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MID-CONTINENT BANKER MARCH, 1985 (ISSN 0 0 2 6-296X) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis IN THIS ISSUE Electronic Banking Software Directory Don Brandin . . . At the Helm of Missouri's Largest Bank HC lIS IH i Who would ever think of Liberty as a computer software store? la c k H enry and the Liberty D ata Services Professionals. Jack Henry President. Jack Henry & Associates Inc. More and more banks are turning to Liberty for computer software for inhouse data processing. And the reason is a man named Jack Henry, president of Jack Henry and Associates, Inc. Since 1976, Jack Henry and Associates has licensed financial software to over 300 banks throughout the United States. And now Liberty is the exclusive licensor of Jack Henry software in Oklahoma. This contractual relationship enables Liberty to assist and support your bank in every phase of getting your in-house data system on-line. And our team of data professionals is at your service, helping you design and install your system, select appropriate software and train your personnel. Are you ready to think of Liberty as a computer software store? For your inhouse data processing needs, call Liberty Data Services today. Darrell W ood bill Smith Kenny Morgan Hannah Uriyahz Vicki Obi tz Jim Crouch Jim Zellner Phyllis Bunch i§J Liberty A Bank of Mid-America Member FDIC Liberty National Bank and Trust Company P.O. Box 25848 Oklahoma City, Oklahoma 73125 405/231-7000 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SOLID SECURITY STEMS FROM O U R SOLID STATE O F M IN D https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The name o f the game today is electronic security. But unless electronic wizardry is scientifically w edded to solid steel, your protection becom es more electronic than secure, more “gee whiz” than wise. At Mosler, our feet have been firmly planted in solid steel since 1848. And it’s from that point o f view that w e’ve designed all o f our electronic networks and apparatus. B ecause physical security is the con tainment o f things o f value, whatever they may be, the heart o f it must forever be in the solid protection that’s resistant to fire and theft. With so m uch security experience, M osler fully understands that and is uniquely qualified to advise you about phys ical security and how it must relate to the electronics that surround it. We package physical security in any size installation or configuration you need. A com plete line o f vault doors, maintenancefree safe deposit boxes, innovative modular vaults (proof you can take it with you), depository safes and more. A line second to none in application and depth. But M osler doesn ’t stop there. F acility planning, expert installation and profes sional service support are more o f the M osler promise. We have a nationwide network o f over 1,100 o f the industry’s besttrained technicians ready to maintain and service your security on call, around the clock . Solid steel, solid service, a solid state o f mind. That’s why we say, with M osler all is well. F or a deeper look into M osler Physical Security, ask for information on the security products that most interest you. It’s yours, toll free, at 1-800-543-4584. In Ohio, (5 1 3 )8 7 0 -1 1 3 8 . Mosler An American-Standard Company_____ A LL IS WELL. CONVENTION CALENDAR March 20-21: First Lease Equip ment Corp. Seminar, Chicago, Hyatt Regency. March 24-26: Inter-Financial Asso ciation’ s Travel Services for Banks Conference — New Fee Opportunities, San Francisco. March 26-29: Bank Administration Institute Check Processing Con ference, Dearborn, Mich. March 26-30: Louisiana Bankers Association Annual Convention, New Orleans, New Orleans Hil ton. March 29-April 2: Association of Reserve City Bankers Annual Meeting, Wesley Chapel, Fla., Saddlebrook Resort. March 31-April 3: ABA National Retail Banking Conference, San Francisco, Hilton/Tower. April 11-14: Assembly for Bank Directors Assembly 61, White Sulphur Springs, W. Va., The Greenbrier. April 14-16: Conference of State Bank Supervisors Annual Con vention, Phoenix, The Pointe. April 14-17: National Automated Clearinghouse Association Con ference, Phoenix, Hyatt Regency Phoenix. April 14-18: Bank Administration Institute Bank Auditors Confer ence, Washington, D. C., Sher aton Hotel. April 14-19: ABA Bank Trainers School, Boulder, C olo., Uni versity of Colorado. April 14-19: Bank Marketing Asso ciation School of Bank Marketing/Strategic Planning, Athens, Ga., University of Georgia. April 20-24: Bank Marketing Asso ciation Business Development Training Conference, Chicago, Holiday Inn Mart Plaza. April 21-23: Inter-Financial Asso ciation’s “ Real Estate Brokers/ Bankers Join F o r c e s,’’ Los Angeles, Sheraton Universal. April 21-May 2: ABA National Commercial Lending School, Norman, Okla., University of Oklahoma. April 26-30: Association of Reserve. City Bankers Annual Meeting, Boca Raton, Fla., Boca Raton Hotel. April 28-May 1: Bank Marketing Association Advertising Confer ence, Chicago, Westin Hotel. 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER (Incorporating MID-WESTERN BANKER) IN T H IS ISSU E Volume 81, No. 3 March, 1985 7 ATM/POS STRATEGIC PLANNING IMPORTANT To assure usage, profitability 9 SURVIVAL PLAN FOR REGIONAL ATM/POS NETWORKS Not all network superstars will make it 12 EDP COORDINATION SUPPLIED TO THREE-BANK HC Enables development o f co7mnon identity 16 AUTOMATIC CURRENCY SORTING CUTS ATM DOWNTIME Use o f used bills made possible 22 HOW DO YOU CHOOSE RIGHT SOFTWARE? Five essential steps outlined 26 ELECTRONIC BANKING NOTES Ideas/services that can be used by banks 27 NEWS ABOUT BANKS/BANKERS Promotions, mergers, retirements 39 SOFTWARE DIRECTORY Listing o f products available fo r banks 52 BOATMEN’S ACQUIRES CHARTERCORP Merger makes Boatmen s largest bank HC in Missouri 62 THE BANKING SCENE Evolving corporate trade-payment system Mid-Continent Banker Staff Editorial/Advertising Offices Ralph B. Cox 4 0 8 Olive St., St. Louis, Mo. 6 3 1 0 2 . Tel. 3 1 4 / 4 2 1 -5 4 4 5 . Publisher MID-CONTINENT BANKER is published monthly by Commerce Publishing Co., 4 0 8 Olive St., St. Louis, Mo. 6 3 1 0 2 . Lawrence W . Colbert Vice President, Advertising POSTMASTER: Send address changes to MID CONTINENT BANKER at 408 Olive S t., St. Louis, MO 63102. Rosemary McKelvey Editor Printed by The Ovid Bell Press, Inc., Fulton, Mo. Second-class postage paid at St. Louis, Mo., and at additional mailing offices. Jim Fabian Senior Editor Subscription rates: Three years $27; two years $2 0 ; one year $12. Single copies, $ 2 .5 0 each. Foreign subscriptions, 50% additional. John L. Cleveland Assistant to the Publisher Marge Bottiaux Advertising Production Manager Nancy Gilbreath Staff Assistant Shelia Humphrey Subscriptions Commerce Publications: American Agent & Broker, Club Management, Decor, Life Insur ance Selling, Mid-Continent Banker and The Bank Board Letter. Officers: Donald H. Clark, chairman emeritus, Wesley H. Clark, president and chief executive officer; James T. Poor, executive vice president and secretary; Ralph B. Cox, first vice president and treasurer; Bernard A. Beggan, David A. Baetz, Lawrence W. Colbert and W illiam M. Humberg, vice presidents. MID-CONTINENT BANKER for February, 1985 BANK SERVICE We can help your bond portf work in concert with your ■ ■ •■ ■ I By coordinating your bond portfolio with your banking objectives, you can improve your bank's overall position. Thaf s the concept of BANK SERVICE,® a service of L. F. Rothschild, Unterberg, Towbin. We have a unique approach toward ana lyzing banking activities, and over 30 years of experience. We assign a team of experts to examine how your banking activities and bond portfolio work together. We review your rate sen sitive assets and liabilities, your tax situation, your overall rate struc ture—everything that effects per formance. We probe the ways all these activities are contributing (or failing to contribute) to your bank's overall goals. II Then we come back to you with an objective, thirdparty recommendation. It demonstrates steps that can strike a chord between your banking objec tives and bond portfolio. For example, we might show you how to reduce your market exposure without d e creasing performance. Or how to gain some tax advantages through bond exchanges. We also offer two other inno vative products that complement your BANK SERVICE® analysis. Our Portfolio Managers System monitors your portfolio, does its accounting, values all holdings and more. Then there's a Fixed Income Computer Service which will introduce new tech niques to help immunize your portfolio from rate fluctuations. BANK SERVICE'S® total orchestration of bond portfolios with banking activities has helped hundreds of banks around the country achieve their goals. Perhaps thafs why the substantial majority of our business is repeat business. To learn how we can be instru mental in improving your bank's position call Stephen H. Kovacs, Special Limited Partner, BANK SERVICE® at (212) 425-3300, or write to 55 Water Street, New York, NY 10041. Because it's time your bond portfolio worked in concert with your banking activities. IEI L. F. ROTHSCHILD, UNTERBERG, TOWBIN BANK SERVICE® We help orchestrate banking success. MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 5 In tro d u c in g M icro-BRMS An Asset/Liability M anagem ent tool that is COMPREHENSIVE POWERFUL FLEXIBLE and now, Micro-Based Until now, we have been providing sophisticated asset/liability support on a mainframe. Now we are providing it for your micro. Micro-BRMS was built by bankers for bankers. It provides meaningful analyses, not just output. Our Strategy Simulator allows you to customize analyti cal techniques that enable you to understand the impact o f changing environments and alternative strategies on your institution. Our Strategy Analyzer enables you to interactively develop risk/return profiles o f alternative gap positions. With micro-BRMS, you can • integrate with Lotus 1-2-3 • use Chase Econometrics’ rate forecasts or your own • centralize or distribute your asset/liability manage- ment function • interconnect with other micros or mainframes • use our 24 hour data back-up facilities • rely upon a customer support group staffed by both bankers and computer professionals A free démonstration disk is available to introduce you to microBRMS. To get your dem o disk or to learn m ore about microBRMS, cali Mei Strauss at 212/306-6808 or write to him at 22 Cortlandt Street, New York, New York 10007. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Electronic-Systems-Delivery-Conference Report Strategic Planning Ever More Important To Assure ATM/POS Usage, Profitability As ATM saturation nears, bankers must gain an understanding of factors that influence usage of units. TM s have completed their revolu These factors include pricing, tionary phase — and, perhaps, their period of greatest growth in numacceptance and credibility/ bers. The teller-replacement units are availability. A expected to be relatively long-lived as a banking fixture, but the balance of their years of favor isn’t expected to follow any pattern established in the past. Rather, ATMs — and their electron ic cousins, POS terminals — have reached a maturity that demands a greater degree of sound planning on the part of institutions using them. For instance, ATMs no longer are exclusive to financial institutions. They’re appearing in railroad stations, airports, grocery stores; and their pur pose is becoming more varied. They’re being used to dispense tickets to enter tainment events, paychecks, stock re ports and travelers’ checks. Although deliveries of ATMs are ex pected to level off in a year or two, manufacturers are introducing new models. And additional firms are be ginning to produce the machines. Any banker who thinks ATMs aren’t necessary should think again. Also, any banker who feels his/her bank’s supply of ATMs is adequate should rethink his/her conclusion. No one knows just what’s going to happen to the ATM/POS market, but it’s a sure bet there will be change, and it behooves bankers to be ready for it. Strategic planning is the process of assimilating a large body of present data, placing the data in perspective of an institutional goal and guessing what course of action is best to achieve this goal, says J. Michael Demma, vice president, National Bank of Washing ton, D. C. Mr. Demma conducted a session on ATM/POS strategic plan ning at the recent Electronic Delivery Systems Conference sponsored by the Bank Administration Institute. “ Strategic planning not only is im portant, it’s necessary,” he said. “A strategic plan, while a best-guess situa- tion, must remain flexible, merely be cause it’s a best guess.” Bankers involved in strategic plan ning for ATMs should recognize that ATM programs are in two parts — card issuance and placement. The primary difference between these two parts is expense, Mr. Demma said. Placement of ATMs is capital inten sive; issuance of cards isn’t. Network ing provides banks without ATMs a ch oice: They can take the cardissuance-only route, thus avoiding the high cost of purchasing machines. The desire to avoid the high cost of machinery makes POS service attrac MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tive to bankers, Mr. Demma said. The cost of POS placement falls on mer chants, not banks. A strategic planner should be famil iar with the two types of pricing associ ated with electronic banking: implicit and distributive. With implicit pricing, each product is fully costed and an appropriate fee is charged for it. The fee is based on the cost plus a profit margin. Planners are realizing the wisdom of formulating valid consumer fee struc tures for their institutions, Mr. Dem ma said. “ As long as we re moving toward having to pay interest on every dollar deposited, shouldn’t we charge for ev ery service or product provided?” he asked. Care should be taken to consid er market condition, competition and consumer demand before establishing a price. Distributive pricing is the pricing ATMs to Proliferate at Supermarkets TM s will be appearing in increasing numbers in supermarkets in the near future, according to a spokesman for an ATM manufac turer. “ Given their numbers, locations, the number of customers served and the frequency with which their customers shop, supermarkets would seem to be prime locations for placement of bank-owned ATMs,” says Rex M. Fleet, vice president, financial systems, NCR Corp. Increased ATM installations at supermarkets results from these three reasons: • Escalating bank costs have made the branch system too expensive to maintain in its present form. • Significant reductions have been made in ATM-ownership costs. • Progress has been made toward resolution of issues dividing bank ers and supermarket operators on ATM placement in stores. Mr. Fleet sees this trend as mutually beneficial to banks, markets and customers. They accelerate checkout time and have the potential to reduce the supermarket’s needs for cash on hand. They provide convenience to bank customers, offer deposit-gathering services, offset some teller costs and reduce need for branches. They provide customers with convenience of time and location. A 7 mix of a group of related products, Mr. Demma said. Products such as ATM and POS. Distributive pricing can be used to push the consumer to the cheapest product for banks to provide. Example: "If POS is cheaper to pro vide than ATMs, then lowering the fee for POS below the ATM fee makes sense to both the consumer as user, and the bank, which is seeking better profit margins.” A strategic planner must be familiar with consumer-usage patterns, Mr. Demma said. Here’s a list of reasons people use ATMs: • To withdraw cash. • To get balance inquiries, make de posits, transfers and pay bills. • Because it’s often cheaper than writing a check, ATM transactions usually are free, or, if not, are priced below the cost of writing a check. • Because there’s less hassle with an ATM than at a teller’s window. • To take advantage of the conven ience of 24-hour banking. • To avoid waiting in line. • Faster transaction time. • The convenience of network loca tions. It’s also necessary to know why peo ple don’t use ATMs: • The mistaken belief that the units are often down. • Errors by the bank in recording ATM transactions. “You can’t argue with a machine!” • Fear of electronic gadgets; dis trust in machines over humans. • Reluctance to accept change. "The old way of writing checks has al ways worked well. • Difficulty in keeping records. • High cost per transaction, espe cially on network units. Mr. Demma thinks people use POS for the following reasons: • As a replacem ent for writing checks. • Less hassle than writing a check at a store and going through the approval process. • POS generally is cheaper than writing checks. • POS speeds checkouts. People don’t use POS for the same reasons they don’t use ATMs plus one other factor: loss of float. Many people don’t want instant debiting of their accounts. Even though customers use ATMs to get cash and POS to eliminate check writing, the one augments the other, Mr. Demma said. “Those who don’t use ATMs, for the most part, will not be attracted to POS.” Getting down to the nitty-gritty of an ATM/POS strategic plan involves 8 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis consideration of the following factors: pricing, acceptance, credibility/availability. • Pricing involves fees banks re ceive from their electronic banking systems. Fees generate income, and the bottom line of a POS program is less expensive than that of an ATM program, according to Mr. Demma. This is due primarily to the high capital requirements of ATM placement. In POS, bankers pay for cards and the means to provide wide availability of merchants, which results in POS transactions costing banks less than ATM transactions. It should follow, he added, that, under implicit pricing and POS Still in Infancy POS is in its absolute infancy, said Linda Fenner Zimmer, paymentservices expert, at the Electronic Delivery Systems Conference spon sored recently by the Bank Adminis tration Institute. POS has experienced two false starts, with start No. 3 underway now. POS must be handled cooper atively to succeed, she said. Pro prietary efforts have failed. Retailers are demanding cooperation among financial institutions because they don’t want a proliferation of POS ter minals clogging the aisles of their stores. POS has an excellent opportunity to achieve success, she said, but it won’t win the race against checks for a while because the tremendous volume of checks still hasn’t over loaded the system. POS is causing concern in man agement suites. Questions are being asked. What is the relationship of ATMs to POS? Will POS eliminate the huge investment banks have in ATMs? The jury is out on that ques tion, she said. On the whole, ATM users tend to shun POS terminals. Check writers are the ones to take to POS. This situation represents a new market ing focus, she said. In addition, POS is suffering from the fragmentation approach taken in the past. W hen cooperative at tempts are made, questions arise that are yet to be satisfactorily solved, such as who pays the transac tion cost. No one — the retailer, the bank or the customer — wants to foot the bill. Banks and retailers are question ing whether POS should require a PIN. Other bones of contention arise from setting withdrawal dollar limits, she said. Bankers and retailers must make efforts to understand each other’s needs in the area of POS, she con cluded. distributive pricing, POS should cost less to customers. “ If through distributive pricing we can move a large portion of paper transactions to paperless transactions, our total expense picture lessens. If we maintain income at the same levels, we have greater profits.” The strategic planner will make sure implicit and distributive pricing are used, even if it means restructuring existing fee schedules. Bankers using flat-rate monthly fees may have to re consider their position. • A cceptance will im prove as younger people mature and become bank customers. Today’s young people are growing up with computers and electronic hardware; they are less like ly to believe that computers are errorprone. Thus, they will have less resist ance to electronic banking and, in fact, probably will demand it, Mr. Demma said. This acceptance will boost use of both ATMs and POS services. • Credibility/availability must be part of strategic planning. Terminals must be available and transactions must be processed without errors. “ Without a high commitment of all concerned — financial institutions, merchants and switches — we will never be able to expect more than m ediocre volumes and profits on either system,” Mr. Demma said. “ If we can provide customers with a high comfort level in both products, both should show increased usage, re sulting in higher bottom lines.” Increased ATM usage will mean more ATM placements. Mr. Demma recommended that ratio of ATMs per customer be considered rather than pure volume, when placing ATMs. “ Because of the high initial cost of an ATM, cost-per-transaction can in crease even though volumes are in creasing if bankers aren’t cognizant of this ratio. The saturation level be comes even more important if we are placing ATMs to make money off of interchange fees. Bankers must re member that users are finite and at some point more ATMs will only drive the cost per transaction up. ” Bankers should take care in building an efficient, cost-effective system and they must price to influence usage pat terns, to lessen paper and human costs. “ If we do this, we stand a chance of the POS program augmenting the ATM program to induce higher volume in both. We should increase profitability, due to lower costs, and we can more effectively place ATMs,” he said. — Jim Fabian, senior editor. MID-CONTINENT BANKER for March, 1985 R eg io n al A T M /P O S N e tw o rk s Plan fo r S u rv iv a l T is a battle of network superstars, and when the smoke finally clears, not all still will be standing. While that may be a cold-hearted assessment o f the situation in the ATM/POS-network market, it is one any bank CEO considering links to a regional or national network cannot ignore. Debate still rages over who the surviving players in the ATM/POS network game might be and over what form POS technology ultimately might take, but most ATM/POS network observers seem to regard an industry shakeout as inevitable. I "I think we are looking at the possibility of one national net work emerging that would tie together all the regional net works. " — Ken Sovereign. “ I think we are looking at the possi bility of one national network emerg ing that would tie together all the re gional networks,” says Ken Sovereign, president, ATM Network Manage ment, Inc., Downers Grove, 111. Mr. Sovereign says he believes it is possi ble that as many as a half-dozen region al ATM networks may survive. He be lieves ATM Network Management should be in an excellent position to be among the survivors because it has offices both in Illinois and Texas and is a major software provider to ATM net works throughout the nation and Canada. Linking ATMs and ATM net works together generally is an easier task when a common software base already exists, he says. “We are able to support all the major types of ATMs, which is something not all networks can do,” Mr. Sovereign says. Jim Martin, president of Wisconsinbased Take Your Money Everywhere (TYME), the nation’s oldest statewide shared-ATM network, says reported discussions between Denver-based Plus System, Inc., and Visa on using Visa’s communications system for a POS program and rumors of possible links between MasterCard Interna tional, Inc., and Chicago-based Cirrus Systems, Inc., another national net work, “are steps in the right direc tion.” “ If we could get to the point of hav ing one national network,” says Mr. Martin, a past president and current director of NationNet, another nation al network, “I would see no need for the existence of a second or third nationwide network.” Cirrus and Plus probably will con tinue to be the major players in the national ATM/POS competition, many observers agree. On the question of possible links between Cirrus and MasterCard, Bruce Burchfield, Cirrus Systems’ president, says, “That cake isn’t baked yet.” There are compelling arguments for national and regional networks to con tinue to explore areas of possible coop eration, Mr. Burchfield says. In fact, he echoes others in the industry who say that unless fragmented bank electronic-funds-transfer networks co operate more, banks ultimately could lose control over the nation’s payment system. There are at least two areas where cooperation would prove beneficial, according to Mr. Burchfield. One would be development of a unified communications network capable of handling transactions of all or most of the existing networks. Cooperative ventures such as this lower costs for the various networks and eliminate the waste of building duplicate networks to perform essentially the same func tion, he says. Evolution of a unified communica tion network, some observers argue, is necessary before POS systems can gain greater acceptance. Development of universally recognized debit-card ser vice marks also is touted as another important ingredient of POS accept ance. Mr. Burchfield says creation of such service marks is another subject BANKER for March, 1985 DigitizedMID-CONTINENT for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis on which regional and national net works need to cooperate. Visa and MasterCard, the bankowned credit-card operations, have made no secret of their desire to play a major role in the debit-card business. Visa’s electron card was designed to fill the role of a universal debit card, but thus far has gained limited acceptance. Some doubt the popular Visa and MasterCard service marks can be easi ly transferred into the debit-card world. They continue to see debit cards essentially as a different product from credit cards and argue for pres- "If we could get to the point of having one national network, I would see no need for the ex istence of a second or third nationwide network/ 7 — Jim Martin. ervation of a difference in the mind of the public. What happens when a customer gives a debit/credit card to a retail clerk, who debits the customer’s bank account instead of charging the pur chase as the customer intended? When the customer’s house-payment check bounces the next day because of the mistake, who is supposed to take the blame? Who will straighten the problem out? Answers to these questions are not clear, but then, not much related to the POS market is. Although retailers, bankers and ATM networks have been accumulating experience in debit-card technology and marketing for years, many critical answers remain as elu sive as ever. Despite strides in con sumer acceptance (due largely to the spread and acceptance of ATMs) and POS technology, such central ques tions as whether the banker or the re tailer will pay for installation of the equipment and who will collect the fees have yet to be settled. In the long 9 "I think we're seeing something of a ground swell of support now for POS. The merchant base now is more attuned to it and is helping us sell it to the c o n su m e r/' — R. Je ffre y Brooks. run, POS offers much more potential for profit for network managers than the ATM market alone, and most re gional ATM networks can point to POS pilot projects or studies as evidence of their commitment to becoming factors in the POS market. R. Jeffrey Brooks, vice president/ director of product management, First National Bank of Commerce, New Orleans, which owns a regional net work known as GulfNet, says GulfNet’s “whole plan” has been to get in volved in the POS market. “ Everything we re doing is aimed at taking us in that direction,” he says. GulfNet’s current plans include ex pansion into all of Louisiana, Missis sippi, Alabama and the panhandle of Florida. Mr. Brooks sees a cultural and geographic homogeneity within this region, most of which has yet to feel the impact of regional ATM/POS net works. “ I think we re seeing something of a ground swell of support now for POS, ” he says. “The merchant base now is more attuned to it and is helping us sell it to the consumer.” Wisconsin’s TYME network started out in the mid-1970s as a debit-card network and at one time had as many as 200 POS machines in place through out the state. The early debit-card ex periment proved a dismal failure, however, TYME’s Mr. Martin says. Consumers were not yet ready for POS, nor had technology yet provided a product that met a perceived con sumer need, he believes. Currently, TYME is completing a new POS experiment at four test sites and has plans to install debit-card equipment at 30 other retail sites this spring. Consumer acceptance of the revitalized POS product has been “amazing,” far surpassing early projec tions, he says. He declares POS now to be the right product for the right times. “ Previously, we did not have the educated card base we have today,” he says. Digitized for 10 FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W hile TY M E ’ s POS success is heartening for POS advocates, TYME’s situation is somewhat unique. Mr. Martin says he is aware of only three ATMs out of more than 600 in Wisconsin that do not bear the TYME service mark. Only ITS, Inc., in Iowa comes close to providing the level of statewide coverage TYME does, according to Mr. Martin. “ Outside of Iowa and Wisconsin, ATM networks are extremely competi tive, but I believe POS is going to force networks in other states to cooperate, ” he says. “There is no way an institution can afford to install and maintain a POS network that does not allow access by other cards unless it can control 80% of the local market, and how many banks can say they have that?” ATM Network Management’s Mr. Sovereign says that if financial institu tions do not pay more attention to realities of the retail market, thirdparty service providers will move in and take the market for themselves. He concedes that technology may not yet have come far enough to match the expectations of some consumers who seem to want to have instantaneous access to their cash anywhere in the world. “ I can understand that a customer might not want to stand at a POS ter minal for 30 seconds or so, he says, “but when I read predictions that the ideal POS response time might be as little as two seconds, that’s a little un realistic considering how many dif ferent computers the transaction may have to go through.” On the other hand, service provid ers that do not have fault-tolerant equipment that kicks in automatically when the main system goes down will have difficulty in the POS world, he says. “ Downtimes of 10 to 15 minutes just are not acceptable in a POS en vironment,” he says. Jerry Nix, head of electronic ser vices at First American National, Nashville, owner of The Money Place, another regional network, says debit cards will catch on with the young "W e want to let the fellows with the big bucks find the solu tions and clear a path before we follow. W e don't want to be one of the pioneers; we want to be one of the early settlers." — Jerry Nix. urban professionals who look for con venience when they visit a food store or gas station. These consumers will use debit cards as a hassle-free substi tute for checks in those situations in which they would have to go through time-consuming identification proce dures in order to write a check, he says. Loss of float interest will not — as some bankers have contended — be an impediment to getting Yuppies — as they are sometimes called — to switch from credit to debit cards, he says. Although he is convinced POS has a future, Mr. Nix is not rushing blithely into that brave new world. “We want to let the fellows with the big bucks find the solutions and clear a path before we follow,” he says. “ We don’t want to be one of the pioneers; we want to be one of the early set tlers. — John L. Cleveland, assistant to the publisher. • Dale A. Hunt has join ed IAC Group, Kansas City, as an associate of its field-marketing staff for central and western Missouri. He is based in the Joplin area. A B A C h ooses E.V.P. WASHINGTON, D. C. — Don ald G. O gilvie, vice president, Celanese Corp., is the new ABA ex ecutive vice president, effective this month. He succeeds Willis W. Alex ander. Mr. Ogilvie joined Celanese in 1980 and has been responsible for corporate public policy/communications/govern m en t relations and health/safety/environmental affairs. Previously, he spent three years as dean of Yale University’s School of Organization and Management. Mr. Ogilvie also has held govern ment posts: Department o f Defense, 1967-69, and Executive Office of the President, 1973-77. In the latter post, he was associate director, National Security and International Affairs in the Office of Management and Budget. For four years, Mr. Ogilvie was president/director, ICF, In c., a Washington, D. C.