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https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis L ib e rty P resen ts Paul N adler on E lectro n ic Funds T ran sfer S e rv ic e Paul Nadler Says: Liberty Says: “EFTS developments will end local bank customer geographic restraints. Banks of any size will eventually be able to serve their custom ers wherever they are. With EFTS, people will be paid automatically through automated clearing houses. They will be able to borrow automatically through ‘credit cards’ and they will be able to make withdrawals through ‘debit cards’ at point-of-sale terminals everywhere. To community banks, this pre sents good news and bad news. It's good because banks can now fol low their customers anywhere in our highly mobile society. But, it will also breed intense competition. Although people will want to re main loyal to their local bank, if it doesn’t offer competitive services and rates ...th e y will say, 'Oh well, we are all Okla homans or we are all Am ericans...' and will switch to the bank that offers the same geo graphic fle x ib ility but better rates and services. Each bank, then, will have to make sure it is doing its job and doing it w e ll...fo r geo graphic protection is sure to fade away.” “CH ECO KARD .. .doing more than ending check cashing hassle for your custom er... is just the initial step in helping you maintain your competitive posture in a rapidly maturing electronic environment. A n ticip atin g the 'sharing' provision in the recently passed Oklahoma legislation, CHECOKARD was designed for cor respondent bank participation.The system is now in its first evolu tionary stage...from verification and guarantee to on-line deposit, withdrawal and transfer of funds transactions at point-of-sale and automatic teller machines. The CHECOKARD system is op erational today in Oklahoma, and it wiN lead the way into the nationwide ENTREE Card system for tomorrow. With Liberty’s help, you and your customers can have individual local identity with CHECOKARD's complete range of EFTS on-line capabilities... plus the national capability of ENTREE Card. If you want to maintain your leadership in your community, contact Liberty’s Correspon dent Department for assistance with all the challenges and opportunities of EFTS.” ÉK aty°ur m LIBERTY THE BANK OF MID-AMERICA Liberty National Bank and Trust Company P. 0. Box 25848/Oklahoma City, Oklahoma 73125/Phone 405/231-6164/Member FDIC https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Louisiana bankers call: / \ “ \ D 0 \ ____ y 1 y V 11 A! -* V v _ / Alabama, Arkansas, Mississippi, O klahom a and East Texas bankers call: Bankers in all other parts o f the country call collect: At First NBC —New Orleans, our Correspondent Banking Department is service-intensive and we’re always available to help you find a creative solution to any correspondent banking problem. That’s why we’ve recently improved our incoming WATS facilities —so reaching us is easier than ever. Try one of our brand-new numbers. We’re anxious to hear from you. FRSI NATIONALINK OFtOMBICi Correspondent Banking 210 Baronne Street / New Orléans, Louisiana 70112 MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 H IN T BANKER Convention Calendar The Financial Magazine o f the Mississippi Valley & Southwest Volume 7 2 , No. 6 May J 5 , 1976 FEATURES 25 COMPTROLLER'S OFFICE VIEWS BANKING PROBLEMS Including losses, problem banks, agency consolidation H. Joe Selby 29 TECHNIQUES FOR SAVING PROBLEM LOANS That can benefit bank, customers Claude Higginbotham 37 W H A T LOAN REVIEW OFFICER SHOULD CONSIDER In determining quality of portfolio 44 PUTTING CO M M ERCIAL LENDING PROBLEMS IN PERSPECTIVE RMA president presents views Robert A. Young 48 ASSOCIATION PRESIDENTS SPEAK OUT How can we keep problems from recurring? 66 APPLYING MARKETING TECHNIQUES TO DEBT-INSTRUMENT SALES Frederick Deane Jr. Ways to generate more equity and debt capital CONVENTIONS 79 TENNESSEE 90 ALABAMA 83 MISSISSIPPI 93 ILLINOIS 97 IN D IA N A 101 NEW MEXICO 74 FIRST TIMERS DEPARTMENTS 6 BANKING WORLD 14 NEW PRODUCTS 10 CORPORATE NEWS 8 C O M M U N ITY INVOLVEMENT 16 SALES/MARKETING 12 NEWS ROUNDUP 20 EFTS STATE NEWS 104 ALABAMA 105 ILLINOIS 107 KENTUCKY 107 MISSOURI 104 ARKANSAS 106 KANSAS 107 LOUISIANA 109 O KLAHO M A 109 TEXAS nnniii i i iiiiiiiiiiiiiiiiiiiiiiiiifliiuniiniiniiinnninnnininninnnini Editors Ralph B. Cox Editor & Publisher Lawrence W. Colbert Assistant to the Publisher Rosemary McKelvey Managing Editor Jim Fabian Associate Editor Daniel H. Clark Editorial Assistant Advertising Offices St. Louis, Mo., 408 Olive, 63102, Tel. 314/ 421-5445; Ralph B. Cox, Publisher; Mar garet Holz, Advertising Production Mgr. Milwaukee, Wis., 161 W. Wisconsin Ave., 53203, Tel. 414/276-3432; Torben Soren son, Advertising Representative. 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER is published 13 times annually (two issues in May) by Commerce Publishing Co. at 1201-05 Bluff, Fulton, Mo. 65251. Editorial, execu tive and business offices, 408 Olive, St. Louis, Mo. 63102. Printed by The Ovid Bell Press, Inc., Fulton, Mo. Second-class postage paid at Fulton, Mo. Subscription rates: Three years $21; two years $16; one year $10. Single copies, $1.50 each. Commerce Publications: American Agent & Broker, Club Management, Decor, Life Insurance Selling, Mid-Continent Banker, Mid-Western Banker, The Bank Board Letter and Program. Donald H. Clark, chairman; Wesley H. Clark, president; Johnson Poor, executive vice president and secretary; Ralph B. Cox, first vice president and treasurer; Bernard A. Beg- gan, William M. Humberg, Allan Kent, James T. Poor and Don J. Robertson, vice presidents; Lawrence W. Colbert, assistant vice president. May May 18-22: Alabama Bankers Association An nual Convention, San Juan, P. R., Sheraton Puerto Rico. May 19-20: ABA Liability/Asset Management Policy Decisions Seminar, Atlanta, Stouffer’s Hotel. May 22-26: Mississippi Bankers Association Annual Convention, Biloxi, Biloxi Hilton/ Broadwater Hotel. May 23-25: Tennessee Bankers Association Annual Convention, Nashville, Hyatt Regency-Nashville. May 23-25: Illinois Bankers Association An nual Convention, St. Louis, Stouffer’s River front Towers. May 23-26: Robert Morris Associates Finan cial Statement Analysis Workshop, Chicago, Airport Marriott. May 23-28: Bank Marketing Association Es sentials of Bank Marketing Course, Boulder, Colo., University of Colorado. May 23-29: ABA National School of Bank In vestments, Dallas, Southern Methodist Uni versity. May 23-June 4: Bank Marketing Association School of Bank