve”
and ATM accounts, both of which will
receive primary emphasis in the bank’s
1977 marketing effort. • •

• Bank Administration Institute.
The fifth in BAI’s community bank
series on operations and automation,
entitled “The Customer Information
File,” has been published. The report
demonstrates how the customer infor
mation file can be considered as a “sub
set” of the bank’s total data content.
Included in the report are sections on
the implementation of a C IF; C IF sys
tem conversion; maintenance; utiliza
tion and an appendix of case studies.
Cost to members is $5; to nonmembers,
$10. Write: Bank Administration In
stitute, P. O. Box 500, 303 S. North
west Highway, Park Ridge, IL 60068.

i O R E F O R Y O T IÎ

M \ EY

1 S V IV I A l‘O R I
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m m m t

FIRST NATIONAL

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o f EVANSTON

The
promotion was
publicized
through the local newspaper, the re
gional edition of the Chicago Tribune
and by direct mail. Much of the cam
paign’s success has been pegged by a
bank spokesman on the fact that First
National personnel became involved in
the promotion through a special color
slide presentation outlining the cam
paign.
And how successful was the ATM
M oney B ook campaign? Nearly 2,000
ATM-card applications and more than
$1 million in deposits resulted. “W e
were especially pleased with the re
sults,” said Gary A. Scott, senior vice
president, “because the population of
our primary trade area is declining and
it’s difficult to generate new deposits.”
A policy at First National is to use
premiums that offer constructive bene
fits to current and prospective cus
tomers, Mr. Scott notes. For example,
another campaign that was run parallel
to the Sylvia Porter offer featured a
free selection from the B etter H om es ù
G arden book series for a customer open
ing a new “First Reserve” checking
account or a savings account, plus a
MID-CONTINENT BANKER for March, 1977

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Federal Reserve Bank of St. Louis

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107

Bill Paying by Phone Offered at Tw o Banks;
Up to Now, a Service Offered O n ly by S&Ls
IL L PAYING by telephone— a ser
vice previously offered only by
S&Ls—now is available at two com
mercial banks, both located in the MidContinent area. These banks are Lou
isiana National, Baton Rouge, and St.
Joseph Bank, South Bend, Ind.
A commercial bank, Seattle-First Na
tional, pioneered telephone bill paying
in 1973, but discontinued the program
because of low acceptance. According
to Louisiana National, this prototype
service had two major shortcomings:
1. It required consumers to use only
touch-tone phones. 2. It was priced at
$6.50 a month.
Farmers & Mechanics Savings Bank,
Minneapolis, introduced a revised payby-phone service in November, 1974.
Payments were priced at 150 each, and
any telephone (rotary dial or touch
tone) could be used. Since then, says
Louisiana National, this thrift institu
tion has built a large base of enthusias
tic users: 18,000 customers, 1,400 mer
chants and more than 350,000 pay
ments a year as of last September.
Since 1974, about 50 S&Ls in the Unit
ed States have begun offering the ser
vice.
Louisiana N ational’s program . The
Baton Rouge bank calls its program the
Bill System. Under the program, the
consumer dials the bank, gives an ac
count number, his secret identification
number (which he chooses himself),
the store or business to be paid and
amount to be paid. With a dial tele
phone, these instructions are given to
an answering service, which leads the
caller through the sequence using ap
propriate questions. With a touch-tone
phone, these orders are given directly
to the bank’s computer. The bank then
handles all the work of paying the mer
chant and deducting the funds from
the customer’s checking account.
Louisiana National customers can
pay any merchant they wish—from the
smallest one-person shop to the largest
corporation. They also can call any
time of day or night seven days a
week. Calls can be made from any
phone—at home, in an office, any
where there’s a telephone.
A merchant will be mailed his pay
ment on the banking day following the
processing of his customer’s payment.

108

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

By ROSEMARY McKELVEY
Managing Editor
Allowing for normal mailing delays, the
merchant can expect to receive his pay
ment within five banking days follow
ing the processing of the customer’s
payments. Louisiana National points
out that merchants with checking ac
counts at that bank have an advantage
—payments to their accounts will be
made on the banking day following
payment processing.
Louisiana National customers are ad
vised to make their calls at least five
days prior to the payments’ due dates,
excluding Saturdays, Sundays and legal
holidays. Ordinarily, LNB is not re
sponsible or liable for incurrence of late
charges unless the bank is at fault.
However, each case will be reviewed
on an individual basis.
A customer periodically can add or
delete names on his list of merchants.
An authorization form is placed in each
subscribing customer’s packet. All he
has to do is complete the appropriate

This is sample of monthly, itemized and
descriptive statement Louisiana Nat'l, Bat
on Rouge, sends customers subscribing to
its Bill System. Latter is program by which
customers pay their bills by phone, with
bank taking funds directly from custom
ers' accounts and sending them to mer
chants.

sections on the form, sign it and send
it in a return envelope or take it to one
of LN B’s offices.
Provisions are made for errors made
by customers. An emergency teller is
on duty from 8 a .m .-ll p.m. on week
days and from 9 a.m.-5 p.m. on Satur
days.
To keep his checkbook straight with
payments made through the Bill Sys
tem, a Louisiana National customer—
before he makes his call— enters the
payment code, merchant’s name and
amount of payment in his checkbook.
Then he can read the entries during
the call. Touch-tone callers on the perpayment plan (150 per payment) are
given a total service-charge figure at
the end of each call. They enter this
service charge in their checkbooks.
Rotary callers on the per-payment plan
have to remember to enter the service
charge after each call or wait and ad
just their balances when they receive
their statements.
A customer can include a “one
time” bill or “nonrecurring” bill on his
list of allotted merchants. However,
Louisiana National points out, the Bill
System provides the biggest advantage
when paying recurring bills that come
in each month.
Louisiana National’s Bill System pro
vides each customer with a description
of the payment on his checkingaccount statement. The bank says it
will stand behind any payment appear
ing on a descriptive statement as being
proof of payment.
St. Jo sep h B ank’s program . Called
Phone-Pay, St. Joseph Bank’s program
is available from 10 a.m.-lO p.m. Mon
day through Friday. Once a customer
signs up, all he has to do is call a spe
cial number, tell the bank whom he
wishes to pay and how much. The
bank does the rest. All payments are
handled on a daily basis, and creditors
receive their payments from the bank
each day.
A major feature of the South Bend
programs, says Arthur H. McElwee Jr.,
president and chief administrative of
ficer, is that a subscribing customer can
keep his funds in an interest-bearing
savings account and transfer the neces
sary amount of money to his checking
account when he calls the bank to have

MID-CONTINENT BANKER for March, 1977

Randolph Stivers, Executive
Vice President of First National
Bank & Trust of Corbin co n
ducts Jim M cKenzie, Asst.
C ashier and Murphy Brock,
Vice President of Liberty Bank,
on a tour of downtown Corbin.

Liberty National Bank
and Trust Company of Louisville
w

MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

109

his bills paid. This results in additional
interest income for the customers, Mr.
McElwee points out.
The customer receives a monthly
statement from the bank spelling out
all his Phone-Pay payments for that
month. The totals are cumulative so
that the customer is instantly aware of
the total amount he had paid to any
creditor in a given year.
Benefits o f program . According to
Louisiana National, here are some of
the advantages to the customer sub
scribing to its service:
• It’s like having a branch bank in
his home.
• It saves time— no trips to mer
chants to pay bills, no check writing,
no envelope addressing, no stamp
hunting, no trips to the post office.
• It saves the cost of stamps, enve
lopes and checks.
• It’s convenient, providing afterhours service.
• It’s secure, confidential and ac
curate.
• There’s overdraft protection through

BankAmericard overdraft procedures.
• There’s prompt payment—no mail
delays or unintended delays because
of putting off going to the post office.
• There’s a monthly, itemized and
descriptive statement.
• Customers pay from their check
ing accounts, and they maintain con
trol over those accounts.
Louisiana National says merchants
derive these benefits from the service:
• Customers like the convenience.
• There are no N SF checks; pay
ments are guaranteed.
• There’s prompt remittance.
• There’s no charge to merchants
for participating in the Bill System.
• There’s increased operating effi
ciency.
• There are no formal, signed
agreements.
At Louisiana National, rules relating
to checking accounts remain in effect.
If a payment overdraws a checking ac
count, a $6 charge is assessed on all
overdrawn payments. As with checks,

payments can be paid (overdraft) or go
unpaid (N S F ). The BAC overdraft
feature can be used. Customers receive
overdraft or N SF notices in the mail.
At Louisiana National, customers are
offered a choice of two service-charge
plans: 150 per payment or a flat fee of
$1.50 a month. St. Joseph Bank says
it charges a “small transaction fee” for
its service, adding that this amounts to
considerably less than a customer
would pay for stamps, checks and sta
tionery.
In addition to being a new service
for customers and merchants, Louisiana
National describes the Bill System as
a step toward “source data capture.”
If banks can capture payment data at
their source (i.e., in the home), the
bank believes the banking system can
skip its expensive paper data-capture
process. The typical check is handled
more than 10 times during its life span.
If all this handling can be eliminated,
the bank points out, then the costs of
this effort can be reduced. * *

Employee Incentive Campaign Reversal:
Customers Ask to Be Sold Services!
OW DOES a bank go about secur
ing 800 new accounts (checking,
savings, CDs) and more than $9.5 mil
lion in eight weeks without the use of
premiums?
By using employees, say the people
at National Bank of Commerce, San
Antonio, Tex.
Ho, hum, another employee incentive
program with bank customers and pro
spective customers being pestered by
employees out to make a buck! Not at
all!
NBC took the tack that prospective
customers should pester bank employ
ees, not the other way around. They
did this by launching an “Ask Me, I’m
From NBC” promotion, in which peo
ple were encouraged to identify and

approach bank employees wherever
they found them in the San Antonio
area.
The bank made employees highly
visible, outfitting them with tee shirts
emblazoned with “ask me” slogans. The
tee shirts Were designated to be worn
during employees’ leisure time. When
on the job, employees were encouraged
to wear necklaces and pins identifying
them as employees of the bank. One
side of the necklace pendant had the
words “I’m Me” stamped on it, the
other side bore “I’m From NBC,” iden
tifying thé person as a bank employee.
Newspaper ads told the public that
NBC employees “had the answers” and
that anyone approaching an employee
and asking a question about banking

Employees of NBC, San Antonio, were en
couraged to w ear bank-supplied tee shirts
during leisure hours so public could identify
them and ask them questions about banking,
setting themselves up for sales pitch by em
ployee.

would probably find out more than he
wanted to know about the topic of the
question.
Of course, what the ads didn’t say
was that the employee would take
every advantage to sell the questioner
a bank service!

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Federal Reserve Bank of St. Louis

MID-CONTINENT BANKER for March, 1977

D o you ever get the feeling
Newlibrk’s closing in on you?
New York is ten people ahead
o f you for a cab, a hundred
places that sell frozen yogurt
and a thousand things to do
before you go home.
New York is everything you
could want. Everything except
easy.
T h a t’s why there’s a Barclay.
T h e Barclay is a small hotel

on the east side. (T h e lobby is
fifty feet across. T h e Big
Conference Room holds twenty
people.) T h e Barclay is quiet,
calm. It’s elegant without being
stuffy, expensive without
being ridiculous.
Next time you want New
York to leave you alone for a
while, rem em ber T h e Barclay.