-based manage ment consulting firm, which he founded. MID-CONTINENT BANKER for March, 1985 SHARE SYSTEM) Network, American Fletcher National Bank’s shared ATM Network, now gives you a direct link to Cirrus. So you can offer your customers 24-hour banking convenience at over 300 Indiana locations, and at ATMs all across the country. SHARE SYSTEM Network is a total service provider. The SHARE SYSTEM Network can put a complete range of electronic banking services within your reach. From preliminary evaluation, through purchase of equip' ment, site selection and machine installation, we can develop and deliver an ATM program that best fits your needs, and your budget. SHARE SYSTEM Network can extend your services. CIRRUS If you already have an ATM system, the SHARE SYSTEM Network can help you realize its full potential, and allow you to take advantage of the latest deveb opments in EFT services. MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Put the future of financial services within your reach today. To learn how you can take advantage of the opportune ties available to you through the SHARE SYSTEM/ Cirrus Network, call Chuck Nordmeyer, SHARE SYSTEM Manager, or John Bradshaw, Vice President, Electronic Banking at ( 317) 639 - 7624 . Outside Vendor Supplies Data-Processing Coordination For Three-State Bank H C f i n a n c i a l c o r p ., one of the four largest bank hold ing companies in the Ninth Federal Reserve District, recently took a series of steps to meet the rapid change in banking brought about by deregula tion. The corporation changed the names of its 26 banks, 25 branch offices and other subsidiaries, which then were organized into five regional groups based on geographic and eco nomic mutuality. “ Development of a common identi ty through the shared name of First American Banks was the first step in developing synergism of the banks and other subsidiaries,” explains Robert Hall, vice president/chief administra tive officer at Bremer. “The regional structure assured that local efforts, re gional strengths and corporate pro grams would best be utilized.” According to Mr. Hall, the changes allow groups of banks within geo graphic areas an opportunity to better develop and increase services offered in their regions. The new regional form also promotes better communica tion among the local banks, region and corporate management. rem er B On-line terminals to bank's data base per mits that bank to make on-line inquiry on account inform ation. This picture was taken in Bremer Financial Corp. affiliate bank. 12 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By Eric Kehle “These changes position us to sur vive in today’s competitive environ m ent,” Mr. Hall says. “ The name change and subsequent organizational changes are allowing us some signifi cant economies of scale. The corpora tion now can purchase many items in quantity and provide support services, such as marketing, on a group basis at significant savings.” In concert with the common name change, Bremer appointed a market ing director to research and develop products and services and expand its business base. “These efforts to develop common products and com m on delivery methods logically wrap around Brem er’s data-processing systems,” Mr. Hall says. “ Being aware that we were heading in a common direction, we selected First Bank System Informa tion Services to provide the dataOn-line-proof capabilities allow Bremer Financial Corp. banks to transmit transac tions directly to First Bank System Informa tion Services, St. Paul. processing coordination Brem er needed.” Information Services, based in St. Paul, is the primary provider of dataprocessing services for Bremer, in cluding on-line processing of Bremer’s automated teller machines, known as the Anytime Teller network. One of the first challenges for the firm was consolidation of all Bremer banks’ reporting structures. Experts from Information Services worked with each Bremer bank to standardize all major categories in their general ledger chart of accounts. Standardiz ing reporting structures ultimately eased the roll-up of the banks’ financial results in a cohesive format for the cor poration, furthering the synergism of the banks. “ One of the many reasons we chose Information Services to become our primary data-processing provider was its ability to serve a geographically di verse organization like ours,” Mr. Hall explains. “ Bremer’s First American Banks are located across North Dako ta, Minnesota and Wisconsin, and many did not have data-transmission capabilities when we first signed on Drovers First American Bank, South St. Paul, Bremer Financial Corp. affiliate, uses First Bank System Information Services for on-line processing of its Anytime Teller transactions. MID-CONTINENT BANKER for March, 1985 O ur night owl is a serious bird when it com es to your business. \ / m eet the night owl. United * ~ " Missouri’s computer processing service. It performs the work most banks need overnight. Every night. When your day is over, just give us your work. We give it back to you the next morning. Every morning. It’s a well-managed, quality data service that’s as reliable as the sunrise. So, if you want to be absolutely certain your bank’s work gets done give us a call. Our night owl’s on the lookout for your business. Computer Services Division UNITED MISSOURI BANKS Members FDIC Kansas City St. Louis Carthage 10th a n d G ra n d o P.O. Box 226 Kansas C ity, M is s o u ri 64141 (816) 556-7000 312 N o rth 8 th S treet o P.O. B ox 1126 St. Lo uis, M is s o u ri 63188 (314) 621-1000 300 G ra n t S treet o P.O. Box 876 C a rth ag e, M is s o u ri 64836 (417) 358-2135 MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 13 with Information Services.” Information Services maintains eight data-processing-entry centers in its region, and three of these are geo graphically accessible to the Bremer bank locations. These centers are a plus for those banks that need to use courier service to transport data, while others simply can transmit data via the telephone. Regardless of the delivery method, Information Services handles demanddeposit accounts, savings, savings cer tificate and loan processing for the Bremer banks. In addition, most of the banks have on-line terminals to their data bases, permitting those banks to obtain on-line inquiries to account in formation and handle data input through source-data entry. Most of the banks also use the central information system, which retains broad informa tion on all activities of all accounts per customer. Bremer has established a proprie tary ATM network, using the same marketing strategy of commonality by choosing the same name for all — Any time Teller. Currently, there are 18 Anytime Teller machines being sup ported by the Information Services ATM network. Bremer also owns 10 FASTBANKs under a franchising agreement with First Bank System. In addition, Bremer has joined the FASTBANK ATM network of more than 300 machines that handle over 1,100,000 transactions per month. This, in turn, allows Bremer bank cus tomers access to a variety of other ATMs, including the PLUS network of more than 4,000 ATMs located in 47 states and Canada. “ In looking toward the future, pro viding our customers with access to both FASTBANKs and a national ATM system like PLUS makes sense,” Mr. Hall says. “With the corporate nature of banking, we must continually make an effort to expand our business base. ” According to Mr. Hall, the Bremer decision to work with Information Ser vices rested on that organization’s reputation as one of the largest ven dors. He feels Information Services can provide several intangible benefits to the Bremer banks. “ We looked at the entire spectrum of attributes when selecting Informa tion Services as our data-processing vendor,” Mr. Hall explains. “Timeli ness, technical expertise, pricing, reEric Kehle, a.v.p., First Bank System Information Services, St. Paul, joined First Bank St. Paul in 1966. Since 1969, he has been working with First Banks and correspondent customers to meet their data-processing needs. 14 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Correspondents Offered New Investment Service By Chase Manhattan Robert Hall is v.p./chief adminis trative officer, Bremer Financial C orp., w hich o b ta in s d a ta processing services from First Bank System Information Services, St. Paul. sponse to change and follow-up on reg ulatory changes affecting data process ing were taken into consideration. Our decision also was affected by the lati tude of choice in compatible equip ment for our banks.” Information Services’ flexibility in cludes capability to serve banks using multiple vendors. Whether a bank uses IBM, NCR or Burroughs item processing equipment, compatibility is assured. Information Services maintains a close working relationship with Brem er, with scheduled monthly meetings to review products and services. These meetings serve as a forum to discuss new products, processing changes, regulatory changes and other specific needs of Bremer. “ In line with our recent regionalstructure changes, a representative from each region attends the meetings to voice special concerns,” Mr. Hall says. “ Our operations committee, composed of several Bremer people who serve as liaisons with our banks, also has input at the monthly gather ings. A variety of tailored solutions to Bremer problems result from these efforts.” As one example, window transac tions such as Series E bonds were re quired to be reported to the IRS on magnetic tape this year. Information Services developed a system to do that, thus simplifying the 1099 report ing for Bremer. According to Mr. Hall, First Bank System Information Services has com plem ented Bremer’s consolidation efforts and will be used for even more sophisticated financial analysis and comprehensive information in Brem er’s future. • • NEW YORK CITY — Chase Man hattan now offers correspondent in stitutions a service providing easy ac cess to investment in money-marketmutual funds. Chase says it is the first money-center bank to do so. Through the new Portfolio Invest ment Funds Service (PIFS), Chase’s customers can elect to invest for their own investment portfolios in any of five mutual funds: 1. Dreyfus general m oney-m arket fund. 2. Dreyfus general government-securities mon ey-market fund. 3. Goldman Sachs ex empt-assets portfolio. 4. Goldman Sachs government-assets portfolio. 5. Nuveen tax-free accounts. Chase acts as agent for customer banks in buying and redeeming shares of the funds. Current yields on the five funds are available through a toll-free quote line. Chase will accept initial orders of $100,000 or more per fund. Orders of $25,000 or m ore are accepted for subsequent purchases/redemptions. Minimum balances of $100,000 must be maintained in each fund chosen. PIFS, described by a Chase spokes person as “one-stop banking” for cus tomer institutions, provides daily accounting records and monthly re porting on each fund investment. ABA Forms Task Force On Consumer Issues The ABA has formed a consumerissues task force because of the need for dynamic leadership from the bank ing industry to address a wide array of consumer-financial issues. The task force will oversee develop ment of a coordinated communications strategy on such issues as basic bank ing services, branch closings, uncol lected funds and truth-in-savings leg islation. Its chairman is Robert L. Stevens, president, Bryn Mawr (Pa.) Trust. Members will include bankers from the ABA’s consumer financialservices group, operations/administration group, communications council, community bankers council, govern ment relations council, corporate plan ning division, state associations divi sion and Bank Marketing Association. The new task force’s duties will in clude oversight of several research projects already underway to analyze the impact of expanded financial com petition in the marketplace. MID-CONTINENT BANKER for March, 1985 HERE$ WHAT YOUWWTED FDIC CallReport Datafrom BFlWCPEffl \ inLotus 1-2-3™formatfor \ Q \m r personalcomputer. \ \ \ V \y \ ^ y^ The BANCPEN Reports in print-out form have become familiar items on the desks of decision makers in over 1500 of the country’s leading banks. Carner & Associates, Ltd., which produces these reports, now offers BANCPEN Report data on 5Vi inch floppy diskettes for use on your personal computer. For the first time, Federal Deposit Insurance Corporation data is presented in a format loadable to all popular spread sheet programs. The BANCPEN Reports for personal computers will load to Lotus 1-2-3™ and Symphony™, and to VisiCalc™, SuperCalc™ and Multiplan™. It has been expanded to give you 120 balance sheet and income statement line items from the FDIC report of condition and income of your bank and, even more important, on all your competing banks. You choose the banks you need in your report — as many as you wish. You choose the quarter or quarters you want reported. For data on up to 400 banks you pay only $495 for an annual report, $695 for twice a year reports, or $995 for reports for all four quarters. If you wish to build a history of the data, we will provide the previous four years’ data at the same price you pay for the current year data. For example, if you order second and fourth quarter data for 1983 at $695, we will provide all second and fourth quarter data for the years 1979 through 1982 for an additional $695. Camer & Associates, Ltd. Producer of The BANCPEN Reports TELEPHONE ORDERS/(417) 866-5053 ©Copyright by CARNER & ASSOCIATES, LTD., 1977, 1983. All rights reserved. BANCPEN is a trademark of Carner & Associates, Ltd. Symphony, 1-2-3, and Lotus are trademarks of Lotus Development Corp. VisiCalc is a trademark of VisiCorp. SuperCalc is a trademark of Sorcim Corp. Multiplan is a trademark of Microsoft Corp. BANCPEN®PO. BOX 1482/SPRINGF1ELD, MISSOURI 65805 Please send sample diskette and additional information about the BANCPEN Reports in Lotus 1-2-3™ format for my PC. NAME TITLE BANK NAME PHONE A D D R E S S .................................................................................. .... ....... ................................... t o MEMBER BANK MARKETING ASSOCIATION MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CITY _________________________________________ STATE ________________ ZIP 15 A utom atic Sorting O f C u rre n cy C u ts A TM D ow ntim e EDUCING downtime on ATMs is a major concern of all financial institutions with 24-hour tellers. Although it may go unrecognized, downtime often is related directly to the quality of currency being dis pensed. An ATM requires a consistent quality of currency, which, until re cently, implied new currency. While there’s no doubt new money works well in ATMs, a premium may well be being paid for storing new currency. Historically, it was necessary for financial institutions to rely on the Fed or their correspondent banks for sup plies of new and fit currency required by their ATMs. This meant ordering and storing enough new currency to fill the needs of the ATMs, resulting in higher-than-necessary reserve levels and crossovers in shipments of funds. Crossover shipping leads to increased trucking costs and fees. Now there’s a viable alternative to all this: the process of currency sorting to obtain ATM fit money. Currency is sorted by removing those bills not fit for the use for which they are in tended; either ATM or teller reissue. In the past and still in many institu tions today, sorting is done by tellers who examine the bill and subjectively determine its fitness. This is a tedious, time-consuming process, which often is not elfective in obtaining both the quality and quantity of currency re quired to fill ATMs. What is said to be the most effective method of sorting currency or “clean ing” it is through utilization of the Brandt Model 885 Currency Fitness Sorter as demonstrated by First Secur ity National, Lexington, Ky. First Security, a $930-million bank, pur chased the Brandt Model 885 Curren cy Fitness Sorter in January, 1984. Since then, the bank has been sorting currency automatically for its 15 ATMs and for distribution to correspondent banks. 16 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Brandt Model 885 Currency Fitness Sorter sorts currency automatically for 15 ATMs operated by First Security Nat'l, Lexington, Ky. Prior to purchasing the Brandt Mod el 885, First Security National was hand-sorting currency for six of its branches at the main office, while their remaining nine branches hand-sorted on site. The manual-sorting process at the main office alone took approx imately 40 hours per week. After ana lyzing the extensive amounts of time exhausted at both the main vault and the branches, First Security was able to justify the purchase of a Brandt Model 885 Currency Fitness Sorter. The Brandt Model 885 Currency Fitness Sorter is designed to sort “ asreceived” money and produce a con sistent quality of currency for ATMs. The Model 885 performs 10 tests on each bill, sorting the currency against customer-selected sort levels as well as predetermined levels to determine which bills are fit and which are unfit to use in ATMs. The 10 tests check for doubles, note length, holes, tears, cor ner folds, condition (crispness), miss ing corners, tape, counterfeit detec tion and “Z” folds. The fit money goes into the fit pocket while those bills not meeting the preset-condition levels are sorted into the unfit pocket. Any suspect notes, those too long, too short, doubles or counterfeit, are directed into the third or cull pocket. The Brandt Model 885 will sort and verify up to 16,000 notes per hour. According to Curtis Hastings, first vice president o f First Security, “W e’ve had a dramatic increase in pro ductivity with the advent o f this machine. Charlotte Green, vault su pervisor at the bank, goes on to ex plain, “We now are sorting currency for all our branches in an average of eight hours total per week. We send the fit currency out to our branches twice a week. ” She emphasizes how much em ployees enjoy operating the unit as compared to hand sorting and, of course, the branches appreciate not having the task of hand-sorting curren cy; “ One important benefit is that we can verify and reconcile the straps at the same time we are ‘cleaning’ the currency,” says Ms. Green. “ Any overages or shortages are determined and rectified at that time. The unit is accomplishing what we purchased it to do, giving us a consistent quality of currency for our ATMs. Downtime due to currency-related problems vir tually has been eliminated. Doug Chenault, retail field adjustor for First Security, is in charge of the response team responsible for on-site service of the ATMs. “ Since we have begun automatically sorting currency, we virtually have not had to dispatch the response team be cause of currency problems. There has been a significant drop in the out time of the response team,” Mr. Chenault says. First Security has found the curren cy sorter to be an excellent marketing tool. “ We re actively marketing the prep aration of fit ATM money to our corre spondent banks, both locally and throughout the state,” explains Mr. (Continued on page 20) MID-CONTINENT BANKER for March, 1985 Yield ahead Improving the yield on your investments takes constant, careful review. Under today’s rapidly changing market conditions, knowing what to buy, when to buy it, and when it matures is Com m erce Bank Bond Investment Group. Our Bond Group representatives are trained professionals in portfolio management. They will keep you up to date and informed of rapidly changing market conditions. And they will help you in making timely decisions in order to improve your yield. Call the Com m erce Bank Bond Investment Group at 816/234-2462 today. Together, we will review your current investment position and assist you in the management o f your o f K ansas City 816/234-2462 • 10th & Walnut • Kansas City, MO 64141 portfolio. MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 17 At Bank in Kentucky — Adopting N ew Form s Increases Efficiency In Bank's O p eratio ns overlooked in a bank’s rush to automate highvolume operations are forms that serve both as operational and data-inputsource documents. Among these are official checks and certificates of de posit, two items we modified recently at Peoples Liberty Bank of Northern Kentucky to improve their effective ness and contribution to the efficiency of our paperwork and data processing. W hen we embark on a design change, we call on the knowledge and expertise of a forms specialist from Standard Register Co., Dayton, O. This, we have learned, assures us of a form ’s economical production and most effective end use. In the case of our CDs, we were influenced by both external and inter nal factors. Our old CDs included pre printed terms and conditions as re quired by federal regulations. These, however, were not permanent, and as, changes were made, we had to rede sign the form. We also had a separate form on which information concerning a CD was set up for computer input via keypunch equipment. That meant a second writing of information. Changes in our methods of comput er input and the need to avoid so much changing of design led us to try to establish a CD form that would be permanent, easy to use and fulfill necessary information requirements in one document. We also wanted to im prove the appearance of our CD and make it look more official. Consultation with the forms special ist resulted in creating two versions of a CD — one for renewable and one for nonrenewable applications. They are two-part ZIPSET forms measuring 81/2x7 inches without the top stub. Each is divided into two equal sections — the top being the certificate; the lower half replacing the old separate requently F 18 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By Cy Miller Vice President And Cashier Peoples Liberty Bank O f Northern Kentucky Covington computer-entry form. The two ver sions are distinguished by color and terminology. Where our former CDs had been rather plain, we dressed up the new ones by simulating a parchment back ground and engraved border. The low er half of the form has preprinted list ings to describe the CD for the com puter input operation, which now is done by the cathode-ray-tube unit. Here we make use of check boxes to indicate such items as interestcalculation method, interest-payment period and interest-payment method. There also are areas for entry of other basic information concerning the cus tomer and CD. Basic terms and conditions not sub ject to change are printed on the backs of the certificates. All other present and future applicable rules and regula tions now are covered in a separate brochure. This just about eliminates the need to redesign the CD whenever a regulation is changed. It is much sim pler to change the wording in the brochure. As before, the certificate original is given to the customer while the copy is used to enter the information into our computer data base. Our problem with special checks was entirely internal. It involved trustdepartment checks and certifiedcheck vouchers used when customers bring checks in for certification. In both cases, the need was for a simpler method of sorting transactions be tween demand-deposit accounting and Although some information for new twopart ZIPSET CD forms issued by Peoples Liberty Bank of N o rth e rn Kentucky, Covington, is entered by hand on lower portion (top), greater part of forms is filled out by typewriter (bottom). Forms are sup plied by Standard Register Co., Dayton, O. MID-CONTINENT BANKER for March, 1985 A/L MANAGEMENT EDUCATION • FINANCIAL MODELS . CONSULTING anks and S&Ls nationwide, with assets from $10 million to over $20 billion, use Sendero services and financial models. B Full Service A /L Management with Specialization for: ■ Community Banks ■Large Banks ■ Multibank Holding Companies ■ Savings & Loan Associations SENDERO O FFICES Cleveland, Ohio Danbury Connecticut Milwaukee, Wisconsin Phoenix, Arizona (H eadquarters) SENDERO DISTRIBUTORS Charlotte, North Carolina Morris Plains, New Jersey Pittsburgh, Pennsylvania Seattle, Washington London, England FOR INFORMATION call (602) 225-0555, or complete and mail the coupon below Supporting the Intellectual Process of Management TO: MCB0385 Sendero Coiporation, 1422 North 44th Street, Phoenix, Arizona 85008 FROM: Name_________________________________________________ Send me the following information: Title__________________________________________________ □ A/L Management Courses Organization___________________________________________ □ A/L Management Models A d d re ss___________________________________________________________ □ Profit Planning Models City_______________________ State_________ Zip---------------- □ A/L Consulting Service Telephone________________ □ Bank https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis □ Savings Institution □ Multibank Holding Company Total Assets______________ general-ledger accounting. Trust-department check forms — one for transactions involving probate court and the other for non-courtinvolvement transactions — are twopart ZIPSET documents. The certified-check voucher is a three-part ZIPSET form. In all cases, magnetic-inkcharacter-recognition (MICR) encod ing is the key to the sorting operation. Previously, originals and second copies of both checks and voucher car ried our routing and transit numbers and the document’s serial number. A later encoding operation placed the account number on the original. At regular briefing session, Standard Reg ister Co. representative Kay Ferneding and Cy Miller, v.p./cash., Peoples Liberty Bank of Northern Kentucky, Covington, discuss forms supplied by Ms. Ferneding's firm to bank. Because we had the same MICR routing and transit numbers printed on copies one and two, the computer’s automatic-sort accepted the DDA in formation, but rejected the secondcopy information without directing it to the general-ledger account. That meant we had to review the forms and pull those for manual posting of the general-ledger information. It all amounted to extra work in both DDA and general-ledger accounting. To solve the problem, we decided to have a different routing and transit number preprinted on second copies o f the forms. In addition, trustdepartment-check second copies also are encoded with the general-ledgeraccount number. The result is that all documents now are sorted automati cally and posted to the appropriate accounts. Usage volume of these forms is not great, but any improvement that leads to greater efficiency within the bank’s operations is a plus. By creating forms that are more attractive, are easier to use and contribute to our overall effec tiveness, we are contributing to a bet ter banking operation. • • 20 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Software Places Bank's ATM, Mainframe In Position for In-House Processing ESPITE increased friendliness toward their human operators, computers still can be downright friendly when it comes to communicat ing intelligibly with their own kind. Creating an interface between an ATM made by Diebold and a new IBM System/36 can be a daunting task even for a large bank, for example, but con sider the potential magnitude of prob lems faced by rural Chillicothe (Mo.) State. Until the new IBM computer was installed last year, the bank — with assets of about $65 million — had relied on an outside service bureau for most computer-processing needs, in cluding transaction processing for the bank’s single on-premises ATM. Finding integrated software to handle the bank’s operational needs was a concern, but according to Vicki Silkwood, assistant cashier/com pliance officer at the bank, finding soft ware that would petmit the ATM to communicate with the System/36 was difficult. Data from each ATM transac tion had to be captured and transmit ted on a real-time basis to the bank’s database on the System/36. Communication protocols differ be tween computers. This is why Chilli cothe State had difficulty getting its ATM to communicate effectively with its mainframe. For the bank to estab lish a link between the ATM and the System/36, special software from Arkansas Systems, Inc., Little Rock, had to be purchased. The software, titled “ On-Line Bank Environment ATM Management,” converts signals from the ATM into a form the System/ 36 can read. ATM transactions are memo posted in customer-account files on an on-line basis. Hard-posting of the day’s ATM transactions is done at the end of the business day, according to Ms. Silkwood. Bank officers now can retrieve up-to-the-minute information from each customer’s file stored on the mainframe. The big advantage for the bank is a measure of control not possible pre viously, Ms. Silkwood claims. No long er must bank officers wait days for a management report from a service bureau, and savings in service-bureau fees from doing transaction processing in house have been significant. She emphasizes that the bank did not have to spend a great deal of time or money on retraining people to operate the system. D Gail Hart, operations coordinator, Arkansas Systems, says a number of un banks in rural communities have rec ognized the advantages of having more control over their routine ATM transaction processing and the servicefee savings that can result. She says that interfacing one or a series of ATMs with a mainframe com puter — whether over telephone or dedicated lines — need not be a major impedi ment for a financial institution that wants to process ATM transactions in house. Ms. Silkwood says she doubts any of the bank’s customers can tell the dif ference in the way the ATM handles a transaction since the bank dropped the service bureau. She estimates that of the bank’s more than 4,000 customers, about a fourth have Chillicothe State Bank-issued ATM cards. “There always will be a certain num ber of our customers who prefer to deal face-to-face with a teller,” she says. But she has noticed that since the bank switched to in-house-transaction pro cessing, the ATM seems to have less downtime. So, as a result of friendlier computer-to-computer communications, she says, the bank’s ATM — at least in a subtle way — must seem a little friend lier and more accessible to customers. — John L. Cleveland, assistant to the publisher. Automatic Sorting (Continued from page 16) Hastings. “We currently provide ATM fit currency to Lexington Federal Sav ings & Loan Association,” he con tinues. According to Tom Herndon, vice president/treasurer, Lexington Feder al S&L, First Security provides the S&L with currency for its three recent ly installed ATMs. “ We are happy with the quality of currency we receive from First Secur ity,” says Mr. Herndon. “We have not had any currency-related jams in our ATMs since installation.” First Security’s Mr. Hastings has this to say: “ Not only does the currency sorter process currency quicker, bet ter and with less labor, it reduces our currency levels at every branch. We are pleased with the sorter because we now can offer our customers a better service at a better price.” • • MID-CONTINENT BANKER for March, 1985 How Financial Energy can help you manage the problems facing bankers today. ß d ia i i m î d d • O ìt-I _ 'â / . w a tfoU. ¡iï'iï !.x c m ,ic m .m e n First — t- ™ ¡ 010-17 First National Correspondent Consulting Services offers M educational and training opportunities that deal with the National vital issues and problems you face today. offers other Each “ hands-on" course features experienced in programs: Retail Sales Incentive Program, Officer Call structors from First National Bank of Louisville—the Program, IRA Seminar. Each is custom-tailored for your region's largest and strongest bank. In a very short time, bank and your customers. you'll gain inform ation and refine skills that can For a presentation of these programs or in help you make your bank stronger and more formation on any of our services, contact First profitable. National. And let us put the power of Financial All eight courses—three are new for 1985— Energy to work for you. FIRST earn Continuing Education Units (CEU's) from Call Correspondent Consulting Services: Direct N A TIO N A L the University of Louisville. (502) 581-7741; Kentucky WATS (800) 292-2272; In BANK In addition to the courses and seminars, other states (800) 821-5789. Put it to w o rk for you. MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H o w D o You C hoose The Right Softw are? By James A. Towns III OW DO YOU choose the “ right” software? What do you look for? Should it run on a mainframe com puter, a micro or a mini-computer? James A. Towns III is vice president, Bank If you ever have tried to buy a soft Earnings Systems ware package, you probably have been (BES), A tlan ta, and faced with some of these questions. product manager for And, unless you’re a data-processing its consulting group. technician, you’ve probably been con He participates in all fused by the terminology, claims and aspects of consulting for BES, including counter claims put forth by competing data-processing software vendors. strategic planning, Several key words and phrases in vendor evaluation/recvariably appear in vendor presenta ommendation, imple tions. Concepts such as database, state mentation scheduling of the art and integrated will be used and hardware/software analysis. Mr. Towns, depending on what is fashionable in who has more than 15 years' experience in data processing for the financial industry, formerly the software industry at the time. was data processing manager at a major south These concepts have importance. eastern bank. He holds a BBA in accounting However, technical excellence and from Georgia State University. state of the art are secondary. Primary considerations in software selection are basic business case ques tions of benefits delivered to specific volumes were much lower than the users and total life-cycle costs. In commercially oriented banks. With short, despite technical complexity, their real-time software, S&Ls were software selection should be similar to able to post transactions to their cus any other type of purchase. tomers’ accounts at the time the trans Before exploring specific steps in actions occurred, rather than batching the software-selection process, it them together for input to a nightly might help to quickly review the posting cycle. evolution of software in financial in Generally speaking, the first sys stitutions to get a feel for the issues tems developed were for general involved. accounting functions (i.e., general Software Evolution. Financial in ledger), followed closely by software stitutions, because o f their highly for deposit/loan accounting. These ear labor-intensive operations, were ly software systems were developed by among the first to make extensive use some of the larger banks and S&Ls, of computers when they became com which could afford to buy these early mercially available. At that time, computers and which stood to gain the banks and S&Ls were forced to write most by automating labor-intensive their own software because there was functions. little available for purchase. However, they developed distinct types of software because they served Five Essential Steps in two different types of markets. Banks Software-Selection Process: tended to develop batch-processing software because of efficiencies that 1. Recognize investment required can be gained in high-volume environ 2. Define your requirements ments by batching together all of a 3. Identify potential vendors day’s transactions to be posted in one 4. Evaluate vendors nightly processing cycle. S&Ls tended 5. Evaluate software to develop real-time processing soft ware because their transaction H 22 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis As computers evolved, they became affordable to a larger number of finan cial institutions, which sometimes de veloped their own software, but more frequently obtained software from other banks and S&Ls and then cus tomized the software to fit their in stitutions. At that time, independent software firms sprang into existence to satisfy the increasing demand for financial software. However, these software firms tended to develop soft ware primarily for banks because the market was larger and the batch processing software used by banks was simpler (cheaper) to develop than the real-time software used by S&Ls. As a result, S&Ls continued to develop their own software or to obtain it from other S&Ls. Today, there continues to be less software available for S&Ls. During this period (early 1960s to mid-1970s), computers continued to evolve, becoming smaller, faster and cheaper. But the software-develop ment process did not progress at the same rate, with the result that many financial institutions found their inter nal programming efforts were taking a larger percentage of their budgets as users found more functions that could be automated on these faster comput ers. Also, most financial institutions found that larger programming staffs were required to meet ever-short ening deadlines to bring new products to the marketplace. Those pressures were exacerbated in the late 1970s with the advent of deregulation. Since that time, S&Ls, banks and their new competitors have begun targeting the same markets, which has resulted in fierce competi tion, a blurred distinction between types of financial institutions and squeezed margins for all. Shortened reaction times, greater complexity and increased develop ment cost have all impacted software production. Today, few financial in stitutions can afford the luxury of de veloping their own customized soft ware and are forced to purchase soft ware that will enable them to be com- MID-CONTINENT BANKER for March, 1985 Renaissance Center, Detroit W hy does a bank 2 0 m iles from Detroit have its data processing done in Pittsburgh? “With Mellon Bank we went immediately to a system that was up to date—and stays up to date” Harold W. Allmacher Jr., President has been fast start-up, little or no downtime, and a system that’s constantly updated to stay on top of changes in the industry. Others promise. Mellon delivers.” First National Bank in Mount Clemens Mellon was one of the first banks to apply electronic systems to The First National Bank in banking, in 1955, and we’ve been Mount Clemens is one of more in the forefront of development than 200 financial institutions ever since. A staff of more than from Vermont to Arizona that use 500 bankers who are data-process Mellon’s Datacenter Services. ing professionals, supported by an annual development budget in “We were willing to pay a little excess of $40 million, ensures that more for Mellon’s Remote Job commitment. Mellon’s Datacenter Entry systems because of the pay shares in those resources, giving off,” says Allmacher. “The payoff its customers a distinct financial @ and competitive advantage in today’s demanding, rapidly changing financial services environment. If you’re concerned about main taining cost-effectiveness while providing the new services that staying competitive demands, compare your processing costs and capabilities with those provided by Mellon’s Datacenter. Just call Dick Meyer, vice presi dent, (412) 234-4861. Or write to him at Mellon Bank, Datacenter Division, One Mellon Bank Center, Pittsburgh, PA 15258. Mellon Bonk Bankers helping bankers compete. MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 23 petitive, low-cost providers of financial services. Choosing “Right” Software. Now, back to the original question: How do you choose the “ right” software? Your primary purpose is to get the greatest number of functions and features you possibly can for the least cost. But how do you do that? Generally, there are five essential steps required in a software-selection process. These steps are: 1. Recognize the investment re quired. 