Marketing, Boulder, Colo., University of Colorado. May 24-25: ABA National Conference on Ur ban & Community Economic Development, Washington, D. C., Lowes L’Enfant Plaza Hotel. May 24-27: Association of Bank Holding Com panies Annual Meeting, London, Grosvenor House. May 26-27 : Robert Morris Associates Auto mated Loan Information Systems Work shop, Houston, Hyatt Regency. May 26-28: National Association of BankWomen Inc., Lake/Midwest/North Central Regional Conference, St. Louis, Stouffer’s Riverfront Inn. May 30-June 4: Bank Marketing Association School of Trust Business Development, Boulder, University of Colorado. May 30-June 11: Illinois Bankers Association Illinois Bankers School, Carbondale, South ern Illinois University. May 31-June 2: AIB Annual Convention, St. Louis, Chase-Park Plaza Hotel. June June 1-2: Robert Morris Associates Loan Policy Workshop, Chicago, Continental Plaza. June 2-3: ABA Liability/Asset Management Policy Decisions Seminar, Dallas, Fairmont Hotel. June 6-11: Kentucky Bankers Association Kentucky School of Banking, Lexington, University of Kentucky. June 6-18: Stonier Graduate School of Bank ing, New Brunswick, N. J., Rutgers Uni versity. June 7-8: Robert Morris Associates Lending to Banks & Bank HCs Workshop, San Francisco, Hyatt on Union Square. June 10-12: New Mexico Bankers Association Annual Convention, Las Cruces, Holiday Inn. June 13-15: Bank Marketing Association Bank Planning Conference, Oakbrook, 111., Drake Oakbrook. June 13-16: ABA National Operations & Au tomation Conference, Washington, D. C., Washington Hilton. June 15-17: Kansas Bankers Association Bank Management Clinic, Lawrence, University of Kansas. June 16-17 : Indiana Bankers Association An nual Convention, French Lick, French LickSheraton Hotel. June 16-18: Missouri Bankers Association Young Bankers Seminar, Osage Beach, Mo.. Tan-Tar-A Resort. June 17-18: Robert Morris Associates Secured Lending: Accounts Receivable, Inventory & Equipment Financing Workshop, St. Louis, Stouffer’s Riverfront Inn. July July 11-16: Kansas, Missouri & Nebraska Bankers Associations Basic Trust School, Lincoln, University of Nebraska. July 11-23: ABA School for International Banking, Boulder, University of Colorado. July 18-21: ABA I&PD Risk Management in Banking Seminar, Boulder, University of Colorado. MID-CONTINENT BANKER for May 15, 1976 Bank on more from Mercantile... Our resources are assets to you The point is, at Mercantile, you get all the services you’d expect from one of Am erica’s largest correspondent banks. And more. But the biggest asset of all is our eagerness to work for you! Count on Mercantile. Where you count. -Rcnrm i= BflfK Central Group, Banking Dept. • Mercantile Trust Company N.A. (314) 425-2404 • St. Louis, Mo. • Member F.D.I.C. MID-CONTINENT BANKER for May 15, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 5 B A N K IN G W O R L D S IL IE C K LA SA TER • Robert B. Silleck has joined Brad ford Computer & Systems, Inc., New York City, as senior vice president. He goes there after a 37-year career with Citibank, New York City, where he most recently was vice president, cor respondent banking. Bradford Comput er & Systems specializes in financial, clerical, computer and recordkeeping services for financial, industrial and gov ernmental organizations throughout the country. • Donald E. Lasater, chairman and CEO, Mercantile Bancorp., St. Louis, was elected to the HC’s board at its annual shareholders’ meeting April 22. Mr. Lasater resigned as a director of the HC last year after being indicted for perjury by a federal grand jury in Kansas City. The indictment came after Mr. Lasater testified on certain loan transactions between Mercantile Bancorp’s lead bank, Mercantile Trust, St. Louis, and the late J. V. Conran. How ever, late in 1975, he was found in nocent of the perjury charges. Mr. Lasater also is chairman of Mercantile Trust. • Gabriel Hauge, chairman and CEO, Manufacturers Hanover Corp. and Manufacturers Hanover Trust, both of New York City, has been elected pres HAUGE ADAM S SH U R LY ident of the Association of Reserve City Bankers. He succeeds Richard P. Coo ley, president and CEO, Wells Fargo Bank, San Francisco. Replacing Mr. Hauge as association vice president is T. C. Frost Jr., chairman, Frost Na tional, San Antonio. William G. Erics son, president, American National, Chi cago, succeeds Irving Seaman Jr., for mer executive committee chairman of National Boulevard Bank, Chicago, as association treasurer. Roger E. Ander son, chairman, Continental Illinois Na tional, Chicago, has been named a di rector of the association, while Corwith Hamill has retired as executive secre tary, to be replaced by Jean E . Smith, who has been with the Reserve City Bankers since 1960. • Burt R. Shurly Jr. has retired as senior vice president and officer in charge of the national division, com mercial loan department, of Detroit Bank. He joined the institution in 1951, advancing to senior vice president in 1969. • Terry Kalp has been named vice president, Bank of America’s Chicago Corporate Service Office, while Tom Goosens and Stephen Setness have been elected assistant vice presidents. Mr. Kalp joined the bank in 1968 and will SETN ESS G O O SE N S be administrative assistant to Senior Vice President Gerald H. Thompson, office head. Messrs. Goosens and Set ness, who joined Bank of America in 1974, have been serving as corporate finance officers. • Eugene H. Adams, chairman, First National, and First National Bancorp., Inc., both in Denver, has been named 1975 Colorado Businessman of the Year by the Beta chapter of the Alpha Kappa Psi professional business fraternity. Mr. Adams was chosen for his “business leadership and his dedication to civic and community affairs.’’ He began his career with the International Trust in 1934, advancing to president in 1951. He became executive vice president of First of Denver when the two merged in 1958, and was named president one year later. FARMERS GRAIN & LIVESTOCK HEDGING CORP. L OOKING FOR IMMEDIA TE ACCURATE INFORM A TION TO DEAL WITH TODAY’S WILDLY FLUCTUATING GRAINS, LIVESTOCK MARKET? OUR ONLY BUSINESS WRITE OR C A L L IS A D V IC E F G L * 1200 35th St. West Des M oines, Iowa 50265 515 223-2200 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for May 15, 1976 M usically, Roy Law rence is strictly a listener...country'Style. But as a Correspondent Banker, he's a virtuoso perform er. For relaxation, Roy Lawrence likes to load up his stereo with a stack o f country music records and pretend h e’s onstage at the Grand Ole Opry. But on the jo b as our Vice President/ Computer Applications, Roy sets all fan tasy aside to deal realistically with our more than 3 7 0 customers’ correspondent banking requirements. With 27 years bank ing experience, Roy can be depended upon to come up with the right answ ers.. .fast. Whatever your correspondent banking need or problem, call the Third National representative who serves your area. With home office support from experienced professionals like Roy Lawrence, h e’ll provide you with the kind of service you ’ve been looking for. Our Tennessee WATS line is 800342-8360. In neighboring states, dial 8 0 0 -251-8516. We’re here to serve you. THIRD NATIONAL BANK IN NASHVILLE MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member F.D .I.C. 7 Community Involvement Social-Responsibility Role of Banks Has Improved, Stu d y by Firm Show s \ j AJOR BANKS in the U. S. have implemented a number of pro grams directed at improving their social responsibility role. This was the finding of a study by Booz, Allen & Hamilton, Inc., Chicago-based international man agement consultants. The survey, “Study of Social Re sponsibility of Banks,” covered 10 ma jor banks in the United States. It also included attitudes of banks and the public toward social responsibility in Britain and Germany. Three banks in each of those nations were covered by the study. It was found that the level of criti cism against banks in the U. S. on the subject of social responsibility was high er than against banks in the two foreign countries. In America, it was found, major areas of criticism involve minori ties and women (primarily in employ m ent), inner-city housing and continu ing support of small (primarily minori ty) businesses. Other areas of criticism covered consumer issues, environment and urban development. The major criticism against banks in Britain was concentrated on lending practices to industry, profit levels and certain investments in real estate and in South Africa. Germans found much less to criticize about the social responsibilities of their banks than did citizens of the U. S. and Britain. Criticism there was concen trated on the power of banks and their control over German industry. A significant aspect of the study was https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the stress placed on future regulation and legislation of banking in the U. S. A great part of that legislation, it was felt, would be directed toward social responsibility. It also showed that criti cism from consumer and special-interest groups would continue and that costs of social responsibility programs probably would increase. It was seen that, while the situation would continue to intensify in this country, such demands also would in crease in England and Germany. The study found that banking was “poorly understood” by the public and that the product/service it provides is relatively intangible. Banks sometimes are thought of as semi-utilities, the study showed. That is, many people believe banks exist primarily for the public good. The re sults indicated that many people feel “intimidated" by banks, particularly when asking for a loan. The Booz, Allen findings showed housing, small business development, community development, youth and ed ucation, community health and con tribution programs to be the major is sues U. S. banks are facing. The study pointed to the need for programs by banks in all three countries to in crease public understanding of banking through advertising, speakers’ bureaus, educational programs, sponsorship of public events and student and youth programs. The United States and Brit ain are somewhat more aggressive in such programs than Germany, it was found. By and large, the study concluded, the number of specific social programs implemented in the banking community appears commensurate with the inten sity of the criticism in each country. The key ingredient in the success of such programs, it was added, is the full sup port of bank CEOs. * * N o 'Buy' C e n te n n ia l: Bank Underwrites Book On Cumberland-Area Past According to officials of First Amer ican National, Nashville, the bank wanted to commemorate the nation’s bicentennial with something lasting. The celebration, they said, was be coming too much of a “buy” centen nial, with various candles, pens and other too-commercial items. So the bank underwrote the pub lication of a book, Early Tim es in the C um berland Valley. Author James Crutchfield’s work spans more than the 200 years of U. S. history. He includes a geologic his tory of the area and deals with the possibility that Hebrew, Roman and Viking explorers may have walked the area long before the Spanish, French and English. Net proceeds of the book’s sales will go to help support the Tennessee Bi centennial Arts Celebration, which is sponsored by the Junior League of Nashville and the Nashville Section of the National Council of Jewish Women. The celebration will be held in down town Nashville June 25-27 and will feature Tennessee craftsmen and per forming artists. First American National will turn its lobby into an art gallery for the state’s bicentennial collection during the event, while the bank’s plaza will be a stage for ongoing entertainment from dawn to dusk. The book is being sold in the bank’s branch offices and also is available by mail. Lookin g over cop y of Ea rly Tim es In the C u m b e rla n d V a lle y, p u blication o f w hich w a s underw ritten by First A m erican N atio n a l, N a sh ville, are (from I.): Ja m e s C rutchfield, author; H arriet Bubis of N ash v ille Section, N atio n a l Council of Je w ish W om en; A n d rew Benedict, ch.; an d C o rin e Fran klin of Ju n io r Lea gu e o f N ashville. | r^ ¥ INDIVIDUAL BANKS COMMITTED TO MUTUAL GROWTH tfl' * The Continental Correspondent Community Sem inars - y • • Leasing • The Economy • Legislation • Operations Marketing • The Consumer Competition • Planning Where correspondents share knowledge and experience CONTINENTAL BANK CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY OF CHICAGO 231 S O U T H L A S A L L E S T R E E T . C H I C A G O . I L L I N O I S 60693 MID-CONTINENT BANKER for May 15, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 9 Look to Ziegler of West Bend for tax-exempt investments. Whether you manage a portfolio for your bank or for your bank’s customers, tax-free investments may be just what you need for diversification. And Ziegler may be just what you need for tax-free investments. B. C. Ziegler and Company has been underwriting and distributing institutional securities for over sixty years. Our tax-exempt affiliate, Barcus, Kindred and Company, has specialized in the