Ask M e. I’m From N B G
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Cimimerci*.

Advertising for NBC, San Antonio, bore addi
tional logo during employee incentive promo
tion—"National Bank of Confidence."

Extensive training sessions were held
to educate employees about the various
bank services so they could sell effec
tively. Employees were segregated into
categories and quotas were established
to make them eligible for a series of
cash prizes up to a $1,000 grand prize.
As an incentive, the bank stationed
“mystery” people around town whose
job was to approach bank employees,
query them and give the employees op
portunities to sell services. Instant cash
awards were given when employees re
sponded with sales pitches.
The bank projected the “I’m Me”
theme to the public as a sign of confi
dence. In line with that, it added a line
to its logo— “National Bank of Confi
dence”!
A bank spokesman said the campaign
received enthusiastic support from both
officers and employees. Judging from
the results, the spokesman was under
stating the facts! • •

First Commerce HC income Up
N EW ORLEANS— First Commerce
Corp. had consolidated net income for
1976 of $6.3 million, or $3 per share,
compared to 1975 income of $151,000,
or 70 per share.
Total assets at year-end 1976 stood
at $984.6 million, compared to $1 bil
lion at year-end 1975, reflecting a de
liberate reduction in time deposits. Av
erage demand deposits have remained
stable and average savings accounts
have increased by 16.7% over 1975.
MID-CONTINENT BANKER for March, 1977

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

W hen enough New York’s enough.
48th just off Park. (800) 221-2690. In New York State, (800) 522-6449.
In the city, 755-5900. Or call your corporate travel office or travel agent.

lit

Board Room News
Promotions • Elections • Earnings • Retirements

Edwin Yeo Joins First, Chicago
As Executive Vice President
C H IC A G O —Edwin H. Yeo III,
former Undersecretary of the Treasury
for Monetary Affairs, has joined First
National as chairman, asset and liability
management committee, and executive
vice president.
The committee includes the heads of
the various line departments of the
bank under the direction of the chair
man and president.
Mr. Yeo will also be responsible for
coordinating the bank’s strategy on eco
nomic and financial conditions in vari
ous regions of the world as well as the
bank’s view on issues of international
monetary policy.
Prior to service with the Treasury,
Mr. Yeo was with Pittsburgh National,
where he was vice chairman of the
board. He is a recipient of the Trea
sury’s Alexander Hamilton Award.

Messrs. Brennan, Gudinas and Lewis
were senior vice presidents, Mr. Smith
was a vice president.
Mr. Brennan also was elected senior
vice president-loan administration at
Boatmen’s Bancshares, and Robert J.
Bennett was named senior vice presi
dent-planning and development at the
HC. Mr. Bennett formerly was HC vice
president.
Mr. Shepley joined Boatmen’s in
1953 and is president of Boatmen’s
Bancshares. Mr. Brennan joined the
bank in 1970, Mr. Gudinas in 1960, Mr.
Lewis in 1947 and Mr. Smith in 1971.
In other action, the bank elected Mel
Johnson assistant vice president. He is
manager, auto leasing, and joined the
bank in 1973.
Fred L. Kuhlmann, Anheuser-Busch,
Inc., has been elected a director.

At Boatmen's Nat'l, St. Louis

https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Elections, Promotions Made
At First National, St. Louis
ST. LOU IS—Four a s s is ta n t vice
presidents have been elected at First
National.
They are Bernadine T. Alexander,
William K. Carson, Allan G. Curtis and
Michael F . Timmerman.
New officers are Daryl W . Crawford,
personnel officer; Lorraine H. Greene,
bond investment officer; and Lynette F.
May den and Steven J. Maier, inter
national banking officers.

Commerce Bank, Holding Co.
Announce Promotions

Top-Management Promotions
ST. LOUIS— Senior m a n a g e m e n t
changes have been made at Boatmen’s
National. Ethan A. H. Shepley Jr.,
formerly executive vice president, was
named vice chairman; John M. Bren
nan, Richard J. Gudinas and Hugh
M. F . Lewis were promoted to execu
tive vice presidents and Marvin W.
Smith was promoted to senior vice
president.
Mr. Brennan is in charge of the bank
ing division, Mr. Gudinas is in charge
of the operations division, Mr. Lewis
is in charge of the trust division and
continues as senior trust officer and
Mr. Smith is responsible for the ac
counting and auditing functions and
continues as controller.

Harrell, Lawrence J. LeBon III, Richard
Dufrene and Mrs. Geraldine T. Rainey.
Mr. Elstrott joined the bank in 1950,
Mr. Johnson in 1968, Mrs. Jeanfreau
in 1954, Messrs. Lee and Dufrene in
1973, Messrs. Herrell and LeBon in
1975 and Mrs. Rainey in 1966.

JOHNSON

ELSTROTT

Johnson, Elstrott Are VPs
A t Bank of New Orleans
N E W O R L E A N S — Bank of New
Orleans has promoted Jacob J. Elstrott
Jr. and James O. Johnson to vice presi
dents. Mr. Johnson is in the correspon
dent department.
Dorothy C. Jeanfreau and James W.
Lee Jr. were advanced to assistant vice
presidents.
Named assistant cashiers were Ronald

KANSAS CITY— C o m m e rc e Bank
has elected W . Kay Voorhees a senior
trust officer, Franklin D. Shobe and
Michael S. Daffemer assistant vice
presidents and Josephine M. Guiter
and Richard A. Hutchins trust officers.
Mrs. Voorhees joined the bank last
June and was formerly with Traders
National. Mr. Shobe joined the bank
in 1970, Mr. Daffemer joined Com
merce Bancshares in 1975, Miss Guiter
has been with the bank since 1947 and
Mr. Hutchins joined the bank in 1975.
Robert H. West, executive vice presi
dent, Butler Manufacturing Co., has
been elected a director of the bank.
J. Hugh Shields has joined Com
merce Bancshares as a vice president,
loan administration. He was formerly
with Bank of Virginia-Potomac. Charles
E. Templer has been elected controller
of the HC. He had been assistant con
troller since joining the firm last April.

Directors Elected at FNB, Jackson
JACKSON, M ISS.— First National
has elected three new directors. They
are T. G. Blackwell, owner of an auto
agency; Dudley J. Hughes, managing
general partner, Pruet & Hughes Co.;
and Bernard Weiss, founder and part
ner, Maison Weiss.
MID-CONTINENT BANKER for March, 1977

BANK«

DIRECTORS
WILLIAM F. MURRAY
Chairman of the Board

STANLEY G. HARRIS, JR.
Vice Chairman of the Board

Consolidated Statem ent of Condition

CHALKLEY J. HAMBLETON

ASSETS

CHARLES M. BLISS

December 31, 1976

Cash and Due from B an ks...............................................................
Time Deposits in Other B an ks.......................................................
Federal Funds Sold and Securities Purchased
under Agreement to R esell.......................................................
Investment Securities:
U .S. Treasury Securities................................................
State and Municipal Securities...............................................
Other Securities.................................................................................
Trading Account Securities.............................................................
Loans, net of Unearned D iscount...............................................
Less: Reserve for Possible Loan Lo sses.................................
Direct Lease Fin a n cin g .....................................................................
Customers Acceptance Liability....................................................
Bank Premises and Equipment......................................................
Other A ssets..............................................................................................
Total A sse ts...............................................................................................

$ 830,051,954
436,639,033
299,195,625
646,719,605
428,079,853
16,629,308
180,768,841
1,786,878,399
(22,860,913)
53,546,657
30,180,271
90,365,097
82,203,582
$4,858,397,312

Vice Chairman of the Board
President

BENNETT ARCHAMBAULT
Chairman and President
Stewart-Warner Corporation

JOHN W. BAIRD
President
Baird & Warner, Inc.

JOSEPH A. BURNHAM
President and Chief
Executive Officer
Marshall Field & Company

JAM ES W. BUTTON
Senior Executive Vice President —
Merchandising, and Director
Sears, Roebuck and Co.

O. C. DAVIS
President
Peoples Gas Company

KENT W. DUNCAN
Executive Vice President

SAMUEL S. GREELEY
Chairman and Chief
Executive Officer
Masonite Corporation

ROBERT C. GUNNESS

LIABILITIES
Demand Deposits...................................................................................
Savings Deposits and Certificates...............................................
Other Time Deposits............................................................................
Deposits in Foreign O ffices.............................................................
Total Deposits....................................................................................
Federal Funds Purchased and
Other Short Term Borrow ings.................................................
Acceptances Outstanding.................................................................
Accrued Interest, Taxes and Other Expenses.......................
Mortgage Payable......................... ......................................................
Other Liabilities...................................
Total L ia b ilitie s ......................................................................................

$1,371,283,834
810,258,538
809,267,351
694,075,058
$3,684,884,781
753,415,118
30,180,271
59,801,637
3,160,199
36,042,351
$4,567,484,357

EQUITY CAPITAL

Retired Vice Chairman of the Board
Standard Oil Company (Indiana)

HUNTINGTON HARRIS
Trustee
Estate of Norman W. Harris

DONALD P. KELLY
President and Chief
Operating Officer
Esmark, Inc.

JOSEPH B. LANTERMAN
Chairman
A M STED Industries Incorporated

ARTHUR C. NIELSEN. JR.
Chairman of the Board
A. C. Nielsen Company

JAM ES E. OLSON
President and Chief
Executive Officer
Illinois Bell Telephone Company

GEORGE A. RANNEY

Capital Stock ($16 Par Value) Authorized and
Outstanding 3,137,815 shares.................................................
Surplus..........................................................................................................
Surplus Arising from Assumption of Convertible
Capital Notes by Parent Com pany..............................
Undivided Profits...................................................................................
Equity Capital........... ................................................................................
Total Liabilities and Equity C ap ital...........................................

Vice Chairman
Inland Steel Company

50,205,040
102,389,160

15,590,700
122,728,055
$ 290,912,955
$4,858,397,312

THEODORE H. ROBERTS
Executive Vice President

DANIEL C. SEARLE
Chairman of Executive Committee
and Chief Executive Officer
G. D. Searle & Co.

MAYNARD P. VENEMA
Director and Past Chairman
of the Board
U O P, Inc.

Harris Trust and Savings Bank
W holly owned subsidiary of H A R R IS B A N K C O R P , Inc.