2. Define your requirements. 3. Identify potential vendors. 4. Evaluate the vendors. 5. Evaluate the software. Your softw are-evaluation group should prepare a de tailed list of requirements, which may be used in a check list fashion to compare the offerings of multiple software vendors. The first step is to recognize the in vestment required to change software or to put in new software. Since data processing now is a focal point for product delivery in most financial in stitutions, any changes will have a rip ple effect throughout an organization. Any new software will require staff training and participation in many areas — progamming, computer op erations, accounting, branch opera tions, back-office operations, customer service and any other impacted areas. Also, recognize that some trade-offs are required. Purchased software usually is easier to implement if it is put in “plain vanilla. ” Any changes you put in to customize it will increase the implementation effort and will result in on-going efforts to reapply those changes each time the software vendor sends a new version of that software containing enhancements. The second step is to define your requirements for the new software. This generally is best accomplished by establishing a user-driven softwareevaluation group of four to seven users with data-processing participation. Groups smaller than this usually have a 24 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A/L Management Sessions Set for Bank Executives Six educational sessions on asset/ liability management for financial in stitution executives have been sched uled during April, May and June by Sendero Corp., Phoenix. In addition, a session presenting the fundamentals of asset/liability management has been set for March 27-29 at the firm’s head quarters. The six sessions are as follows: April 10-12, Seattle; April 17-19, Dallas; April 24-26, Boston; May 1-3, Chicago; May 8-10, Los Angeles, and June 1214, Pittsburgh. The courses emphasize case studies and use of micro-computers to assess the effects of selected strategies. Sendero’s business focus is the education and support of executives involved in the asset/liability-management process. Its services are de signed to familiarize bankers with the steps required to assemble necessary data, use dynamic simulation properly and make effective ALCO or Board presentations in order to evaluate alternatives for managing interest-rate risk. Further information is available from John Myers, Sendero Education, 1422 N. 44th St., Phoenix, AZ 85008. focus that is too narrow, and larger groups tend to be counterproductive because their focus is too broad. This software-evaluation group should prepare a detailed list of re quirements, which may be used in a checklist fashion to compare the offer ings of multiple software vendors. This list of requirements also should be re viewed by senior management to en sure that it fits into the institution’s business plan (both the formal plan and any unstated plan). The third step is to identify potential vendors. This may be accomplished by consulting a number of sources — advertisements in trade magazines and periodicals, contacts in other financial institutions, publications that list or rate software packages and/or engag ing a consultant to assist in the evalua tion. As mentioned earlier, the next step is to evaluate software vendors. It makes little difference how good the software is if the vendor isn’t going to be around to support it. At this point, primary considerations should be financial stability and profitability, level o f satisfaction o f a vendor’s clients, the vendor’s on-going commit ment to research and development and level of training and implementa tion assistance provided by the ven dor. If the product or vendor is rel atively new, spend more time evaluat ing that vendor since the risk will be higher. Do not reject new products or ven dors simply because they are new. “ New” can be creative and innovative, which, in the current environment, may result in competitive advantage. After the vendor-evaluation step, a number of vendors will be eliminated, resulting in a more manageable list of software packages to be evaluated. The fifth step is to perform a detailed eval uation of the software offered by the remaining vendors. In this evaluation, there are several key items to be ex amined. These items are: 1. Comparison of functions and fea tures to the requirements list (from step two). 2. Ease of use. 3. Quality of documentation. 4. Ease of interface to existing sys tems. 5. Cost, including initial acquisition cost, annual maintenance costs, imple mentation costs and on-going daily operating costs. This evaluation and final selection of the “right” software naturally will in volve some trade-offs, particularly in items one and five above. The impor tant element in item five is total lifecycle cost. The typical life cycle today is three to seven years for software. Ini tial purchase price often is not the de termining factor in these costs. More often, staff costs, either for operation or at the user end, are more important. For example, a higher front-end cost for an automated system may be “low er” over time as a result of staff reduc tions. Conversely, high cost for a “ state-of-the-art” system that doesn’t actually improve function or lower staff may be unwise. The software-eval uation group will have to compare the value of the functions and features offered to the incremental cost of obtaining those capabilities. Once this evaluation process is com pleted, the software-evaluation group should present its findings to senior management. Those findings should include a comparison in detail of the functions and features of each of the software packages that were evaluated in detail, a cost comparison of those packages and a specific recommenda tion. At this point, you will have chosen the “ right” software — not be cause it’s the best in the world, but because it’s the best fit for your institu tion. During this process, you may (Continued on page 51) MID-CONTINENT BANKER for March, 1985 BankDisk microcomputer software for banks Microcomputer software from BankDisk combines innovation with accuracy based on a solid foundation of experience. It is designed especially for banks with built-in dedication to your need for software that’s easy to use. BankDisk quickly transforms a microcomputer into a powerful workshop for any bank professional. Each product deals with a particular area of bank operation. All provide answers to unlimited “what-if” situations in daily decision making. All improve productivity in handling the many facets of routine bank operations while giving you a powerful new tool for generating revenue. All give you the flexibility to easily adjust to your continually changing rates and strategies. And, all demonstrate proven experience in both computers and banking. The growing series of BankDisk software includes the Loan Document Processor, Safe Deposit Box Accounting, Fixed Asset Accounting, Board Reporting, Interest Spread Analysis, IRA Proposal and Disclosure, Asset and Liability Management, Agricultural Credit Analysis, Commercial Credit Analysis, and Client Profitability Analysis with new innovative products on the way. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Bottom Line BankDisk is fast becoming the standard for comparison in financial software. We’re running on Apple,® IBM,® Burroughs,® and NCR® micro computers with professional installation, service and on-going support always as close as your telephone Call today for the representative in your area. Burroughs is a trademark of Burroughs Corporation. NCR is a trademark of NCR Corporation An electronic information-gathering/delivery system will soon be available from Centerre Bank, St. Louis. The system is made up of three primary components: specialized computer software developed by National Data Corp.; computer hardware developed by Tandem Computers, Inc.; and a nationwide communication net work operated by Tymnet, Inc. Customers can use the system to electronically access balance/transaction information for their accounts at Cen terre and at other banks in the U. S. The system also serves as a multidirectional electronic-mail and messag ing system. The system is expected to be operational by mid-year. Discovery, a work station for corporate treasurers, has been introduced by United Missouri Bank, Kansas City. It allows treasurers to manage their firm’s cash flows more efficiently and in a more timely fashion, says the bank. The program offers balance reporting that has manual or auto-dial access with multi-bank capabilities. Balance information is available any time during the day, and multiple time-share services may be accessed automatically at any time. Treasurers also receive disbursement/deposit information. Customers lease software from the bank that is com patible with an IBM PC, XT or AT computer or compara ble hardware that has a minimum 256 K memory and a Hayes smart modem or acoustical coupler. Services include EFT, automatic wire transfer and bal ance reporting. Other products are being developed. A new micro-based service that permits banks and other financial institutions to anonymously compare their performances to those of peers and competitors has been introduced by InnerLine, Chicago. Called PeerLine, the service is expected to be useful to senior executives and boards by allowing them to com pare their operating results each month, based on non public data. Users must have an IBM or IBM-compatible computer and must gather and input approximately 200 pieces of performance data, using a software package provided with the service. These data include information on loan quality, fee income, financial data, staff control, staff pro ductivity and new-business generation. The system combines these data with similar informa tion from participating institutions to create comparative peer-group data. The final report is delivered on-line within 48 hours of the data-submission period and provides comparative performance information for up to eight peer groups. The service was developed in conjunction with Bank Earnings International, Atlanta-based consulting firm. Electronic home-banking services are being offered by Louisiana National, Baton Rouge, to customers who have personal computers and modems. Services available include electronic-bill payment, funds transfer between accounts, account-balance check- 26 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ing and electronic mail to the bank and to other custom ers. National news, sports and weather information also are offered. Louisiana National belongs to the National Shuttle Network, which permits participating banks to offer their own and electronic services from Shuttle Corp. in their respective marketing areas. Micro-computer model for commercial credit is the name of a new software product for commercial-loan offic ers available from the ABA. It’s a self-paced model that provides bankers with two software products: Credit Tutorial, which teaches credit and cash-flow analysis by taking bankers step by step through two case studies, supplementing traditional management-training programs and later acting as a ref erence guide; and TopOne credit-analysis model, tables and graphs that produce four years of balance-sheet, cash flow and ratio projections needed for commercial-credit analysis. Information is available from Peter Greaney at the ABA by calling 202/467-5291. A high-tech information-retrieval system, known as Financial Industry Information Service (FINIS), is on line that provides banks and other institutions with in stant access to the library of financial-marketing informa tion maintained by the Bank Marketing Association. FINIS is accessed through in-house computer termi nals and provides access to any of the 20,000 article abstracts housed in the BMA’s Information Center in Chicago. Abstracts are drawn from the estimated 200 periodicals in the Information Center collection as well as from varied other sources, including student papers prepared for BMA-sponsored schools of bank marketing and win ning entries in the BMA’s annual Golden Coin Competi tion of bank-marketing campaigns. Subscriber cost is based on an hourly computer con nect charge or on a combination of connect time and frequency of searches, depending on which of two data base distributors — Dialog or Mead — is used. A paperless, automated wire-transfer system called MoneyNETSM recently went on line for correspondent and corporate customers of First National Bank of Com merce, New Orleans. The system improves incoming and outgoing domestic wire-transfer process, administrative requests and re quests for funds by customers with near-instantaneous service. The system is facilitated by a Tandem Nonstop II® computer. No-additional-cost advantages to customers include faster, more efficient handling of wires, multilevel secu rity, faster response to inquiries and ability to process repetitive transfers. The system is self-balancing and provides more effi cient use of time for bank personnel by allowing a higher work volume, the bank says. MID-CONTINENT BANKER for March, 1985 About Banks & Bankers ALABAMA Paul Gourley Jr. has been promoted to senior vice president, SouthTrust Corp., Birmingham, which he joined in 1974. At SouthTrust Bank of Ala bama, Birmingham, these promotions were made: Michael D. Murray and John M. Nobinger to vice presidents and Charlie E. Silliman and James A. Robbins to assistant vice presidents. In other action at the bank, Emmet O ’Neal III, vice president, O ’Neal Steel, Inc., was elected to the board. His father, Emmet O’Neal, retired as a director in December. Terry W. Gaskin has been promoted to vice president as well as manager, asset-based loan-servicing depart ment, Central Bank o f the South, Birmingham. He joined the bank in 1982. ARKANSAS Balder Corp., whose ultimate stock holder is Andree Halim of Jakarta, In donesia, has exercised its previously announced option to acquire 207,000 shares of Worthen Banking Corp. (Lit tle Rock) from C. Joseph Giroir Jr. Mr. Giroir, a Little Rock attorney and director of the bank HC, had sold 207,000 shares to Balder Corp. last November 23, with an option for Bal der to purchase an additional 207,000 shares. In exercising its option, Balder now owns 414,000 shares, or approx imately 9.6%, of Worthen Banking Corp.’s outstanding shares, and Mr. Giroir owns 399,614 shares, or approx imately 9.3%, of outstanding shares. Larry Kircher has been elected presi dent, Citizens State, Bald Knob, which he joined 15 years ago. He was one of the organizers of the Indepen dent Community Bankers Association of Arkansas and now is vice president of that group. The Fed has approved the application of First National Corp., Wynne, to be come a bank HC through acquisition of the successor by merger to First National Bank, Wynne. The Fed also approved the application of Mainline Bankshares of Portland, Inc., to be come a bank HC through acquisition of Peoples Bank, Portland. ILLINOIS Charles J. Ballot Jr., auditor, First National, Belleville, is serving as chairman of the board of trustees of the Internal Auditing School of the Illinois Bankers Association. This year, the week-long school will be held August 4-9 at DePaul University’s Lincoln Park campus, Chicago. Richard B. Ogilvie, former Illinois governor, and Francis E. Ferguson, chairman, Northwestern Mutual Life Insurance Co. of Milwaukee, have been elected to the boards of Con tinental Bank and Continental Illinois C o r p ., ^Chicago. In other action, Robert H. Malott, chairman/CEO, FMC Corp., has resigned from both boards. Cole-Taylor Financial Group, North brook, has named Robert I. Logan ex ecutive vice president/director, Rene Y. Thomas marketing coordinator and Yevette Newton Jackson corporatedevelopment representative. C. J. Gauthier, chairman/president/CEO, NICOR, Inc., parent firm of Northern Illinois Gas Light & Coke Co., has been elected to the HC’s board. Dennis E. Bielke, president, General Bank-Belleville, has been given the additional title of CEO and Larry N. Boente has been promoted from vice president/senior loan officer to senior vice president. John H. Hurwith has been elected chairman, First Commercial Bank, Chicago, succeeding Vivian F. Hur with, who has been named chairman of Firstcom Bancorp, the bank’s HC. John Hurwith formerly was executive vice president/trust officer. Northbrook Trust & Savings has appointed Robert M. Buchta senior MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis vice president/senior lending officer and David C. Strom vice president/ cashier. Devon Bank, Chicago, has elected Richard A. Loundy and Willard S. Thomas chairman and president, re spectively. Richard Loundy advanced from president to chairman to succeed Mason A. Loundy, who has retired and now is honorary chairman. He joined the bank in 1953 and had served as president since 1975. Harris Bank, Chicago, has promoted Robert J. Genetski, Richard J. More land and Richard J. Brown to senior vice presidents. Mr. Moreland recent ly was named head of the bank’s treas ury group in the investment depart ment, succeeding Jeffrey S. Chisholm, who resigned to join Bank of Montreal, parent firm of Harris Trust. Mr. Genetski is chief economist and Mr. Brown heads the financial institutions and international divisions of the bank ing department. First National, Winnetka, has pro moted Craig E. Arnesen to executive vice president, Steven Neudecker to senior vice president/controller, James Kottmeyer to vice president/ cashier and Janet Bruechert and Roy F. Gibson to assistant vice presidents. INDIANA Richard A. Byrd has joined Irwin Un ion Bank, Columbus, as an associate of the recently formed capital markets group. He is responsible for market ing, sales-trading and public-finance activities. Ralph Waltz has retired as president, American National, Noblesville. He has been succeeded by Ronald G. Miller, former executive vice presi dent. Mr. Waltz had been with the bank for 38 years and was president for 18 years. Mr. Miller joined the bank in 1956. Citizens National, Evansville, has pro moted David L. Knapp from senior vice president/chief financial officer to executive vice president/chief finan27 cial officer. He also has been named secretary, CNB Bancshares. William E. Vieth was promoted from senior vice president to executive vice presi dent. He also was elected to the boards of the bank and the HC. They joined the bank in f 957 and 1960, respective ly. Fort Wayne National has promoted Marlene A. Buesching to trust officer from assistant trust officer. Paul A. Turner has joined the bank as assistant vice president and manager o f methods/procedures. KANSAS P. Michael Castello has joined Farm ers & Merchants State, Derby, as vice president/commercial loan officer. He formerly was president/CEO, First National, Holcomb, and has been in banking eight years. McPherson Bank has promoted the following to assistant vice presidents: Steve Christensen, consumer loans/individual retirement accounts/discount brokerage, MBT’s North Bank; Terry Neher, agricultural loans, Main Bank; and David Steffes, consumer loans, Main Bank. In other action, McPher son Bank elected Larry E. Williams to its board. He is president, National Cooperative Refinery Association, McPherson. Steven J. Kelly has advanced from assistant vice president to vice presi dent, Security State, Great Bend. He has taken over the duties of Dale Engleman as the bank’s agricultural rep resentative. Mr. Engleman retired December 31 after 28 years’ service. Emil R. Scherlacker, who joined the bank’s consumer loan department January 1, has been named assistant vice president. A new bank director is David D. Marmie, secretary/treasurer, Marmie Motors, Inc. He had been an advisory director for the past year and replaced Joe J. Honaker on the board. Mr. Honaker now is an advisory director. John Means has been promoted from president to chairman, Citizens State, Hiawatha. Theodore L. Starr moved up from vice president to president. Allan Lierz has been named agricul tural loan representative. He was ex ecutive director, Doniphan County ASCS office. Mr. Means succeeds J. W. “ Bill” Patton, who has retired from active bank service after serving as chairman since 1973. 28 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Dennis D. Rogers has been promoted from assistant vice president/trust officer to vice president/trust officer, Fidelity State, Topeka. Harold E. Van Slyck Jr. advanced from assistant cashier/marketing officer to assistant vice president/marketing officer. Dale E. Hoosier has been named ex ecutive vice president/cashier/CEO, Timken State. He formerly was vice president/cashier, Kanopolis State. Leland R. Johnson Jr. has been named vice president, employee ben efit, trust division, Com m ercial National, Kansas City. He formerly was a senior trust officer with a large Kansas City, M o., financial institution. Charles W. Wayman has retired as president, Emporia State, but con tinues as chairman. Howard Gunkel, who was executive vice president/trust officer, has moved up to president. In other action, the bank has promoted James Wayman to executive vice pres ident, Jeffrey Morrow from assistant trust officer to trust officer and Carolyn Davis from assistant vice president to vice president. First Kentucky Nat'l HC Pledges Financial Help For Catholic High School LOUISVILLE — First Kentucky National Corp. (FKNC) has pledged $25,000 over the next five years to Holy Cross High School’s develop ment program. Holy Cross is the only coeducational Catholic high school in Jefferson County. Enrollment is approaching 800, more than the present building was designed to handle. The school has undertaken a $1.2-million develop ment program, including an $800,000 addition to the present building. FKNC’s contribution is being han dled through First Kentucky National Charitable Foundation, the corpora tion’s philanthropic arm. Gayle A. Thomas and Joye B. Haneberg have been named senior vice presidents, National Bank of Wichita. Sharon K. Boyer was named vice president/auditor, and Duane C. Miles was elected vice president. Beverly Blagg has been promoted to assistant cashier, First National, Cof fey ville, where she is in charge of teller operations at the Eighth & Buckeye facility. J. B. Jensen, president/chairman, Jensen International, Inc., has been elected a bank director. Stephen K. Matthews became presi dent, Bank of Mid-America, Wichita, February 1. He was executive vice president/trust officer, National Bank, Pittsburg. KENTUCKY Kentucky Southern Bancorp, Inc., Bowling G reen, parent HC for Citizens National, Bowling Green, and Citizens Bank, Glasgow, has ex ecuted a definitive merger agreement under which Citizens Bank, Glasgow, would become a wholly owned sub sidiary of Kentucky Southern. The HC previously had announced it had ac quired an option to acquire a control ling interest in Bowling Green Bank. Consummation of the merger transac tion with Citizens Bank is subject to approval of the bank’s shareholders as well as regulatory authorities. Ted Pearce (I.), principal, Holy Cross High School, shows plans for school's $ 8 00 ,0 00 addition to James Tobe (c.) and John Crockett of First Nat'l, Louisville. Bank's parent HC, First Kentucky National Corp., pledged $25,000 to help kick off school's fund drive. Steve Van Wart has joined Liberty National of Louisville’s retail banking group as vice president responsible for retail branch-banking sales manage ment. He most recently was regional sales manager for Alex Sheshunoff & Co., an Austin, Tex., bank-consulting firm. Gene R. Miller has been named senior vice president, First National, Mayfield. He has 22 years’ banking ex perience and has taught banking for the AIB and at the University of Ken tucky. The St. Louis Fed has approyed the applications of the following firms to acquire Kentucky banks: Wilson & Muir Bancorp, Inc., Bardstown, to ac quire at least 80% of the voting shares of Citizens Bank of Grayson County, Leitchfield; Farmers Capital Bank Corp., Frankfort, to acquire United MID-CONTINENT BANKER for March, 1985 You enhance life. We insure it. Your customers leave your office satisfied. With your help, they’ve made a financial decision they feel good about. You can make sure the good feeling continues by helping protect that financial decision with Integon’s credit insurance products. In the credit insurance business since 1935, Integon’s solid foundation promises stability for you. Our progressive, ever-growing product line promises custom plans for your borrowers. Gene Humphries Account Manager Arkansas, Tennessee (615) 239-8059 Tim Myers Regional Vice President Illinois, Indiana, Kentucky (606) 272-2382 MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis It’s a personal matter A solid history and progressiveness must be followed by responsive service. Integon’s local account manager is your personal tie to the home office. Your questions are answered quickly and accurately. There’s a knowledgeable and friendly “ Listener Team” on the line, too, as close as our toll-free number: 1-800-438-1058. Take just a minute to give your area account manager a call. Integon can enhance your life in return. Steve Parker Account Manager Kansas, Missouri, New Mexico, Oklahoma, Texas Bruce Tarleton Credit Insurance Vice President Alabama (205) 626-6475 (918) 251-5813 INTEGON INSURANCE 29 Bank, Versailles; and First Kentucky National Corp., Louisville, to acquire American National, Bowling Green. Ken S. Reinhardt Jr., vice president, First National, Louisville, has suc ceeded Robert Aldridge as correspon dent-banking head. Mr. Aldridge is the new president, American Nation al, Bowling Green. William T. Luckett, vice president of First National, succeeds Mr. Reinhardt as head of cor respondent consulting services. Mr. Reinhardt joined First National three years ago after having headed corre spondent banking at United Kentucky Bank, Louisville, two years. Mr. Luckett has been with First National 25 years. REINHARDT Lawrence A. Warner has been named president, First Kentucky Trust, Louisville. He succeeds and continues to report to William O. Rudd, who has been put in charge of all retail/trust banking for First National, Louisville, and First Kentucky Trust. Mr. Rudd is an executive vice president of the HC and has been named vice chairman of the trust company. Mr. Warner had been executive vice president, First Kentucky Trust, since 1982. Also at the trust company, Dennis W. Weihe, vice president, administrative ser vices, has been promoted to senior vice president. 