un derwriting and distribution of tax-free municipal and non-proftt-corporation revenue bonds for over forty years. This combined record of experience can be of great benefit to investors in tax-exempt securities. For our latest offerings or information on tax-free investments, write Bob Poggenburg, B. C. Ziegler and Company, 215 North Main Street, West Bend, Wisconsin 53095. Or call him collect at (414) 334-5521. B .C. Zie gle r and Com pany West Bend, Wisconsin 53095 10 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Corporate News Roundup • Armento Bank Design, Inc. Richard J. Cozak, Fidelity Financial Sales, Arlington Heights, 111., has been ap pointed midwestem regional sales rep resentative for Armento Bank Design, Inc., Buffalo, N. Y., which specializes in manufacturing electronic lobby traffic distribution systems and related prod ucts. Mr. Cozak had 15 years’ ex perience in business management, sales and marketing with electronic instru mentation manufacturers prior to the recent establishment of his own manu facturer’s representative organization. His most recent post was national sales/ marketing manager, Elec-Tro-teC, Inc., Elk Grove Village, 111. • American Express Co. Marjorie Greene has been appointed director of E F T strategy for American Express Co., New York City, while Jack M. Moody has been named vice president, product development. Mrs. Greene, who joined the company in March, will be the liaison for George W. Waters, executive vice president, and the President’s Na tional Commission on E F T . Mr. Moody is responsible for product development for the company’s marketing and sales and Travelers Cheque and money order divisions. He has been with American Express 30 years. In St. Louis: Free McDonald's Dinner Offered to New Accounts Crestwood (M o.) Bank, which is located in the St. Louis suburbs, has offered free food from McDonald’s res taurants to those opening new savings accounts. When a customer opened an account, he received a yellow coupon for a ham burger— a “Big Mac.” The coupon was redeemable at five participating M c Donald’s restaurants. A surprise came when the coupon was used. McDonald’s handed bank customers another cou pon, a bonus good for an additional $2.50 in food! How well did the cooperative pro gram work? In eight weeks, the bank opened 271 new savings accounts aver aging $140 each. MID-CONTINENT BANKER for May 15, 1976 “V\&can handle most things, but when we can’t it’s nice to be able to call on the First.” The Kaw Valley State Bank and Trust Company of Warn ego, Kansas is a true success story. A ------ «JEirM National Baulutf JCa#sa£ City correspondent relationship has given it added financial L, strength and a team of specialists. Frank Meek, president;/is ;a ^ggsm an who conducts modern day ¡p i^ b an k in g from behind a rolltop desk. He understands and l|Studies each customer’s Jpbusiness needs in the best traditions of the old-fashioned, // small town bank. In a town with a population of 2,500, his customers are his friends and neighbors. And he can give them most services they might require. But Frank Meek has a correspondent relationship with the First National Bank of Kansas City to help him handle those services his customers / may need from time to time that ^ h e cannot give. Together, with the First, Kaw Valley State Bank has the added strength of both economic and manpower resources. If your bank could benefit from assistance with overline loans, investments, transit collection, bonds, international services, trusts, cash management.and other financial services, call the professional staff of the First National Bank Correspondent Department. We take pride in the success of Frank Meek and the Kaw Valley State Bank of Wamego. Our correspondent banking tradition has been built on help like this. Why not put our strong tradition of excellence to work for your success. K la Frank Meek Kaw Valley State Bank and Trust Company of Wamego Yxir success is our tradition. First . National Naup Bank 'of KANSAS CITY. .MISSOURI An Affiliate of First National Charter Corporation MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member FDIC If NEWS ROUNDUP News From Around the Nation IR S Can Demand Bank Records The Supreme Court has ruled that the Internal Rev enue Service has the right to demand the records of a tax payer from his bank, accountant or attorney. The court held 7-2 that a taxpayer has no “legitimate expectation of privacy” when he uses a bank and that, in any case, the subpoenaed materials were actually business records of the bank and not the individual’s private pa pers. “The depositor takes the risk, in revealing his affairs to another, that the information will be conveyed by the person to the government, Justice Lewis F. Powell Jr. wrote for the court. Bank Card Service Fee Set Master Charge cardholders at Citibank, New York City, who have not been charged interest on their purchases because they pay their balance in full each month will begin paying a 500 monthly service charge in June. The charge will be applied only in months when the cardholder makes purchases and pays the entire balance. The maximum service charge will be $6 annually. In a statement to customers, a bank spokesman said, “We feel this small fee is well within reason. The revi sion is necessary to offset our rising costs and to improve our level of customer service.” He said the bank is asking those not paying finance charges to contribute to the cost of providing the Master Charge service. Burns Comments on Fed Reform Fed Chairman Arthur Burns has testified before the House Committee on Banking and Currency that the Fed opposes the provision of the Federal Reserve Reform Act of 1976 that calls for presidential appointment and Senate confirmation of reserve bank presidents. The Fed also opposed the “narrow” criteria for selec tion of Class C reserve bank directors and the requirement that the Fed provide explicit projections of employment, production, the price level and interest rates. While other provisions of the act are not objectionable, Dr. Burns said, the Fed sees no clear need for any of the act’s provisions. No Routing Numbers for Branches The ABA and the Fed are reminding banks that no routing numbers will be assigned as branch designators after July 1. Certain systems constraints among banks may force 12 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis some banks to initiate dual systems to operate during the 12-month phaseout period for branch routing numbers that begins July 1, the ABA said. The policy of reducing the number of endpoints in the payments system and