MAIN BAN KIN G P R E M IS E S : 111 West Monroe Street, Chicago, Illinois 60690
O P ER A TIO N S C EN TER AND BAN KIN G F A C IL IT Y : 311 West Monroe Street, Chicago, Illinois 60690
IN V ESTM EN T D EP A R TM EN T R EP R ES EN TA TIV E O F F IC E S : New York; St. Louis; San Francisco
LONDON B R A N C H : 48/54 Moorgate, London, EC2R 6EU , England
IN TER N A TIO N A L O F F IC E S : Mexico City; Nassau; Säo Paulo; Singapore; Tokyo

Harris Bank International Corporation:
Harriscorp Leasing, Inc.: 111 West Monroe

345 Park Avenue, New York, N.Y. 10022
Street, Chicago, Illinois 60690

W holly owned subsidiaries of H A R R IS T R U S T AND S A V IN G S BANK
O R G A N IZ E D A S N .W . H A R R IS & C O .,1 8 8 2 • M E M B E R F E D E R A L D E P O S IT IN S U R A N C E C O R P O R A T IO N , F E D E R A L R E S E R V E S Y S T E M

MID-CONTINENT BANKER for March, 1977

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Ft. Worth Nat'l Names SVP;
Richard McKithan Retires
FO R T W ORTH— Fred L. Jones has
been elected a senior vice president at
Fort Worth National. He was previously
a vice president and director of em
ployee relations and is now manager
of the administration division.
Richard W. McKithan, senior vice
president and manager of special pro
jects, retired recently following 35 years
with the bank. He had held his last
position since 1972.
Other promotions involved David W.
Farmer, who moved from Texas Ameri
can Rancshares to the bank. He served
the HC as vice president-personnel and
now serves the bank as vice president
and director of employee relations.
Others promoted were Buck Clary

JONES

McKITHAN

LARGEST
IN
MICHIGAN

Jr., Jack Dacy and Archie L. Nance,
to vice presidents; C. LaMar Gemberling, to vice president and trust officer;
Paris Couturiaux, James B. Peterson
and Thomas C. Sassman, to assistant
vice presidents; and Jerry C. Vandever,
to assistant vice president and trust
officer.
Mr. Jones joined the bank in 1964
and Mr. McKithan has been with Fort
Worth National since 1941.

Executive Promotions Made
A t American Fletcher
INDIANAPOLIS—American Fletcher
National and American Fletcher Corp.
have promoted Walter W . Ogilvie Jr.
to senior executive vice president,
executive management group.
Named executive vice presidents
were Larry J. Hannah, AFC corporate
group; Alvin L. Kuehn, portfolio and
money market group; A. L. LePere,
AFC consumer and operating groups;
and J. Albert Smith Jr., to head a new
group named the real estate group,
which includes A m e ric a n Fletcher
Mortgage Co.
Mr. Ogilvie joined the bank in 1967
and Mr. Hannah was with the bank
from 1964 to 1972. Mr. Kuehn joined
American Fletcher in 1972, Mr. LePere
in 1968 and Mr. Smith in 1969.
In other action, the bank promoted
Eugene E. Henn to vice president and
senior counsel and David R. Hamer
and Frank C. Pirillo to vice presidents
and counsels. All are in the general
counsel department.
Mr. Henn joined the bank in 1961,
Mr. Hamer in 1967. Mr. Pirillo has
been with American Fletcher Mortgage
Co. since 1972 and recently joined the
bank.

Correction
Last month’s issue carried an item
about promotions at Commercial Na
tional, Little Rock, but inadvertently
stated that those being promoted
were associated with First National,
Little Rock. M i i > C o n t i n e n t B a n k
e r regrets the error.
Promoted at Commercial Na
tional were James R. Cobb and Bar
nett Grace, to senior vice presidents;
Ron W. Strother and Dale J. Wintroath, to vice presidents; Jim James
and John Roewe, to assistant vice
presidents; Greer Baber, to assistant
auditor; Jerry Griffin, to loan of
ficer; Carol Hardwick, to assistant
board secretary; and Richard G.
Prinz, to travel officer.

Fox, M cCreary Named SVPs
A t First Amtenn, Nashville
NASHVILLE— First Amtenn Corp.
has promoted John C. Fox and J. Frank
lin McCreary to senior vice presidents.
Mr. Fox continues as treasurer and
joined the HC in 1972. Mr. McCreary
is also general counsel and joined First
American National Bank in 1964.

FOX

McC r e a r y

Frank E. Reeves was promoted to as
sistant general counsel and David E.
Johnston joined the staff recently as
assistant general counsel. Bobby R.
Carpenter was named administrative
officer and Thomas N. Cripps was
elected assistant auditor.

Officers Elected, Promoted
At BancOklahoma HC, Tulsa
HAMPSON

OGILVIE

Hampson Joins Worthen Bank
N A T IO N A L B A N K O F D E T R O IT

assets over
7 billion dollars
Member Federal
Deposit Insurance Corporation

I 14

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Federal Reserve Bank of St. Louis

L IT T L E ROCK—Leonard L. Hamp
son has joined Worthen Bank as vice
president in the correspondent bank di
vision. He had been with First Nation
al here since 1963 and was director of
its correspondent bank department the
past 10 years.
Mr. Hampson also is chairman, Bank
of Locksburg, and a director, First
State, Dermott, both in Arkansas.

TULSA—Lemuel C. Cragholm Jr.
has been named vice president and
manager, energy department, Banc
Oklahoma Corp. He was formerly with
Continental Illinois National, Chicago.
Christopher J. S. Andrews has been
appointed an international officer. He
was formerly with Toronto Dominion
Bank, Montreal, Canada.
Dennis Hicks was promoted to as
sistant vice president, Louise Glass was
elevated to operations officer and Robert
Fugate was appointed assistant trust
officer.

MID-CONTINENT BANKER for March, 1977

Board of Directors

Wrigley Building * 400-410 N. Michigan Ave. * Chicago, III. 60611 * (312) 467-4100

MYRON RATCLIFFE
President, M iami Corporation
Chairm an

ASSETS
Cash and Due from B a n k s ....................................
Securities:
Investment Securities:
U.S. T r e a s u r y ....................................................................................
U.S. Government A g e n c ie s ........................................................
State and Municipal S e c u r it ie s .................................................
O t h e r .........................................................................................................
Total Investment S e cu ritie s..........................................
Trading Account S e c u rit ie s ...............................................................
Total Securities......................................................................
Federal Funds S o l d .............................................................................
Loans, Less Reserve for Possible Loan Losses of $2,309
Leasehold Improvements and E q u ip m e n t ...................................
Customers' Acceptance L i a b i l i t y ........................................................
Other A s s e t s ..................................................................................................

$ 33,198

ROBERT C. BARTLETT
President, Commerce Clearing House

6 6 ,1 1 7

7,581
40,037
3,794
117,529
3,891
121,420
18,600
202,089
1,095
23
6,373
$382,798

LIABILITIES AND CAPITAL A CCO U N TS
Demand D eposits....................................................................................
Time D e p o sits...........................................................................................
Total D ep o sits...............................................................
Federal Funds Purchased and Other
Borrowed F u n d s .............................................................................
Acceptances O u t s t a n d in g ...............................................................
Other L ia b il i t ie s ....................................................................................
Total Liabilities...............................................................
814% Capital Notes (Sub ord inated )..........................................
Shareholders' Equity:
Common Stock (200,000 shares,
par value $20.00) ......................................................................
Surplus ..................................................................................................
Undivided P r o fit s .............................................................................
Total Shareholders' E q u i t y .................................................

HENRY K. GARDNER
President

$149,041
185,285
334,326
16,951
23
2,379
353,679
7,500

4,000
8,500
9,119
21,619
$382,798

ROBERT H. BURNSIDE
Group Vice President and Director—Retired
International Harvester Com pany
ROBERT L. GROVER
Chairm an
Snap-on Tools Corporation
JOHN E. GUTH, Jr.
Vice President, M arketing Operations
International Business
M achines Corporation
C A R L A . KROCH
President
Kroch's & Brentano's, Inc.
M. JOSEPH LAMBERT
Senior Vice President, K raft, Inc.
W. W . McCALLUM
President
W. W. McCallum & Associates
JAM ES L. O 'KEEFE
O 'Keefe, Ashenden, & Lyons
FRANK C. OSMENT
Executive Vice President
Standard Oil Com pany (In d ia n a )
THOMAS H. PEARCE
Chairm an
National-Standard Com pany
CHARLES E. SCHROEDER
Vice President
M iam i Corporation
W ILLIAM L. SEARLE
Chairm an, G . D. Searle & Co.
JO H N W . SHELDON
C hairm an, Chas. A . Stevens & Co.
CHARLES B. STAUFFACHER
President, Chief Executive O fficer and
Chairm an Executive Committee,
Field Enterprises, Inc.
O . EVERETT SW AIN
Executive Vice President
K raft, Inc.
HENRY G. VAN der EB
Chairm an and Chief Executive O fficer
Container Corporation of Am erica
M A X E. WILDMAN
W ildm an, Harrold, Allen & Dixon
W ILLIAM W RIGLEY
President, Wm. W rigley Jr. Com pany

NATIONAL BOULEVARD BANK
OF CHICAGO

Member Federal Deposit Insurance Corporation
MID-CONTINENT BANKER for March, 1977

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400-410 N M IC H IG A N AVE . 23 7 E G R A N D AVE..
PHONE (312) 4 67-4100 • MEMBER FD IC

assistant vice presidents to vice presi
dents.
Michael A. Luby Jr. was promoted
from assistant cashier to assistant vice
president and Betty J. Barlow was
elected vice president and treasurer,
First National Safe Deposit Co.
Mr. Adams was formerly with
Charter Bank, Jennings, Mo. Messrs.
Dunn and McKay joined the bank in
1936, Mr. Thomas in 1971, Mr. Luby
in 1973 and Mrs. Barlow in 1962.

Bank of Southwest, Houston,
Names Three Vice Presidents
HOUSTON— Bank of the Southwest
has elected A. W. Nelson and Walter
B. Hendrick vice presidents and James
C. Thompson has joined the bank as
a vice president and director of the
human resources department.
Mr. Nelson was an assistant vice
president and operations supervisor in
the international banking division. He
joined the bank in 1947. Mr. Hendrick
joined the bank last January and is in
charge of the Southwest corporate de
partment’s real estate finance section.
Mr. Thompson was formerly with
Affiliated B a n k sh a re s of Colorado,
Boulder, and First National, Albu
querque.

NELSON

HENDRICK

THOMPSON

FERGESON

GOODWIN

HOUSE

Three Elected, Three Raised
A t Texas Bank, Dallas

New Unit, Managers Named
In Continental Reorganization

DALLAS—Texas Bank has promoted
three officers and elected three new of
ficers.
Gene L. Burgen was elected senior
vice president in charge of operations;
Rex B. House was promoted to senior
vice president and manager, correspon
dent banking and southwestern ac
counts division; and W. Jerome Dano
was promoted to senior vice president
in real estate and construction loans.
Michael Chaffin and John F. Good
win were elected vice presidents. Mr.
Chaffin is manager, trust operations,
and Mr. Goodwin is in the correspon
dent and southwestern accounts di
vision. Dale E. Cole was promoted to
vice president, real estate and con
struction.
Mr. Burgen was formerly with
U. S. National, Omaha; Mr. House has
been with Texas Bank’s correspondent
division for 14 years; Mr. Dano joined
the bank in 1975; Mr. Cole is a former
vice president of a construction firm;
Mr. Chaffin was formerly with First
City Bancorp., Houston; and Mr. Good
win was formerly with Fort Worth
National, where he was vice president
and manager, correspondent bank de
partment.