30 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Robert E. Aldridge, senior vice president/head of correspondent banking, First National, Louisville, became president/CEO, American National, Bowling Green, February 11. The appointment followed consummation of the acquisition of American National by First National’s parent HC, First Kentucky National Corp., Louisville. Herbert J. Smith, who was chairman/ president, American National, con tinues as chairman. Mr. Aldridge was senior vice president/manager, corre spondent banking division, Citizens Fidelity, Louisville, and headed the correspondent banking division at First American National, Nashville, before joining First of Louisville. LUCKETT Holman R. Wilson Jr. has been pro moted from vice president to senior vice president, First National, Louis ville. H. Dudley “ Doug” Haggard and Gary W. Sieveking have moved up to vice presidents, Mr. Haggard from senior corporate services officer and Mr. Sieveking from senior commercial banking officer. WARNER ALDRIDGE RUDD LOUISIANA Hibernia National, New Orleans, has promoted the following to senior vice presidents: A. Timothy P. Lacey, man ager, general-services division; Thom as S. Mabon, manager, international division; Charles S. Petrey, controller; Fred H. Sisk, manager, city-offices di vision; and William H. Wilkerson, manager, metropolitan division. Correction In the January issue o f M i d C on tinen t Ban k e r , it was reported that W oody C. Schick was made president/CEO, American Bank, Baton Rouge. This is incorrect. W. J. “ Dub” Noel has been presi dent/CEO of that bank for two years and continues in both posts. Mr. Schick is the newly elected president/CEO of American Bank, Shreveport, moving up from execu tive vice president, lending. He also has been made president/director, A m erican Bancshares H oldin g Corp., Shreveport, and a director of the bank. In other action at American Bank, Shreveport, Robert G. Lunn was named senior executive vice presi dent. He also is a director. He re mains vice president/secretary of the HC. David E. Tyrone, executive vice president, financial services di vision, American Bank, Shreveport, has been elected a bank director. First National Bank of Commerce, New Orleans, has appointed Adrian A. D uesler vice president/hum anresources manager. He formerly was with Central Trust, Cincinnati. Pro moted to assistant vice presidents were: Ann Azcona, Herb B. Billiot, John L. Haspel, Lucien F. Justin, Donna A. King, Michael S. Kuehne, Patrice G. McNeal, Margaret K. Papaleo, Catherine M. Robinson, Elizabeth Smith, Suzanne C. Thomas and Joseph A. Vitale. Donna D. Cuchinotto, Maryem F. Hopkins and Fiona M. Norton were promoted to trust officers. Baton Rouge Bank has appointed Melisie P. Stewart assistant vice president/commercial-loan officer. She formerly was with Ouachita National, Monroe. MISSISSIPPI Hancock Bank of Gulfport’s trust de partment officials, Charles L. Eastland and Mart Melton Jr., and Gulfport attorney Harris Barnes III conducted a trust/estate-planning seminar for military and federal-service retirees at Keesler Air Force Base Officers Club January 24. About 40 persons attended. Mr. Eastland, vice president/trust officer, discussed advan tages o f individual retirem ent accounts. Mr. Melton, vice president/ senior trust officer, outlined benefits of establishing a trust account as a means of protecting and enhancing retire ment funds for individuals and benefi ciaries. Mr. Barnes led a discussion on interaction of wills, trust funds, trust accounts and estate planning. After the seminar, luncheon was served at Kees ler Officers Club. MISSOURI Warren Druschky retired January 31 as president, Boatmen’s Bank, Webster Groves, formerly CharterBank W eb ster Groves Trust, after 48 years’ ser vice there. He joined the bank January 8, 1937, three weeks before his Janu ary class was to graduate from Webster Groves High School. He started in the bookkeeping department and worked up to president in 1974. In between, Mr. Druschky served with the Naval Air Corps during World War II and held various positions at the bank. He remains on the board. Farmers Bank, Stover, has announced these prom otions: to president, MID-CONTINENT BANKER for March, 1985 Stephen D. Taylor; to vice president, Rick Varner; to assistant vice presi dent, John Holem; to assistant cashier/ operations officer, Mark Tucker; and to assistant cashier, loans, Craig Bollenbach. C. Ted McCarter has been elected president/CEO/director, Boatmen’s First National, Kansas City. Donald N. Brandin, chairman/CEO, Boat men’s Bancshares, Inc., St. Louis, also was elected to Boatmen’s First Nation al’s board. Mr. McCarter, a Kansas City banker since 1960, had been president/CEO, Boatmen’s Bank, Kansas City. At Boatmen’s First National, he succeeds Gordon E. Wells as CEO and Michael F. Mayer, who resigned as president. Mr. Wells, who has been elected vice chairman, Boatmen’s Bancshares, continues as chairman of Boatmen’s First National. Realign ment of that bank’s top management follows completion of the merger of CharterCorp, Kansas City, the bank’s former parent company, into Boat men’s Bancshares January 28 (see page 52). First NationalCharter, Kansas City, officially changed its name to Boatmen’s First National following the merger. M cCa r t e r kem per Jonathan M. Kemper, executive vice president, Commerce Bank, Kansas City, has been elected to its board. He joined Commerce in 1982 as vice pres ident, metropolitan department. The bank also elected Bruce E. Lacoss vice president, with responsibility for over all credit departm ent/loan-review functions, and John L. Klein assistant vice president/assistant manager, in stallment-loan administration. Mr. La coss formerly was treasurer/associate vice president, St. Louis University. Mr. Klein was manager, consumer loan department, Landmark Federal S&L, Dodge City, Kan. A. Bayard Clark has been elected ex ecutive vice president, Commerce Bank of St. Louis County, Clayton, with responsibility for affiliate loan administration in the 17 Commerce banks in St. Louis. He had been execu tive vice president, Commerce BancMID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Full Service. In an era of discount stores, fast food restaurants and 'no frills' service, Stern Brothers & Co. intends to remain a full service investment banker. So when your investment depart ment requires back-up help or a second opinion, you can depend on Stern Brothers to provide it. All the financing resources and market expertise we've gar nered during our 67 years in the business are available to you. Use us for fast, accurate appraisal of stocks and bonds. To assist in arranging capital loans and equities. To provide evaluations of your own portfolio or of bank customers' securities when used as collateral. Stern Brothers & Co., Investment Bankers. We're the full service expert you've been looking for. The Banker's Banker BröThers S. C o . Suite 2 2 00 City Center Square • P.O. Box 13486 Kansas City. HO 64199 • 816 47 1-6 4 6 0 SiPC 30A shares, Inc., Kansas City, where he, was responsible for strategic/financial planning/bank administration. James J. Rau has been elected president/CEO, Mercantile Bank of St. Charles County, St. Charles. He formerly was with St. Louis’ Centerre Bank, which he represented in Mis souri and Arkansas. He has 18 years’ experience in banking. RAU HURD Renee Fiddler-Hurd has been pro moted to correspondent bank officer, First National, St. Joseph, and is re sponsible for correspondent accounts in Missouri, Iowa, Kansas, Illinois and Nebraska. She has been with the First Bank organization 10 years. Richard J. Garvey was promoted to assistant vice president at First National, which he joined last year as commercial loan officer. Jerry Byrd has been elected presi dent, St. Johns Bank, St. John, moving up from executive vice president. In his new post, he succeeds Walter C. Branneky, who continues as chairman. Other promotions are: from vice presi dent to senior vice president, Harold W. Pletz; from assistant vice presi dents to vice presidents, Mark Wells, George Chapman and John Tullock; and to assistant vice president, Ruth Dickey. John Peters MacCarthy, president, Centerre Bancorp, St. Louis, has been elected to a three-year term on the board of Bank Building Corp., St. Louis. Centerre Bancorp has ap pointed Robert H. Longmire regional marketing director for the Kansas City region. In his newly created position, Mr. Longmire will design and imple ment combined marketing programs on behalf of all Kansas City-area Cen terre banks. Before joining the HC, he was marketing director for another ma jor Kansas City-area bank. Centerre Bank, St. Louis, has elected Roger D. Bell and James E. Cummins vice presidents and Kathleen A. Kley assistant vice president. Mr. Bell re cently joined the bank, and Mr. Cum 30B https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis mins has been there since 1981. Ms. Kley went to Centerre in 1971. William R. McDaniel has been named executive vice president, Centerre Bank, Kansas City, where he oversees lending functions, including opera tions of the correspondent/metropolitan/secured lending/regional/interna tional departments. He joined Cen terre in 1979 and replaces Gerald E. Karlin, who resigned to head a Nebras ka bank. Charles R. Kruger has moved up from vice president to senior vice president, Centerre Bank, where he heads the metropolitan department. The bank also has restructured its funding division, resulting in promo tions of two officers. Michael R. Hart, senior vice president/funding division manager, now oversees operations of the funding/personal banking/corporate services/business development departments. Marjorie Orr has been prom oted from vice president, marketing, to senior vice president/ funding department manager. Lawrence E. Russell and Kirk W. Vaughan have been promoted to ex ecutive vice presidents, United Mis souri Bank, Kansas City. Mr. Russell also has been named manager, invest ment banking division. He joined the bank in 1973, left in 1979 and returned in 1982. Mr. Vaughan, with the bank since 1973, also is in the investment banking division and continues to su pervise new-business development/ customer service. Michael L. McAuley has been promoted to senior vice president/manager, trust real estate division. He joined United Mis souri in 1969. Mercantile Trust, St. Louis, has elected Lawrence R. Lucy and Charles F. Teschner Dies ST. LOUIS — Charles F. Tesch ner, 64, w hose banking career spanned about three decades, died February 2 after a long illness. He was with First National, now Cen terre Bank, from 1945 until retiring in 1970. At First National, Mr. Teschner was an assistant vice president, cor respondent banking division, where he called on nearly all banks in major Missouri markets, including Kansas City, Springfield, Columbia and Jef ferson City. He also was with United Bank, St. Louis, from 1940 until 1945, when it was merged with First National. After his retirement, Mr. Tesch ner was an auditor with the sales tax division o f the Missouri Revenue Department from 1973-82. Richard G. Race vice presidents and Gary J. Harris, J. Daniel Hoag and William R. Nading assistant vice presi dents. Mr. Lucy went to Mercantile in 1979; Mr. Race recently joined the bank’s data processing department as manager, information planning/control division; Mr. Harris, who has 10 years’ banking experience, also recent ly joined Mercantile as manager, cred it analysis group, credit division, corporate banking; Mr. Hoag has been there since 1981 and Mr. Nading since 1970. In other action, the bank’s Air port Banking Center at Lambert-St. Louis International Airport has added Sunday to the times staff members are available to serve customers. Mercan tile says the center is the first banking location in the St. Louis area to do so. On February 1, the center became a facility of Mercantile Northwest Coun ty, Hazelwood. It had been associated with Mercantile Bank of South Coun ty- NEW MEXICO John M. “Mel” Eaves has been elected chairman, Moncor Bank, Albuquer que. He is president, Eaves, Darling, Anderson & Porter, P.A., and has been a practicing attorney in Albu querque since 1971. Moncor Bank also has elected Steven L. Allen executive vice president, Kenneth J. Carson senior vice president/commercial loan officer and Robert D. Placzek senior vice president/commercial lending officer. Mr. Allen formerly was vice president, credit administration, Unit ed Central Bancshares, Des Moines, la., before joining Moncor, Inc., as a loan review officer. Mr. Carson moved up from vice president in charge of credit administration/compliance, and Mr. Placzek was a vice president, com mercial lending division, of another Albuquerque bank before joining Moncor. Armin Rose, vice chairman, New Mexico Banquest Corp., Santa Febased HC, has been appointed by Governor Toney Anaya to the New Mexico Foreign Trade and Investment Council. The council was established under gubernatorial directive to stimulate equitable foreign trade with New Mexico businesses. Mr. Rose is international adviser to Banco de Viz caya, Spain’s fourth largest bank, and adviser to the chairman of Banco Comercial de Mayaguez, Puerto Rico. Ernest R. Bemis has joined Banquest/ First National, Santa Fe, as assistant (Continued on page 36) MID CONTINENT BANKER for March, 1985 Precision teamwork pays off. Where? Our customers know. Only one player can put the ball through the hoop at one time. But it takes a synchronized team of five hustling players to take advantage of each scoring opportunity. Your bank’s success depends on your ability to take advantage of each opportunity to secure a new source of income. Thafs why your banking teammate, Centerre, offers Fee Income Programs, a full line-up of profit-generating opportunities. For example, there’s our Discount Brokerage Service. It allows you to execute Equity transactions that generate brokerage commissions. Without requiring expensive research, advice or back-office support. And our Indirect Sales Program gives you the opportunity to offer Fixed Rate Securities to your customers. What’s more, Centerre offers you Corporate Services, including expert Trust, Financial and Cash Management programs. All worth a lot to your customers. All new sources of income for you. Best of all, we make sure our Fee Income Programs are coordinated with your bank’s total product mix. Precision teamwork is one reason why Centerre is among the nation’s most respected correspondent banks. Our customers know we can serve their needs. Work with us—we can serve yours, as well. CENTERRE R V ^K One Centerre Plaza St. Louis, MO 63101 (314) 554-6000 P.O. Box 666 Kansas City, MO 64141 (816) 474-6211 Member FDIC MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 30C Key personnel for eastern Missouri opera tions of Commerce Bancshares include (from I.): Joe J. Curtis and W illiam A. Sullins, both v. ch., Commerce Bank of St. Louis County; David W. Kemper, HC pres., and ch., Commerce Bank of St. Louis Coun ty; Thomas M. Noonan, pres., Commerce Bank of St. Louis County; and Darrell J. Proctor, ch., Commerce Bank of St. Louis. Com m erce Bancshares President Bullish As H C Focuses on St. Louis Market O M M E R C E Bancshares is b u ll ish about positioning itse lf to b e com e the dom inant com m ercial-b an k ing organization in the St. Louis re gion, describ ed as the “ m ajor regional financial cen ter for the central M id w e s t a rea ” b y D a v id K e m p e r , th e H C ’s president. M r. K e m p e r p resid ed at a financial presentation for m em b e rs o f the St. Louis financial and in vestm en t c o m m unity late in January. T h e $4 .6-b illio n -a sse t H C solidified its coverage o f the M issou ri m arket last year, follow ing its m erger w ith C ou n ty T o w er C orp. U n til recently, that was th e largest banking m erg e r in M is souri’s history. P lan s fo r 1 9 8 5 in c lu d e m e r g in g C o m m e r c e ’s St. Lou is C ou n ty banks to create what M r. K e m p e r says w ill be “ b y far th e la r g e s t b a n k in th a t m a r k e t” ; settin g up a “ sign ifica n t” b on d operation in St. L ou is; relocating its v en tu re-cap ita l subsidiary to St. Louis from Kansas C ity ; establishing a regional corporate group based in St. Louis; setting up a “ state-of-th e-art” c a s h -m a n a g e m e n t a n d o p e r a t io n s cap ab ility; and p la c e m e n t o f m ajor com m erc ia l r e a l-e s ta te -le n d in g p e r sonnel in b oth St. Louis and Kansas City. M r. K em p er was n am ed chairm an/ C E O o f the St. Louis operation last year. H is jo b : F ocu s the firm ’s atten tion on m arket seg m en ts that h old the best potential for sound grow th, in cluding the con su m er m arket and the m iddle-m arket com m ercial cu stom er with sales o f from $5 m illion to $ 2 0 0 m illion. H e indicated that C o m m e r c e always has focused on th ese m arket 30D https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis segm en ts, but that n ow m ore financial institutions are realizing what the p e o ple at C o m m e r c e have know n for a long tim e — the value o f the dom estic m arketplace, the n ee d for core con su m er deposits and control o f operat ing expenses. M r. K e m p e r said that C o m m e r c e plans to defen d and expand its m id d lem arket niche b y looking to its St. Louis Proctor Elected Ch./CEO At Commerce of St. Louis Commerce Bank of St. Louis re cently elected Darrell J. Proctor chairm an/C E O and James B. Hebenstreit and David W. Kemper directors. Mr. Proctor joined Commerce in 1969 and is a former president/chairman, Commerce Bank o f Mound City, which merged with Commerce Bank of St. Louis a year ago. He was elected executive vice president at Commerce Bank of St. Louis in 1981 and vice chairman last year. Mr. Hebenstreit is president, Capital for Business, a venturecapital firm and an affiliate of Com merce Bancshares. Formerly lo cated in Kansas City, Capital for Business has relocated in Clayton, w hile retaining its Kansas City office. Mr. Kemper is chairman, Com merce Bank o f St. Louis County, Clayton, and president, Commerce Bancshares, which is headquartered in Kansas C ity. Both M essrs. H eben streit and K em per have moved to the St. Louis area from Kansas City. and Kansas C ity banks for production o f c o m m e r c ia l b u sin e ss. T h e r e are m ore than 2 ,0 0 0 target firm s in these two m etropolitan areas, h e said. H e then cited som e o f C o m m e r c e ’s c h ief advantages, including the h igh est public credit rating o f any bank in M isso u ri and a $ 5 4 -m illio n le n d in g lim it. C o m m e r c e had its share o f pro blem s last year, M r. K e m p e r said. T h e H C r e p o r te d e a r n in g s fo r 1984 of $ 3 1 ,0 4 7 ,0 0 0 , an 1 1 % declin e from rec ord 1983 earnings o f $ 3 4 ,8 9 3 ,0 0 0 . E xcluding the after-tax effect o f in vestm en t-secu rities transactions from both periods, earnings decreased 3 % to $ 3 2 ,0 1 9 ,0 0 0 from 19 83 earnings o f $ 3 3 ,0 9 9 ,0 0 0 . Earnings for the fourth quarter o f 1984 w ere $ 6 ,0 9 3 ,0 0 0 , a decrease o f 1 6 % from earnings o f $ 7 ,2 3 2 ,0 0 0 for the same period in 1983. Earnings b e fore securities transactions d e clin ed 1 5 % fo r th e t h r e e m o n t h s , to $ 6 ,0 8 2 ,0 0 0 from $ 7 ,1 1 7 ,0 0 0 for 1983. In a n n o u n c in g th e r e s u lt s , M r . K e m p e r sa id , “ O u r lo w e r fo u r th quarter and fu ll-year results prim arily reflect higher provisions for loan losses in our rural banks. T h e provision for loan losses in the fourth quarter in creased to $ 5 ,4 6 5 ,0 0 0 from $ 2 ,9 7 3 ,0 0 0 in the sam e quarter o f 19 83. Strong perform ances in Kansas C ity , St. Louis and Springfield pro vid ed som e offset to the w eak perform ances o f our rural banks. T h e high level o f charge-offs in the fourth quarter as w ell as pay dow ns have substantially red u ced our n o n a c c r u a l lo a n s to a p p r o x i m a t e ly $ 3 2 , 0 0 0 , 0 0 0 fr o m $ 4 4 , 0 0 0 , 0 0 0 at S e p te m b e r 3 0 , ab o u t 1 .5 % o f total MID-CONTINENT BANKER for March, 1985 BRANDT Brandt Has The Products That W ill Wrap Up Your Money Handling Needs. Count On It. Chances are when you think of Brandt, you think of your money handling equipment. Actually, Brandt is a total sup plier o f banking related items. Paper products are a good example. W e handle flat, tubular coin wrap pers. Crimped end wrappers. Paper rolls for automatic packaging. All color coded by denomination. All produced to Brandt’s high quality standards. And, for money coming into your operation, we can supply high quality bank bags. Bags de signed to provide the security you and your customers need. Bags built to hold up for extended use. Paper products. Bank bags. Just a part of the complete line of Brandt money handling products. Brandt. Making your m oney count. BRANDT Brandt, Inc. P.O. Box 200, Watertown, WI 53094 (414) 261-1780. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Give your bank a better build. / \ mm A \ v T -jSI A At HBE, we plan, we design, we construct, we furnish, we do it all. We take your new bank all the way from planning study to the ribbon cutting, with a guaranteed cost. The bottom line: HBE gives your bank a better build. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The total HBE package included a warm, welcoming interior of carefully coordinated carpeting, furniture and woodwork. “There was not one penny added to the cost of this job over the original estimate.” Dick Schanze, president of Peoples State Bank of St. Joseph, Michigan. No one can “design in” operational efficiencies as well as HBE: the floorplan developed for Peoples State was designed to solve workflow needs years into the future. For more information, return this form to HBE, 11330 Olive Street Road, St. Louis, MO 63141 or contact Sally Eaton at 314-567-9000. NAME ADDRESS STATE Bank Facilities U PHONE NO. Cross Sell Manager Builds Business Five Wavs. Enhance Personnel • And Product Management. Sell More Services •Per Customer. 5 1 C olo r-b a sed "show & tell" so ft w are helps you r platform staff present services effec tively, cross sell related services easily and answ er com p lex custom er "what if" questions responsively. V aluable activity in form ation is available at a k ey stroke to assist y o u in m aking accurate and tim ely m anagem ent decisions ab out p er sonnel, products and p rom otion al questions. Build Long-Term Customer •Relationships. 2 Cross Sell Manager. All The Right Answers. Just In Time. C ustom ers w ill appreciate yo u r personal and p rofessional financial cou n seling and w ill return for additional services as their relationship w ith y o u r institution grow s. Promote An Effective And • Motivated Staff. 3 C ross Sell M anager is a selling to ol, a training course and a m anagem ent system in one. So y o u can m anage effectively, rather than p layin g the odds. Take a m om en t and find out m ore. Toll free 1 - 8 0 0 - 4 - B E R M A N ( 1 -8 0 0 -4 2 3 - 7 6 2 6 ) . In Virginia, 1 -8 0 4 -9 7 1 -5 9 8 9 . O r write Berm an Technologies, D ept. M C B 185 1 2 2 2 H arris Street, C harlottesville, Virginia 22 9 0 1 . C om p rehensive and exciting v id eo b ased training teaches y o u r staff the fine art of consultative selling. T he dynam ic IBM ®-PC softw are helps them gain product k n ow led g e quickly. Optimize Your Advertising •Dollars. 4 Vital inform ation about you r customers' source of interest and key service interests help y o u target p rom otion al dollars to achieve the best product and m edia mix. Copyright, 1984, Berman Technologies Corp. All rights reserved. Subject to license agreement. Cross Sell Manager,Mis a trademark of Berman Technologies Corporation. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis IBM is a registered trademark o f International Business Machines Corporation. Commerce Baneshares President Bullish that o cc u r.” M r. K e m p e r fa v o r s r e g io n a l banking legislation b ein g con sidered for M isso u ri. T h e legislation w o u ld “ O u r strategy for the trust area in create a regional banking cen ter in cluding M issouri and eight contiguous states, a plan that “ m akes good sen se” in M r. K e m p e r ’s w ords. “ Such a re cludes a statew ide trust-m arketing and b u sin e ss-d e v e lo p m e n t plan w ith in creased attention to acquiring larger gion w ou ld provide excellen t grow th o p portu n ity for the m ajor M issou ribased H C s. p en sion -fu n d b u sin e ss,” he said. “ P er sonal-trust business efforts are b ein g “ O u r strong balance sh eet, superior m arket position and solid cu sto m er $ 1 ,7 0 8 ,0 5 6 ,0 0 0 at y ear-en d 1 9 83 . T o tal d e p o s it s w e r e $ 3 , 8 1 9 , 7 6 0 , 0 0 0 , c o m p a r e d to $ 3 , 5 2 7 , 5 7 2 , 0 0 0 at coordinated w ith sales efforts in K an sas C ity and St. L ou is, targeted at the affluent individual c u sto m e r .” base allow us to co m p ete effectively against any o f our com p etitors, and w e S e p te m b e r 3 0 , and $ 2 ,7 0 1 ,8 1 9 ,0 0 0 at y ear-en d 19 83. N e t loan losses for the O n the com m ercial side, C o m m e r c e has b e e n focusing on m id d le-m a rk et firm s and steadily redu cin g activity in th e national-loan area. T h e H C ’s capital picture provides addition al good n ew s, M r. K e m p e r said. Prim ary capital to average assets at y ear-en d 19 84 was 7 .5 % , “ an ex cel len t figure in our m arket w h en m ost lo a n s.” Total assets w e re $ 4 ,6 1 5 ,9 2 2 ,0 0 0 at D e c e m b e r 3 1 , 1 9 8 4 , c o m p a r e d to $ 4 ,3 9 7 ,1 4 9 ,0 0 0 at S e p te m b e r 3 0 , and $ 3 ,4 7 7 ,1 4 7 ,0 0 0 at y ear-en d 1 9 83 . T o tal loan s, n et o f u n ea rn e d in c o m e , w e r e $ 2 , 2 4 9 ,0 4 4 ,0 0 0 , c o m p a r e d to $ 2 ,1 9 0 ,4 7 2 ,0 0 0 at S e p te m b e r 3 0 , and fourth quarter w ere $ 6 ,4 9 4 ,0 0 0 , c o m pared to $ 5 ,7 1 3 ,0 0 0 in the third quar ter and $ 1 6 ,6 4 5 ,0 0 0 for the full year. T h e a b o v e am ou n ts in clu d e total assets o f $ 1 ,0 7 6 ,0 3 1 ,0 0 0 , total loans o f $ 5 2 4 ,6 9 4 ,0 0 0 and total d e p o sits o f am on g the nation’s fix ed -in com e m an agers in 1984. $ 9 0 9 ,2 1 6 ,0 0 0 for nine banks acquired as o f January 1, 1984. T h o se nine banks banks are in the 5 % - 6 % range. O u r H C con tribu ted net in com e o f $ 6 ,2 5 1 ,0 0 0 for the year and $ 1 ,1 1 1 ,0 0 0 for the leverage at 2 2 % d e b t/e q u ity and g o o d w ill/eq u ity at about 1 1 % further reflect m ost recen t quarter. A fter con siderin g acquisition costs, d e b t expen ses and am ortization o f goodw ill, the im pact our sound position. ” H e a dded that the capital position places th e H C in a on net in com e for 1 9 84 was not m a te rial, M r. K e m p e r said. “ W e feel w e have taken a realistic approach w ith our farm cu sto m ers, “ highly flexible posture, prep ared to react to op p o rtu n ities or a difficult general industry en v iro n m en t, should w h ile continuing to w ork w ith those cu stom ers w e feel stand a good chance o f re c o v e r y .” H e added that C o m m e r c e ’s ex p o sure to foreign and en e rg y loans is m in im al, w ith only $2 m illion in for eign loans outstanding and virtually no loans to sm all en e rg y-rela te d firm s. “ W e w ill con tin u e to avoid these tem p tin g but inh eren tly chancy areas as th ey com e a lo n g ,” he said, “ as w e a v o id e d th e re a l-e s ta te in v e s tm e n t trusts in the early 1970s and n ow are avoiding the leveraged b u y -o u t .” T h e firm ’s focus on grow th in the c o n su m er-lo a n area du rin g th e past y ear has had ex cellen t resu lts, M r. K e m p e r said. V o lu m e increased 4 4 % and dollars outstanding w e re up 1 6 % in 19 84 over 1 9 83 in the area o f tradi tional con su m er-loan products. C r e d it-c a rd o u tsta n d in g s in c re a se d 3 1 % during the sam e tim e. “ W e project an increase in our m ix o f retail loans to 4 5 % b y 1 9 87 and w ou ld h op e for an ev en m ore aggressive loan ra te ,” he said. Trust operations nearly d o u b le d in 1 9 8 4 as a result o f the m erge r w ith C o u n ty T o w er and M r. K e m p e r said h e ex p ects addition al n e w b u sin ess this year becau se o f the in ve stm en t perform an ce o f C o m m e r c e Bank, St. Louis. H e said the bank ranked fourth MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis look to 1 9 85 to provide us w ith ev en greater opportunities to m e e t our dual goals o f increased profitability and ex pansion o f m arket share. ” — Jim Fa bian, senior editor. • W. L. Hadley Griffin, chairm an, B row n G ro u p , I n c ., St. L o u is, has b e e n redesignated chairm an o f the St. Louis F e d . M ary P. H o lt, presid en t, C loth es H o rse, In c ., L ittle Rock, has b e e n redesignated d epu ty chairm an. M r . G riffin also was r ea p p o in te d a director for a th ree-yea r term en d in g D e c e m b e r 3 1 , 1987. Check-Clearing Times Improve L E A R I N G tim es for checks b eca m e one tenth o f a day faster, on average, o ver the six-m on th period from July to D e c e m b e r , 1984, a c c o r d in g to P h o e n i x -H e c h t , C h ic a g o -b a s e d c a s h -m a n a g e m e n tconsulting firm. C “This seem in g ly sm all change is in actuality qu ite large in the w orld o f cash m an agem en t and can im pact b otto m lines o f corporations by tens o f thousands o f d o lla rs,” said Larry A . M arks, P h o en ix-H ech t president. T h e study m easures the tim e it takes checks to clear from the deposit bank back to the draw ee bank. This period o f tim e, called “ clearing float, ” has b e e n the su bject o f m u ch controversy over the years, accord ing to M r. M arks. “ C learing tim es have b e e n red u ced substantially over the past few years and I anticipate little new s or c o m m en t from the F ed eral R eserve Board concerning con trolled d isb u rsem en t in the fu tu r e ,” he said. T h e study, w hich u sed b oth large and sm all dollar-size item s, show ed som e large differences b e tw e e n the two grou ps’ perform ances. M ean clearing tim e across the U . S. for larger-dollar-size item s ($ 1 0 0 -$ 1,0 0 0 ) was 1 .4 0 days in larger cities and 1 .7 0 days for sm aller-size item s ($1). Perform ance in regional ch eck-processin g centers was 1 .9 1 days for larger item s and 2 .2 5 for sm aller ones. C ou n try points sh ow ed the sam e distinction: 2 .4 0 days for large item s and 2 .8 5 for sm aller-dollar item s. T h e city w ith the shortest m ean clearing tim e was D allas, w hich averaged 1 .1 1 days. O th e r m ajor cities sh ow ed the follow ing results: C le v e la n d — 1 .4 2 ; D e t r o it — 1 .5 0 ; P ittsb u rgh — 1 .5 3 ; C hicago — 1 .5 4 ; M inneapolis — 1 .5 4 ; D e n v e r — 1 .5 5 ; P h ila d e lp h ia — 1 .5 8 ; N e w York — 1 .6 0 ; Jackson, M iss. — 2 .2 8 . “ T h e introduction o f a n ew la rg e -d o lla r ’ check-clearing study has indicated a real n ee d for corporations to ask their banks for updated review s o f their d isb u rsem en t site s,” M r. M arks said. 35 State News (Continued from page 30B) vice presid en t o f the ban k’s custom banking office, located in the D elg ad o H ou se . M o st recen tly, M r. B em is was v ic e p r e s id e n t/c a s h ie r , C o m m u n ity National, M u k w on ago, W is . Larry Willard has bank also has a n ew director, D a v id S. B on d , w ho is w ith several Tulsa-area firm s. ton ’s form er duties as m anager, p er s o n a l b a n k in g g r o u p , h a v e b e e n assum ed b y B ernard S. K w as, senior First National, v ic e p r e s id e n t a n d fo r m e r b ra n c h adm inistrator. D w ig h t S. L a m p le y , M id w e s t C ity , has e l e c t e d G r a d y W . M c C o r k le a n d M . Joe Crosthw ait Jr. to its board. M r. M c C o r k le is sen io r v ic e p r e s id e n t/ c o m p tr o lle r o f th e b an k , w h ich h e jo in e d in 1965. M r. C rosth w ait is an attorney in private law practice. b e e n n am ed ex ecu tive vice p resid en t/c h ief credit officer, U n ited N e w M exico Financial C o r p ., A lb u q u erq u e . H e form erly was chairm a n /C E O , C olem an (T ex.) Bank. T h e A lb u q u e r q u e H C also has two n ew directors — T o m C . N ich ols, a m e m b er o f the F ord In v estm e n t G ro u p , and G e r a ld W . T h o m a s, p r e sid e n t em eritu s, N e w M exico State U n iv ersi ty- OKLAHOMA LEONARD John Moore Lee Jr. TENNESSEE Warren G. Creighton has m o v ed up to vice chairm an, U n io n Planters N ation al, M e m p h is. In his n ew post, h e o v er sees operations o f the ban k’s n ew ly fo r m e d fin a n cia l se r v ic e s d iv isio n , w hich includes the in ve stm en t bank ing group (IB G ) and the n ew ly created financial m an a gem en t group (F M G ). T h e latter consists o f U n io n Planters’ tru st d e p a r t m e n t , p r iv a te b a n k in g c en ter and B ren n er S tee d discoun t brokers. M r. C reigh ton Joined U P in 1981 to form IB G . B efore that, h e was c h a ir m a n a n d p r i n c ip a l fo u n d e r , U M I C , In c ., a securities corporation w h ose dealings prim arily w ere with g ov ern m en t authorities, hospitals and in du strial corp o ration s. U M I C also m anaged portfolio planning for banks, S & L s and individuals. CATINGTON e r . M r . M i ll e r fo r m e r ly w as w ith Y u k o n N a tio n a l as p r e s id e n t . M r . E v a n s w as w ith L ib e r t y N a tio n a l, O klah om a C ity. United Bank, T u lsa , has p r o m o te d C harles E . M urray II from vice p resi d en t to senior vice presid en t. H e c o n tin u es in c om m ercial le n d in g. Julie B alla rd m o v e d u p fro m o p era tio n s officer to assistant vice presid en t. T h e 36 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tinues to b e associated w ith that firm . Kenton I. Crossett and R e u b e n S. R hea Jr. have b e e n elec ted directors, M o sc o w Savings Bank, and its parent bank H C , M o sc o w Bancshares, Inc. M r. C rossett, w ho lives in M e m p h is , is a sales represen tative, M a y e r M y ers Paper C o . , w h ere h e was ch osen sales m an o f the year for 1 9 84 . M r. R hea farms near Som erville. H e is a su p er visor, Soil C on servation D istrict, and presid en t, F ayette C ou n ty Livestock Association. TEXAS that provide financial services for p ro fe s s io n a ls a n d i n v e s t m e n t - r e la t e d p resid en t, len din g, and M r. E van s as senior vice presid en t/sen ior trust offic son & Stein e, I n c ., a fully o w n ed su b sidiary o f First A m eric a n , and c on LEE senior operations officer. She w en t to and C harles G . Evans have jo in e d C itizen s N ational, O k la h o m a C ity , M r. M iller as execu tive vice m an, K en n eth L. R oberts. M r. L e e previously was chairm an, L e e R o b in vice president. First American National, N ash ville, is c o n so lid a tin g its sep arate div isio n s Jan L. Miller eco n om ic policy c o m m itte e . H e re ports to First A m erican C o r p .’s chair d epartm en t, m ain office. Lou is Jarvis, w ho is in the m ain office’s loan dep a rt m en t, has b e e n p ro m o te d to assistant M id w e s t C ity , has p ro m o ted E lain e D ak e to cashier/ the bank in 1983. has b e e n elected Merle Chamberlain has b e e n a d van ced from assistant vice p resid en t to a s s is t a n t v ic e p r e s i d e n t /c a s h i e r , H am ilton Bank, M orristow n . H e con tinues as m anager, cred it/d eb it card E . Leonard Jr. has b e e n p ro m o te d from senior vice p resid en t in charge o f region al/m etrop olitan len din g to ex e c u t i v e v ic e p r e s i d e n t , c o r p o r a te banking, Fourth N ational, Tulsa. H e jo in ed the bank in 1982 . In oth er ac tion, Fourth N ational p ro m o te d B e v erly B aber and M ary G re th e n to assis tant vice presid en ts/tru st officers. M s. B ab er and M s . G re th e n jo in e d the American National, branches. M r. W e lls and M r. G ilb ert are vice presidents. executive vice presid en t, First A m e r ican C o r p ., N ash ville, and chairm an, H. bank last year. vice president, su cceed s M r. Kw as as branch adm inistrator, and James W . W e lls joins John D . G ilb e rt Jr. as re gional m anagers o f First A m eric a n ’s products to corporate cu stom ers into a n ew group, h ead ed b y E x ecu tiv e V ice P r e s id e n t Jam es D . C a tin g to n Jr. A ccord in g to O w e n G . “ B o b ’’ Shell Jr., First A m erican ’s presid en t, the n ew financial services group will centralize those areas that h elp individual custom ers/b u sin e sses w ith their in vest m e n t d e c is io n s /tr u s t se r v ic e s. M r . C a tin g to n h ad b e e n e x ec u tiv e v ice presid en t/h ead o f the personal ban k ing group since 1982 . T h e n ew finan cial services group includes the trust group, professional banking division, b o n d in v e stm e n t division and L e e , R obinson & Stein e, Inc. M r. C atin g- Jack Hall, senior vice presid en t, First National, A m arillo, has b e e n n am ed th e b a n k ’ s co n tro ller. H e su cceed s C a r te r K e lly , w h o n o w h e a d s th e c o r p o r a t e /a d m i n i s t r a t iv e s e r v ic e s group. In addition to his n ew respon si bilities, M r. H all continues to m anage the accounting dep a rtm en t. H e has b e e n w ith the bank since 1 9 7 2 and was pro m o ted to accounting depart m en t m anager in 1976. First Amarillo Bancorp and S y stem atics, I n c ., L ittle R ock, h ave c o m pleted the sale to System atics o f W e s t ern D ata C e n te r s , In c ., fo rm erly a w h o lly o w n e d s u b s id ia r y o f F ir s t Am arillo. T h e purchase price was $ 3 .3 m illion. W e s te r n D ata C en ters con tinues operations as a subsidiary o f MID CONTINENT BANKER for March, 1985 S y s t e m a t ic s , p r o v id in g d a t a -p r o c essing services to about 6 0 financial institutions in a four-state area around Am arillo. Pamela J. Herrington has b e e n LOAN CALCS n am ed assistant vice presid en t, financial plan ning, Frost N ational, San A n ton io. Robert L. Herchert, fo r m e r F o rt $599 W o r t h city m a n a g e r, jo in e d T exas A m e r ic a n B a n c s h a r e s , I n c . , F o r t W o r th , M arch 1 as senior vice presid e n t/h u m a n reso u rces d irector. H e was Fort W o r th city m anager, 1 9 7 8 8 4 , w h e n h e jo in e d S anus T exas H ealth Plan, I n c ., Irving, as executive v ice p r e s id e n t. A t T exas A m eric a n B ank/Fort W o r th , B ob C a m p and Joe K elly Pace w ere elec ted directors. M r. C am p is p r e s id e n t/C E O , Pier 1, In c ., and M r. Pace is p resid en t/d ire cto r, Runs on IBM PC, Monroe, Olivetti, AT&T 6300, Apple, Leading Edge, Columbia, Compaq and many other micro computers. A lso A vailable: J. C . Pace & C o . George F. Jones Jr., Reg. Z Compliance p resid en t, Texas A m erican B an k /D allas, also has b een n am e d C E O . M r. Jones jo in e d the bank in 1980. James W. Hunt has b e e n elec ted to the board o f R ep u blicB an k G re en ville. H e is c h a ir m a n /C E O , C en e rg y C o r p ., a N e w York Stock E xch an ge-listed oil/ gas/pipeline firm . Bank Hosts Breakfast • • • • • • • Professional Training Forms Generator Credit Bureau Reports Main Frame Communications Networking Custom Programming Research & Development Projects For m ore in form ation call or w rite EL D O R A D O SYSTEMS, INC. 1350 E. Arapaho, Suite 20 0 • Richardson, T X 75081 • (214) 699-9082 Ron Parrish (I.), pres., InterFirst Bank Fort Worth, and Jeff Wentworth (r.), v. ch. of the bank, are shown with Lonnie "Bo" Pil grim, ch./CEO, Pilgrim Industries, Inc., at the bank's 33rd annual Junior Exhibitors Breakfast, held each year during the Southwestern Exposition/Fat Stock Show in honor of approximately 1,000 FFA and 4-H Club members and Stock Show officials. Mr. Pilgrim was this year's speaker. His firm began as an FFA project when he was 17 years old and now is the eighth largest broiler producer and 20th largest egg pro ducer in the U. S. Pilgrim Industries recent ly introduced a marketing campaign based on the theme, "Honest Chicken From Real Pilgrims." MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The choice is yours... the responsibility is ours. Bunce has built its reputation on designing and building the best. Choose our unique team approach, which offers single-source responsibility. It puts you in control eliminates surprises...and assures that your job comes in on time... and on budget. For more information on how we can help you with your next project, call 314-997-0300. 