the implementation schedule were published in the 1975 edition of the ABA “Key to Routing Numbers” to allow for a suitable period of time to modify systems and deplete existing check supplies, the ABA said. Bankers Query FTC on Holder' Issue Bankers have been asking the Federal Trade Commis sion why they should be responsible for warranties of goods rather than the sellers of the goods. The question was asked in connection with the federal agency’s new regulations that alter the holder-in-due-course doctrine, which states that a consumer must honor his obligation to the creditor regardless of any dispute with a merchant. The Fed has implemented regulations to conform with those of the FT C and the banking industry has been reg istering strong opposition to the regulations. The bankers pointed out the difficulty for a lender to be placed in the position of picking and choosing sellers with whom to do business on the basis of potential mis conduct by the sellers. “By excluding not only sellers who are guilty of mis conduct but also the vast majority of sellers who are re sponsible, reputable members of the business community but who do not meet the exemplary standard necessary to induce the lender to act as a warrantor of their goods or services, the consumer’s product and credit alterna tives are limited severely,” the bankers testified. The Independent Bankers Association of America has told the Fed that its regulations assaulting the holder-indue-course doctrine are illegal and violate congressional intent. ABA Defends Auto Leasing The ABA supports the continuation of permitting sub sidiaries of HCs to provide auto leasing services. The association told the Fed that HCs were providing consumers with an “alternative to direct borrowing and an additional competitive source to meet their financing needs.” According to forecasts, auto leasing is expected to be come a prevalent alternative to buying. While more than 10% of new cars are leased today, by 1980, some 40% are expected to be leased. Thirty-one states have specific statutes permitting banks to lease personal property. Many other states permit banks to do so through regulation or interpretation, the ABA said. MID-CONTINENT BANKER for May 15, 1976 “W hen you com e up with a b e tte r cred it life policy, it's hard to keep it to yourself." D urham L ife’s new Low 100. D esigned especially for m obile home loans and second m ortgages, the fa ste st growing part of the m ortgage loan business. We call it the Low 100 because premiums are lower for the borrower, bu t you get 100% protection. You're paid back the entire unpaid balance net of unearned interest and finance charges, y et you can offer your custom ers lower m onthly paym ents. We keep the premiums low by fully covering your exposure and no more. One premium is charged regardless of age. The entire premium is paid a t one time, elim inating paper work, collec tions and policy lapses. And no medical exam is required. W ith all th is you still g et the same attra ctiv e com mission plan. The Low 100. One more policy in D urham L ife’s complete line of credit life. E v ery th in g you'll ever need. Call D an Boney. Durham Life Durham Life Insurance Company Home Office: Raleigh, N.C. 27611 P.O. Box 27807, Tel. 919/782-6110 MID-CONTINENT BANKER for May 15, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis * Rand McNally & Co. To update the manual style coupon system in use since the 1930s, Rand McNally & Co., Skokie, 111., has introduced new coupon books for manual and on-line Christmas club customers. They feature two coupons to a page and the coupons are progressively longer in size. Compati bility between old and new books also is claimed. The coupon books come New Products and Services moving parts and a release mechanism that facilitates installation or removal of the deposit hopper. The N ighticatcK s exterior is of stainless-steel plate and has a recessed and angled door for protection against the elements. Receiv ing chests come in four standard sizes and custom sizes are available. Write: Meilink Rank Equipment, 3100 Hill Avenue, Toledo, OH 43607. with full-color cover designs and sup port material and are designed for manual posting to pre-scheduled ledger cards or as source documents for teller terminal on-line entries. The two-to-apage concept is said to encourage mul tiple payments and makes them easier to handle, since a teller can handle two payments on one piece of paper. Write: Rand McNally & Co., 8255 North Central Park Avenue, Skokie, IL 60076. • Meilink. Exceptional security and convenience reportedly are the features of the N ightw atch combination bag and envelope depository from Meilink, Toledo, O. The unit also is available as a bag drop only and provides 24hour resistance against “fishing” and “trapping.” The N ightw atch carries the U/L label and exceeds Rank Protection Act specifications. Features of the unit are side-by-side hoppers, only three N ig htw a tch d ep o sito ry from M eilink featu res ligh t w eigh t, fe w m oving p arts, unique release m echanism an d sid e-b y-sid e hoppers fo r fle x ib ility, convenience. Unit exceeds B ank Pro tection A ct sp ecifications an d has U / L listing. 14 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • NCR Corp. A microprocessor-based desktop document encoder has been an nounced by NCR Corp., Dayton, O. Called the NCR 7740 Utility Encoder, it is said to provide encoding for all fields on documents in either M ICR or OCR fonts. A second model, the 7740 Proof Encoder, incorporates a journal printer and four totals including an adding-machine feature. It can be used as a utility encoder or for low-volume proof applications. A key to the en coder’s flexibility is said to be the Pro grammable Read Only Memory, which allows the user to specify formats, type fonts and other variables. The proof encoder verifies debit items for total credits of a transaction, and more. Write: NCR Corp., Dayton, OH 45479. • Gilbertson Advertising Co. Two informational packets, the “Home Buyer’s Guide” and the “Home Seller’s Guide,” have been announced by Gil bertson Advertising Co., Minneapolis. The packets may be used with adver tising as handouts to home owners or for customers of real-estate brokers and contractors with which the bank works. Information covered in the two packets includes buyer’s or seller’s inventory checklists, moving tips, building and fi nancial terms, a net-worth statement, what to do at closing, a last-chance check list and more. Write: Gilbertson Advertising Co., 5277 Lochloy Drive, Minneapolis, MN 55436. • Diebold, Inc. The Multi-Guard