CHICAGO— Formation of a new fi
nancial services department and ap
pointment of several managers were
announced by Continental Bank.
The new group consists of the exist
ing commercial and international de
partment and a new multinational de
partment to serve large customers with
extensive overseas operations.
John E. Porta, vice president, is head
of the new department. Mr. Porta was
formerly head of Continental Illinois
Ltd., London.
The financial services department in
cludes the following service sections:
Corporate finance and international
securities, London, headed by George
L. Scheuppert, vice president. Another
corporate finance section will be located
in Chicago.
Global cash management, based in
Chicago and headed by Andries H. J.
Jansma, vice president. Russell J.
Hovde, vice president, will supervise
domestic cash management.
Activities of Continental Illinois Leas
ing Corp., Chicago-based subsidiary of
the bank’s HC, Continental Illinois
Corp., will continue to be managed by
Joseph M. Nachbin, executive vice
president.
U. S. trade finance, based in Chi
cago.
Gerald M. Keeley, senior vice presi
dent, will head staff administration for
the general banking services group.
Kenneth J. Rudnick, vice president, will
be in charge of general banking’s train
ing section.

Three Exec. VPs Named
At Liberty Nat'l, OC

First Nat'l, Kansas City,
Promotes 4, Elects 2

O K L A H O M A CITY— Liberty Na
tional has promoted Fred M. Moses to
executive vice president, commercial
banking, and Jack E. White to execu
tive vice president, trust. Joe H. Blair
was promoted to vice president, trust.
Named assistant vice presidents were
Clifford Elliott, Kendric F e r g e s o n ,
Robert Henley, Marjean McCrady, John
H. Masters, John A. Shelley, Dorothy
Riffel and Janell Tidwell. Mr. Fergeson
is in the correspondent banking depart
ment.
Liberty Financial Corp. promoted
William B. Robberson to executive vice
president.
Mr. Moses joined Liberty in 1969
and Messrs. White and Robberson have
been with the bank since 1963.

KANSAS CITY— First National has
elected Harry W. Adams Jr. vice presi
dent in the operations division and
promoted Franklin L. Dunn, William J.
McKay and James A. Thomas from

1 16

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Federal Reserve Bank of St. Louis

DUN N

ADAM S

B A R LO W

M cK A Y

TH O M A S

MID-CONTINENT BANKER for March, 1977

are right through Houston.
News of international importance
from Houston’s largest bank.
F irst City N ational B ank can assist
you in providing d irect international
banking connections to your custom
ers with interests in Europe and the
F ar East.
O u r in te rn a tio n a l in v o lv e m e n t
in c lu d e s a f u ll- s e r v ic e b ra n ch in
L ondon, a representative o ffice in
T o k yo and a Eurocurrency unit in
N assau, the B aham as. In 1 9 7 3 , we
to o k p art in f in a n c ia l h is to ry by

helping to establish the first m erchant
bank in Indonesia offerin g a wide
range o f financial services.
D om estically , our sta ff includes
ex p erien ced in tern atio n al ban kin g
specialists who understand the m on
etary particulars o f overseas opera
tions. T his part o f our 100-year co m
m ercial banking experien ce is yours
fo r the asking.
W e ’ re b e c o m in g in v o lv ed w ith
more and more industries every day.
In so doing, w e’re proving to co rre

MID-CONTINENT BANKER for March, 1977

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Federal Reserve Bank of St. Louis

spondents that m ore service is the
result o f more experien ce. U nder
standing business as well as banking
worldw ide has made us . . .

A major financial strength
behind Texas industry.

FIRST
CITY
N A T IO N A L

BANK

OF HOUSTON

117

Burrow, Jarvis, Lambert
Raised at Worthen Bank
L IT T L E ROCK—Larry Burrow, Don
Jarvis and Bev Lambert have been pro
moted from vice presidents to senior
vice presidents at Worthen Bank. All
three are division managers.
Mr. Burrow joined the bank in 1970
and manages the trust division. Mr.
Jarvis manages the operations and ad
ministration division and has been with
Worthen since 1971. Mr. Lambert, who
heads the investment division, joined
the bank in 1969.

First City Nat'l, El Paso,
Promotes Two Officers
E L PASO— First City National has
promoted Lester L. Parker Jr. to vice
president and Steve DeGroat to as
sistant vice president in the commercial
lending division.
Mr. Parker joined the bank in 1970
and has worked in operations, market
ing, national accounts and commercial
lending. Mr. DeGroat has been with
the bank since 1973, assigned to the
operations, marketing and commercial
lending divisions.

Cos+akis Named President
A t LaSalle Nat'l, Chicago

JARVIS

LAMBERT

CHICAGO—LaSalle National has re
aligned its senior management positions.
James G. Costakis, chairman, executive
committee, takes on additional duties
as president. He will continue to share
principal executive responsibilities with
Harrison I. Steans, chairman.
Former President Milton F. Darr Jr.
was elected vice chairman. He will con
tinue to represent the bank while de
voting more time to outside interests.
Mr. Darr has been with the bank more
than 30 years.

New Bank of St. Louis Chairman

ZETTLER

BURROW

Zettler, C arr Promoted
A t St. Louis Fed Reserve

ST. LOU IS—Jack W. Minton has
been elected chairman* Bank of St.
Louis, and continués as president and
CEO. Kenneth Poslosky, commercial
loan division, has been named execu
tive vice president and a director; Fred
Fangmann, controller of the bank’s
parent HC, General Bancshares Corp.,

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Federal Reserve Bank of St. Louis

NEW ORLEANS—First N a tio n a l
Bank of Commerce has promoted four
officers and elected five others to bank
ing officer status.
A. Peyton Bush III was promoted to
manager, operations division; William
H. Keener Jr. was named vice presi
dent, metropolitan department; Terry
D. Barnett was promoted to assistant
vice president, personal lending depart
ment; and Ronnie J. Foret was named
assistant vice president, petroleum and
special credits department.
Louis J. Provenzano, Michael G.
Gretchen, Michael L. Tindall, Michael
L. Sappington and Malcolm P. Schwarzenbach Jr. were named banking officers.
Messrs. Bush and Keener joined the
bank in 1974, Mr. Barnett in 1970 and
Mr. Foret in 1974.

Business Development Officer
Named at Commercial Nat'l, KCK
KANSAS CITY, KAN.— Donald L.
Steppe has been elected business de
velopment officer, installment loan di
vision, at Commercial National. Mr.
Steppe will conduct new business de
velopment and marketing programs for
the division.
He joined the bank in 1970 and was
formerly collection manager, Master
Charge credit card division.

TULSA— BancOklahoma Corp. has
named J. E. (Jim) Tyree, president,
Oklahoma Natural Gas, an advisory di
rector. Mr. Tyree was named to his
present post at the utility last October
and has been with the utility for 28
years.

Kehoe Named Chairman, Director
At First Tenn. Nat'l, Nashville
MINTON

United Mo. Names Directors

1 18

Five Promoted, Four Elected
A t First NBC, New Orleans

BancOklahoma Names Director

ST. LOU IS—The Federal Reserve
Bank of St. Louis has named Charles
D. Zettler vice president and A. Melvin
Carr assistant vice president. Mr. Zettler
succeeded Edgar H. Crist, who retired
recently.
Mr. Zettler joined the bank in 1949.
Prior to that, he was an Illinois state
bank examiner. Mr. Carr, who suc
ceeded Mr. Zettler, joined the bank in
1952. Prior to that, he was with
Peoples First National, Paducah, Ky.

KANSAS CITY— United M isso u ri
Bank has elected Mrs. Muriel Kauffman
to its board. She is associated with
Marion Laboratories, Inc., and has been
an advisory director since 1971.
United Missouri B a n c s h a r e s has
elected Paul D. Bartlett Jr., president,
Bartlett & Co. Grain, to its board. He
is a member of the board of United
Missouri Bank.

St. Louis, has been named the bank’s
senior financial vice president and sec
retary; and Martin Harrington has been
appointed senior vice president, cor
respondent banking division.

HARRINGTON

FANGMANN

Cullen Kehoe, president and director,
First Tennessee Bank and First Ten
nessee National Corp., both in Memphis,
has been named chairman and director,
First Tennessee Bank, Nashville.
Both the Memphis and Nashville
banks are affiliated with First Tennessee
National Corp.
Mr. Kehoe also serves as director of
Allied Bank International and is a mem
ber of the Association of Reserve City
Bankers and the Bankers Association of
Foreign Trade.

MID-CONTINENT BANKER for March, 1977

First NBC knows what it means
cor «respond (kôr'i spond') v.i. 1: for a per
son, partnership, firm or corporation to carry
on business transactions with another at a
distance; esp: BANKING 2: to communicate
by letter, telegram or telephone, and, esp. at
First National Bank of Commerce, to com
municate on a personal level. Our corre
spondent banking officers understand all the
services you require and anticipate all your
needs. When you deal with us you know we
know the meaning of correspondent. For in
formation on First NBC’s correspondent
banking programs contact Doug Lore at
1/800/462-9511, within Louisiana, or 1/800/
535-9601, outside Louisiana.

First National Bank of Commerce
C O R R E S P O N D E N T B A N K IN G D E P A R T M E N T

210 B aronne Street/New O rleans, Louisiana 70112/504-561-1473
M em ber F D IC

MID-CONTINENT BANKER for March, 1 977

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Federal Reserve Bank of St. Louis

Raymond Doll Retires
From Kansas C ity Fed
KANSAS CITY— Raymond J. Doll,
senior vice president and director of
research, Kansas City Fed, retired re
cently following more than 26 years
of service. As the bank’s senior policy
advisor, he was an associate economist
with the Fed’s Open Market Com
mittee.

C&S Names Five AVPs
ATLANTA— Five assistant vice presi
dents have been named at C&S Na
tional.
They are Richard S. Cassels, Daphne
T. Garrett, Nancy P. Johnson, Michael
R. Knight and Felix Rodriguez.
They joined the bank in 1972, 1949,
1973, 1972 and 1975, respectively.

FNB, St. Louis, Elects AVPs
ST. LOUIS— First N a tio n a l has
elected T. Ellis Barnes III and Richard
L. Winters assistant vice presidents.
Mr. Barnes joined the bank in 1973,
Mr. Winters the following year. Mr.
Barnes is in the metropolitan division
and Mr. Winters is in commercial bank
ing.
He chaired the Fed’s committee on
agriculture and rural development and
was involved in the Fed’s re-evaluation
of its discount mechanism in the late
1960s, which led to adoption of the
seasonal borrowing privilege for mem
ber banks.
Mr. Doll joined the Fed in 1951,
following service with Kansas State
University.