37 Regulators Should Be Banker Advocates, Not Adversaries, Community Bankers Told Frustrations, Strong Points Emphasized at ABA Assembly F E D E R A L bank regulators should b e banking advocates, not adver saries, said the chairm an o f the A B A ’s C o m m u n ity Bankers C ou n cil at the N a tio n a l A s s e m b ly for C o m m u n ity B an k ers, h e ld in O rla n d o , February. F la ., in C o m m u n ity bankers are frustrated b y the open -ad vocacy stance taken by the Fed eral H o m e Loan Bank Board and the F ed eral Savings and Loan In and m on ey-m ark et-fu n d shares. “ This t y p e o f s e llin g is n ’ t d a n g e r o u s to banks, although u nderw riting m ight b e , and it w ou ld provide banks w ith an additional source o f in com e. ’’ Later, during a pan el discussion on the prospects for m ore deregulation legislation, M r. K illeb rew urged “ reg ulatory parity” w ith thrifts in pow ers and capital req u irem en ts. banking’s adversaries, h e said. A n o th er thing frustrating c o m m u C on gress hasn’t acted on financial services for banks becau se the banking system appears to b e in a safe position and voters aren’t d em an d in g further deregulatory action, said John C ollin s, partner in a W a sh in g to n , D . C ., law firm . H e p r e d ic te d , h o w e v e r , that congressional action continuing bank deregulation is m ore likely this year than next becau se key provisions o f the 19 82 G arn /St G erm ain A ct will expire, nity bankers is h ow the m ed ia report bank failures. “ T h e y n ever say h ow sm all a fraction o f banks actually fails or that m ost o f th em reopen the next day as part o f a m erger and w ith m ost o f their depositors m ade w h o le ,” he said. M r. K illeb rew also called on regula tors to assist banks in gettin g b roker age pow ers in insurance, real estate including authority to provide assist ance to trou bled thrifts. C o-p a n elist Patrick M u llo y , m in or ity cou n sel for th e S en ate B anking C o m m itte e , agreed w ith M r. C ollins on the prospects for m eaningful bank ing legislation this year. H e said the ranking m inority m e m b e r o f the S e n ate B anking C o m m itte e — Senator surance C o r p ., said Randall A . K illebrew , w ho chaired the a ssem bly. H e a lso is p r e s i d e n t , F ir s t N a t io n a l, Petersburg, 111. T h e F H L B B and F S L IC p rom ote thrifts, b u t the F e d and the F D I C are c o n s u m e r a d v o c a t e s , w h ic h o fte n places th em in the position o f b ein g W illia m P roxm ire ( D . , W i s . ) — be lieves action is n e e d e d this year to prom ote the safety and soundness o f the banking industry, p rev en t c on ce n tration o f financial pow er and resolve conflicts o f interest that threaten the industry. H o w e v e r, ex -S en a te m ajority lead er H ow ard Baker, w ho spoke to bankers two days later, told m e m b e r s o f the press that banking legislation is u n like ly until 19 86, since Senator G arn and R epresen tative St G erm a in “ have a lot o f talking to d o ” before any a greem en t is reached on the contents o f banking legislation. A s s e m b ly k e y n o te r w as N . W . “ R e d ” Pope, form er senior vice p resi den t, Sun Banks, O rlan do. H e n ow is w ith V a lley N ation al, P hoenix, in a similar capacity. H e said com m u n ity bankers have m ore in co m m o n w ith star quarterback D o u g F lu tie than th ey m ay realize. (M r. Flu tie recen tly jo in e d the N e w Jersey G enerals and was in training in th e O rlan do area during the a ssem b ly .) T h is i s n ’ t b e c a u s e b a n k e r s are rookies or m illionaires, h e said, b u t becau se their banks are a good deal sm aller than m ost o f their o ppon en ts. “ F lu tie is only five feet, 9 Viz inches ta ll,” M r. P ope said. “ T h e sm allest player in the line against him p robably is six-feet-four inches. B ut F lu tie isn ’t a fraid . H e has c o n fid e n c e a n d h e know s th e g am e and w h at h e does b e s t .” M r . P ope told bankers th eir size isn ’t im portant, but their u n derstan d ing o f the banking gam e is. A football player can’t b e all things to a team ; n either can a com m u n ity banker. B ut the com m u n ity banker b en efits from his identity in the c o m m u n ity — an identity that larger com p etitors lack b ecau se o f their rem oten ess and inflex Among speakers at ABA's National Assembly for Community Bankers were Donald T. Senterfitt (I.), ABA pres.-elect, and v.ch., Sun Banks, Orlando, Fla.; Randall A. Killebrew (2nd from r.), ch., ABA Community Bankers Council, and pres., First Nat'l, Petersburg, III.; and N. W. "Red" Pope (r.), former s.v.p., Sun Banks, Orlando. At Mr. Killebrew's r. is John R. Revell, pres., Nat'l Bank, Monticello, III. 38 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ibility. H e advised bankers to b e in volved in the com m u n ity so th ey cou ld b e seen. “ B e a n eigh bor instead o f a tollfree 8 0 0 n u m b e r ,” h e advised. A good portion o f the a ssem bly tim e was d e vo ted to p e er-g ro u p sessions, MID-CONTINENT BANKER for March, 1985 w h ere sm all clusters o f bankers d is cu ssed various topics. M o r e p ro b lem s than solutions w ere p rese n te d at m ost tables, b u t bankers se e m e d to b en efit from sharing their experiences w ith their peers. D u rin g a session about evaluating BEFORE YOU SPEND THOUSANDS IN A NEW VAULT, . e m p lo y e e s , it was b ro u gh t out that several banks rep resen ted in the group w e r e u sin g p a r t-tim e e m p lo y e e s to p r o v id e for extra h e lp d u rin g peak periods. Since part-tim ers n e e d not b e p r o v id e d w ith b e n e fits , banks fin d th ey can lo w er their ex p en ses w ith su ch h e lp . T h e y pay p a r t-tim e r s a h igh er hourly w age than fu ll-tim ers, h ow ever. O th e r participants told o f ex p eri en ces w ith o u tside consultants w ho evaluate jo b perform an ce and advise banks h ow to operate w ith few er e m ployees. A lth o u g h the cost for this ser vice is high, it m ore than pays for itself in savings dow n the road, th ey said. Bankers in a group discussing the selling o f bank services revealed that t h e ir i n s t i t u t i o n s a re p a y in g e m p lo y e e s for any n e w b u sin e ss th ey bring in. For instance, one e m p lo y e e w ho brou gh t in a $ 1 0 0 ,0 0 0 account re ceived a $ 6 0 0 b on u s. O n e banker said his institution has hired salespeople w ho work on com m ission only. S o m e banks levy quotas on their salesp eop le. A n o th er bank m aintains a library o f tapes dealing w ith selling tech n iqu es. E m p lo y e e s are encou raged to spen d their coffee-break tim e listening to the t a p e s . T h o s e w h o d o a re g iv e n “ ch ecks” that can b e exchanged for m erchandise at stores that deal with the bank. — Jim Fabian, senior edi INVESTA FEW MINUTES LEARNING ABOUT VAULT-STOR,. Building a new vault is a costly proposition. Yet you may be facing this costly addition as new storage requirements put too much pressure on your existing vault. ATENCO can relieve that pressure with VAULT-STOR, a complete line of vault storage concepts designed to maximize available space in your present vault. VAULT-STOR puts every available cubic inch of space to work through a variety of custom-designed systems...expanding vault capacity for a fraction of the cost of new construction! tor. Your “ full” vault may be half-empty! Mobile shelving is just one of many ways V A U L T -S T O R puts empty space to work in vaults. U N IQ U E ! Invest a few minutes before you spend thousands. 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Box 1267; Atlanta, GA 30301; Attn: Joe Marchisen 38A 'Spirit of Louisiana' Convention Theme To Make Pilots Out of Bankers/Spouses O U I S I A N A bankers will b e seeing th em selves as airplane pilots dur ing the 85th annual convention o f the L T h e convention program w ill begin at 10 a .m . on Thursday, M arch 28 , w h e n “ c o n tr o l t o w e r ” r e g istr a tio n Louisiana Bankers Association, set for starts. G ra n d -op en in g “ take-off” c ere m onies are set for 2 p .m . at the con M arch 2 8 -3 0 at the N e w O rlean s H il ton H otel. C o n v e n t i o n t h e m e is “ S p ir it o f L ouisiana” and th e con v en tion logo v en tion ’s “ aerodrom e exposition c e n ter” and “ activity h a n g e r .” A t 3 p .m ., “ fly in g -a c e ” education sessions will b eg in , featuring con cu r features a sin gle-en gin e biplane soar ing high in the sky. rent workshops on m ortgage banking, A c c o r d in g to L B A p u b lic ity , the a ssociation ’ s c o n v e n tio n and “ aerod o m e ” exposition “ w ill show h ow and w h y L o u is ia n a ’ s b a n k e r s m u s t b e ready to ‘take o ff’ and fly in ban kin g’s sh ow p lace.” P re-con ven tion publicity is laden w ith term s associated w ith flying. T h e Spirit o f Louisiana “ w ill slip into view the real legislative and co m p e ti tive challenges that will affect banking in L o u is ia n a a n d o n th e n a tio n a l s c e n e ,” according to publicity. It will “ prevail in p resen tin g a fac tual and b e s t-e v e r p ro g ra m , givin g bankers the chance to navigate the ever-grow ing ch allen ge to learn m ore about what can m ake tu rb u len ce dis appear as it com es into view on the control tow er screen o f the ban k’s o p erations.” It will “ provide sightings and handson stick control in a fascinating exhibits runway o f the latest e q u ip m e n t and services d e v e lo p ed to m ake bank o p erations m ore produ ctive. It will save bankers m any standby business hours back at their h o m e b a se s.” , m ergers and personal financial plan ning. “Jetstream ” refresh m en ts will b e T h e “ flight sch ed u le” o f speakers for the even t includes A rt L in kletter as S a tu rd a y lu n c h e o n s p e a k e r ; M ik e V an ce, a “ stim ulator o f creativity,” as secon d-gen eral-session speaker; and at least seven con cu rren t-session speak ers, including L e e Pitre, consultant on w ritten com m u n ication ; B ob Y ou n g, Carl Byoir & A ssociates, consultant on o ra l c o m m u n i c a t io n ; S u sa n B o r g m e y e r , R o n R a d a le t a n d A r t h u r Parham , p erson al fin an cial-plan n ing cou n selors w ith E rn st & W h in n e y ; A n th on y J. C orrero III, N e w O rleans attorney and m erger consultant; and a m ortgage-ban kin g consultant y et to b e nam ed. T h e “ Star F ligh t C ab a ret” closing even t for the con ven tion will feature Johnny C ash and June C arter, cou n try-m u sic singers. A s p o u s e s ’ p r o g r a m w ill fe a tu re C e le ste H o lm , the creator o f the role o f A d o A n n ie in R ogers’ and H a m m e r stein’s first m usical, “ O k la h o m a .” available from 5 to 7 p .m ., follow ed by th e “ S p ir it o f L o u is i a n a ” g r a n d open in g reception. F riday’s sch ed ule includes a “ barn storm in g ” continental breakfast at 8 a .m .; the con v en tion ’s o p en in g g e n e r al se ssio n , “ V ie w s F r o m th e T o p ” fe a t u r in g ABA P r e s id e n t-E le c t D on a ld T . Senterfitt, vice chairm an, Sun Banks, In c ., O rlan d o, F la .; M s. H o lm ’s presentation, “T h e C reation o f ‘ O k la h om a , ’’ at 2 p .m . and “ pylon sp e e d se ssio n s” at 2 p .m . cov erin g w ritten and oral com m u n ication and sp eed reading. F in a l e v e n t on F rid a y w ill b e a “ w in g -w a lk in g d e sse r t p a r ty ” fro m 3 :3 0 to 5 p .m . T h e sch edule for Saturday will b egin Convention Speakers Program at a Glance Thursday March 28 10:00 a.m. — Registration 2:00 p.m. — Grand-Opening Ceremonies 3:00 p.m. — Educational Sessions 7:00 p.m. — Grand-Opening Reception Friday March 29 10:30 a.m. — Opening General Session 2:00 p.m. — Communication Sessions Saturday March 30 10:00 a.m. — Second General Session 1:15 p.m. — Convention Luncheon 5:00 p.m. — Reception/Banquet 10:00 p.m. — Johnny Cash/June Carter Show , , LINKLETTER 38B https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for March, 1985 Pam Delamore, Jim O’Hare, Drew Whitley, Gus Tramonte, Rose Greco, Roger Ayers, and Doug Lore. Bankers whose business is helping your bank grow. irst NBC shares your profes sional commitment to the future o f banking. And we demon strate that commitment through growthoriented correspondent services. Our correspondent banking specialists can supplement your bank’s growing power with loan participation, check processing and wire transfers, federal funds trans actions and investment securities F management. We’re banking for you — with correspondent services that can give your bank competitive leverage today and a big boost toward your long-term goals. Our correspondent banking depart ment has twelve staff members, includ ing the seven pictured here. Five o f them have more than 20 years o f bank ing experience at First NBC. Three have more than ten years. This First NBC Correspondent Bank ing Team will win your confidence with service, know-how, a sure sense o f where your bank is going, and the commit ment you need to take you there. Banking Your W ayA t First N B C F ir s t N BC First National Bank O f Commerce, 210 Baronne Street, P.O. Box 60279, New Orleans, Louisiana 70160, (504) 561-1371 MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member FDIC 38C w ith a “ p re-fligh t” continental b reak fast at 7 :3 0 a .m .; “ A d ven tu res in C r e a tive Thinking” b y M ik e V an ce at 10 a .m .; “ biplane b ingo b on a n za ,” also at 10 a .m .; an “ in -flig h t” recep tio n at 1 2 :3 0 p .m .; the con ven tion lu n ch eon at 1 :1 5 p .m .; a “ sky’s-th e -lim it” r ec ep tion /ban q u et at 5 p .m .; and the “ starflight cabaret” at 10 p .m . • • Livingston Bank, D enham WATSON Springs, has n am ed an advisory board to assist in d e v e lo p m en t o f financial products and services for the p rofession al/com - COMISKEY KINBERGER Kinberger to Preside At LBA Convention m ercial m arket served b y the bank. M akeu p o f the board includes three physicians, an oral surgeon, a radio station m anager, a bu ilder, a C P A and an attorney. H en ry K in b erger, L B A p resid en t, and presid en t, Security 1st N ational, Alexandria, will presid e at this y ear’s con ven tion in N e w O rleans. Serving with M r. K in b erger for the American Bank, Baton R o u ge, o p en e d its Tw o U n ited Plaza Branch recently. It operates as a satellite o f the E ssen L ane Branch and is located in the o n e story annex o f T w o U n ited Plaza T o w er. Roger Clarke has b e e n appointed vice chairman and C E O at First G uaranty Bank, H a m m o n d . Ralph Ross has b een n am ed p resid en t/c h ief operating officer/director. T h e y jo in e d the bank in 1981 and 1 9 76 , respectively. 1 9 8 4 -8 5 term are James A . C o m isk e y , L B A p resid en t-e lect, and presid en t, Bank o f Louisiana, N e w O rlean s; and W illia m W . W a tso n , L B A treasurer, and presid en t, Bank o f St. Joseph. M r. K in b erger en tered hanking in 1 9 6 4 at H i b e r n i a N a t i o n a l, N e w O r l e a n s . H e j o i n e d S e c u r i t y 1st N ational, Alexandria, in 1 9 73 as presid e n t /C E O , titles he still holds. H e h as s e r v e d as p r e s i d e n t , Louisiana In d e p e n d en t Bankers A sso - ciation, a m e m b e r o f the A B A ’s advis ory board and faculty m e m b e r at C o l orado Schools o f Banking, School o f Banking o f the South and In stitute for B an k D ir e c to r s at V a n d e r b ilt U n i versity. M r. C om isk e y has b e e n p resid en t, Bank o f Louisiana, since 19 77. Prior to that, he was a district court ju d g e and an attorney. H e serves on the boards o f his bank and those o f F id elity Bank, Slidell; Bank o f the South, M eta irie; and First A m erican Bank o f Tan gipa hoa Parish, H a m m o n d . M r . W a t s o n e n te r e d b a n k in g in 1 9 6 0 at his p resen t bank. H is first jo b was that o f cashier. H e has b e e n p resi d en t since 1969. THE BSST EXPERIENCE The B S S T is unique— th ere’s ju st no other school like it. Although it is exclu sively for bankers, it d o esn ’t cover banking topics; yet the substance o f the school is absolu tely essential to an efficiently functioning bank H ere’s What Former Students o rg an iza tio n . Bankers attending the school learn sound concepts and Say About BSST . . . “ There are several banking schools around today, but in my opinion none of them equal BSST in content and presentation.” James W. Daniel President and CEO The Citizens Bank Marshall, Arkansas “ The program is great for building personal resources that you can apply to management in your own bank. I wholeheartedly recommend that more CEO’s take time to attend the school.” E. J. Dronet President Cameron State Bank Cameron, Louisiana techniques o f m an a ge m e n t, and they learn about them selves and the w ays in w hich they relate to others. Bankers w h o have attended previous sessions have been u n an im ou sly lavish in their praise o f the experience because the school w orks. It works because o f the outstan din g faculty m em b ers w ho m ake the dyn am ic curricula excitin g for each banker. And it works because the bankers quickly develop an en th u siasm for w hat is going on. In addition to varied types o f classroom presentations, the B S S T provides a m p le opportunity for inform al discussion o f ideas, p ro b lem s and solutions by bankers and faculty m em b ers. The 1985 sessions are scheduled for M ay 19 -2 4 at the University o f Southwestern Louisiana at Lafayette and June 9 -1 4 at Louisiana State University in Baton Rouge. A registration fee o f $3 75 includes room , m eals, tuition and all course materials. I’d like to know more about BSST. Send complete details to: Clip and mail to: BSST P.O. Box 2871 Baton Rouge, La. 70821 504/387-3282 NAM E BANK M A IL IN G A D D R E S S C ITY 38D https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PH O N E ST AT E ZIP MID-CONTINENT BANKER for March, 1985 with no programming skills required. Software Directory HARDWARE: IBM PC, XT, AT, NCR PC-4, Zenith, Compaq and most MS-DOS-based com puters. HARDWARE REQUIREMENTS: 256K RAM. ALMS MicroSystems, Memphis O R E than 7 5 software firms resp o n d ed to M i d - C o n t in e n t B a n k e r ’ s recen t survey o f software firms that produ ce products for financial institu tions. D u e to space lim itations, M i d - C o n t in e n t B a n k e r had to restrict the M n u m ber o f listings to three per firm. T h e listings are grou ped alphabetically by type o f use belo w . A n alphabetical listing o f the vendors w ith products described begins on page 46 . FPSpc (Financial-Planning System pc) Menu-driven, easy-to-use asset/liability system w ith pre-defined color graphics, interestsensitivity reports, static and dynamic gap analyses, regional consolidations, acquisition/ merger analyses and index rates. HARDWARE: IBM PC, XT. HARDWARE REQUIREMENTS: 512K RAM. Asset/Liability Management Agri-Banking FarmChek™ Computer-based financial-management ser vice designed for the particular needs of farm ers, ranchers and small businessmen. HARDWARE: Burroughs B-90 and larger. HARDWARE REQUIREMENTS: CMS and na tive mode systems only. Farm Data Corp., Burnsville, M N Money M aker, PlanSmith, Plansmith Plus, Plansmith Extended Four d iffe re n t levels of asset/liabiIitymanagement software depending on degree of required sophistication. Extended version per mits analysis out to six years. Training provided. Hale Systems, Inc., Roslyn, NY Asset!Liability Management Management package designed to assist in opti mization of a financial institution's net-interest margin. HARDWARE: IBM PC, XT, AT, NCR D M 5, PC 4, Burroughs B-25. HARDWARE: IBM compatible and others. HARDWARE REQUIREMENTS: 256K RAM. Plansmith, Palatine, IL Interactive Planning Systems, Atlanta BancPlan Bank Calc 1, Bank Calc 2, Bank Calc 3 HARDWARE: Apple II series, IBM PC, XT, DEC Rainbow 100 PC. An asset/liability-m anagem ent and p ro fit planning model with unlimited "w hat-if" capa bilities and interactive summary program. Plan ning can be done on an annual or long-range (three years) basis by quarters. A collection of 38 templates, which cover almost all areas of bank management and which can easily be modified by bankers with no knowledge of computer programming. HARDW ARE REQ UIREM ENTS: D ual-disk drives for other than XT models HARDWARE: IBM PC, XT, compatibles, Com paq, Victor 9000. Wisconsin Microware, Inc., Madison, W l HARDWARE REQUIREMENTS: 128K RAM, dual drives. Agricultural Analysis Advanced Planning Systems, Inc., Arlington Heights, IL Ag • Pac Provides profit/loss analysis for crop/livestock enterprises. Bank-oriented, menu-driven program that per mits credit analysis, IRA accounting and in terest-margin analysis. Includes farm planner and loan-document processor. ALMS (Asset!Liability-Management System) HARDWARE: Apple II, Apple III, IBM PC and IBM compatibles. Micro Book Inc., Schaumburg, IL Complete Asset!Liability-Management System Comprehensive system providing asset/liability management with gap analysis, financial plan ning, budget comparisons, key-ratio reporting, regulatory reporting. Modular asset/l ¡ability system. Module I is gapanalysis/simulation and management report ing; module II is optimization; module III is bond swaps; module IV is futures trading/hedging. Consolidation/communications package, too. HARDWARE: Most popular micro-computers. HARDWARE: IBM PC, XT, AT. Microshare® Thrift 401 (k) HARDWARE REQUIREMENTS: 256K RAM. Systematics, Inc., Little Rock Designed for 401 (k) thrift plans, profit sharing, ESOP and money-purchase pension-plan rec ord-keeping. HARDWARE: IBM or compatibles. The Sendero Model, Level I, Level II HARDWARE: IBM PC, Apple III HARDWARE REQUIREMENTS: Hard disk. Menu-driven guide to aid bankers in making repricing decisions and setting balance-sheet goals. Financial statements and gap-analysis re ports are produced for evaluation. Key market rates are used to project interest rates. Trilog, Inc., Philadelphia HARDWARE: IBM PC, XT, Apple III, Burroughs B25. Microcom, Inc., Cedar Rapids, IA AccuFarm-GL Follows format of FHA-approved coordinated financial statements for cash-flow monitoring, tax purposes or complete general ledger de signed especially for farmers and farm lenders. Ontario Systems Corp., Muncie, IN The Homestead Financial Planner A tool for farm-credit analysis that benefits ag lenders by generating more reliable informa tion in less time. It produces monthly cash flows, financial ratios and other reports. Financial Technology, Inc., Chicago Banking/Fmance HARDWARE REQUIREMENTS: 256K RAM Batch Data Transfer HARDWARE: IBM PC, XT, AT and compatibles such as Compaq, Monroe, Burroughs, AT&T. HARDWARE REQUIREMENTS: 256K RAM, hard disk recommended. PC-TRACS Sendero Corp., Phoenix Performs bi-synchronous file transfer to/from any mainframe, mini or board-compatible mi cro. HARDWARE REQUIREMENTS: 128K RAM, dual drives or hard disk and one floppy drive. Micro-BMRS HARDWARE: IBM PC or board compatible. Homestead Management Systems, Inc., Des Moines, IA Micro-based asset/liability system that allows user to fully customize his balance sheets using Lotus 1-2-3. HARDWARE REQUIREMENTS: Synchronous type modem, EX201C or 208AB. HARDWARE: IBM PC, XT, AT and IBM com patibles. Asset-Based Lending CLF/3000 On-line, interactive computer system designed to support asset-based lending. It manages cash, disbursements and daily activity with corporate, regional and branch reporting capa bilities. Custom Application Systems, Inc., Los Angeles HARDWARE: IBM XT, AT or compatible. Sterling Software Marketing, Rancho Cordova, CA HARDWARE REQUIREMENTS: 640K RAM, color monitor, hard disk. TRACS Chase Manhattan Bank, New York City Performs bi-synchronous transmission of batch data between computers and teleprocessing devices. Asset!Liability-Management System Capabilities include interest-sensitivity analy sis, profit planning, budgeting, monthly report ing, gap analysis and graphics. Menu-driven MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis HARDWARE: IBM 370, 30XX, 43XX. HARDWARE REQUIREMENTS: Transmissioncontrol unit (TCU) and any disk or tape unit. 39 Sterling Software Marketing, Rancho Cordova, CA trends, reconciliations, cash flows, RMA com parisons and projections are produced. Bond Accounting HARDWARE: IBM PC, XT, AT, Apple and IBM compatibles. HARDWARE REQUIREMENTS: 192K RAM. Non-Interest Payment System (BIPS) A real-time system for processing registered, partially registered and bearer bonds. It can handle transfers, check printing, collectionletter processing, report requests and call pro cessing in a real-time environment. HARDWARE: IBM mainframe or compatible or Series 1. HARDWARE REQUIREMENTS: CICS/VS. Shaver Associates, Inc., Orlando, FL Crowe, Chizek & Co., South Bend, IN Customer Information A complete bond-portfolio data base designed to allow the addition of user-desired custom features. A system in which a bank's corporate accounts obtain deposit and float information from the lockbox account via the telephone using a key pad as a control. HARDWARE REQUIREMENTS: Cognitronics Model 638 Voice Response Marcai Systems Corp., Cary, IL BondPac A comprehensive bond-accounting analysis and decision-making package providing bond accounting, portfolio analysis, multi-bond swapper and bond calculator. HARDWARE: Most popular micro-computers. HARDWARE REQUIREMENTS: Hard disk. The BondSwap Manager Analyzes economic advantages of swapping one group of fixed-income securities with another. HARDWARE: Apple II, II plus, lie, III in emula tion; IBM PC, XT, AT. Banking Customer Information System Provides banks with ability to cross-reference, locate and retrieve customer-account informa tion for tellers, loan officers and other bank officials. Up to 100 related account numbers and comments per customer. Enables financial institutions to submit disket tes from personal computers for data input in embossing, encoding and other card services, thus improving plastic-card processing and turnaround. HARDWARE: IBM and compatible micro and mini systems. Faraday National Corp., Herndon, VA Computer Mapping DaTamap Provides point locations and boundaries for census, postal-carrier routes, five-digit zip codes, highways, streets, and communities. HARDWARE REQUIREMENTS: Minimum Con figuration. Arkansas Systems, Inc., Little Rock Credit Analysis Commercial Credit Analysis System Analyzes strengths and weaknesses of corpo rate clients based on historical evaluations of balance sheets and income statements. Ratios, 40 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis HARDWARE: IBM PC or compatible. Plansmith Corp., Palatine, IL HARDWARE: IBM PC or compatible. InnerLine, Arlington Heights, IL PFP Professional Designed specifically for use with customers of a financial institution, this system can produce a 50-page personal financial report that can be maintained on disk for periodic updates. Customer Service HARDWARE: IBM PC, XT and compatibles. Touch Banking Designed to serve as an information-access companion to the ATM. Customers can arrange for future transactions, make account inquiries, open/close accounts, learn about bank services and rates and access news. HARDWARE: IBM PC, XT, NCR Tower, ISC. Software Alliance Corp., Berkeley, CA HARDWARE REQUIREMENTS: 128K RAM and printer. Infoware Corp., Nashville AccuFarm PLAN Offers a systematic way to develop a projected farm plan that includes both production and financial information on a pro-forma basis. HARDWARE: IBM or compatibles. Deposit-Box Accounting Ontario Systems Corp., Muncie, IN Safe-Deposit-Box Accounting Provides complete record keeping and billing capabilities for a single or multi-branch finan cial institution. HARDWARE: IBM PC, XT, AT, NCR D M 5, PC4, Burroughs B-25. HARDWARE REQUIREMENTS: 256K RAM. Interactive Planning Systems, Atlanta Fixed-Asset Accounting Fixed-Asset Accounting Maintains history of each asset, calculates monthly depreciation (for book and tax), calcu lates investment-tax credit and recapture. User may choose standard depreciation and tax credit for each asset. SeriesOnePlus: Safe-Deposit Accounting HARDWARE: IBM PC, HP150, HP120. An autom ated approach to safe-deposit accounting for the bank professional. Total accounting control, including automatic gen eration of billing notices and processing of pay ments. HARDWARE REQUIREMENTS: 128K RAM on IBM PC and HP150, 64K RAM on HP120. Marcai Systems Corp., Cary, IL General Ledger Executec Corp., Dallas Electronic-Funds Switching Micro-computer-based general ledger/financial-information system HARDWARE: DEC, IBM. DaTamap, Inc., Eden Prairie, M N Provides index of bank performance so that officers may run peer-group-perform ance comparison. Service available on on-line basis. Financial Planning HARDWARE: IBM System 34/36. Piedmont Software Co., Charlotte, NC Faraday Card Processing System Micro Bank Facts Allows a bank, S&L or HC to compare itself anonymously to peers and competitors based on a pool of confidential data relating to inter nal operations. Customer Profitability HARDWARE REQUIREMENTS: Card Processing HARDWARE REQUIREMENTS: 256K RAM. Carner & Associates, Ltd., Springfield, M O Peerline Financial Technology, Inc., Chicago Bond Swaps Provides complete balance sheets and income statements for banks selected directly from FDIC call reports. Program is in Lotus 1-2-3 format. Cognitronics Corp., Stamford, CT HARDWARE: IBM PC, HP150, HP120, com patibles. HARDWARE REQUIREMENTS: 128K RAM on IBM PC and HP150, 64K RAM on HP120. Bancpen<S) HARDWARE: IBM PC or compatible. PC Lockbox Voice Response Communciation System HARDWARE: IBM PC, XT, AT. Bond Plus Financial-Management-Support System SATM® Commercial electronic-funds-transfer hardware/software combination providing on-line support for ATM/POS devices and various host computers. HARDWARE: HP1000. ATM Network Management Corp., Downers Grove, IL General ledger provides complete financial re porting and control reporting. Other features include various reporting functions, massive database and user-defined chartin g of accounts. HARDWARE: Most popular micro-computers. HARDWARE REQUIREMENTS: Hard disk. Financial Technology, Chicago MID CONTINENT BANKER for March, 1985 W e won’t do a job unless w e can do it rig h t F R E M O N T S O F T W A R E u n d e rsta n d s a g o o d deal o f y o u r needs because o u r p ro g ra m w as de ve lo p e d by bankers fo r banks and w ritte n by data pro ce ssin g p ro fe ssio n a ls. W e also realize m a n a g e m e n t s tru c tu re m ust be rig h t fo r an in ternal a u to m a te d system . B ut F re m o n t is re sponsive w hen you are ready. W e th in k o u r “ in -h o u s e ” system is best fo r several reasons. It gives yo u a system th a t you c o m p le te ly co n tro l, at a fixe d v o lu m e c o s t — w ith in fo rm a tio n on dem and. O u r p ro g ra m does m ore than save tim e and m oney. It can be a decisive fa c to r in g ro w th and b e tte r m a n a g e m e n t d ecisions. A c o m p le te data p ro ce ssin g p ro g ra m , w ith an e xp e rie n ce d sta ff ready to help you, F R E M O N T S O F T W A R E offe rs m ore in fo rm a tio n and b e tte r c u s to m e r service than m a n y large banks have. For m ore in fo rm a tio n on a system th a t s u c c e s s fu lly m eets the needs o f g o o d b a n kin g , C all D o u g B arton, v ic e -p re s id e n t DP, 219-495-9135. “from one bank to another’ •==•1R' Value Added Remarketer System/36 MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FREMONT SOFTWARE The First National Bank of Fremont • PO. Box 666 Fremont, IN 46737 Phone 219-495-9135 Integrated Bank Management IBM System/34 Bank System Integrated bank-processing package for the community bank, with nine modules, including CIF, D D A , savings, mortgage, commercial loans, installment loans and asset/liability man agement. System W Distributed Integrated mainframe and micro software for financial planning and reporting. Features financial modeling, relational database man agement, statistics, graphics and report writer. HARDWARE: IBM configurations with U M / CMS or MUS/TSO on mainframe and PC DOS on micro-computer. HARDWARE: IBM System/34 or System/36. HARDWARE REQUIREMENTS: Micro software sold only with mainframe software. NuComp Systems, Inc., St. Paul Comshare, Ann Arbor, Ml FMS M O D IV Integrated-Transaction Processing Financial Data (System FDS)/Financial Termi nal System (FTS) Contains major enhancements to previous financial-management system in the areas of forecasting, budgeting and warehouse entry. Designed to be a complete financial-institution accounting and management system. Systematics, Inc., Little Rock Uses IBM Series 1 and proprietary software to connect and intermix teller and administrative terminals and ATMs on line to a central com puter system. HARDWARE: IBM Series/1. HARDWARE REQUIREMENTS: IBM Series/1 with connections to IBM System 