SP-500, introduced by Diebold, Inc., Canton, O., provides perimeter, space, object and holdup alarm protection. De signed for chest or safe applications, the unit can accommodate a wide range of other applications by accepting con nections of numerous activating devices and sensors and can ennunciate a premises alarm condition in any one of three zones on its control panel. During an alarm situation, the Multi-Guard SP-500 can be programmed to signal police silently, to activate an alarm bell, or both. It also can activate cameras or other supplementary devices. A special application for the SP-500 is the pro tection of the Diebold Total Automatic Teller System (TABS). Write: Diebold, Inc., Canton, OH 44711. • Brandt, Inc. A new compact ver sion of the “Countess®” line of docu ment processing equipment has been introduced by Brandt, Inc., Watertown, Wis. The Countess Jr. Model 809 (pic tured) counts currency, food stamps, tickets, checks or any document rang ing in size from 2x4 inches to 4x8 inches. It counts at a rate of up to 750 documents per minute, and its digital display allows quick verification. Other features include: one-button control for continuous or batch counting; signal light indicating completion of process; two types of drums for imprinting and endorsing/canceling messages; and fac tory setting of two to six mils, but may be adjusted to up to 10 mils. W rite: Brandt, Inc., Watertown, W I 53094. MID-CONTINENT BANKER for May 15, 1 9 7 6 record-keeping tool. A conventional register is included and can still be used for keeping the balance if preferred . . . the copy just makes it a little easier. It’s not for everybody, but it may be just what some o f your customers need. Find out what your customers really want. And don’t overlook the unforgettable check . . . DeLuxe Duplicate Checks for personal accounts. The check this proud father is handing his daughter is not an ordinary check. It’s a Deluxe Duplicate Check. She gets the original, “Thanks, D ad.” And he gets an exact copy of the check for his records. Here’s how it works. Each ,v check is bound with a copy that requires no carbon. As a check is made o u t . . . a copy is made as well. Your customer then has an additional CHECK PRINTERS, INC. SA LE S HDQTRS. • P.O. BO X 3399, ST. PAUL, MN. 55165 S T R A T E G IC A L LY LO C AT ED PLANTS FROM CO AST TO COAST MID-CONTINENT BANKER for May 15, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 15 Selling / Marketing It's O n ly M oney: Vault Is Short $2,000 After Successful 'Caper' Successful in her “caper” with United Missouri Bank, Springfield, Della Maness walked away with $2,056 from the institution’s vault—in full view of a crowd of cheering people! No, Mrs. Maness wasn’t a bank rob ber. The “caper” was a contest run by the bank and a local radio station en titled the “Great Bank Caper.” Its pur pose was to draw attention to the re cently opened bank headquarters. To win, Mrs. Maness had to guess the names of three celebrities, one na tional, one regional and one local, from clues given during radio broadcasts. As the winner, she was alloted 210 seconds This pile of ca sh —$ 5 ,0 0 0 —w a s targe t o f w in ner o f United M issouri of Sp rin g fie ld 's " G re a t B ank C a p e r" contest. Clues to identities of three celebrities w ere b ro ad cast on lo cal rad io station an d person correctly gu e ssin g them w on 210 seconds' time to ca rry off as much of the pile as possible to a tab le 50 feet a w a y . Show n in v a u lt (from I.) a re D ale W . Tilton, v.p ., Don Schooler Jr., pres., an d M aurice C h a n d le y, cash. to carry as much of $5,000 cash as she could to a table 50 feet from the vault. Dressed in a pantsuit and wearing a new pair of sneakers, the winner showed herself to be in better-thanaverage condition. Her relatives re ported that she had marked off a 50foot course in her back yard and had practiced to get in shape for the event. Did the conditioning exercises work? Bank officials reported that Mrs. Man ess carried over 480 pounds of coins and currency, only showing fatigue in the final 30 seconds of the “caper.” A m erican a: Bank Salute to Bicentennial Is Made in Colonial Style What better way to salute the found ing of our nation than to do it in colo nial style? That’s what the Seventh and Bace Office of Central Trust, Cincin nati, is doing until July 4. Its historical displays are comple mented by an atmosphere of the early days which is created by decorations, souvenirs and personnel in colonial cos tumes. Exhibits, which are to be shown in the bank at various overlapping inter vals, include a collection of historical documents compiled by Charles F. Curro, bank vice president and office manager. There also will be a lobby exhibit of currency and banking history, which will be borrowed from the Cleve land Fed and the Begional Adminis trator of National Banks. Foam-and-paper stars in a number of sizes have been suspended from the office ceiling, lending a festive air to the event. Souvenir copies of the stars —called “Ameristars”— are being dis tributed to customers by tellers on days the employees are in colonial garb. replicas that had been sewn from tex tiles woven during the era in which the dolls were made. Some of the more than 50 dolls on display originally were used as depart ment-store mannequins and are over 40 inches tall. Others were included in the exhibit due to the materials from which they were made— such as the Queen Victoria wax doll or the Dolly Madison china doll. Another rare type was the stockinette mannequin which had been used as a training aid by nurses at the turn of the century. An added feature of the doll display was a collection of Easter bonnets, which dated from the early 19th cen tury. A “Polk Bonnet,” similar to one worn by the wife of U. S. President James K. Polk, was one of those. The display was open to the public during normal banking hours. O n ly the Sm a ll O nes: Upper Ave. Nat’l, Chicago, Displays Zoo Inhabitants A number of the inhabitants of Chi cago’s Lincoln Park Zoo have been the guests of Upper Avenue National—the smaller inhabitants, of course. The event was part of the bank’s series of bicentennial salutes to the city’s cultural organizations. Comple menting the collection of live animals — that honored the zoo—was a display of 100 photographs of domestic and wild animals culled from over 700 that had been entered in a competition. The Occasion Is '$2 Day' Parade of Fashions: Focal Point of Doll Show Is Old-Time Clothing Styles Della M aness of C a b o o l, Mo., w on United souri of Sp rin g field 's " G re a t Bank C a p e r" test, w a s flow n to Sp rin gfield at b an k's pense to collect re w ard . Mrs. M aness w a s to carry a w a y $2,056 in time alloted. 