Citizens Fidelity H C , Bank
Make Officer Appointments
L O U ISV ILLE— Michael N. Harreld
has been promoted to senior vice presi
dent and manager of the marketing
department at Citizens Fidelity Corp.
and Charles J. Thayer has been pro
moted to senior vice president in
corporate planning.
In
th e o p e r a tio n s
d iv is io n ,
H. C. Churchill has been promoted
to first vice president and manager,
Anthony Frank to assistant vice presi
dent and property management officer
and Mary Dugan to operations officer,
transmittal banking.
In retail banking, Grover Johnson
and Ronald Kresen have been appointed
assistant vice presidents and Helen
Pumphrey, Rrenda Keys, Etta Zwigard
and Mary Ann Brinke have been ap
pointed assistant cashiers.
A. J. Desposito, senior vice president
and manager, Citizens Fidelity Leasing
Corp., has also been named a vice
president of Citizens Fidelity Bank.
Brent Raines has joined the bank as a
vice president in marketing. He was
formerly with Provident Bank, Cincin
nati.
Michael B. Vairin has been promoted
to vice president, commercial loans. He
joined the bank in 1968.
120

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Federal Reserve Bank of St. Louis

United Missouri Bank, K C ,
Names Thomason Exec. VP
KANSAS CITY— Don V. Thomason
has been promoted from senior vice
president to executive vice president in
the business development department
at United Missouri Bank. He joined the
bank in 1970.
Promoted to vice presidents were
Suellen E. Long, Michael R. Hart and
Lindy J. Evans. Promoted to assistant
cashiers were C. Steven Cole and Gary
Foltz.
Hoyt H. Thompson, president, Townley Metal & Hardware, was elected to
the board.
Mrs. Long joined the bank in 1962,
Mr. Hart in 1971, Messrs. Evans and
Cole in 1971 and Mr. Foltz in 1972.

County Nat'l Assets Up
CLAYTON, MO.— County National
Bancorp, had net income of $2.3 mil
lion, or $3.34 per share, in 1976, com
pared to $2.5 million, or $3.63 per
share, for 1975.
Total assets of the HC on December
31 were $355 million, compared to $311
million a year earlier. Total deposits
were $293 million, up from $255 mil
lion at the end of 1975.

Steady Growth at BankAmerica
SAN
FRANCISCO—BankAmerica
Corp. reports net income for 1976,
including securities transactions, of
$336.8 million, up 11.2% from $302.8
million earned in 1975. This amounted
to $2.41 per share, up 10% from $2.19
per share in 1975.
Total assets increased to $73.9 bil
lion at year-end 1976, up 10.7% from

$66.8 billion at year-end 1975. Net
loans rose to $35.4 billion at year-end
1976, up 8.9% from $32.6 billion at
year-end 1975. Total deposits stood at
$60.8 billion at year-end 1976, up
7.4% over 1975.

Citicorp Earnings Rise
NEW YORK— Consolidated operat
ing earnings after tax for 1976 for
Citicorp reached a record level of
$404.9 million, up 16.3% from 1975
figures. Earnings per share were $3.24
for 1976, compared to $2.81 for 1975,
an increase of 15.3%.
Total assets at year-end 1976 stood
at $64.3 billion, up $6.4 billion from
year-end 1975.

1st Kentucky Income Up
L O U ISV IL L E —Operating income
for 1976 for First Kentucky National
Corp. was $12.7 million, or $3.14 per
share, an increase of 7% over the $11.9
million or $2.94 per share, earned in
1975.
Loans outstanding stood at $629.8
million at year-end 1976, up $60.9 mil
lion, or 10.7% from year-end 1975. D e
posits were $928.1 million at year-end
1976 and total assets were $1.2 billion.

First Union Income Increases
ST. LO U IS—First Union Bancorp,
had net operating income for 1976 of
$21 million, compared with $18.7 mil
lion for 1975. On a per-share basis,
1976 net operating income was $4.58,
an increase of 12.5% over the $4.07
earned in 1975.
Total assets were $2.8 billion at
year-end 1976, compared with $2.6
billion a year earlier. Total deposits
were $2 billion at year-end 1976, com
pared to $1.9 billion for 1975.

First City HC Reports Profits
HOUSTON— Record income before
securities transactions of $31.9 million,
up 13% year to year, was reported by
First City Bancorp, of Texas for 1976.
Per-share equivalents were $3.43 and
$3.11, respectively.
The HC became a $5-billion organi
zation for the first time last year. Total
year-end assets were $5.3 billion, an
increase of 14.8% from the $4.6 billion
reported a year earlier. Total deposits
at year-end were $4.3 billion, up 13.5%
from $3.8 billion a year earlier.

Republic's Income Up
DALLAS— Republic of Texas Corp.’s
income for 1976 increased 2.2% to
$46.2 million, or $4.06 per share, com
pared to 1975 figures of $45.2 million,
or $3.98 per share.
As of December 31, 1976, total con-

MID-CONTINENT BANKER for March, 1977

solidated assets of the firm stood at
$6.5 billion, a 21.2% increase over the
year-earlier figure. Total loans in
creased 17.4% to $3 billion and total
deposits increased 15.6% to $4.6 billion.

C&S Reports Higher Assets
ATLANTA—An increase in total as
sets and deposits was recorded by Citi
zens & Southern National last year.
Total assets stood at $3.2 billion at
year-end 1976, versus $3.1 billion at
year-end 1975. Deposits were $2.5 bil
lion for 1976, compared to $2.4 billion
for 1975. Loans were $1.9 billion at
both year-end 1976 and 1975.
Consolidated net income for 1976
was $15.2 million, including after-tax
securities gains of $705,000. This is a
decrease of 11.8% from net income of
$17.2 million in 1975, which included
the addition to last year’s earnings of
the $1.2 million cumulative effect of
a change in the method of reporting
finance income on installment loans of
C&S Finance Co.
On a per-share basis, net income for
1976 was 530, versus 600 in 1975.

American Nat'l Deposits Rise
CHICAGO—American National re
ported average deposits rose 5.8% last
year and total resources at year-end
1976 stood at $1.8 billion, a 10.4% in
crease over 1975 resources.
A decision for a sharply increased
loan-loss provision resulted in reduced
net income for 1976. Exclusive of the
loss provision, profitability in the other
aspects of the bank’s operations, before
securities transactions, matched the
record level set in 1975.
Net income for 1976 was $8.8 mil
lion, compared to a record $11.8 mil
lion a year previous.

Higher net interest income on a tax
able equivalent basis, strong expense
control and increased fees and profits
from other sources all contributed to
the improved earnings performance,
the firm said.

Boatmen's Has Record Income
ST. LOU IS— Boatmen’s Bancshares
had consolidated income before secur
ities gains and loses in 1976 of $8.8
million, or $3.70 per share, compared
to $8.3 million, or $3.53 per share, for
1975.
Total assets, deposits and loans stood
at record levels at year-end 1976. Total
assets were $1.2 billion, up 18%; de
posits increased 17% to $962.3 million;
and net loans increased 16% to $603.2
million.

Increased Earnings at Liberty
L O U ISV IL L E — Net income for Lib
erty National after securities gains in
1976 reached a record level of $4.4
million, or $5.39 per share, compared
to $4.1 million, or $5.04 per share, in
1975, up 7%.
The bank reached its highest level
of deposits at year-end 1976— $480.4
million, compared to $459.2 million at

year-end 1975. The bank exceeded
$600 million in total assets for the first
time in its 123-year history.

1st Charter Hits $1-Billion Mark
KANSAS
CITY— First
National
Charter Corp. exceeded $1 billion in
deposits for the first time last year, a
14.3% increase over 1975 deposits.
Net income for 1976 was $10.8 mil
lion, or $5.98 per share, up from $10.2
million, or $5.63 per share, for 1975.
The firm has had five consecutive quar
ters with successively higher earnings.
Consolidated total assets of the HC
stood at $1.4 billion at year-end 1976,
up 10.6% from the $1.3 billion at yearend 1975.

Detroitbank Has Record Earnings
D ET R O IT— Detroitbank Corp. had
net income, after securities transac
tions, of $27.2 million, or $6.39 per
share, for 1976. In 1975, earnings were
“$26.9 million, or $6.34 per share. On
a per-share basis, this represents a 1%
increase.
Total assets of the HC rose to $3.4
billion, up 6%. Deposits reached $2.8
billion at year-end 1976, up 7% over
1975.

Beverly Hills newest hotel for those
who demand the ultimate in

Central Nat'l Reports Profit
CHICAGO— Central National Chi
cago Corp. had consolidated net in
come of $3.9 million for 1976, or $3.26
per share, compared to a net loss in
1975 of $11.3 million, or $10.19 per
share. The figures include gains on se
curity transactions and the recognition
of tax loss carry forward benefits.
Exceptional profitability in the bond
portfolio and bonds trading activities
of Central National Bank contributed
to the improved earnings for the year.

Record Earnings for Continental
CHICAGO— Continental
Illinois
Corp. had record annual earnings for
1976 before security transactions of
$130.9 million, up 10.1% over 1975
earnings of $119 million. Per-share
earnings were $7.45, compared with
$6.84 for 1975.
MID-CONTINENT BANKER for March, 197 7

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Federal Reserve Bank of St. Louis

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121

CORNERSTONE.
M e m p h is Bank & Trust is becom ing th e co rn e rsto n e o f area
b an kin g . M o re and m ore banks, o v e r 100 n ow a ll o ve r th e M id-South,
a re b a n kin g w ith M e m p h is Bank & Trust. We have th e fa ste st g ro w in g
C o rre sp o n d e n t Bank D e p a rtm e n t in D ixie.
W e're in th a t p o sitio n not just because w e o ffe r th e fu ll ra n g e o f
b a n kin g services, o th e r banks also o ffe r im p re ssive shopping lists.
N o r a re w e m a kin g it just because w e 're big, som e banks a re b ig ge r.
Banks a re b a n kin g on us fo r th e sam e reason o u r o th e r custom ers
d o . . . w e 're d ep e n d a b le . W e're th e m ost solid b an k in to w n , stonesolid, and w e back o u r services w ith personal a tte n tio n and
u n b e a ta b le e xp e rie n ce . We th ro w in som e e xtra s, too, th a t b a n ke rs
a p p re cia te , lik e e x p e rt insurance ca p a b ility , guidance in th e
co n stru ctio n and design o f bank fa c ilitie s . . . even se lection o f
fu rn ish in g s.
S o lid a rity plus th e personal touch and th e w illin g n e s s to ta k e
th e e x tra step have m ade M e m p h is Bank & Trust th e fa ste st g ro w in g
m a jo r b an k in M e m p h is . . . in a ll d e p a rtm e n ts.
M in n ™
That sam e p hiloso p hy is m akin g us th e bank
w h e re b a n ke rs bank in
n
th e M id-South. That''s
p lim e n t a bank
can get.