34/36/38, Sys tem 3 or any S/370. SDD, Inc., Boulder, CO ABS (Advanced-Banking-System) Consolidates loan accounting, savings account ing, demand-deposit accounting and safedeposit accounting w ith a custom erinformation file that maintains records on ev ery customer for on-line inquiry or batch pro cessing. HARDWARE: Geac 8000 and the Concept 9000. Marcai Systems Corp., Cary, IL Geac Computers Inc., Woodland Hills, CA Community-Banking Software Enables a bank to automate all bank functions and, in so doing, reduces processing costs while affording greater flexibility in all applications. HARDWARE REQUIREMENTS: 212 modem, port and memory for phone-in support capabil ity. FutureBank A versatile, flexible, easy-to-use and inexpen sive system for financial institutions. HARDWARE: IBM PC, System 34/36/38. International Software Inc., Allentown, PA V. I. P. 34/36 ® A totally integrated, on-premises system that provides unified statements and databased cen tral file. It is parameter driven, and complete maintenance and software support is provided. HARDWARE: IBM System 34/36. Integrated Banking An integrated financial system designed to pro vide a complete package of services for finan cial institutions. HARDWARE: IBM System/370 (model 125 & up), 43XX and 303XX Series CPUs and plugcompatible mainframes running under DOS, DOS/VS and DOS/VSE. Canton Automated Systems, Inc., Canton, O H Piedmont Software Co., Charlotte, NC One-Minute Market Analyst Provides regular updates of a wide range of market indicators, including NYSE, AMEX, OTC, gold/silver, interest rates and currencies to aid in market analysis. HARDWARE: IBM PC, XT, AT. HARDWARE REQUIREMENTS: Hayes modem, dual drives and color monitor recommended. A stock-analysis program for performing onbalance volume analysis and generating stock charts for technical analyses. It can retrieve quotations from Dow Jones or from Warner Computer's financial database. HARDWARE: IBM PC, XT, AT and compatibles, including Compaq, Tandy 1200 and 1000. HARDWARE REQUIREMENTS: 128K RAM, dual drives or one drive and hard disk, IBM graphics adapter. Micro-Investment Software, Inc., Stockton, CA Options-80: Stock-Option Analyzer Maximizes annualized returns from calls, puts, spreads, covered writing and allows commis sion and cost of money. Includes graphs and tables. Black-Scholes modeling available in advanced versions. HARDWARE: IBM PC, XT, Apple family, TRS80, Wang. Investment-Oriented Statistical Software OMNI Totally integrated in-house data-processing system that includes training, planning, docu m entation, installation, federal-regulatory compliance, new-product enhancements and around-the-clock support. HARDWARE: IBM System 34/36. Fifty programs for statistical forecasting of stocks, bonds, options, futures and foreign ex change. HARDWARE: IBM, Apple, Radio Shack, Com modore, Kaypro, DEC, Sanyo or any MS-DOS or CP/M-based system. HARDWARE REQUIREMENTS: 48K RAM. Programmed Press, Elmont, NY O M N I Resources, Inc., Altamonte Springs, FL Loan Calculation/Documentation Decimus Data Services Corp., Walnut Creek, CA The Canton System 1990 HARDWARE: Apple, IBM PC, XT, AT. Options-80, Concord, MA HARDWARE: IBM Series 1, 4300, 370; Hon eywell, DPS-6; NCR Adds MENTOR, DEC, General Automation. Bankline, Inc., Phoenix Professional system for processing fed funds, commercial paper, CDs, repurchase agree ments and other interest-bearing securities. Stockchart-ll (OBV Analysis Software) BANK250 HARDWARE: HP 250 Model 10. Investment-Management System Personal Equity Computing, Inc., Framingham, MA Integrated Bank System A flexible, parameter-driven, retail-oriented financial-transaction system allowing users to create/maintain CIF, deposits, loans and gener al ledger with ability to back-date and futuredate transactions. Investment Analysis Integrated-Financial Control T lll-LPS Financial-8® for Banking Industry Integrated system for financial control, includ ing following accounting modules: accounts payable, capital project, exployee-expense, fixed asset, general ledger, inventory control, purchasing and requisition management. HARDWARE: IBM 370, 303XX, 43XX. Calculates any loan by using Regulation Z for mulae and printing required loan documenta tion. HARDWARE: IBM PC, Monroe 2000, Oliveti M 24, AT&T 6300. HARDWARE REQUIREMENTS: 128K RAM, re verse-feed printer. El Dorado Systems, Inc., Richardson, TX American Software, Inc., Atlanta, GA Loan Management MSA Software Nine integrated application software systems, including general ledger, forecasting and mod eling, fixed-asset accounting, project tracking, inventory management, accounts payable, foreign exchange and payroll. HARDWARE: IBM 360/370, 303XX, 43XX, OS, DOS, OS/VS1, DOS/VS(E), SVS, MVS, VRX, SSX, Burroughs 2700-7800, Sperry 1100, NCR 85XX, 86XX, among others. Management Science America, Inc., Atlanta 42 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Interest-Margin Spread Loan-Loss Control The Bond Bidder with Optimizer Developed for m unicipal underw riters to calculate NIC, TIC, spread, etc., for serial and term-bond issues. Provides complete tracking of loans from date of charge-off through final disposition and has customer-information-file capabilities. HARDWARE: IBM PC, XT, AT, NCR D M 5, PC4, Burroughs B-25. HARDWARE: Apple and IBM PC, XT, AT HARDWARE REQUIREMENTS: 256K RAM. Piedmont Software Co., Charlotte, NC Interactive Planning Systems, Atlanta MID-CONTINENT BANKER for March, 1985 CANNED PROGRAMS MAY BE HAZARDOUS TO YOUR WEALTH. Canned programs for your loan pro cessing functions are costly substitutes for the real thing. Because o f their in flexibility, all they can offer is the prospect of greater expense as your department grows or changes. But, that’s history because the LOANStar system for loan processing can give you a taste of the future right this minute. Designed ¿is fifth-generation soft ware, LOANStar’s artificial intelligence allows you to perform: YOUR LOANS, YOUR WAY ON YOUR FORMS. LOANStar adapts to YOUR PRO CEDURES. There is no need for you to adapt to it. That means your people can sit down and produce with almost no training right from the start. LOANStar is extremely powerful but very easy to use. It offers com plete on screen editing, entry modification and recalculation at any time, the automatic entry of repetitious data and a no miss function that informs the operator of possible mistakes. LOANStar operates at speeds 3 to 10 times faster than those “ canned go ods” and it automatically eliminates the worries associated with examiners and compliance officers. So, if you demand optimum efficiency and want to take your organization into the future call us today about LOANStar . . . and kick the can habit for the sake o f your wealth. 404 972-2871 - COMMERCIAL AND CONSUMER LOANS MORTGAGES - Including The SECONDARY MARKET LOAN STATUS AND TRACKING REPORTS NEW ACCOUNTS - CHECKING - IRA S - CD’S, ETC. TOO BUSY TO CALL? SEND YOUR BUSINESS CARD FOR FURTHER INFORMATION. LOANStar ☆ n Ä ^ ___ .. LOQn H ro cessm g oysr© i 7? mug National Financial Computer Systems, Inc. p.o. box459 conye™,Ga.30207 404-972-2871 iiim u iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiim iiiiiiu m iiH m i MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ll llll lll llll lll llll lll llll lll llll lll llll lll il lll llll lll llll lll llll lll llll lll llll lll lll llll lll in i ll llll lll lll llll lll llll lll llll lll llll lll llll lll llll lll llll lll llll lll llll lll llll lll llll lll llll lll llll lll llll lll lll llll lll lll^ T111111111111111111i111 II 111111111i 1111! 1111! ! 111i i 11! 1111i i i111! 1111111111111111111 ! 11IS! 11!ì I lìl 111111111111111! 111111II 111111111111111111 i 11111111111111111111111111111111i111111111111111111111111111! 1111111111111III 11! I r WARNING: 43 Loan Pricing Loan Pricing Analyzes historical loan/deposit information to roject profitability of new and existing loans ased on target return. Reports in actual dollars and annualization of yields. E HARDWARE: IBM PC, XT and other compati bles. HARDWARE: NCR InteracTV. VCM Systems, Cedar Rapids, IA HARDWARE REQUIREMENTS: 128K RAM and dual drives. Programming Analex, Inc., Durham, NC Omni-Model Building, Report Language and Data Management Mortgage HARDWARE: IBM PC, XT, AT or compatibles. HARDWARE REQUIREMENTS: 256K RAM. DCC Mortgage-Banking System Crowe, Chizek & Co., South Bend, IN Newly enhanced system now capable of han dling needs of all mortgage bankers regardless of number of loans. Model building of simple to complex reports with unlimited levels of consolidation. Capa bilities include w hat-if analyses, complete financial routines, extensive forecasting and statistical analyses. HARDWARE: Data General Eclipse, including DG Desktop series, IBM 43XX. HARDWARE: IBM 370, 34XX, 3XXX, Univac 1100, DG Eclipse, Prime, DEC Vax, HP1000A. Data Communications Corp., Mortgage Bank ing Division, Memphis Haverly Systems Inc., Denville, NJ Loan Processing LoanStar A calculating, forms-printing and tracking sys tem for installment loans, consumer loans and mortgages. Matsch Mortgage-Closing System HARDWARE: IBM PC and compatibles, NCR DecisionMate 5. A complete mortgage-closing system with re porting and tracking capabilities. Sales Management HARDWARE REQUIREMENTS: 256K RAM. HARDWARE: NEC-Astra. Financial Software Corp., St. Charles, M O Matsch Financial Systems Ltd., Grand Rapids, Ml Matsch Loan-Processing System A complete installment-lending package with automatic document preparation and reporting features. HARDWARE: NEC-Astra Matsch Financial Systems Ltd., Grand Rapids, Ml Personal-Banker System® Loan-Document Processing The Loan Handler, The Loan Tracker, The Loan Finder, The Loan Closer, The Loan Servicer A five-package, mortgage-loan-processing package that offers a complete range of easyto-use mortgage-processing capabilities for the micro-computer user. HARDWARE: Apple, IBM PC, XT and IBM com patibles. Contour, Inc., San Jose, CA Calculates payments for all types of loans, in cluding finance charge, and all insurance pre miums. Automatically completes all user's loan and insurance documents. HARDWARE: IBM PC or compatibles. HARDW ARE REQUIREMENTS: 256K RAM with dual drives or one drive with hard disk. Computech, Inc., Minneapolis Comp Systems Package Designed to be a com plete m ortgage processing, tracking and closing package with screen and forms generator. HARDWARE: Any M S-DOS or Unix/Xenixbased machine. HARDWARE REQUIREMENTS: 128K RAM. Comp Systems, Miami Mortgage-Servicing Package Part of a package of loan-servicing software that includes residential loan-inventory con trol, construction loan-management package and residential loan-production package. HARDWARE: IBM Mainframes. Computer Power, Inc., Jacksonville, FL Profile Integrated (commercial, consumer, mortgage, construction, student) loan processing, track ing and document-preparation system for use in primary and secondary markets. HARDWARE: Digital Equipment Corp.'s Rain bows and Micro Vax's; IBM PC/XT. Merger Analysis 2AB/DataBank Performs tasks essential to competitive analysis of financial-institution mergers under Depart ment of justice/Fed guidelines. 44 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BEI Holdings, Ltd., Commerce, GA Client Lead and Listing System Monitors and tracks calling efforts of bank officers by products, services and prospects. Can be used to organize a call program at a bank. HARDWARE: IBM PC, XT, AT, and compati bles. HARDWARE REQUIREMENTS: 256K RAM. Crowe, Chizek & Co., South Bend, IN Portfolio Management The Investor^: Portfolio-Tracking System A new mainframe software system designed specifically to pay incentive compensation to investment officers based on size and quality of their investment portfolios. L. E. D. Master Software that allows a main branch or indi vidual branches to control on-line L. E. D. boards to display current rates for CDs, IRAs or loans. BEI Holdings, Ltd., Commerce, GA HARDWARE REQUIREMENTS: L. E. D.s with RS 232 Modem. microISS Miller/Zell, Atlanta Enables machine-readable data transmission to or from in-house systems and ISS (a tradingactivity/reporting system for custodial clients) for cash reconciliation and other processing. MKT/MGR® HARDWARE: IBM PC XT or other compatibles. HARDWARE REQUIREMENTS: 340K RAM, Hayes Smart Modem 1200, printer. Interactive Data Corp., New York Stores and retrieves up to 35 pieces of data on thousands of companies. HARDWARE: IBM PC and compatible micro computers. HARDWARE REQUIREMENTS: Hard disk drive and printer. Micro Applications, Inc./James Doyle Associ ates, St. Louis Portfolio-Management System Portfolio-management/accounting modules providing portfolio reporting, performance valuations, heavy real-time retrieval and entry of asset information. HARDWARE: IBM PC, XT, AT, Texas Instru ment PC, Tl Minis, DEC, IBM System 36, 4300 VMS, Televideo, Altos. HARDWARE REQUIREMENTS: On PCs, 256K RAM, dual floppy disks or hard disk, 132column printer. The Lobby Manager A lobby-automation system for loan and new accounts, including all forms processing. Menu driven with no code memorization necessary. Able to work in local-area network with main frame communications available. HARDWARE: IBM PC, XT, Columbia Data, NCR Model 4, Sperry PC. Information Resource Management, Bloomingdale, IL HARDW ARE REQUIREMENTS: 256K dual drives, hard drive recommended with mini mum of 10K. For local-area network, Sperry USERNET recommended. Product Display Advanced Resource Technologies, Inc., Coun cil Bluffs, IA HARDWARE REQUIREMENTS: 256K RAM. S. C. A., Malvern, PA The Motivatorm Jr.: Sales-Incentive System A m icro version of The M o tiv ato r salesincentive program that is designed especially for smaller financial institutions. It offers cross selling tracking, incentive calculation and sales-management training. Financial Touch Cross-Sell Manager Graphic, interactive turnkey public-access touch-screen system (with terminal) to pro mote retail products of financial institutions by providing information and "w hat-if" calcula tions of customers' finances. A Multimedia sales, training and management system. Software shows financial products/services in color and includes management re ports. Video-based training program included. HARDWARE: IBM PC. MID-CONTINENT BANKER for March, 1985 Would you love to generate three times the profit of a com mercial loan? W ould you love to institute a program that’s predicted to be 60% of the Capital Goods Market by the 1990’s? Are you within arm ’s reach of a telephone? If the answers to all three of the above questions is “ yes,” then pick up the phone and call (502) 423-7730 . . . but be prepared to fall in love. Because First Lease has a story you’re going to love to hear. First Lease is one of Am erica’s largest equipment leasing consultants. We help independent banks across the coun try set up profitable, in-house leasing departments without a major investment in start-up and maintenance. And First Lease works on a fee basis, so that leasing prof its stay where they belong . . . with our clients. Fall in love in only two days The best way to find out how your bank can start reaping high equipment-leasing profits is to attend a First Lease Two-Day Seminar. In only two days, you’ll gel a clear understanding of tjhe pro cedures and huge benefits of equipment leasing. Plus, you’ll discover what it takes to get started and how to negotiate, document and fund an equipment lease transaction. But hurry, First Lease seminar space is limited and fills up fast. To make your reservation or to find out more, call (502) 423-7730 or fill out and mail the attached coupon. Then attend a First Lease seminar, where you’ll sit back, listen and fall in love. I MC03 Name I F ir s t L e a s e AND EQUIPMENT CONSULTING CORP. You’ll love leasing! I Position/Title Address 420 Hurstbourne Lane • Suite 202 Louisville, KY 40222 State (502) 423-7730 Phone https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis j Company Name Ifc fW B H P HARDWARE REQUIREMENTS: Color monitor, 256K dual drives, 320K RAM, clock/calendar, 80-column graphics printer. Berman Technologies, Charlottesville, VA Shareholder Accounting Stock Transfer and Reporting Plus (STAR + ) A real-time stock transfer and reporting system designed to meet today's stock-transfer needs using current technology. It features real-time certificate preparation, checks, transfers, cor rections and proxy tabulations. HARDWARE: IBM mainframe or compatible or Series 1. HARDWARE REQUIREMENTS: CICS/VS. Shaver Associates, Inc., Orlando, FL Student-Loan Processing cesses transactions from teller terminals or ATMs. HARDWARE: IBM 4300 Series. HARDWARE REQUIREMENTS: Supports IBM, ISC, Burroughs, NCR, Lundy, Diebold and other transaction-entry equipment. Systems Solutions, Inc., Longwood, FL HARDWARE: NEC-Astra. Matsch Financial Systems Ltd., Grand Rapids, Ml Teller-Terminal Management On-Line-Banking Environment Teller-Terminal Management Provides on-line communication between IBM System 34/36/38 and teller terminals in order to use current-account data for transaction au thorizations and to update account data as ATM transactions take place. The CashExpress Workstation Advanced Planning Systems, Inc. Provides all of the key functional requirements of a treasurer, including balance, target, cash position, bank relations, debt and investment management. HARDWARE: IBM PC/XT. HARDWARE REQUIREMENTS: Communica tions, 10 megabyte hard disk. 120 West Eastman, #201 Arlington Heights, IL 60004 312/392-1744 ADP Financial Network Services, Ann Arbor, Ml ALMS Microsystems Trust Accounting 443 East Paces Ferry Rd. Atlanta, GA 30305 404/261-4381 HARDWARE: IBM PC, XT, AT or compatibles. Ontario Systems Corp., Muncie, IN Trust 34/3 6 A complete trust-accounting system for bank ers. Includes sweep accounting, comprehen sive-printed reports, immediate-inquire access, automated check writing and more. HARDWARE: IBM System 34/36, IBM PC, XT or AT. LWS Inc., Webster City, IA Provides maximum reporting to trust custom ers, utilizing a low-cost system that is flexible, functional and practical. Over 20 reports are available to provide information to manage ment and operations personnel. HARDWARE: IBM System 34/36/38. HARDWARE REQUIREMENTS: Minimum con figuration. Designed to help financial institutions learn more about financial planning while gaining valuable hands-on experience. HARDWARE: IBM PC, XT and IBM compati bles. HARDWARE REQUIREMENTS: 128K RAM. Infoware Corp., Nashville Check Characteristics A stand-alone tool for teller training or retrain ing. It is a self-paced program responding to the student's ability level. Quizzes are included. HARDWARE: IBM PC, Apple II, HE, III. HARDWARE REQUIREMENTS: 48K RAM. Knowledge Systems, Inc., Avon, NY Transaction Reporting Combined Interest and Transaction Reporting Plus (CINTX + ) An 1RS reporting system with a real-time mod ule for processing window-reportable transac tions. Automatic-backup-withholding calcula tions is key feature. Provides for duplicate TIN reporting and TIN certificate processing. Arkansas Systems, Inc., Little Rock 8901 Kanis Rd., #201 Little Rock, AR 72205 501/227-8471 ATM Network Management Corp. 2901 Finley Rd. Downers Grove, IL 60515 312/932-9555 Bankline, Inc. 11225 N. 28th Drive, #C-207 Phoenix, AZ 85029 BEI Holdings, Ltd. 114 State St. Commerce, GA 30529 404/335-5684 Berman Technologies 1222 Harris St. Charlottesville, VA 22901 HARDWARE: Burroughs B80, B800, B90 and B-20 Series. HARDWARE REQUIREMENTS: 512K RAM. K. C. Data Program Services, Inc., Mattoon, IL P.O. Box 1482 Springfield, MO 65805 417/866-5053 Trust Management Carner It Associates, Ltd. Chase Manhattan Bank, N . A. 22 Cortlandt St., 33rd Floor New York, NY 10007 212/306-6805 MicroQUEST Cognitronics Corp. Allows down loading of trust information from a mainframe to a PC for purposes of evaluation and manipulation. HARDWARE: IBM PC, XT. HARDWARE REQUIREMENTS: 256K RAM. Dyatron Corp., Birmingham, AL 25 Crescent St. Stamford, CT 06906 203/327-5307 Wire Room and Payment System BESS® (Bank Electronic Support System) Data Architects Systems, Inc., Waltham, MA 46 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Arkansas Systems, Inc. 100 Central Plaza South (P.O. Box 110) Canton, OH 44701 216/489-3680 Teller-Terminal Solutions Shaver Associates, Inc., Orlando, FL 1901 Chapel Hill Rd. Durham, NC 27707 800/438-5014 Canton Automated Systems, Inc. An IBM host-system software package that pro- HARDWARE REQUIREMENTS: CICS/VS. Analex, Inc. TRACSm : Trust-Accounting System A trust-accounting system, including IRA and farm-accounting segments. Menus and easy screen formatting guide operators. On-site training provided by systems analyst. A fully integrated international wire-room automation and payment funds-transfer soft ware system. Interfaces supported include FedW ire, Bankwire, SWIFT, CHIPS and domestic and international Telex. HARDWARE: Tandem NonStop® HARDWARE: IBM Mainframe or compatible. One Commerce Square Memphis, TN 38150 901/521-0851 American Software, Inc. HARDWARE REQUIREMENTS: 128K RAM. PFP Decision Maker and PFP Professional 106 West Washington Ave. Council Bluffs, IA 51505 712/322-6824 Complete range of customer- and administra tion-report generation. Features include cash sweep, alphanumeric retrieval and tax-lot accounting. Automated Trust-Accounting System (ATAS) Training Advanced Resource Technologies, Inc. AccuTrust HARDWARE: IBM System 34/36/38. Arkansas Systems, Inc., Little Rock ADP Financial Network Services 175 Jackson Plaza Ann Arbor, MI 48106 313/769-6800 Treasury Management Matsch Student-Loan System Full-blown student-loan processing system with accounts receivable, automatic pooling and payout. Includes document preparation and quarterly reporting. The following is an alphabetical list ing of software firms with products listed in the financial softwaredirectory. Comp Systems 9655 South Dixie, Highway #101 Miami, FL 33183 305/666-3783 Computech, Inc. 511 Eleventh Ave. South Minneapolis, MN 55415 612/338-6044 Computer Power, Inc. 661 Riverside Ave., #110E Jacksonville, FL 32204 904/350-1400 (Continued on page 48) MID CONTINENT BANKER for March, 1985 >3 Presenting you r best reach to the financial services market. United States B Banking Savings Banks Trust Com] U.S. Treasuries Brokerage Savings Commercial Finance Companies Pi Market Accounts Preferred Stock WP Anaiysi CUNA Bankers Acceptances Dema Plannin Commercial Loans Auto Loans Es L-j Insuranc Travelers Cheques Eurobonds Indus nagemen Secondary Market Hedges Calls Rein! FDIC Ag Lending Bank Cards DBMS Fixed Asset Home Banking Teller Bill Paying Personnel/Payroll/Pension Teller Staffin Investment Firms Insurance Companies Accounting Internationa Banking Credit Unions Trust Lending Commercial Bank Financial Analysis Consumer Finance Companies Life/Health Money Marke Funds Passbook Accounts NOW7 Accounts Dividends ARM NAFCU Computing Audits Installment Loans Personal Loan Personal Financial Planning Money Orders Flower Bonds Zero Coupon Bonds Mortgage Insurance Futures Puts Options Ris There’s a new kind of financial industry today — financial services — broader, less structured. And as deregulation and new technology provide diverse opportunities for growth, financial services are being provided by many different players. United States B an ker and F in a n cia l Computing understand this evolution and provide a unique reach into the vital financial arena. These magazines serve the entire financial industry — banks, thrifts, credit unions, investment firms, mortgage, finance and insurance companies. Each publication reaches executives in the leading financial institutions to provide in-depth, authoritative infor mation on activities affecting the industry as a whole — and on each segment of the total industry picture. U.S. B an ker is an independent national publication serving top management. Each issue provides commen tary and objective analysis of industry developments as well as face-to-face interviews with financial in dustry leaders. F in a n cia l Com puting concentrates on practical in formation about computer applications, hardware and software specifically designed for banking and finance. End-users, managers and DP executives find in its pages computing solutions — micro, mini or mainframe — for their financial specialty. Use both magazines to effectively influence deci sion making at all levels within financial institutions. Reach the financial services industry with United States B an ker and F in a n cia l Computing. Cleworth Publishing C o., Inc. One River R oad, Cos C ob, CT 06807 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Telephone (203) 661-5000 Call or write for a free media kit on each magazine today. Alphabetical Listing (C o n tin u ed f r o m page 4 6 ) Haverly Systems Inc. 78 Broadway Denville, NJ 07834 201/627-1424 Homestead Management Systems, Inc. Comshare 3001 South State St. Ann Arbor, MI 48104 313/994-4800 Contour, Inc. 4960 Hamilton Ave., #215 San Jose, CA 95130 408/370-1700 Crowe, Chizek ù Co. P.O. Box 7 South Bend, IN 46624 800/348-2521 Custom Application Systems, Inc. 11726 San Vincente Blvd., #500 Los Angeles, CA 90049 213/820-5800 Data Architects Systems, Inc. 245 Winter St. Waltham, MA 02154 617/890-7730 Data Communications Corp., Mortgage Banking Division 3000 Directors Row Memphis, TN 38131 901/345-3544 Information Resource Management 113 Fairfield Way, #101 Bloomingdale, IL 60108 312/894-5598 Infornare Corp. 2407 12th Ave. South Nashville, TN 37204 615/385-1515 InnerLine 95 West Algonquin Rd. Arlington Heights, IL 60005 800/323-1321 Interactive Data Corp. 22 Cortlandt St. New York, NY 10007 212/676-0837 Interactive Planning Systems 1800 Century Blvd. Atlanta, GA 30345 800/241-3246 International Software Inc. 1405 North Cedar Crest Blvd. Allentown, PA 18104 215/433-8488 DaTamap, Inc. K. C . Data Program Services, Inc. 6874 Washington Ave., South Eden Prairie, MN 55344 612/941-0900 P.O. Box 1054 Mattoon, IL 61938 217/235-1919 Decimus Data Services Corp. Knowledge Systems, Inc. 2737 North Main St. Walnut Creek, CA 94596 415/944-6176 102 Genesee St. Avon, NY 14414 716/226-3313 Dyatron Corp. LWS Inc. 210 Automation Way Birmingham, AL 35210 205/956-7570 P.O. Box 515 Webster City, IA 50595 515/832-1058 El Dorado Systeins, Inc. Management Science America, Inc. 1350 East Arapaho Rd., #218 Richardson, TX 75081 214/699-8705 3445 Peachtree Rd., N.E. Atlanta, GA 30326 404/239-2000 Exécutée Corp. Marcai Systems Corp. 12200 Park Central Dr. Dallas, TX 75251 214/239-8080 4 Crystal St. Cary, IL 60013 312/639-3000 Faraday National Corp. Matsch Financial Systems Ltd. 13854 Park Center Rd. Herndon, VA 22071 703/435-0100 900 Ionia N.W. Grand Rapids, MI 49503 616/459-0782 Farm Data Corp. Micro Applications Inc./James Doyle Associates 101 West Burnsville Pkwy., #104 Burnsville, MN 55337 612/890-7317 Financial Software Corp. 1390 Charleston Industrial St. Charles, MO 63307 314/723-6800 Financial Technology, Inc. 612 North Michigan Ave. Chicago, IL 60611 312/280-0600 Geac Computers Inc. 6300 Variel Ave., Suite A Woodland Hills, CA 91367 818/887-3180 Hale Systems, Inc. 1044 Northern Blvd. Roslyn, NY 11577 800/645-3120 48 2024 N.W. 92nd Ct. Des Moines, IA 50322 515/225-0085 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 727 North First St., #410 St. Louis, MO 63102 314/421-1366 Micro Book Inc. 1365 Wiley Rd., #149 Schaumburg, IL 60195 312/882-4025 Micro-Investment Software, Inc. 9621 Bowie Way Stockton, CA 95209 209/952-8833 Microcom, Inc. 1221 Park Place N.E. Cedar Rapids, IA 52402 319/378-1378 Miller/Zell 4715 Fredrick Dr., S.W. Atlanta, GA 30336 404/696-9330 NuComp Systems, Inc. 2277 West Highway 36 St. Paul, MN 55113 612/633-3800 OMNI Resources, Inc. 711 East Altamonte Dr. Altamonte Springs, FL 32701 305/831-3001 Ontario Systems Corp. 300 West Airpark Dr. Muncie, IN 47303 317/284-7131 Options-80 Box 471-MC Concord, MA 01742 617/369-1589 Personal Equity Computing, Inc. 10 Speen St. Framingham, MA 01701 Piedmont Software Co. 5200 Park Rd., #119 Charlotte, NC 28209 704/527-0117 Plansmith 50 N. Brockaway Palatine, IL 60667 800/323-3281 Programmed Press 2301 Baylis Ave. Elmont, NY 11003 516/775-0933 S. C . A . Phoenixville Pike and Charlestown Rd. Malvern, PA 19355 215/296-8877 SDD, Inc. 3100 Arapahoe Rd. Boulder, CO 80303 303/449-3634 Sendero Corp. 1422 North 44th St. Phoenix, AZ 85008 602/225-0555 Shaver Associates, Inc. 1001 Executive Center Dr., #271 Orlando, FL 32803 305/894-0355 Software Alliance Corp. 2100 Milvia St. Berkeley, CA 94704 415/548-7752 Sterling Software Marketing 11050 White Rock Rd. Rancho Cordova, CA 95670-6095 916/635-5535 Systematics, Inc. 4001 Rodney Parham Rd. Little Rock, AR 72212 501/223-5435 Systems Solutions, Inc. P.O. Box 3336 Longwood, FL 32729 305/869-1759 Trilog, Inc. 1700 Market St. Philadelphia, PA 19103 215/564-3404 VCM Systems 427 6th Ave., S.E. Cedar Rapids, IA 52406 Wisconsin Microware, Inc. 4506 Regent St. Madison, WI 53705 608/233-4459 MID-CONTINENT BANKER for March, 1985 COMMERCIAL LENDING A Specialist's View of Leveraged-Buy-Out Lending O By Richard D. Tunick V E R the past few years, there has b e e n a good deal o f discus sion o f leveraged b u y-ou ts (L B O s), the m arket leader, the com p an y ’s substan a cq u isitio n o f c o m p a n ie s u sin g r e tial fixed-assets in vestm en t or exist latively little eq u ity capital and su b en ce o f a franchise. T h ere should b e stantial fu n d ed in d eb ted n e ss. L B O s low req u irem en ts for capital ex p e n d i frequ ently are facilitated b y w riting up tures over the first several years o f the fixed assets to reflect their allocated tra n sa c tio n c o u p le d w ith m in im a l cost, w hich perm its h igh er d e precia tion expen se and increased cash flow. In terest ex p e n se sim ilarly is u n d er w ritten to som e extent b y the Internal R e v e n u e S e rv ic e . M o n e y fo r m e r ly paid in in com e taxes can b e applied to red u c e loan p rin cip al and financial leverage. B ecause m any highly visible trans actions have taken place, and substan tial rewards have b e e n d elivered to investors, this financing form has b e com e quite attractive, both to b orrow ers and len ders. This d e v e lo p m e n t has given rise to con siderable concern by banking authorities already p reo ccu p ie d w ith p o r tfo lio q u a lity and b y securities regulators over rapid growth o f debt bu rden s on su bject com pan ies. This article will address so m e o f the criticisms o f L B O s and set som e broad standards b y w hich th ey m ay b e done properly. A r t F o r m f o r S p ecia lists. H avin g b e e n en gaged in financing L B O s for m any years, know n earlier to som e le n d ers as “ b oo tstrap a c q u isitio n s,” m y bank view s th em as an art form that should b e u sed with great care b y qu al ified specialists and only in appropriate c ir c u m s ta n c e s . L e v e r a g e d a c q u isi tions are not suitable for m any indus tries, nor are they suitable for all c o m panies in those industries that m ight len d th em selv es to this typ e o f financ ing. H o w ev er, those com p an ies with secu re m arket p osition s and h igh ly predictable cash flows are appropriate candidates for L B O s . B ut th ese c o m panies should not b e strongly tied to fashion, style or tech n ology so as to avoid either short produ ct cycles or obsolescen ce. A G o o d L B O C a n d id a te . U n d e r m ost circum stances, the L B O candi date d o esn ’t have great grow th p o te n tial that w o u ld attract c o m p e titio n from large com p an ies. M o r e o v e r , e n try into the m arketplace b y com p etin g com pan ies should b e difficult becau se o f the L B O candidate’s position as a n eed s for research and d e v e lo p m en t. U n d er no circum stances should this m od e o f financing b e applied to im m a nization m ust all b e d isp osed o f satis factorily b y ex perien ced and qualified specialists. T h e le n d er m ust b e satis fied the assets are sufficient to cover all in d eb ted n ess so there is no qu estion as to the com p an y ’s solven cy follow ing the L B O . I f this is not the case, in the ev e n t o f bankruptcy, senior lenders m ay have their claim s eq u itab ly su b ordinated to other classes o f creditors, w ho m ay b e found to have b e e n d e ture businesses. frauded. I f the transaction is secu red and in volves purchase o f stock o f a pu blic com p an y subject to m argin constraints o f R eg U , the good-faith value o f the Richard Tunick has financed leveraged buy-outs for more than a dozen years and man ages the area in his bank re sponsible fo r these transac tions. In this article, he ad dresses issues raised recently in the media regarding leveraged buy-outs. W hile the author acknow ledges the risks in volved, he also feels this type of lending offers opportunities for success as long as tra dition al lending principles prevail in arranging financing. collateral m ust com p ly w ith req u ire m en ts o f the regulation, w hich cur L egal I s s u e s . Basic rules o f c o m m e r cial len din g apply to L B O s to the sam e extent th ey apply to any oth er loans. Stru ctu ral fo rm s th e se tran saction s take, h ow ev er, are quite different and require the m ost expert legal d o cu m entation. Such legal issues as con sid e r a tio n fo r u p s t r e a m g u a r a n t e e s , potential for fraudulent con veyan ces in payou t o f sh areh old ers for oth er than a corporate p u rpose, com p lian ce w ith F ed eral R eserve R egulation U (R eg U ) and taxes o f corporate reorga- Copyright 1985 by Robert Morris Associ ates. Reprinted with permission from The Journal o f C o m m er cia l Bank L en d in g , O ctober, 1984. Richard D. Tunick is s.v.p., corporate finance division, National Westminster Bank USA, New York City. MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis rently m andates 2 : 1 collateral-to-loan coverage. Should any o f the collateral b e disp osed o f prior to rep a ym en t o f the loan in full, so-called “ retention r e q u ir e m e n ts ” for c o m p a r a b le c o l la t e r a l- t o - lo a n c o v e r a g e d e e m e d applicable. m ay be W h ile service com pan ies generally are unsuitable subjects for L B O s , leas ing com panies for eq u ip m en t w ith no risk o f tech n ology o bso lesce n ce , radio and T V stations, c a b le -T V franchises, b everage franchises and hospitals all m ay perm it relatively h igh er degrees o f levera ge and, th erefo re, m ay b e suitable for L B O s. In m any cases, it’s possible to pass along the potential o f interest-rate increases to the cu sto m ers. W h e r e this is not feasible, it is ju d icio u s to use as m u ch fixed-rate funding as possible so as to project costs with the greatest d egree o f cer ta in ty . T h is m a y take th e fo rm o f m a t c h e d -fu n d e d b an k loan s or socalled “ m ezzan in e” financing, either subordinated d e b t or preferred stock, w hich can enhance the lim ited capital in the transaction. I f subordinated d e b t is in vo lv ed , it should b e subordinate in all respects and at all tim es to b oth principal and interest on the senior debt. D efa u lt on subordinated d e b t should not b e p e r m itted to accelerate any oth er in d eb t edness o f the com pany. Source o f su b ordinated d ebt should b e institutional and not transferable excep t to other financial institutions. Taking this m ea sure avoids the potential defen se in bankruptcy that the subordinated class o f claimants is u nsophisticated and d e - 49 serving o f protection at the expen se o f the senior lenders. C o n s id e r in g p r o fits e n j o y e d b y som e investors in L B O s, m any lenders have b een tem p ted to operate as m e r chant bankers. T h ese len ders focus on the potential rewards (by investing in all tranches or layers in the transac tio n , in clu din g sen ior and su b o rd i n ated d e b t, co m m o n and preferred stock) rather than on som e o f the risks. T h e p r ic in g o f t h e s e tr a n sa c tio n s sh ou ld reflect th eir c om p lex ity and un iqu en ess, both o f w hich d eterm in e the tim e requ ired to analyze and struc ture th em properly, rather than the inherent risk to the len der. I f the risk is significant, the loan req u est should b e declin ed. T o the extent the acquirers have rel atively less at risk, this does provide a cogen t argum ent for the le n d e r’s gain ing a greater rew ard from successes o f the transaction. Since the fron t-en d fees to the deal sponsor m ay exceed th e a m o u n t o f his risk capital, the prospective len d er m ay b e properly skeptical. M o reo v er, m any large L B O fund m anagers are com p en sated h an d so m e ly irre sp ectiv e o f th e ultim ate success o f their in vestm en ts, although, in all fairness, there usually is con siderable in centive for the fund m an ager to b e su ccessful. A t all tim es, how ever, one should re m e m b e r that a higher interest rate or eq u ity partic ipation (through eith er co m m o n stock or stock warrants) will not b e adequate com pensation for a poorly con ceived transaction. U n w is e L e n d i n g ! I n v e s t i n g . A s L B O s began to attract a great deal o f notoriety, it was reasonable to antici pate that the fundam ental hum an q u al ity o f g reed w ou ld encourage unskilled sponsors and len ders to en gage in this practice. T h e result was readily antici p a ted w ith m o r e p e o p le and m ore m o n e y c h a sin g a fin ite n u m b e r o f appropriate opportunities. M o reo v er, the m assive size o f so m e L B O funds has effectively increased the size o f potential transactions. In m any cases, prices for com panies rose b ey o n d the le ve l w h ere their acquisitions cou ld b e fin a n ced eco n om ically. M a n y L B O s w ere done for com pan ies w ith ou t se cure m arket niches or highly p red ict able cash flows and lacking the quality o f m an agem en t to su cceed in a highly le v e r a g e d c o n d it io n . In a d d it io n , aggressive len d ers, ignoring their ex perien ces with real estate in vestm en t trusts, oil tankers, en erg y loans and lo an s to le s s -d e v e lo p e d c o u n tr ie s , elec ted to cut prices, elim in ate c ol la te ra l, drop co v en a n ts and ign o re those safeguards that historically p ro 50 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis vid e som e financing discipline. and h u m an reso u rces. W i t h in c r e a s e d m e d ia a tte n tio n pointing out the excesses on the part o f th e e n trep ren e u r (investor/m anager) E n co u ra gin g banks and others, m any len ders have to reap greater rewards from his labors b y providing him w ith in centive c o m elected to retrench and n ow are avoid in g all L B O tra n sa c tio n s, s o m e o f w hich are quite m eritorious. T h ere are tw o lessons to b e learn ed from recen t pen sation , tion in the o f sh a r e s ow nership history: 1. I f one is to m e e t the aggrandized m arket price for a good com p an y that the perform ance o f the entire ec o n a d irec t-e q u ity participa L B O or through ow nership in an e m p l o y e e s t o c k trust (E S O T ) w ill enhance o th erw ise w o u ld b e suitable as the o m y. R ecen t changes in legislation e n courage loans to finance E S O T in vest m en ts in the operating com p an y by su bject o f an L B O , the transaction no lon ger m ay m ake eco n om ic sen se to m aking a portion o f the interest earned nontaxable to the len der. Paym ents by the investor or len der. T h e investor no the com p an y to the trust will continue lo n g e r m ay b e a b le to r e c e iv e his targeted return on in v e stm en t, and to b e tax d edu ctib le. A lso to b e con sidered is that not all the len d er m ay find that d e b t-service coverage is insufficient and risk o f in terest-rate fluctuation is excessive. 