16 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M is con ex ab le Detroit Bank has presented a bicen tennial parade of fashions through the medium of a showing of antique cos tumed dolls in its lobby. The exhibit included a Queen Anne doll dating from the early 18th century and a Shirley Temple doll from the only edition endorsed by the child star of the ’30s. Most of the dolls were dressed in their original costumes or wore exact W ayne E. Firestone (r.), pres.. State B ank of Rensselaer, Ind., presents the first tw o -d o llar b ills received by the b ank to local restaurateurs Jam es an d Lois Burris. The fram e d bills now h an g in the Jefferson House Restaurant, w hich is m odeled afte r Thom as Jefferso n 's home, M onticello. The Burris' establishm ent, in com m em oration of Jefferso n 's b irth d a y an n ive rsary an d of the b an k's presentation, featu red a tw o -d o lla r luncheon d u ring the w eek. MID-CONTINENT BANKER for May 15, 1976 BIC EN TEN N IA L ...from Salem Four very timely Bicentennial promotions from Salem: • Georgetown Stoneware • Silverplated Goblets *1776 Stainless • Yorktow n Ironstone . . . so appropriate during our 200th Anniversary celebration. We have co-ordinated for the Bicentennial in product and packag ing. All Salem products are part of complete programs for generating new customers and new deposits. They include a complete sup port package: displays and advertising materials, direct mail MID-CONTINENT BANKER for May 15, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis pieces, internal control and report forms, personnel training, market exclusivity, successful track records, and return privilege of unused merchandise. Write for more information: S A L E M C H IN A C O M P A N Y S A L E M S IL V E R S M IT H S South Broadway Extension Salem, Ohio 44460 Better yet, phone Jay Keller: (216) 332-4655 17 In Chattano oga : Centennial Celebrated With Portrait Offer United American Bank, Chattanoo ga, recently completed a centennial ob servance portrait promotion featuring photos by Olan Mills, which is head quartered in Chattanooga. Anyone— customer or not—who came into the bank could obtain a free 8 x 10-inch color portrait after making an appointment. At the beginning of the promotion, the bank reported that its three-week photo-taking schedule was almost completely booked, rep resenting between 1,200 and 1,500 sit tings. In order to take care of all re quests, the bank had to extend its offer. According to Dianne M. Brogden, public relations director, the response was overwhelming. She said that the promotion has generated much good will for the bank in the community, even before the portraits were taken. The bank announced the promotion by direct mail, advertising and state ment stuffers. The promotion was ad vertised as “something very special for our customers, just to show how much we appreciate your support.” 'It A in 't Braggin': Record Growth of Stock Spotlighted in Bank Ad Dizzy Dean, one of baseball’s greatest pitchers, used to say: “If you done it, it ain’t braggin’.” Apparently, that’s the way South- Colonial Money Is Exhibited west Bank of St. Louis feels about its 23-year record of growth that has in creased the market value of a share of its stock from $225 to $2,421— an in crease of 1,076%. The bank took advertising space in one of the city’s daily newspapers re cently to call the public’s attention to its record of growth. Headlined “South west Bank Common Stock: A 23-Year History,” the ad outlined the record of “splits” and dividends paid over the 23 years. Dividends of $1,538.63 paid on that single share of stock during the years produced an annual yield of 29.73%! Modestly, the ad closed by saying: “There can, of course, be no assurance of continued appreciation and earnings at these levels.” Well, they “done” it. Braggin’ or not, it’s a pretty fair record! A p p le s & M em orabilia Bank's Anniversary Features Look at Past Free red apples and memorabilia were the order of the day when Mid America State, Highland Park, Minn., celebrated its 30th anniversary. While all visitors to the bank’s facili ties received an apple, the Main Office lobby featured a collection of photos, newspaper clippings and other memora bilia concerning the institution. Those items from the past were gathered by bank personnel and highlighted the bank and its second quarters, which were in the Highland Shopping Center during the ’40s. The bank originally opened as High land Park State in 1946 and has occu pied three buildings since that time. Its name was changed when it became an affiliate of Mid America Bancorp., Inc., Minneapolis. inately distributed dollar bills to the first person seen wearing a badge in every department and branch, and a total of $50 was handed out over a two-week period. Bank officials are enthusiastic about the campaign and say a good volume of loans has been attributed to the use of the buttons. N um ber 13: H C Spotlights Georgia With Full-Page News Ads Here’s how one HC thanked its cus tomers for their business while cele brating the bicentennial: Trust Co. of Georgia, Atlanta, published a series of full-page newspaper ads depicting the history of Georgia, the nation’s 13th state. While the messages have been used as institutional advertising in the state’s daily newspapers, bound portfolios of the documents were distributed to all schools in cities where the HC has af filiates. The eight-page portfolio contains historical records which are illustrated heavily with maps, sketches, etchings and portraits. Its text consists of eye witness accounts and observations taken from journals and writings of people who lived dining the eras depicted, while a final page predicts what Georgia might become in the next 200 years. The grand finale of the HC’s partici pation in the bicentennial will come on June 29, when open houses will be held at all affiliate locations throughout the state. Free refreshments will be served. Charter Bank Flies Its Colors M ercy Sakes! Badges Promote Loans; Earn Rewards for Staff Lookin g over p art of an exh ib it o f rare colo n ial A m erican b an k notes are A la n Q . N orw ood (r.), v.p. and asst, sec., First United Bancorp., Inc., an d D aulton K e lly , v.p., First N at'l, both of Fort W orth. Eighteen notes issued in 1776 w ere on d isp la y in the b an k's lo b b y fo r tw o w eeks. The currency w a s from the collection of Jo sep h R. Lasser of C y ru s J. Law rence, Inc., N