Member FDIC

THE BANKER'S BANK
122

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Federal Reserve Bank of St. Louis

MID-CONTINENT BANKER for March, 1977

ABA President-Elect, Regulator Panel
To Highlight 77th Louisiana Convention
Ü MfIP J 9
ì%
m

LENSING

STUART

of the 77th annual
meeting and convention of the
Louisiana Bankers Association will be
a presentation by ABA President-Elect
A. A. Milligan, president, Bank of A.
Levy, Oxnard, Calif., a session with
Roy Jackson, regional FD IC director,
on the duties and responsibilities of di
rectors and a panel of regulators to
answer questions about new examina
tion procedures.
The convention is scheduled for April
2-4 at the Hyatt Regency Hotel, New
Orleans.
The annual event will get underway
on Saturday, April 2, with registration
in the exhibit hall from 9 a.m. to 5
p.m. Exhibits will be open the same
hours.
Saturday evening will see a two-hour
social in the Stadium Club of the Superdome, which is located adjacent to the
hotel. Tours of the Superdome will be
conducted.
Sunday’s events will consist of regis
tration and exhibits from 9 a.m. to
5 p.m.
Events begin early on Monday, April
4. The breakfast for graduates and stu
dents of the School of Banking of the
South will begin at 7 :3 0 a.m. and regis
tration will begin at 8 a.m. Women’s
bingo and the first business session
start at 9 a.m. The latter will include
presentations by LBA President Donald
Delcambre, president & CEO, State
National, New Iberia, and Mr. Milli
gan. Committee reports and the first
reading of resolutions will also be taken
up.
A combined men’s and women’s so
cial will begin at 11:45 a.m., followed
by a combined luncheon, at which
nominations and election of LBA of
ficers and directors will be conducted.
The second business session will con
ig h l ig h t s

vene at 2 p.m. with Mr. Jackson’s talk,
followed by the panel of regulators.
The panel will consist of Mr. Jackson,
representing the FD IC ; Kenneth Pick
ering, state banking commissioner; and
a representative from the office of the
Comptroller of the Currency. Panelists
will answer questions about new exam
ination procedures and completing and
filing quarterly reports, as well as other
topics.
The social will begin at 6 :15, fol
lowed by the annual banquet at 7:3 0
featuring the Conti family, billed as
wholesome entertainment.
In addition to Mr. Delcambre, LBA
officers for 1976-77 include Walter
Stuart III, vice chairman, First Na
tional Bank of Commerce, New Or
leans, who is president-elect; and
George S. Lensing, president, Bank of
Dixie, Lake Providence, who is treasur
er.
Mr. Delcambre joined State Nation
al in 1955 and has been president for
12 years. He is a graduate of the
School of Banking of the South and is
a former director of the Fed’s New
Orleans branch. He has served as
chairman of the LBA’s federal affairs
and legislative affairs committees.
Mr. Stuart has been with his bank
since 1963. He was elected senior vice
president in 1965 and was raised to
executive vice president the same year.
He has been vice chairman since 1973.
He served First Commerce Corp., par
ent HC, as president starting in 1973
and was raised to vice chairman in
1975. He is a director of the School of
Banking of the South.
Mr. Lensing is a native of Arkansas
and joined Logan County Bank, Scran
ton, Ark., in 1934. He moved to his
present bank (then known as Lake
Providence Bank) in 1940 and has
been president since 1945. * *

MID-CONTINENT BANKER for March, 1977

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Federal Reserve Bank of St. Louis

DELCAMBRE

a C O M M E R C IA L NATIONAL,
Shreveport, has promoted A. V. Loftus
III and Seth Morehead Jr. to vice pres
idents; Samuel C. Bonnette to trust of
ficer; Mrs. Nina R. Franklin, William
G. Miller, Mrs. Elsie S. Pierce and
G. Thom Williams to assistant vice
presidents; Mrs. Ann F. Hilman to as
sistant trust officer; and Miss Janet
Brossette, Stanley W. Burke III, Her
bert L. Doughty, John W. Hollis and
Ronnie D. Sheffield to assistant cash
iers.
B TERREBO N N E BANK, Houma, has
announced plans to erect a seven-story
home office building adjacent to its
existing headquarters. Completion is set
tentatively for August, 1978. The con
temporary-styled structure will have ex
terior materials of bronze reflective
glass in bronze settings integrated with
white masonry panels. The first and
second floors will extend into a 6,000square-foot triangular-shaped customer
service area lighted by four large sky
lights. Warm, natural, earth-toned colors

will predominate in the lobby area,
which will have oiled walnut desks and
teller fixtures inlaid with honed finish
Baltic brown granite. The second floor
will overlook the main lobby and will
be connected to it by an escalator. Live
trees and green carpeting will accentu
ate the interior color scheme. The
bank’s present quarters will be avail
able for lease when the new office
tower is completed. The Southwestern
Financial Facilities Division (Dallas)
of Bank Building Corp., St. Louis, is
the consultant and construction man
ager. John Suedel, an associate of Bank
Building, is the architect.
B GUARANTY BANK, Alexandria, has
promoted Willie L. Spears to assistant
vice president and elected Faye Campo,
Judy Medica and Rose Ralston assistant
personal banking officers.

123

From the Mid-Continent Area
Alabama
■ SHOALS NATIONAL, Florence,
has named W. Woodrow Truitt Jr.
executive vice president. Mr. Truitt,
a graduate of Jacksonville State Uni
versity, expects to receive his master’s
degree in business administration in
June. He also is a graduate of the
School of Banking of the South at
Louisiana State U n i v e r s i t y , Baton
Rouge. Mr. Truitt spent eight years
with Commercial National, Anniston,
and the last three years as CEO,
Guaranty Federal S&L, Anniston.

'Bank on the Basics'
“ B a n k o n th e B a s ic s ” is th e title
o f a c o m m u n ity b a n k m a rk e tin g
se m in a r to b e sp o n so re d b y th e B a n k
M a r k e tin g A ss o c ia tio n A p ril 2 0 - 2 1
in c o o p e ra tio n w ith its F lo rid a -A la b a m a C h a p te r. T h e se m in a r w ill b e
h e ld a t th e B a y P o in t Y a c h t an d
C o u n try C lu b , P a n a m a C ity , F la .
T h e se m in a r w ill b e d ir e c te d to
c o m m u n ity b a n k s w ith a ssets o f $ 2 5
m illio n to $ 2 0 0 m illio n , is d e sig n e d
to p ro v id e p a rtic ip a n ts w ith a b a s ic
u n d e rsta n d in g o f c o n t e m p o r a r y
m a rk e tin g te c h n iq u e s an d , a c c o rd in g
to th e B M A , is e s p e c ia lly re le v a n t
fo r in d iv id u a ls w ith lim ite d o r p a rttim e m a rk e tin g re s p o n sib ilitie s.
C o n c u rre n t sessio n s a re p la n n e d
on su c h to p ic s a s: “ S a le s T r a in in g —
H o w to T r a in th e C u s to m e r-C o n ta c t
P e rso n a t a C o m m u n ity B a n k ,” “ E f
fe c tiv e M a r k e t R e s e a r c h o n a B u d
g e t ,” “ P re m iu m s— Y es o r N o ” a n d
“ S e llin g — D i r e c t o r s , S to c k h o ld e rs,
O fficers— C a n I t B e D o n e ? ” I n a d
d itio n , th e r e w ill b e sessio n s on
“ M a r k e tin g b y O b je c tiv e s ,” “A d
v e rtisin g E ffe c tiv e n e s s ” a n d “ C B C T
an d P O S — H o w to Ju s t ify T h e m fo r
th e C o m m u n ity B a n k .”

front Place. Terence E. Renaud, Twin
City Bank’s president and chairman,
has been named “man of the year” by
the North Little Rock Chamber of
Commerce.

Illinois
■ O ’H A R E
INTERNATIONAL,
Chicago, has promoted Thomas B. Sul
livan from senior vice president to exec
utive vice president and Terrance A.
Madura from auditor to cashier. Mr.
Sullivan has charge of lending at the
bank.
■ JOHN A. W ILLIAM S and Paul
Chris Johnson have been elected senior
vice presidents, Alton Banking & Trust
Co. Mr. Williams, who was first vice
president, has charge of commercial
lending and the Master Charge oper
ation. Mr. Johnson, formerly vice presi
dent, heads the installment loan depart
ment. Ruby M. Fritz has moved up
from vice president and assistant secre
tary to vice president and secretary.
Melvin G. Hall, chairman and CEO
of the bank, has received an honorary
degree from William Woods College,
Fulton, Mo. He has been a trustee of
the college and now is first vice chair
man of its board of trustees.
■ N O RBERT E. SCHWARZ became
president, United Bank of Illinois, Rock
ford, February 21, succeeding Loren
M. Smith. Mr. Smith now is chairman.
Mr. Schwarz was president, First Wis
consin Bank, Green Bay, and chairman,
First Wisconsin Bank, West Green Bay.
Seth G. Atwood, who was chairman,
was named to the new post of senior
chairman at the Rockford bank.

Arkansas
■ TH E F E D has approved the appli
cation of First Security Corp., Harrison,
to become a bank HC through acqui
sition of Security Bank, also in Harri
son.
■ TW IN CITY BANK, North Little
Rock, has reached a new record—$100
million in assets. The bank was founded
in 1901 and now is operating in its
new $4-million building at One River

124

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Federal Reserve Bank of St. Louis

Neighborhood Center Under Way

HARROW SMITH COMPANY
! Union National Bank Bldg.

501/374-7555

Little Rock, Arkansas
J. E. WOMELDORFF, Executive Vice President
__________________________________________________________

William D. Plechaty, s.v.p., Continental Illinois
Nat'l, Chicago, makes the snow fly at the
ground breaking for the bank's Neighborhood
Banking Center at Clark, Division and Elm
streets on the city's near north side. The center,
scheduled to open this spring, will contain
4,000 square feet of space and will accommo
date five tellers and eight personal bankers.
It also will have two drive-up teller windows,
a night depository and four automated teller
machines, three inside and one on an ex
terior w all. The exterior ATM will be available
24 hours a day, seven days a week. The center
will have extended hours. It will be located
within 3,500 yards of Continental's Main Of
fice at 231 South LaSalle Street, the boundary
prescribed by state law for one of two offpremises facilities.

New Facility for Loop

This is an artist's sketch of the banking facility
First Nat'l, Chicago, plans to open in April at
the northeast corner of Wabash Avenue and
Monroe Street. Services to be offered will in
clude receiving deposits, cashing and issuing
checks, drafts and money orders, changing
money and receiving loan payments. The
facility will have five First Card electronic
banking tellers, three with 24-hour access, ex
press lines for fast service and personal bank
ing counselors. It will be open 8 a.m.-6 p.m.,
Monday through Friday, which, according to
First Nat'l, will be the longest banking hours
in the Loop. The facility will be opened under
an Illinois law that permits an additional
banking facility within 1,500 feet of a bank's
home office.

MID-CONTINENT BANKER for March, 1977

■ LAW REN CE A. W ILSON, vice
president, City National, Dixon, last
month was elected president of the Illi
nois Bankers Association’s consumer
credit division. Other division officers
are: first vice president, David G.
Siebert, executive vice president, First
National, Dwight; second vice presi
dent, James E. Brown, vice president,
State Bank, Collinsville; and secretary,
Norman C. Peterson, IBA assistant sec
retary, Chicago.
■ ELM H U R ST NATIONAL has ad
vanced William J. Thiel and Lester
Madsen from assistant vice presidents
to vice presidents, Otto W. Balgemann
II to assistant vice president and
Michael W. Stolz to assistant com
mercial loan officer.
■ UNION N A T I O N A L , East St.
Louis, has converted to a state-chartered
bank and has the new name of Union
Bank.