2. C o m m e r c ia l b an k ers n e v e r sh ou ld forget the m ost fundam ental en trepren eu rs have the capability to operate in a highly levera ged en v iro n m en t. Q uality o f m an a gem en t should b e quite high in an L B O . M a n y d i visional m anagers have b e e n spoiled ten ets o f lending. Bankers should re quire proved m an a gem en t and at least two satisfactory form s o f loan repay m en t rather than assum e existen ce of an eb u llien t m arket for equities or an u n in te rr u p te d gro w th e n v ir o n m e n t and increased operating m argins. b y the d e ep pockets o f a parent c o m pany and cannot adjust to a change in L B O s ’ P ositive S ide. Participants in an L B O can m ake a contribution to the eco n om y b y identifying and increasing produ ctiven ess o f industrial, financial FACED WITH DISPOSING OF FORECLOSED BUSINESS COLLATERAL? Bankers Liquidation Report will connect you with buying prospects for all types of business equipment, inventories, even complete businesses. A low cost listing in The Report will be seen by thousands of businessmen and entreprenuers each month. Effective recovery means the best possible price for the collateral with the least time and effort by bank personnel. Bankers Liquidation Report will help you meet this end. Our optional reader inquiry service will provide names and phone numbers of prospective buyers, while shielding your bank from inconvenience and unnecessary publicity. For further information about our service, or to order a listing, contact: BANKERS LIQUIDATION REPORT 6440 Flying Cloud Drive Eden Prairie, Minnesota 55344 (612) 829-0213 corporate culture irrespective o f in centives. O n ce capable m an a gem en t h as b e e n i d e n t i f i e d , h o w e v e r , it should b e w e d d e d to e m p lo y m e n t con tracts and p ro vid ed w ith in cen tiv es that conform to the nature o f the c o m pany and structure o f the L B O . P o ssib le E x c e s s e s !S t r e n g t h s . T h e L B O is a good exam ple o f the type o f opportunity that can presen t itse lf in a free-en terprise eco n om y that, b y its nature, can b e subject to excesses. I f w e apply D arwinian theories o f e v o lu tion, w h erein the fittest survive and perpetuate their qualities, the L B O perm its investm en ts in m atu re, stable com panies to b e liq u efied. B u y-ou t o f original shareholders frees up funds for in vestm en t elsew here in the ec o n om y , further perm ittin g capital form ation, r esea rch and d e v e lo p m e n t in n e w technology or capital accum ulation to finance everyth in g from govern m en tal deficits to h o m e m ortgages. O n e o f the great strengths o f our econ om ic system flows from the in h e r e n t risk o f b u sin e ss failu re and o p p o rtu n itie s that m a y b e c r e a te d th ereb y. U n d er our bankruptcy sys tem , assets o f bankrupt operations b e com e recycled and u n der good stew ardship have led to so m e o f the great successes in recen t years: P enn C e n tral, Toys R U s, M ille r -W o h l. U n d er our tax system , n et operating losses (N O L s), resulting from earlier failures, m ay b e carried forward for tax pu r poses. O n e o f the m ost efficient m eans o f doing so is b y acquiring com panies w ith substantial profits that can b e sh eltered from taxes w ith b en efits o f these N O L s . Penn C en tral has grown significantly from b ein g able to shelter its incom e. T h e recen tly pro p osed ac- MID-CONTINENT BANKER for March, 1985 q u is itio n b y U n it e d M e r c h a n ts & M anufacturers o f Jonathan Logan is predicated on sim ilar principles. O n e should not g en eralize exces A m o n g the costs o f p ro jected suc c e sse s is failu re. R ate o f failu re o f L B O s in m y bank appears to b e low er than w ith less-leverag ed loans, and re Reliable products you can bank on! sively on the su b ject o f L B O financing. E a ch c o m p a n y is u n iq u e , n o tw ith turns certainly are higher. O u r activi ties are lim ited, h ow ever, b y the n u m B an k M a rk , Inc. has becom e one of the leadin g suppliers of bank products and su pplies by consistently offering quality m e rch a n d ise at reasonable prices. B a n k M a rk backs up its products with a full satisfaction w arranty. standing its operation w ithin an in du s b er o f properly qualified len ders and try or industries that m ay m ake the com pan y suitable for L B O financing. I f b y a desire to achieve appropriate b al ance in the loan portfolio. It’s difficult to d eterm in e the reason for m y ban k’s the com pan y already has substantial in deb ted n ess or if the favorable term s o f such in d eb ted n ess w ou ld not sur v iv e reorganization or consolidation with another entity, an L B O arrange m en t m ay not b e feasible. A deal is not to b e co n d e m n e d sim ply because it d e p en d s on disposal o f operations or assets. It m ay b e entirely reasonable to rely on such m easures if results. T h ey m ay b e a function o f b e t ter lenders doing m ore analysis and Carriers for Drive-Up Systems. proper structuring o f loans to m arket n ic h e c o m p a n ie s w it h t o p -m a n agem en t team s. O r th ey could b e a c o n s e q u e n c e o f th e s e tra n sa c tio n s b ein g w ell collateralized with m arket values above those reflected on histor ical financial statem ents. ite m s to b e liq u id a te d are r ea d ily m a r k e ta b le at g iv e n p r ic e ta r g e ts under virtually any circum stances. O n W e always m u st b e cognizant o f the bases o f a good loan. A loan to a c o m pan y w ith little le v e ra g e m ay offer A co m p lete line of new rep lace m ent durable lexan and a l um inum e n d opening and side-opening carriers. O ver 50 different m odels. Send for a free copy of our C arrier S election G u id e today! the other hand, one is ill advised to rely on inflation, a turnaround in o p er n e it h e r a sset p r o te c tio n n or d e b t service coverage. Sim ilarly, in a highly Loan Folders. ating p erform an ce or m a n a g e m e n t’s increased in centive to provide for u n in t e r r u p t e d sa le s g r o w th a n d e n hanced operating m argins. I f historical le v e ra g e d scen a rio , it’s p o ssib le to m a k e c o n s e r v a tiv e a s s u m p tio n s in financial projections that will provide that degree o f com fort w e seek. Since results in term s o f unit sales and m ar gins do not allow for an adequate d e e a c h p o t e n t ia l L B O is u n iq u e , it should b e v iew ed with a d egree o f flex g re e o f d e b t -s e r v ic e c o v e r a g e , th e prospect o f eq u ity participation p ro b ably should not b e an in d u cem en t to ibility w h ile, at the sam e tim e , ap plying those basic com m ercial-len d in g standards that have stood the tests o f tim e. • • lend. T h e com fort le ve l as to d e b tservice coverage will vary in accord ance with asset coverage u n der a con servative liquidation analysis. D e -C o n g lo m e r a t iz a t i o n . M u c h as the 1960s ev id en ce d form ation o f c o n glom erates, w e n ow are observin g the decon glom eratization process, w h e re b y the en trep ren eu r w ho had difficulty operating happily w ithin the corporate fold o f the con glom erate n ow can b e his ow n boss and reap substantially greater rewards from his labors. W h ile on e could argue that the n ew ly in d e p e n d en t com panies are h ighly le v e r aged, one b en efit is reduction o f le v e r age and im p ro v em en t o f liquidity o f th e form er parent com p an y, p e rm it ting in vestm en ts in plant and tec h n o l ogy that m ay have b e e n ign ored over the past few decades. K e y to S u c c e s s fu l L B O s . T h e r e w ou ld appear to have b e e n so m e ex cesses respectin g L B O s in the recent past — certain com p an ies w ere p u r chased at exorbitant prices, and sev er al transactions w ere structured poorly and p rovided inadequate c o m p en sa tion to len ders involved. H o w e v e r , w e n ow have retu rn ed to a scenario that has existed for m uch o f the past d e c ade. A few , highly skilled financiers are e n g a g e d in re -a llo c a tio n o f r e sources in the spirit o f our system o f free enterprise. Choose Software (C o n tin u ed f r o m page 2 4 ) choose to en gage a consultant w ho has gon e through the process before in order to take advantage o f his expertise and experience and to redu ce the tim e required. H o w e v e r , you should insist on extensive in vo lv em en t from m e m b e r s o f y o u r s o ft w a r e -e v a lu a t i o n group, and the final recom m en d ation o f th e “ r ig h t ” so ftw a re sh o u ld b e theirs, not the consultant’s. That soft ware will b e around a lon g tim e after the consultant is gone. • • • N . W . “Red” Pope has b e e n n am ed senior vice presid en t/m ark etin g d irec t o r , V a lle y N a t io n a l o f A r i z o n a , P h o en ix. M r . P o p e , 1 9 7 9 -8 0 p r e si d e n t, B ank M a r k e tin g A sso c ia tio n , w en t to V alley N ational M arch 1 from Sun Banks o f Florida, In c ., O rlan do, w h ere h e was senior vice presid en t, m arketing. T h e s e speciallydesigned versatile classification folders help you keep orderly docum entation for loan process ing and m any other applications. ATM Cassette Carrying Cases. U n iq u e A TM deposit, card, currency and divert cassette carry ing cases for S eries 911 A T M s. Easy to handle, lightw eight and safeguards against costly cassette d a m ag e . Check File Guides. A co m plete selection of r " 1— i exceptional values in i __ ch eck file guides. S elect from a w ide assortm ent of top and end opening vinyl styles and durable P olycleer styles designed to ac co m m od ate all file system s. Cleaning Solvents & Chemicals. • Jeffrey S. Owen has b e e n n am ed executive director o f the A B A s ban k ing organizations group. W it h the A B A since 19 72, M r. O w e n form erly was director o f the state association divi sion. MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 51 Boatmen's Acquisition of CharterCorp Makes It Missouri's Largest Bank H C Expanded Corporate Staff, Enlarged Board Announced C Q U I S T I O N o f C h a rterC o rp , i K an sas C ity , b y B o a t m e n ’ s Bancshares, St. L ou is, has resu lted in B oatm en ’s b eco m in g the largest bank H C in M issouri. T h e acquisition b e cam e effective on January 28. A B oa tm en ’s n ow includes 4 5 subsidi ary banks operating in 100 locations in the state w ith total assets o f approx im ately $ 6 .3 billion. W h e n announcing con su m m ation o f the m erger, D on a ld N . B randin, chairm a n /C E O o f B oa tm e n ’s, said integra tion o f C h arterC orp into B o a tm e n ’s w o u ld c o m m e n c e im m e d ia te ly and w o u ld b e c o m p le te d b y the en d o f 1985. “ In addition to offering the potential for substantial eco n om ies o f scale and efficiencies in operations, this m erger creates a large, financially strong bank ing organ ization w e ll p o sitio n ed to take advantage o f the grow ing o p p o r tunities in its m arketplace, as w ell as those that are d e ve lop in g as a result o f the rapid changes taking place in bank ing law and regulation on both federal and state le v e ls .” (See page 5 6 for an interview w ith M r. B randin.) m a n /p r e s i d e n t /C E O , E m p lo y e r s Reinsurance C o r p .; W illia m A . H all, presid en t, H all F am ily F ou nd ation s; T w o days after a n n o u n cem en t o f the c o n s u m m a t io n o f th e a c q u is itio n , B o a t m e n ’ s r e le a s e d n a m e s o f th e m em b ers o f its restructured board and G e o rg e E . Pow ell Jr., chairm an, Y e l lo w F r e ig h t S y ste m s, I n c .; R o b e rt Sunderland, chairm an, A sh G ro v e C e m en t C o .; and D w ig h t D . Sutherland, corporate staff. B o a tm e n ’s restru ctu red 2 0 -p e r so n board includes G ord o n E . W e lls , for m er chairm an o f C h a r te r C o r p , and partner, Sutherland L u m b e r C o . C on tin u in g board m e m b e r s include R on ald L . A y lw a r d , ex e c u tiv e v ice five additional directors from Kansas C ity, all o f w h o m form erly served on C h arterC orp ’s execu tive com m ittee . O n announcing the election o f these directors, M r. Brandin stated: “ A su b stantial portion o f our assets is in the Kansas C ity area; in fact, B oa tm e n ’s now is the largest banking organization in Kansas C ity. F or that reason, w e w a n ted strong rep rese n ta tio n th ere and w ere pleased that individuals o f their stature agreed to serve on our corporate b o a rd .” T h e five directors, in addition to M r. W e lls , include M ich ael G . Fitt, chair p r e s id e n t , In te r c o , I n c .; L o u is C . B ailey, execu tive vice p re sid e n t/c h ie f financial officer, S o u th w estern B ell C o r p .; E llis L . B r o w n , c h a ir m a n / C E O , Petrolite C o r p .; M r. Brandin; G e o rg e H . C ap ps, p resid en t, C ap itol C oal & C ok e C o . ; A n d re w B. C raig III, presid en t, B o a tm e n ’s B ancshares; Ilus W . D a v is, m an a gin g p a rtn er, D i e t r ic h , D a v i s , D i c u s , R o w la n d s , Schm itt & G orm an ; Julian I. E d iso n , c h a irm a n , E d iso n B roth ers S to re s, I n c .; L o u is F e r n a n d e z , c h a ir m a n , M o n san to C o .; James R. James Jr., chairm an, B o a tm e n ’s Bank o f St. Louis C ou n ty; H en ry A . Lay, execu tive vice Organizational Chart for Boatmen's Bancshares 52 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for March, 1985 Top Management at Boatmen's Bancshares p r e s id e n t, M a y D e p a r tm e n t Stores C o . ; L e e M . L ib e r m a n , c h a irm a n / presid en t, L acled e Gas C o .; T h om as P. R eid y, presid en t, R eid y In tern a tional, In c .; and E th an A . H . S h ep ley Jr., vice chairm an, B o a tm e n ’s B ancshares. M r. W e lls was n am ed vice chairm an o f the corporate staff, and five C h arterC o r p officers and tw o officers from B o a tm e n ’s N ational, St. L o u is, w ere a dded to the corporate staff. F ou r o f the additions from C h arter- WELLS Vice Chairman C orp are m ov in g to St. L ou is: W illia m J. H u h m a n n , executive vice p resid en t/ BRANDIN Chairman/CEO CRAIG President SHEPLEY Vice Chairman officer, M arion Laboratories; W illia m adm inistration ; Earl R. F e ll, senior vice p resid en t/p erson n e l; L elan d M . W a lk e r , sen io r v ice p r e sid e n t/b a n k R e in su r a n c e C o r p .; W . D . G ra n t, chairm an, B usiness M e n ’s Assurance C o . o f A m erica; M ich ael E . H erm an , A . H a l l, p r e s i d e n t , H a ll F a m ily F o u n d a t io n s ; C h a r le s H . H u n te r , lia iso n ; and T o d d S u th e rla n d , p resid en t/in v estm en ts. sen ior v ice p r e s id e n t/c h ie f financial partner/executive vice p resid en t, K e s- v ice T h e fifth addition from C h arterC orp is N orville R. G ish , senior vice presiden t/advertisin g and pu blic relations, w ho rem ains in Kansas C ity. T h e two transfers from B o a tm e n ’s National, St. L ou is, are M arvin W . S m ith , sen ior v ice p r e sid e n t/o p e ra tions, and M ich ael H . T . L y n ch , vice p resid en t/p roperty m an agem en t. T h e s e i n d iv id u a ls jo i n th e fiv e senior m em b ers o f the p resen t staff w ho p layed m ajor roles in bringing B o a t m e n ’ s to its p r e s e n t p o sitio n : R o b e r t J. B e n n e t t , e x e c u tiv e v ic e president; John M . B rennan, ex ecu tiv e v ice p r e sid e n t/lo a n adm inistra tion; James W . K ien k er, senior vice p r e s i d e n t /c o n t r o l l e r ; P h ilip N. M cC a rty, senior vice p resid en t/se cre tary/treasurer; and Larry D . Bayliss, senior vice presid en t/advertisin g and public relations. T h e n ew ly n am ed B o a tm e n ’s First N a tio n a l B an k o f K a n sas C ity has a n n o u n c e d th e n a m e s o f its 2 5 m e m b e r board and 1 7 -m e m b e r advis ory board. T h e n ew board includes representation from the form er boards o f First N ation alC h arter, B o a tm e n ’s Bank and C h arterB an k W a r d Park way, all in Kansas C ity. T h e m erger will b e c o m e final w h en regulatory au thorities give their approvals. T h e ban k’s n ew board consists o f Charles W . B attey, presid en t, U n ited T e l e c o m m u n i c a t i o n s , I n c . ; R o ss B e a c h , p r e s id e n t , K an sas N ation a l G as, In c .; E d w ard L . B en son , p resi d e n t, B en so n In v e s tm e n ts ; M r. Brandin; B ernard H . B row n , p resi den t, Sam B row n C o .; Ilus W . D avis, m an agin g p artn er, D ie tr ic h , D av is, D icu s, Row lands, Schm itt & G orm an ; A r c h ie R. D y k e s , p r e s i d e n t /C E O , Security B en efit G ro u p o f C o m p a n ies; R obert E . E srey , presid en t, R obert E . E srey & C o .; M ich ael G . Fitt, chairm a n /p r e s i d e n t /C E O , E m p lo y e r s MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Howto get maximuminvestment portfolio performance with minimum management expense. Sure, you’d like to make your investment portfolio work harder, but you just don’t have the time. And creating more overhead is out of the question. Here’s how a growing list of banks like yours are getting maximum performance with minimum time and expense: Financial Institutions Investment Services. Financial Services is a registered investment advisory firm specializing in total investment services for community banks. Our strong team of professionals combined with our unique state-of-the-art communica tions system can satisfy all of your invest ment needs. So, you continue to make all the decisions, we do all the work, and your investment portfolio becomes as efficient as those of the larger institutions in your market. Without their overhead. For more information, write or call for our brochure. FINANCIAL INSTITUTIONS INVESTMENT SERVICES 6750 Antioch Road, Suite 200, Merriam, Kansas 66204 National: 1-800-243-4555 Kansas: 1-800-232-0207 5 sin ger/H u n ter & C o ., Inc. Charles W . K eller, execu tive part ner, Black & V eatch C on su ltin g E n R. E . M o rgen th aler, presid en t, In ter b o a rd ch airm an , state Insurance A g en c y , In c .; G eo rg e E . P o w e ll J r ., c h a ir m a n , Y e l lo w C o u r t n e y S. T u r n e r , in v e s tm e n t s ; W a lto n W . S teele, form er vice chair gineers; John T . Lockton III, presi F reigh t System s, In c .; G e o rg e A . R u s sell, chancellor, U n iversity o f M issouri dent, Lockton Insurance A g en c y ; John T . L u n degard , c h a ir m a n /C E O , W e s t ern A u t o S u p p ly C o . ; D o n a ld E . M c C a n d le ss, p resid en t, D o d so n In su ran ce G r o u p ; C . T e d M c C a r te r , p r e s id e n t/C E O , B oa tm e n ’s First N a tional; Clark O . M u rray, p resid en t/ c h a irm a n , In la n d In d u s tr ie s , I n c .; Landon H . R ow land, p resid en t, K an sas C ity S o u th e rn In d u strie s, I n c .; R o b e rt S u n d e rla n d , ch airm an , A sh G ro v e C e m e n t C o .; D w ig h t D . Sutherland, partner, Sutherland L u m b er C o .; Lou is L . W a r d , chairm an/ p r e s id e n t, R u ssell S to v er C a n d ie s, In c .; M r. W e lls ; and R obert M . W o lff, presid en t, W in n in g W a y s , Inc. A d v iso ry b oard m e m b e r s in clu d e T a y lo r S. A b e r n a t h y , in v e s tm e n ts ; G a r y M . A d a m s o n , p r e s id e n t , A ir M id w est, In c .; Francis W . B artlett, in v estm e n ts; Ed w ard L. B ittner, retired vice chairm an, First N ational C h arterBank, Kansas C ity; L yn n V . B ow m an , presid en t, L. V . B ow m an M echan ical C ontractors; H ow ard L . B ren n em an , p r e s i d e n t /C E O , H e s s t o n C o r p . ; R obert F. Jackson Jr., form er p resi den t, C h arterC orp ; Forrest T. Jones, p resid en t, F orrest T . Jones & C o .; G c om p leted form s is especially appreci ated b y bank person n el. Prior to the keted b y F rem o n t Software, a division o f First N ational, F rem o n t, Ind. T h e n ew system replaced one d e v elo p ed in -h o u se, says J. W . H e ie r m a n , c h a ir m a n /c a sh ie r at th e $ 3 7 m illion-asset P eop les State. T h e initial error was found, it was necessary to contact the cu stom er and ask him to com e back in to re-sign th e revised forms. R E A T E R A C C U R A C Y and p ro ductivity have b e e n ach ieved in com p uter system , errors w o u ld creep th e le n d in g d e p a rtm e n t at P eop les into the form s and so m etim es w o u ld n ’t State, L ee sb u rg , In d ., since the bank installed an im p rov ed com p u ter sys b e noticed until after the form s had b een signed and processed . W h e n an tem that operates w ith software m ar sy ste m was n e e d e d after T r u th -in L en d in g regulations requ ired banks to disclose loan inform ation in a set pat tern that len t itself to a com p u terized operation. “ It was du rin g th e sam e tim e in w hich I had taken an avid in terest in CALL THESE SPECIALISTS Harold E. Ball • Carl W. Buttenschon John E. King • Milton G. Scarbrough w ith waiting custom ers. T h e bank’s presen t IB M System 3 6 1 800 527-5511 in clu d e s an in divid u al c a th o d e-ra y tu be (C R T) at each officer’s desk. O ffic ers key inform ation into the com p u ter w hile they are discussing loan requests with custom ers. W h e n a conclusion is reached concerning the am ou n t a cu s tom er can afford in dollar paym en ts, the officer sim ply pushes a bu tton on the term inal and the unit prints the form s. T h is p r o c e d u r e , M r . H e ie r m a n says, saves six m inutes per loan do cu m entation. In addition, each loan form is legib le, w ith all blanks properly fil led out according to T I L regulations. A ccu racy of th e co m p u ter- BANK CREDIT INSURANCE - - Mike Latimer Missouri General Agent 1-417-881-1192 INDUSTRIAL LIFEINSURANCECOM PANY /;/ P.0. Box 660274, Dallas, Texas 75266-0274 m , fflT S U Republic Financial Services. Inc , ..„. /TO O A member company of https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis m an, B o a tm e n ’s Bank, Kansas C ity ; V in cen t P. D a s t a j r ., p resid en t, D asta C o n s tr u c tio n C o . ; and W illia m P. K lin e, m anaging director, M arsh & M c L e n n a n , Inc. • • Bank's Loan Documentation Improved With Help of Software Program personal c o m p u te r s,’’ M r. H eierm an says. “ I decid ed to program a c o m p u ter to ask questions in referen ce to the loan form that was necessary and, on com p letion , allow the personal c o m puter to print out the docu m en tation . ” T h e sy ste m , a lth o u gh a vast im p ro vem en t over the previous hand o p eration, had its disadvantages, notably that bank officers had to leave their desks and walk to the centrally located com p u ter, w hich m ean t th ey often had to leave the cu sto m er. In addition, only one individual could use the c o m puter at a tim e, and there w ere tim es w h en a con siderab le w aiting period was necessary before access could b e gained. Th is, o f course, d id n ’t sit w ell For faster service on 54 at Kansas C ity ; G e o rg e R eu lan d, m an agem en t consultant; Byron T . Shutz, r e a lt o r /m o r t g a g e b a n k e r /h o n o r a r y B yro n S h u tz C o .; A n o th er advantage: Since inform a tion about each loan is stored in a loandocum entation file, sum m aries o f all loans in the system can b e prin ted out at any tim e. M r. H eierm an d e v e lo p ed the sys tem for a personal com p u ter w ith the assistance o f a hired program m er. H e th en took th e program to F re m o n t Software so it could b e adapted to an IB M System 34 com p u ter and, later, to the bank’s p resen t System 3 6 unit. H e could see that oth er banks could m ake good use o f the sy stem , so he asked F rem on t if it w ou ld add the soft ware to its line o f products. T h e p e o p le at F rem on t liked the program so m uch th ey w ere h ap p y to c o m p ly . T h u s, Peoples Bank n ow is using software supplied and u pd ated b y F rem o n t that was d e v e lo p ed b y M r. H eierm an ! “ W e at P eop les State are excited w ith this n ew approach to handling lo an s,’’ M r. H eierm an says. T h e bank has a loan v o lu m e o f $2 5 m illion. — Jim Fabian, senior editor. • Richard Wolf has b e e n n am e d p resi den t, E x te n d ed C are Plan, In c ., a n e w division o f IA C G ro u p , Kansas C ity , credit insurance and b an k -fin an cialserv ices firm . E x te n d e d C a re Plan m arkets a line o f ex ten d e d auto service contracts through len d in g institutions. M r. W o lf had b e e n w ith I A C ’s insur ance division since 19 73. • Ronald D. Roberts has b e e n elected p resid en t/ch ief operating officer o f the In s u r e d A c c o u n ts C o . o f th e I A C G ro u p , Kansas C ity. In su red A ccounts C o . is a w h olly o w n ed property/casual ty a gen cy sp e c ia lizin g in risk -m a n a gem en t products for the banking in dustry. M r. R oberts is a form er p ro d uct en gin eer for IA C . 