Indiana
■ DONALD G. ERLEN BU SH has advanced from executive vice president to
president, Farmers State, Sullivan. He
succeeds Kenneth P. Cooper, who re
tired after 35 years in banking. Mr.
Cooper continues as a director and
part-time trust officer. Mr. Erlenbush
joined the bank in 1971 and has been
a banker since 1962.

■ STANLEY R. BOUGHTON retired
January 31 as president, Purdue Na
tional, Lafayette. He had held the post
since June, 1975, and had been a
banker 44 years. He was succeeded by
James A. Posthauer, formerly executive
vice president and cashier, who also
was elected to the bank’s board. Stanley
J. Calderon has moved up from con
troller to senior vice president and
cashier. Steven A. McQueen, who was
assistant controller, was made con
troller.
■ F IR S T BANK of Berne has an
nounced the elections of L. B. Lehman,
formerly president, as chairman; Brice
Bauserman, formerly executive vice
president, as president; and Frederick
H. Liechty, formerly vice president, as
executive vice president. Completing
the executive-officer staff is Roger L.
Flueckiger, cashier.

■ J. R EX D U W E, immediate past
ABA president, has been named “Kan
san of the Year” by the Kansas Native
Sons and Daughters. The presentation
was made at the organization’s annual
banquet in January by Governor Robert
F. Bennett, who had proclaimed “Rex
Duwe Day” in Kansas October 8, 1975,
when Mr. Duwe was inducted as ABA
president. Mr. Duwe is chairman of the
ABA’s Governing Council and chairman
and president, Farmers State, Lucas.
■ J. A. M ERM IS JR., president, Se
curity State, Great Bend, has been
named vice chairman and trust officer.
He continues as CEO. He is a past
president of the Kansas Bankers Associ
ation. Dale E. Oliver was promoted
to president and assistant trust officer
and Betty J. Sloan was promoted from
cashier to vice president and cashier.

■ F R E D E R I C K E. T U R T O N has
joined the Central Division of Bank
Building Corp., St. Louis, as a con
sultant services manager. His territory
includes southern Indiana and Hamil
ton County, Ohio. Mr. Turton previ
ously was a marketing representative in
data processing sales for IBM Corp. in
Cincinnati.

Kentucky
■ MRS. O ZELLE M. McDONALD,
assistant vice president and trust officer,
Citizens National, Bowling Green, re
tired recently. The bank’s trust depart
ment honored her with a retirement
dinner. She had been with the bank
since 1942.
■ F IR S T CITY BANK, Hopkinsville,
has elected four new directors. They
are J. Glenn Babb, bank president;
Wilma C. Garnett, president and trea
surer, Marion Garnett Farms; Gary H.
Latham, radio station president; and
John C. Thurmond, secretary-treasurer,
Bass & Co.

KBA Convention Sept. 11-13
L O U I S V I L L E —The Kentucky
Bankers Association will hold its
1977 convention September 11-13
at the Galt House here.
■ SID PEAVLEY, treasurer, Whitley
County Fiscal Court, has been elected
a vice president, Bank of Williamsburg.
The bank also has five new directors:
Ray Bryant and J. W. Ferguson,
H H & B Coal Co.; Pascual White,
president, Whitley Development Corp.;
Earl Wilson, chairman, Kentucky Cen
tral Life Insurance Co., and Edwin
Schaeffer, a Lexington attorney.
■ RONALD E. BURDEN has ad
vanced from executive vice president to
president, National Bank of Paris. He
succeeds W . F . Perkins, who resigned.

Louisiana
Louisiana news will be found on
page 123 this month.

Mississippi
■ A. D. BRELAN D, JR ., who was
chairman and president, Mississippi
Bank, Crystal Springs, has been made
chairman and CEO. Cecil Burnham,
formerly executive vice president, has
moved up to president. He has served

W e make correspondent banking easier for you!
Max Dickerson

CO M M ERCIAL
CNB NATIONAL
________ BANK

John Strube

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Federal Reserve Bank of St. Louis

125

facilities, Main Office, personnel and
purchasing. Assistant Vice President
Larry A. Morrow has been named to
the correspondent banking post vacated
by Mr. Folks, who joined the bank in
1949.

■ GRAVOIS BANK, Affton, has pro
moted Jean M. Oebermann, Richard E.
Bachmann and Thomas P. Knapko to
assistant vice presidents and has named
June Enloe assistant cashier. Mrs.
Oebermann was an assistant cashier,
and Messrs. Bachmann and Knapko
were loan officers.
■ F IR S T NATIONAL, St. Charles,
has elected Joe Preston to its board. He
is president, Preston’s Furniture Co.

as president, Young Bankers Section,
Mississippi Bankers Association, during
the past year. Gerald L. White has
been elected vice president, trust di
vision, Mississippi Bank System, head
quartered in Jackson. In addition, Mr.
Breland was elected a director of the
system, and Mr. Burnham, Ruby Lamb
and Dr. Otho Messer were appointed to
its advisory board. Mr. White joined
Mississippi Bank, Jackson, in 1973.
Mrs. Lamb is a worker in civic and
educational causes, and Dr. Messer is
a dentist.
■ W ILLIAM T. HAYNIE JR. has
been named vice president and trust
officer, Hancock Bank, Gulfport. He
will head the trust department. He was
formerly vice president and trust officer,
Birmingham (Ala.) Trust National.

QUIGG

FOLKS

■ W ILLIAM W . QUIGG has been
promoted from executive vice presi
dent and trust officer to president,
Central Trust, Jefferson City. He joined
the bank in 1969. Named chairman was
Sam B. Cook. Louis S. Dennig Jr. was
named vice chairman and Robert M.
Robuck was named executive vice presi
dent and chief financial officer.
Died: R. Waldo Holt, 86, former
vice president at Mercantile Bank, Kan
sas City. He served as president of the
Missouri Bankers Association in 1931.

Missouri
■ AMERICAN NATIONAL, St. Louis,
has promoted Ralph A. Bertel from
senior vice president to executive vice
president, Joseph D. Weis from vice
president and cashier to senior vice
president and cashier, Thomas A. Gross
from assistant cashier to assistant vice
president and M. Colleen Stuetzer to
assistant vice president.
■ DONALD D. FO LKS, who had
been in charge of American National of
St. Joseph’s correspondent banking de
partment, has been promoted to a
senior-management position at the bank.
In his new duties, Mr. Folks, a senior
vice president, has responsibility for all
bank operations, data processing, li
ability management, deposit account
ing, transit, administrative services,

William Moore Dies
William G. Moore Jr.,
vice president, Mercan
tile Trust, St. Louis,
died last month as the
result of an auto acci
dent. He w as 55 and
had been with the
bank since 1947. He
w as a member of the
marketing group, na
t i o n a l / international
banking.

126

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Federal Reserve Bank of St. Louis

HOEMAN

■ W ILLIAM L. HOEMAN and Ken
neth Bean have been promoted to vice
presidents at St. Louis County National,
Clayton. Mr. Hoeman also is a trust
officer. Thelma Schlobohm and Patrick
Stevenson were advanced to assistant
vice presidents, Cecilia Handley and
Geneva Helton to assistant cashiers and
Ruth Cunningham to assistant trust
officer. Mr. Bean directs the installment
credit department.
■ C LIFFO R D J. SANSOUCIE has
been promoted from vice president to
senior vice president at American Bank,
DeSoto. In other action, the bank ad-

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vanced Donald L. Hogan and Bernard
R. “Dick” Westhoff to assistant vice
presidents and Pauline A. “Polly” Wall,
Marion D. Filkins and Vera C. “Pat”
Kirn to assistant cashiers.
■ BANK O F ST. ANN has elected the
following new directors: Dal Maxvill,
former St. Louis Cardinals and Oakland
A’s baseball player and president,
Cardinal Travel, Inc.; Clarence F.
Ahrens, president and chairman, Ahrens

MID-CONTINENT BANKER for March, 1977

& McCarron, Inc.; Santi P. Castelli,
executive vice president, Castelli Tux
edo Rental & Sales, Inc.; J. Walter
Kisling Jr., president, Kisco Co., Inc.;
D. Charles Lesseg, president, Cavalier
Ford, Inc.; and L. Dale Loveall, presi
dent, Loveall Enterprises, Inc.
■ BANK O F POPLAR B L U F F has
promoted Stephen J. Sun and Willard
L. Fox from assistant vice presidents
to vice presidents, Lavena Hills from
assistant cashier to assistant vice presi
dent, Marsha LeGrand to marketing
officer and Barbara Frish to adminis
trative assistant.
■ GRANVILLE J. COOKE, president,
Farmers Bank, Antonia, was honored at
an open house at the bank’s Imperial
Facility January 30 for his 40 years of
banking service. Mr. Cooke has retired
as chief operating officer, but continues
as president and a director.
■ JAM ES J. HICKEY, senior vice
president, Webster Groves Trust, re
tired recently after 51 years in banking.
He joined the bank in 1948 after
spending 22 years at First National,
St. Louis. The bank honored him with
a retirement party.
■ LEMAY BANK has promoted Don
A. Leupold from assistant vice presi
dent to vice president.

New Mexico
■ NEW M EXICO BANK, Hobbs, has
made the following changes: James T.
Hunter, who has been vice president
and manager, Jal Office, has been pro
moted to vice president and manager,
Broadmoor Office. Mark Sparks, loan
officer, Jal Office, has become assistant
vice president and manager of that of
fice. Lucille Reeves has moved up from
operations officer to loan officer, and
Rita Crenshaw has been named oper
ations officer.
■ KERRY BOYD has been promoted
from assistant vice president to vice
president, Hot Springs National, Truth
or Consequences. He is chief agricul
tural officer. Alma Grantham, secretary
to Vice President Fred Robinson, has
been promoted to assistant cashier.
■ RO SW ELL STA TE has promoted
Ralph M. Nix Jr. from assistant vice
president to vice president and elected
Bronson M. Com a director. Mr. Com,
an advisory director since 1973, is a
farmer and rancher.

Oklahoma
■ R O BERT M. RAINEY III, senior
vice president, Bank of Oklahoma, has
been elected to the board of the Dealer
Bank Association, a Washington, D. C.based organization that underwrites
public securities.

RAINEY

■ W. K. “KEN” BONDS, executive
vice president and trust committee
chairman, Liberty National, Oklahoma
City, has been elected vice president
of the ABA’s trust division. His term
begins in October. Division President
is James W. North, executive vice presi
dent, Chase Manhattan, New York.
Vice President is Robert L. Hunt,
executive vice president, Security Pa
cific National, Los Angeles.
■ SEC U RITY NATIONAL, Norman,
has four new directors: Charles Dunn,
president, Dairy Queen Brazier Stores,
Inc.; Gene McKown, a builder and de
veloper; Margaret Melton, a retiring
member of the Norman City Council;
and Robert S. Patten, professor of
English, Rice University, Houston.
■ F IR S T NATIONAL, Pryor Creek,
has received regulatory approval to
increase capital from $400,000 to
$800,000 through a 100% stock divi
dend. The increase will take effect
April 13.
■ F IR S T NATIONAL, Ardmore, has
named Dan Stansill assistant trust of
ficer. He was an assistant national trust
examiner for the Comptroller of the
Currency. Before that, he was with
First National, Tahlequah and Sallisaw.
Died: Marion C. “Bud” Buzzard, 39,
president and CEO, First National,
Miami, and State Bank, Grove, on
February 11, in the crash of a private
plane near Anthony, Kan. Among the
other four persons killed in the crash
were Mrs. Buzzard, 37, and Mr. and
Mrs. Marshall Nash, 38 and 37, re
spectively, and son-in-law and daughter
of evangelist Oral Roberts. Mr. Nash
was on the boards of First of Miami
and State Bank, Grove, and was vice
chairman, Bank of Commerce, Tulsa.

MID-CONTINENT BANKER for March, 1977

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Federal Reserve Bank of St. Louis

BONDS

■ ALMA BARNES has been elected
president, First Bank of Catoosa. She
formerly was senior vice president,
Guaranty National, Tulsa, which she
joined in 1965. She has more than 18
years’ banking experience. The Catoosa
bank is affiliated with Guaranty Na
tional and Security Bank, Tulsa.
■ CITY NATIONAL, Lawton, has an
nounced these staff changes: from vice
president to vice chairman, Zelda
Montgomery Davis; from assistant cash
ier to assistant vice president, Eugene
Norman; to a d m i n i s t r a t i v e officer,
Shirley Huckabay; to operations of
ficers, Barbara Winton, Jim Armstrong
and June Johnston; to installment loan
officer, Rick Strickland; to assistant col
lection officer, Ralph Mobley; and to
a c c o u n t i n g officer, Joe Pazoureck.
George Porter was named advisory di
rector.
■ JOHN D. IZARD, president, Fourth
National, Tulsa, has been elected presi
dent, Tulsa Clearing House Association.
He succeeds Kenneth Olinger, vice
chairman, First National.

■

McD o n a l d An d e r
JR . has been named president
and CEO, First Tennessee Bank, Galla
tin, replacing Buddy Chandler, who re
signed to become executive vice presi
dent, First State, DeQueen, Ark. Mr.
Anderson was formerly with First Ten
nessee, Memphis.
w il l ia m

so n

Texas
■ F IR S T VICTORIA NATIONAL has
promoted J. R. “Jim” Hartman from
assistant vice president to vice presi
dent, e l e c t e d Helen Barnett, Sue
Jurischk and Clementine Peters admin
istrative officers and named J. A. “Jay”
Leggett investment officer and R. Kent
Miller assistant operations officer. May
nard C. Janecka’s title has been changed
from assistant operations officer to
personnel officer and Lucille Tate went
from assistant cashier to women’s ser
vices officer. A 200% stock dividend was
voted by shareholders and will increase
capital from $2 million to $6 million.
■ JACK PILON, CEO, First National,
Brownwood, also has been named chair
man. Elected to the board were Ferris
Clements, who has b u s i n e s s e s in
Brownwood, Stephenville and Mineral
Walls; and Spencer Beal, an oil pro
ducer. Named advisory directors were
Carlton Beal, also an oil producer and

127

former chairman of the bank; and Guy
D. Newman, chancellor, Howard Payne
University, Brownwood.
■ LUBBOCK NATIONAL has pro
moted Robert Askew, Joyce Cozzen,
Cliff Watt and Alan White from as
sistant vice presidents to vice presidents
and Richard Hutchins and Joe Mays to
assistant vice presidents.
■ R O BERT B. LANE, chairman,
Clifton Bank, also has been named
president. He succeeds Hulen C. Aars,
who now is vice chairman. Wendell
Bearden has moved up from vice presi
dent to senior vice president. Mr. Lane
went to the bank in 1968 after spend
ing five years with First National, Dal
las. Mr. Aars has been with Clifton
Bank 42 years and had been president
since 1948. Mr. Bearden joined the
bank in 1956.
■ CAPITAL NATIONAL, Austin, has
named Randal C. Peschel vice presi
dent and real estate loan officer and
James Lockart assistant vice president
and manager of bank services. Mr.
Peschel joined the bank in 1970 and
had been assistant vice president since
1974. Mr. Lockart, with Capital Na

tional since 1973, formerly was finance
officer in administrative services.

Income Up at 1st International HC
DALLAS— First International Bancshares reported an 8.5% increase in in
come before securities transactions for
1976 over 1975 figures. Income totaled
$56.4 million, or $3.80 per share, versus
$52 million, or $3.51 per share, for
1975.
Total assets exceeded $7.1 billion as
of year-end 1976, compared to $6.3
billion at the prior year end.

•

Index to Advertisers

•

American Bank Directory ..............................
American Breeders Service ..........................
Associates Commercial Corp..........................
Atlantic Envelope Co........................................

18
41
19
23

Bank Building Corp.......................................... 22
Bank of Oklahoma, Tulsa ............................ 101
Barclay, The ..................................................... I l l
Beau Rivage Hotel .......................................... 128
Boatmen’s National Bank ............................ 95
Christmas Club-A Corp.
........................91, 96
Commerce Bank, Kansas City .................. 105
Commercial National Bank,
Kansas City, Kan...............................................125
Continental Bank, Chicago ..........................
9
De Luxe Check Printers, Inc ......................
Durham Life Insurance Co............................

17
43

Financial Placements .....................................
First Alabama Bancshares ............................
First City National Bank, Houston ............
First National Bank, Jackson, Miss..............
First National Bank, Kansas City ..............
First National Bank, St. Louis .................
First National Bank of Commerce,
New Orleans ...................................................
Fourth National Bank, Tulsa
.................

106
103
117
13
3
130
119
37

Harland Co., John H.........................................
89
Harris Trust & Savings Bank, Chicago .. 113
Harrow Smith Co................................................ 124
Heid Economic Research .............................. 107
Heller & Co., Walter E .....................................
26
Hibbard, O’Connor & Weeks, Inc.................. 99
Insured Credit Services, Inc..........................

L’Ermitage Hotel .............................................. 121
Liberty Nat’l Bank & Tr. Co., Louisville .. 109
Liberty Nat’l Bank & Tr. Co.,
Oklahoma City ..............................................
2
MGIC-Indemnity Corp........................................24-25
MPA Systems
............................................ 10
Memphis Bank & Trust Co.............................. 45
Mercantile Bank, St. Louis ............................
5
Missouri Envelope Co........................................ 106
National Bank of Detroit .............................. 114
National Boulevard Bank, Chicago .......... 115
National Stock Yards NationalBank ........... 129
Polk & Co., R. L..................................................

Rand McNally & Co. (Banking Div.) ............
Rand McNally Randcard ................................

93
98

Scarborough & Co..............................................

Teller Training Institutes, Inc........................ 126
Tucker Associates ............................................ 94
United Missouri Bank, Kansas City ............
US Life Credit Life Insurance Co...............

7
16

Van Wagenen Co., G. D..................................

Whitney National Bank, New Orleans . . . .

Farmers Grain & Livestock Hedging Corp. 110

Index to Supplement

Call Your Oceanfront
M iam i Beach
Resort Connection.
f P h il S ilv e r s ^
Enjoy, Enjoy, Enjoy.
Phil recommends a duo of Paradise
Resorts. Free golf and free tennis,
entertainment, cocktail parties,
Olympic size pools, sundecks and
wide private ocean beaches.
Call now for rates and reservations.

MTh< C r itic s C h o ice "

(For Advertising Appearing Between
Pages 46 and 87)
Actron, Inc. .................................................
American Candle & Gift Co......................
American International Group ............
American Premium & Specialty Corp. .

BG/36
BG/19
BG/23
BG/15

Bank Board Letter ......................BG/29, 34, 35
Bank Consultants of America ............ BG/24
BayBanks Data Services .......................... BG/33
Bel-Air Studios & Publishers, Inc.........
BG/7
Beneficial Executive Loan Service, Inc. BG/22
Blender Co., Howard J ................................ BG/28
Colt Press ...................................................... BG/25
Creative Image ............................................ BG/20
Custom Alert ............................................... BG/21
Daktronics, Inc.............................................. BG/32
Data Film s ................................................... BG/38
Downey Co., C. L.......................................... BG/6
Elec-Tro-Tec, Inc............................................ BG/22
Federal Signal Corp.
.............................. BG/2
Financial Institution Services,Inc. . . . BG/13
Financial Products, Inc.............................. BG/37
Glendale Federal Savings &
Loan Assoc.................................................. BG/18
Gold Medal .................................................... BG/10
Illinois Bank Building Corp...................... BG/32
International Silver Co................................ BG/11
Lake Shore Markers .................................. BG/24
Magnavox Co................................................... BG/14
Moody Investors Services ....................
BG/5
Mosler Safe Co........................................ BG/39-40
Olan Mills .....................................................

BG/4

P M Industries ............................................ BG/28
Ring King Visibles, Inc.............................. BG/28

OCEANFRONT AT 183rd ST.
MIAMI BEACH. FLORIDA
CALL YOUR TRAVEL AGENT OR:

Anywhere in USA Phone toll free:

M tb 1-800-528-1234
gcst In Florida Phone toll free:

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I28

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Federal Reserve Bank of St. Louis

S & H Financial Promotion Services
BG/8
Salem China Co. ........................................ BG/3
Security Engineered Machinery ............ BG/10
Sillcocks-M iller Co., The .......................... BG/36
Simmel Associates, Inc., Edward C. .. BG/37
Time-O-Matic, Inc.......................................... BG/38
Travelers Express ...................................... BG/17
Uni Comp........................................................ BG/31
Value-Line Investment Survey ............. BG/1
Verdin Co., I. T .............................................. BG/37

MID-CONTINENT BANKER for March, 1977

weather or notH
Sunshine time, snow time or umbrella time. Phil Isbell likes to keep covering
his territory in order to keep a weather eye on your particular jocaf agri
business situation.
Keeping aware of changing economics, having the authority to make decs•sions and possessing a thorough knowledge of ail banking procedures
enables Phil to very often chase the chill factor from your buzzards or cor
respondent matters
[jp u can warm up to Stock Yards
6633. If one of his colleagues
(ft your bank.

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Federal Reserve Bank of St. Louis

THE NATIONALSTOCKYARDS NATIONAL BANK
Of NATiONAt CITY

Work with a banker
who knows what his bank
can do for you.

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Federal Reserve Bank of St. Louis

At First National Bank in St. Louis, our corre
spondent bankers are trained in what our bank can
do for you. Across the board. Department by
department.
The result is men with solid experience and
individual authority. So they can make fast decisions
for you on their own.
They’re backed by a bank with strong, steady
growth. And total banking capabilities including
overline loans, bond department services, computer
ized check collection, cash management systems.
Plus our annual correspondent seminars where you
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Get to know your First National correspondent
banker. He knows his bank. He’d like to put us to
work for you.

F irs t N ational B a n k in S t.L
o u is Wfc
M em b er F D IC HI I

Full text of Mid-Continent Banker : The Financial Magazine of the Mississippi Valley and Southwest : March 1977, Volume 73, No. 3

FRASER