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I FINANCIAL CORPORATION A ffiliated Financial Institutions NAT L 1-800-321-3010 OHIO 1-800-362-0434 Hanna Building, Cleveland, OH 44115 55 Boatm en's C E O Talks A bout A cquisition O f C h arterC o rp . . . as well as regionalI interstate banking, nonbanks, future of midwestern banking I X M O N T H S A G O , B o a tm e n ’s Bancshares, In c ., St. L o u is-b ased S W e w en t through a year or so w ithout acquiring any bank and tried to acquire b a n k H C , an d K a n sa s C i t y -b a s e donly larger ones. T h e first was M e tro C h a r t e r C o r p a n n o u n c e d an a g r e e Bankholding C o r p ., St. L ou is, w hich m en t in principle to m erge the latter was ju st u nder $ 5 0 0 m illion, and then, H C into B oa tm e n ’s. B y January 28 , su b seq u en tly, C h arterC orp. this m erger had b e e n con su m m ated , C h arterC orp is one I identified a m ak in g B o a t m e n ’ s B a n c sh a re s th e largest com m ercial-ban k in g operation in M issouri, w ith total assets o f approx im ately $ 6 .5 billion. H o w did B oa tm e n ’s acquisition o f C harterC orp co m e about? W h a t lies ahead for B oa tm e n ’s? W h a t ’s the next step for this H C , w h ose lead bank, B o a tm e n ’s N ation a l, St. L o u is, not only is the oldest bank in M issou ri, but the oldest w est o f the M ississippi R iv er? T o get answers to th ese questions as w ell as a p ersp ective on the future o f b a n k in g , M i d - C o n t i n e n t B a n k e r editors interview ed D on a ld N . Brandin, B oa tm en ’s B ancshares’ chairm an/ C E O . T h e questions and M r. Brandin’s answers follow . Q # M r. B randin, please tell us n u m b er o f years ago as b ein g an orga nization that w ou ld fit w ell w ith B oat m e n ’s, both from a philosophical point o f view and from a position point o f view . This has b e e n true ev en with C h arterC orp ’s su b seq u en t acquisition in St. Louis o f the L ich ten stein banks — C ity Bank and A m erican National. A Q 56 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W e started the preplanning •• process im m e d ia te ly on the date w e signed the a greem e n t — in July, 19 84 — and w ith the cooperation o f C h arterC orp p e o p le , w e started im p le m e n tin g so m e o f the integration A "C harterC orp is an organization I identified a number of years ago as being one that would fit well with Boat men's, both from a philosophical point of view and from a position point of view ." •• h ow B oa tm e n ’s B ancshares’ A n d that’s pro ved to b e the case. If a c q u is itio n o f C h a r t e r C o r p c a m e you look at the 100 locations w e have about? c o m b in e d , th ere are only four that overlap. It is a good fit. I f you are talk Rationalization for an acquisiing about possible fits, it was the fit. •• tion such as C h arterC orp goes G o r d o n W e lls (C h a r te r C o r p ch air back a couple o f years. T h ere is a great man) knew o f m y lo n ge r-term interest deal o f expen se and difficulty in volved — going back w ell over a cou ple o f in bu ildin g a big h oldin g com p an y b y years — and then I started direct dis b u y in g sm all banks, w h ich was the cussions w ith him m ore than a year go. process all o f us w ere using — w ith the prospect that interstate banking was # B o a t m e n ’ s a c q u is it io n o f g oin g to d e v e lo p fairly rap id ly. A t •• C h arterC orp was co m p leted least, that was m y opinion. (legally) January 2 8 , m aking it M is I felt w e had to do som eth in g m ore significant and use our m anagerial re sources m ore efficiently to grow in a faster and b ette r way. So, w e stop ped the concept o f acquiring sm all banks. things still going on that are necessary to create an efficient organization? souri’s largest H C , w ith assets o f $ 6 .5 billion and w ith 4 5 affiliates and 100 locations throughout the state. A n y ac quisition o f this size requires tim e to “ shake dow n. ’’ W h a t are so m e o f the steps prior to the m erge r date. W e received approval from C h a rterC o rp ’s stockholders D e c e m b e r 18, and, on the sam e day, w e receiv ed F e d ap proval. T h ose w ere the last tw o m ajor decisions w e n ee d ed . W e had som e indications the Justice D ep a rtm en t was not con cern ed about th e acquisition; so, w e started taking so m e definite actions. A s a result, im m ed iately on the acquisition date, w e changed the nam es o f the C h arterC orp banks. W e changed all form s, signs — had tem porary signs up — and w e started at once to put in place plans to integrate operations. B y M arch 15, w e will have integrated all m ajor system s. I ’m talking about all m ajor depository s y s te m s , w h ic h p r o b a b ly c o m p r is e about 9 0 % o f the H C s activity. W h a t w e did was take all the b est o f th e C h a r te r C o r p sy ste m s and p r o grams and B o a tm e n ’s system s and p ro gram s, chose the b est o f th em and im - MID-CONTINENT BANKER for March, 1985 plem ented them throughout the whole organization so that every bank in the Boatmen’s organization will be on identical systems and programs, probably by April 15. Q. What are the logistics of the • • acquisition of CharterCorp? Will your affiliates in the Kansas City area and nearby be administered by a staff there? The entire corporation is administered from St. Louis. We expanded our holding-company staff for the addition of five Charter Corp officers — four of whom already have moved to St. Louis. One is staying in Kansas City. Thus, the whole HC staff is in St. Louis. Banks in Kansas City, for instance, will function inside the holding company just like any other bank. Kansas City will have a branch-comptroller function and a branch-auditing function. The rest of the CharterCorp staff has been dis banded. A •• $400 million and deposits of $5 billion, do you have plans to broaden your market base? We will, of course, be the largest commercial-banking organization in Missouri. We ll have the largest trust operation and the largest correspondent-bank operation here. Thus, we re starting with a strong market base, which we intend to exploit. We have no present intentions to open loan-production offices outside the state. Our corporate-calling pro gram will continue to be aggressive. It requires a little better coordination, but as we merge banks, I think we will just continue the same philosophy as to our calling program that we have now. A •• # What are the efficiencies you Q • • now visualize as a result of the consolidation? For example: loan authority, investment decisions, data processing? We expect economies of scale to come into play. This is where the biggest benefits are from a financial point of view — consolidat ing, for example, operations divisions of our Boatmen’s Bank in Kansas City and First NationalCharter Bank in Kansas City. Both ran substantial op erations centers, although First NationalCharter’s was larger than Boatmen’s of Kansas City. Now, we will operate one center, eliminate all duplication in equipment and duplica tion in systems. Economies of scale, from the standpoint of personnel and equipment utilization, will be signifi cant. We also will pick up efficiencies in processing. Unit costs, for example, can be held lower in a higher-volume operation. As far as other efficiencies, invest ment decisions — short- and long term — at Boatmen’s are centralized in the HC in St. Louis. All data proc essing will be done through one of four operations centers. All of those centers will be on identical systems and pro grams, and they will be coordinated out of St. Louis. A senior vice presi dent will be in charge of operations. His role is to coordinate activities of those four centers and to establish priorities on system design, both cur rently and in the future. A •• Q As of year-end 1984, we became the 15th-largest correspondent-banking organization in the U. S., with over 1,500 correspondent accounts. At Boatmen’s, we had somewhere be tween 800 and 1,000 — close to 1,000 — and CharterCorp has added the rest. There may be some duplication, but the best we can tell is that we have over 1,500 correspondent accounts. Now, as far as expansion of normal trade areas, I don’t see any real change. Boatmen’s Bank in Kansas City and Boatm en’ s National in Springfield both have correspondentbank operations, which are com plementary and will be consolidated when the two are merged. The com bined departments in St. Louis, Kan sas City and Springfield are going to fit well and I think will be a more efficient # With your HC’s combined unit. It will be bigger. It will have • • capitalization of more than more horsepower. MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the standpoint of terQ #•• From minology, what do you want to call the Boatmen’s/CharterCorp merger — that is, as far as “ sensitivi ties” in Kansas City are concerned? I don’t see any “ sensitivities.” Since we paid somewhere be tween 1.4 and 1.5 times book, it’s an acquisition. What we have done is merged CharterCorp into Boatmen’s Bancshares. It is not a merger of equals. It’s an acquisition that was accom plished through a statutory merger. A •• Q # Can you see some benefits to • • your downstream correspon dent banks as a result of the acquisi tion? I think that with the size of our HC, we will have the capability to develop good programs for our independent banks that will help them stay independent if they choose to do so. I believe that’s where correspondent banking is going. By in dependent banks, I am talking about small HCs or affiliated groups. I think we ll have the size to develop, on a continuing basis, programs that will be helpful to these banks; whereas, if a bank or HC is not big, it’s not eco nomical to develop these programs. For instance, take things such as fed-fund sales. We can get much bet ter prices in the market for those funds because we sell blocks of up to $100 million at a time, and we probably are selling $600 million or $700 million a day. Therefore, we can go to big buyers and get the best price for a $100-million block. A •• know, Missouri HB Q #•• As311youwould allow bank HCs in states contiguous to Missouri to ac quire or merge with Missouri banks, provided those states have reciprocal agreements that would allow Missouri banks the same privilege. Do you sup port that concept?* im very much in favor of in• • terstate banking, but not necessarily in favor of HB 311 as it now stands. That bill has branch banking in metropolitan areas, and I think that makes a lot of sense. It has interstate banking, and it has interstate powers. However, I think it has too many things in it, and I hope it will be sepa- A * Shortly after Mr. Brandin was inter viewed, Missouri HB 311 was replaced with a substitute bill that doesn’t contain interstate banking provisions such as con tiguous agreements. However, the issue is expected to be raised again in the legisla ture. — E d itor. 57 rated into components that can be addressed more readily than the way the bill now stands. Another feature HB 311 does not provide is a national “trigger” (a trigger means an eventual “ green light” to interstate banking). From a practical point of view, I be lieve there has to be a national “trig ger.” . ^ we do get contiguous• • state-acquisition legislation Q throughout every state in the nation, this would be a step toward interstate banking, wouldn’t it? Yes, except, as I understand it, most of the bills would pre vent leapfrogging. In other words, banks in Missouri couldn’t use Kansas as a means of going into, say, New Mexico. Most of the bills do not pro vide that. There are other proposals, such as one advanced by the Association of Re serve City Bankers. The ARCB is talk ing about dividing up the U. S. accord ing to Fed districts. Such a proposal would add three states to the eight states contiguous to M issouri — Wyoming, Colorado and New Mexico, all in the 10th Federal Reserve Dis trict, which also serves part of Mis A •• Let’s talk . . . I think it’s impractical. I have made a number o f public statements to the effect that I see, in the next 10 years, emergence of a num ber of large regional HCs with $30 bil lion to $50 billion in resources. I think Boatmen’s could be one of those be cause we have the capital; we have the size; we have the staff. CharterCorp will be integrated completely by the end of the year. We re going to be ready to go somewhere, and there’s no more room in Missouri. I think inter state banking is next. As a matter of fact, I’ve also made the statement that if we get some more changes, we can see Boatmen’s as a $20-billion organization in five years. People say that’s ambitious, but if the state laws move, we ll see a big scram ble for consolidations as bank organiza tions try to align themselves with simi lar organizations — ones they feel compatible with; ones they feel would be a good fit — rather than waiting # A provision in HB 311 would around and wondering whether some • • make an out-of-state HC di body is going to acquire them and vest itself of Missouri bank affiliates if it whether it would be a good philo acquired another HC. Do you agree sophic fit. such a provision would be proper to I believe that’s one reason Charter prevent an over-concentration of eco Corp was interested in coming in with nomic resources in one or more HCs? us. CharterCorp originally was think ing the other way: Whom did it want to get in bed with? I’m flattered to think that was one of the motivating factors in that HC s being willing to come in with us because it recognized the move as a good fit, a good, compatible fit. souri. I know there’s a legal cloud now on regional compacts, but I have no objection to such compacts or to con tiguous-state-reciprocity bills. I just feel the industry has to be realistic about having a national trigger, be cause we can’t afford to be confined even to contiguous geographic re straints in the long run. It’s just a mat ter of how long it will be before we get a national trigger. The ABA has come out with a general policy statement suggesting a five-year national trigger. Now, that could be a basis for com promise in the Missouri bill. Any kind o f regional com pact, whether it be a contiguous state with reciprocity or something else, would be a good interim step for banks in those areas. However, in the long run, I believe — in speaking for Boatmen’s — we don’t want to be confined to contiguous states. A •• Q Q # HCs in other states reported• • ly have been buying stock in terests in banks in states other than their own, sometimes close to the 5% maximum allowed by law, perhaps to position themselves for the day when some type of regional banking is allowed. Will Boatmen’s do this, or have you already done this? No, I haven’t and really don’t contemplate doing it. I don’t see the advantage of that 5% own ership. As you recall, two or three banking organizations did that some years ago, expecting that would give them some sort of an entree into the HCs in which they purchased interest. I don’t think 5% does that. I think we could get that cooperation or future interest in another HC without buying 5% of its stock. I don’t know what good the 5% interest does. It isn’t going to block anybody else from coming in, and, if it’s an unfriendly purchase of 5%, I think it’s a waste of time. A •• . . . if your bank’s earning aren’t what they should be, we believe we can help . . . so, let’s talk! ________JPW SWORDS ASSOCIATES. INC. PROFESSIONAL BA NK IN G CONSULTANTS 4900 OAK 58 SUITE 301 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis KANSAS CITY, MISSOURI 64112 (816)753-7440 # On a personal note, what Q • • about your retirement? You probably have some plans you want to MID-CONTINENT BANKER for March, 1 9 8 5 put in operation before you retire. I would announce any retirement plans if I had any now. At Boatmen’s, the general practice is to retire at 65, although there’s no legal requirement to do so. As you know, we have brought in a new HC president, Andrew B. Craig, III, who is the No. 2 man in the HC, and we have expanded our staff considerably; we have people in place, and we have succession in place. I think that when that turnover comes it will depend on our situation at the time. If we re in the middle of something big, I probably would not leave immediately. On the other hand, if everything is working normally, I assume I’ll retire at 65. A •• surance, real estate, etc., assuming enabling legislation is passed? Are these viable areas for banks in general and for Boatmen’s in particular? Our primary interest right now is in geographic expan sion — we want interstate banking. Our interest in product enhancement is somewhat more limited. We certain ly want to maintain a competitive posi tion, say, if an opportunity comes to retail insurance through our affiliates, and we ll be alert to that. But I think our primary thrust is interstate expan sion as opposed to the big moneycenter banks that want product expan sion. We want territory. A •• there was a binge in California. Maybe the next binge is going to be in the Midwest because it’s a terrific place to live. It’s a place where some major new HCs have materialized in an area not known for its economic development, but, nonetheless, has afforded Boat men’s, for instance, an opportunity to grow at 15% a year for 10 to 12 years. Not bad! • • Future ATM/POS Trends Predicted by Manufacturer Annual sales growth of ATMs for the U. S. market will continue to grow and will peak in 1986, followed by a level ling off of growth for the following two # W ould you agree that re- years, says Robert T. Jansen, presi . Do you see Boatmen’s as an • • search and development of dent, Omron Financial Systems, Las • • “ exporter” or franchiser of new products/services are a must for Colinas, Tex. products/services in the same manner banks and that Boatmen’s size now Bankers can expect to see many im in which First Interstate of California gives it more than enough resources to provements concerning the reduction has franchised banks? develop and offer new products/ser of downtime, he says. Maintenance visits will be reduced from the present 10-12 visits annually to from six to eight for the next two years and will drop as low as four per year after that. New popular locations for ATMs in clude train/subway stations and con "I would announce any retirement plans, if I had any venience stores. Train stations are fa now. . . . We have brought in a new HC president, vored due to heavy, daily repeat traf Andrew B. Craig, III, who is the No. 2 man in the HC, and fic. Mr. Jansen says “ new-generation” we have expanded our staff considerably; we have peo ATMs will be capable of dispensing ple in place, and we have succession in place." statements, tickets and coupons and information such as weather reports and stock-market quotations. He adds that ATM networks will affect the market in coming years by enabling a more viable approach to be vices both to its affiliates and, in some taken to POS, resulting in a more costI don’t know that I see our • • name on other banks as a cases, to downstream respondents? effective payments system. franchise, but I do see an array of ser POS will not replace ATMs, he says, That’s true. I think size gives vice programs, much of which we do but ATMs will enhance POS. That’s • • us the resources. W e ’ve for a number of correspondents now. added substantially to our staff in a because, even though both are cardUnder such programs, we make avail number of key areas so that we will based delivery systems, they serve able our HC’s service programs — have the managerial resources to do different purposes. even brochures and legal documents, One of the most important consid that type of product development. everything like that — to small banks erations when purchasing ATMs is the Thus, I think the combination of our to enable them to compete effectively size and our commitment in the form life-cycle cost when thinking through a as individual banks. Some of those five- to seven-year pro forma, Mr. Jan of staff people should enable us to be banks now are tied into our ATM net competitive on that basis. sen says. Operating costs are much work, and, of course, we re part of higher than initial cost of the equip . Would you like to finish this ment. CIRRUS. We have them tied into a • • interview by giving your discount-brokerage program. A lot of thoughts on the future of banking? them are using our data-processing • Vince Conte has been appointed programs. Larry Bayliss, Boatmen’s I think nonbanks should be branch manager/Atlanta for Brandt, Bancshares’ senior vice president in • • stopped. We should get back Inc., Watertown, Wis. He handles charge of advertising/public relations, to the level-playing field. I don’t think sales management in the Atlanta area. even helps these banks arrange pro one type of financial institution should motional programs. Thus, I see a deliv be permitted to do something another ery system that gives them all the ser financial institution can’t do. I’m opti • Sherwin R. Koopmans has joined vices they would get through a fran mistic about the future of banking and Lyons, Zomback & Ostrowski, Inc., chise agreement, but without our particularly about regional banking in New York City, as a principal/manager name on their doors. the middle of the country. W e’ve had a of its newly established Chicago office. Q Q A A Q A binge in the Southwest and now a you position Boatmen’s Q .•• Will Bancshares to engage in in binge in the Southeast. Before that, MID-CONTINENT BANKER for March, 19 8 5 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis He formerly was assistant regional director, FDIC, in Chicago. 59 Increasing Use of Micro-Computers Could Boost Assets/Employee Ratios HE increasing use o f m icro • Lending officers can visit a cus computers in banking may even tomer’s office, draw information from tually cause the ratio of bank assets perthe customer’s own computer system, employee to double or triple from its analyze data and propose a financial current level of about $1 million, says package in one visit. • With advances in the mouse, a CPA firm Arthur Young & Co. The firm’s national-banking group hand-held device used in place of a conducted a study of micro-computers keyboard to enter data, and in in-touch in banking for the Bank Administration interfaces, customers can inquire Institute titled “ Applied Micro In about services from micros in a bank without spending time with platform tegration for Financial Institutions.” “As micros shrink in size and be officers. Touch technology enables us come more powerful and less expen ers to call up items from a series of menus by touching the appropriate sive, their availability to executive management and employees to in section of a micro screen. crease productivity will become even • As software for relationship bank more widespread,” the report states. ing becomes more widespread, the It added that a direct result can be account officer can analyze a custom an increase in the ratio of bank assets er’s position, review lending options per employee, which is one measure of and make a decision within minutes rather than hours. bank efficiency. • Voice technology — storing the Initially, major changes in technolo gy will have an effect on how financial human voice in computer memories in institutions deal with customers at the digitized form — can replace the direct contact point, the report said. telephone call, enabling a bank Four results of having information account officer and a customer to com available at bankers’ fingertips were municate even though neither may be listed by the report: available to the other at the moment. T The survey was based in large part on case studies of five unidentified banks scattered throughout the U. S. Self-Service Accounts Self-Service Checking was intro d u ced recen tly by W ilm ington (Del.) Trust. The service is attractive to lower-income customers because it frees them from monthly service charges, minimum-balance require ments and per-check charges. If account regulations are faithful ly adhered to, the service is virtually free. Customers must conduct their business through the bank’s ATMs and allow the bank to retain canceled checks. Extra services result in extra charges. The account has attracted numer ous new customers and average bal ances are under $300. Customers take account-opening forms home and mail them to the bank’s SelfService Banking Center rather than to a branch for processing. The majority of account holders are under 25 and are students. Average number of checks written per month: 6.5. INTRODUCING . . . BANKlNG/MARKETING & ADVERTISING '84 REPORT” “ "BANKING/MARKETING & ADVERTISING '84 REPORT (B A N K /M A R ) is th e n e w a n n u a l m a rk e t in g re p o rt th a t p ro v id e s y o u w ith an u p c lo s e re p o rt o n th e b a n k in g in d u s try . "BANK/MAR" is y o u r c o m p le te m a rk e tin g re fe re n c e re p o rt! It g ive s y o u a lo o k at th e le a d in g b a n k in s titu tio n s a n d th e le a d in g a d v e rtis e rs w ith in th e b a n k in g in d u s try . T h e re p o rt a lso p ro v id e s y o u w ith so m e c lo s e -u p p ro file s o f b an ks — in c lu d in g th e ir fin a n c ia l da ta , m a rk e tin g d a ta , c o rp o ra te p e rs o n n e l a n d m o re ! S u b s c rib e N O W a n d re c e iv e y o u r c o p y o f "BANK/MAR" fo r $339.00! A n d , if y o u 'r e n o t s a tis fie d , s im p ly re tu rn y o u r re p o rt w it h in te n (10) days fo r a re fu n d . SU BSC RIBE T O D A Y ! ! ! (Enclosed is my check for $339.00 for the "BANK/MAR" report). NAME ______________________________________________________ TITLE_________________________ INSTITUTION/FIRM _________________________________________________________________________ ADDRESS __________________________________________________________________________________ CITY _____________________________________ STATE_________________ Z IP ______________________ Return to: GRAHAM COMMUNICATIONS, INC. Dept. BNK-11 P.O. Box 888255 Atlanta, Georgia 30338 60 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for March, 198 5 Davids (Continued from page 62) These paper-based systems actually did truncate a certain amount of per sonal handlings of transactions. The systems, however, were not widely adopted until the U. S. government decided to issue certain of its payments to participating financial institutions in the form of magnetic tapes, providing for payment of social security and military benefits. Almost every marketing study has, until now, indicated a disenchantment on the part of the public with such systems. However, these same studies reveal that disenchantment is decreas ing. That is, the public is accepting direct-deposit as either inevitable or desirable. If one were to look at population demographics, one would find that in dividuals amenable to Giro and similar systems are those who are better edu cated and more willing to accept in novation, such as home computers, etc. As the population becomes better educated and more people own home computers — or at least become famil iar with them — some resistance to a Giro system will moderate. For the community banker to ignore these developments is to be overly sanguine. With such firms as Sears and ITT participating in the corporate trade-payment system, bankers can expect such merchandising-oriented firms will not be reluctant to further expand their computer billing and pay ment systems. Community bankers are to be con gratulated for joining the payment net works in such large numbers in the last year or so. The tremendous reduction in cost of computer-based payment systems means they now are within the financial reasonableness of even mod est-sized community banks. • • • Judith A. Walter has been named deputy comptroller for operations for the Office of the Comptroller of the Currency. She joined the OCC in 1979 and had been director for strategic planning since 1981. Index to Advertisers • AFI Financial Corp..................................................... 55 AgriCareers, Inc......................................................... 61 American Fletcher National Bank, Indianapolis........................................................ 11 Atlantic Envelope Co............................................ 38A Austin & Associates, Inc., Douglas ....................... 28 Bank Board Letter .................................................. 38 Bank Building Corp............................>................... 63 BankDisk ..................................................................25 Bank Mark, Inc.......................................................... 51 Bankers’ Liquidation Report ...................................50 Berman Technologies.............................................. 34 Boatmen’s National Bank, St. L o u is ..................... 64 Brandt, Inc................................................................. 31 Bunce Corp.................................................................37 Carner & Associates .............................................. 15 Centerre Bank, St. Louis ................................... 30C Chase Manhattan Bank, New York ..................... 6 Commerce Bank, Kansas City ............................... 17 Dunhill Personnel Agency .......................................61 Hagan & Associates, Tom .......................................61 Heller & Co., Walter E.............................................. 29 Industrial Life Insurance Co..................................... 54 Integon Life Insurance Corp..................................... 29 Liberty National Bank, Oklahoma City ............... 2 Louisiana Banking School ................................. 38D Mellon Bank, Pittsburgh .........................................23 Missouri Encom, Inc............................................ 38A Mosler, An American Standard Co......................... 3 North Central Life Insurance Co............................ 2 Rothschild/Unterberg/Towbin ............................... 5 Sendero Corp........................................................... 19 Stern Brothers & Co............................................. 30A Swords Associates, Inc..............................................58 Travelers Express .................................................... 37 United Missouri Bank, KansasC ity ......................... 13 United States B anker.............................................. 47 BANK OPPORTUNITIES Second Officer — rural bank President — $40MM Ag bank Comml Loan — $250MM urban bank Comml Loan — $200MM suburban bank Junior Operations — urban bank AgriLoan — $30MM rural bank President — $35MM surburban bank Comml/AgriLoan — $750MM community bank $35K $45K $40K $38K $20K $30K $0pen $35K Additional positions available in midwestern states for experienced bank officers. El Dorado Systems .................................................. 37 Financial Institutions Investments......................... 53 Financial Software Corp............................................43 First Lease & Equipment C onsulting..................... 45 First National Bank of Commerce, New O rleans.................................................... 38C First National Bank, Louisville ............................... 21 Fremont Software .................................................... 41 TOM HAGAN & ASSOCIATES of KANSAS CITY Graham Communications, Inc..................................60 SERVING THE BANKING INDUSTRY SINCE 1970 HBE Bank Facilities Corp................................ 32-33 Ag Banking Personnel (Nationwide) Let us help you. Call the ag lending personnel specialists without cost or obligation. Confidential. Employers pay us to hire the best. P.O. Box 12346 2024 Swift North Kansas City, MO 64116 816/474-6874 Dunhill Personnel System. T h e System that puts b an kers in their p laces. The right people in the right places keep the world of finance and banking on a steady course. The Dunhill Personnel System places the right professionals in the right banking positions, nationwide. Our National System will recruit qualified professionals to fill the position, and we can also coordinate the real estate and physical moving needs of your new employee. Call the Dunhill Personnel Agency of Fayetteville and let the System work for you. D unhill Jean 515/263-9598 if no answer, 712/779-3567 Massena, Iowa 50853 Linda 515/394-5827 New Hampton, IA 50659 aqn careers,inc. -* Personnel Agency of Fayetteville, Inc. P.O. Box 1570 Rogers, Arkansas 72757 (501) 636-8578 AG BANKING SPECIALISTS MID-CONTINENT BANKER for March, 1985 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 61 THE BANKING SCENE By Dr. LEWIS E. DAVIDS Professor of Finance Southern Illinois University, Carbondale The Evolving Corporate Trade-Paym ent System OME corporate giants — such as ITT, Westinghouse, Sears and Exxon — are testing the improved corporate trade-payment system. Im provements include new technology and equipment and more facilitative rules from the National Automated Clearinghouse Association and the Federal Reserve. Until now, the typical community bank has made relatively modest use of automated clearing houses (ACHs). But it should be noted that the two major wire systems have a daily aver age ACH volume in excess of $500 bil lion. ACH systems once were used exclu sively by commercial banks, but other large financial institutions gained ac cess. Later, as more treasurers of ma jor firms established computer link ups with their lead banks for deposit consolidation, it became apparent that they could keep track of their bank balances on a collective basis. This is done by a minute-to-minute review of their bank-linked computers, which, in turn, are linked to the ACH. While collected balances were in formative, it was obvious that the potential of ACHs simply was only being scratched. Partly related to this was the recognition of cost trends — paper, stamps, envelopes — and the needless duplication of human effort. An equally powerful reason was the dramatic decrease in the cost of electronic-data-transmission use. The sim ple fact of costs for paper transactions increasing and electronic transactions decreasing accelerated pressure to substitute labor-intensive transactions for those that were more capital inten sive. To this should be added an impor tant element: pressure on the Fed to reduce float. By blotting up float, the Fed has struck an important blow against paper transactions. Revising its deferred-availability schedule and hours of settlement has alienated some correspondent bankers, but, on the S 62 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis whole, progress toward a more effi cient clearing mechanism has re sulted. Another development has been the slow-but-sure growth of the debit card. In an indirect way, the debit card has changed the mind-set of both debt- "Community bankers are to be congratulated for joining the payment networks in such large numbers in the last year or so. The tremendous reduc tion in cost of computer-based payment systems means they now are within the financial reasonableness of even mod est-sized community banks." ors and creditors. As bankers and the public became more conversant with debit and credit cards and as ATMs offered more on-line capability, other changes emerged. For example: A line of credit tied to a debit card made that card a hybrid and expanded its use potential. While the U. S. has lagged consider ably behind Europe in implementa tion of the “ smart chip” card, it looks as though the U. S. telephone system will be more likely to move aggressive ly in this area than can commercial banks and their ACHs. While the “ smart chip” is perceived as being more o f a retail fundsremission technique, the corporate trade-payment system may be viewed as a wholesale operation. Because there are relatively fewer corporations that will utilize the corporate tradepayment system, the system can be made more sophisticated. So far, cor porations have concentrated on pay ment of company bills and switching of funds among their various depositories and their branch offices. Under the corporate trade-payment system, a great deal more information can be in cluded than is found on a typical check being processed through an ACH. The amount of information is limited only by the corporations participating in the corporate trade-payment system. One possibility is a radical change in prevailing trade terms. W e all are familiar with trade discounts such as “ 2/10, net 30. ” Such a trade discount is predicated on mailing of invoices, with the debtor making a payment within a discount “window. ” Europe and Japan have had more experience with Giro payment systems, in which the credi tor — not the debtor — originates pay ment implementation. It can be generalized that probably more than 80% o f payments are periodical in nature, either weekly, monthly, quarterly or semiannually. Thus, better than four out of five trans actions, being repetitious, are predict able in a number of areas, although possibly not in dollar amount. In a similar context, it can be said that those repetitious payments, by and large, are “ clean.” That is, they don’t include or result in overdrafts or nonsufficient-fund returns. These payments typically are be tween creditors and debtors whose in tegrity and credit-worthiness are not suspect. Thus, less risk is involved and, as a concomitant, some discount is in order. As the corporate trade-payment sys tem evolves among major corpora tions, it is likely that, with time, small er businesses will join the system and holders of credit and debit cards will be brought into the picture. In one sense, we have had paperpayment systems involving the Giro system for at least 30 years in the U. S. (Continued on page 61) MID-CONTINENT BANKER for March, 19 8 5 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis : T he R ig ht I dea : : : When we decided to remodel and expand our building;' says Rowan C. McAllister, President of First National Bank of Barron, Wise., “we wanted it to be distinctive...not just another ‘pretty bank.’ We have always been closely tied to our community and wanted our facility to express our own unique personality to our customers and the community we serve. It had to be warm, friendly, inviting, convenient ...and different. ' : We talked to a lot of firms, but the people at Bank Building really listened. And understood. They studied us, our needs, our people and our community. And they came up with the right ideas. Our new facility is exactly what we wanted...efficient, productive, unique...and successful. We couldn’t ask for more. Let us put our ideas to work for you. Call Tom Spalding, 1- 800 - 325-9573 Meeting the needs of the community you serve... by design. < > sU Bank Building Corporation 1130 Hampton Avenue St. Louis, MO 63139 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis
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