ew Y o rk City. 18 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis There have been quite a few sur prised, amazed and happy employees at National Bank of Commerce, Mem phis, as they received one-dollar bills as rewards for wearing “Mercy Sakes” badges while on the job. The badges’ wording is taken from the “lingo” of citizens-band radio, and serves to promote the bank’s current in stallment loan division campaign for loans on new automobiles and recrea tional vehicles. Two representatives of the installment loan division indiscrim R a y Ruby (I.), pres., C h arter B ank, Je n n in gs, Mo., and G lenn Clem son, m gr., River Roads Office, d isp la y one of tw o dozen bicentennial fla g s that are fly in g from the fa c ility 's roof in honor of the nation 's a n n ive rsa ry . Included in the d isp la y are the Betsy Ross fla g , the official A m erican fla g , the Bennington fla g and the bicentennial (A R B A ) fla g . MID-CONTINENT BANKER for May 15, 1976 'Mrs. Olson' Welcomes Visitors A hostess of C en tral Trust, C in cin n a ti, pours a cup of coffee fo r a visitor d u rin g an open house at the b an k's new est office. The 225 East Sixth Street Office, w hich is a n eigh b o r of Proc ter & G am b le 's new h ead q u arte rs, featu red that com p an y's F o lge r's coffee an d a la rg e rth a n -life photo of Mrs. O lson, the Fo lge r's TV sp okesm an , to w elcom e one and all d u rin g the coffee com p an y's m ove to the a re a . Besides free coffee, visito rs w ere invited to take home a free ceram ic coffee cup b e a rin g the legend " H a v e A C u p O n U s," an d to register fo r a free Mr. Coffee coffeem aker and a y e a r's sup p ly of F o lge r's fo r g u e ssin g the correct num ber of coffee b eans in a jar. Provides Answ ers: Four Consumer Booklets Are Released by A B A Money,” “Bank Services and You,” “A Homebuyer’s Guide,” and “Trust Ser vices From Your Bank” are updated versions of previous ABA booklets that have sold in the millions. Issues covered in the booklets in clude : • How long does it take for a check to clear? • What should I do if my bank card is lost or stolen? • What are conventional, FHA and VA loans? • How much can I afford to pay for a house? • How do I figure out my disposable income? • What should I do if I get into fi nancial trouble? • What happens to my property when I die? • How much money should I have to benefit from a trust? Other booklet topics are women and credit, overdraft checking, individual retirement accounts and Keogh plans, variable-rate mortgages, condominiums and cooperatives and unit pricing. For more information, contact the Order Processing Department, Amer ican Bankers Association, 1120 Con necticut Avenue, N. W ., Washington, DC 20036. Single copies of “How To Manage Your Money” sell for 50 cents, while the other three are priced at 45 cents each. Quantity prices are avail able. Four new consumer booklets have been released to the banking industry by the American Bankers Association’s Marketing Division. Designed to enhance a bank’s school, community, consumer or public rela tions program, “How To Manage Your Watercolor Show Draws Crowds W hat once w a s p lain brick w a ll of phone co m p an y in N ee nah , W is., w a s tran sform ed into this red, w hite an d blue bicentennial m u ral by First N at'l. W all fa ce s b an k, in corp o rates b an k lo go at I. center. Enam el d esign w a s chosen by phone com pany and bank. First Customer Arrives in Style G eo rg e B elan ger of W inthrop H a rb o r, III., w a s the first custom er of the d rive -u p of Zion (III.) B an k afte r e x p an d ed hours w ent into effect. A s can be seen, Mr. B elan ger arrived in style—a 1941 Buick Special. H ere 's to the 200th: Two-Fold Birthday Salute Is Unveiled in Illinois As nearly everyone knows, July will mark the 200th anniversary of the United States and to commemorate the event, the Illinois Bankers Association is sponsoring a two-part project. The first part is called “Your Bank Takes Root in Tomorrow’s History.” Banks can plant, in groups of 10 trees, a living memorial to recognize and honor community notables, important events and historical sites. The idea behind the planting of the Marshall Seedless Ash or Summit Ash trees is that “the bicentennial isn’t something you watch: it’s something you do.” Part two of the project is a specially designed display entitled “Illinois and Its Banking Heritage,” which contains a collection of documents, original pho tos of a number of the state’s cities and Illinois’ most famous sons. It cov ers the time period from pre-statehood to the turn of the century. Also fea tured in the display are examples of early Illinois money, banking docu ments and mortgage notes. In Neenah, W is.: Wall Does Peacock Trick With Bicentennial Mural The first p u blic sh o w in g of a selection of 64 o rig in a l w a te rco lo rs by K a y Sm ith (I.) served as a d ra w in g card fo r hu nd reds o f people to the convenience b a n kin g fa c ility o f A m erican N a t'l, C h ic a g o . Jo in in g Miss Smith in this photo are Berthil W. Iverson (c.), fa c ility m gr., and Richard K. M agu ire , b an k v.p ., re tail b an kin g. Subject of the w o rks w a s historic A m erican sites. The p ain tin g s w ere com m issioned by a pu blish er to illustrate a five-vo lu m e series on colonial an d re vo lu tio n a ry A m erican history. First National, Neenah, Wis., had an “ugly duckling” plain brick wall facing its parking lot. However, the bank solved the problem by paying an artist to redo the wall in bicentennial colors. Before the wall was decorated, it was of plain brick. After two under coats, the chosen design— a waving flag with stylized American eagle and the bank’s logo—was applied in weatherresistant enamels. 'Front-Door' Loan Service U nion Planters N atio n a l, M em phis, uses this motor home as a m obile loan office. M anning it a re Jam e s H. M athis an d S. Floyd H a rv e y , b a n kin g officers. H ours o f the 'office' are M on d a y th rou gh F rid a y even in gs an d from 10 a.m . to 9 p.m . on Sa turda ys. Besides accep tin g installm ent loan a p p licatio n s, M essrs. H a rv e y an d M athis consult on direct deposit of social security, retirem ent accounts an d use of ATM s. MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Loan EFTS (Electronic Funds Transfer Systems) EFT Offers O n ly Short-Term Benefits In Staff, Building S ize Areas, M a y e s Says HAT effect will E F T have on the number and size of bank staffs and buildings in the long run? Not much, according to experienced bank designer and builder John A. Mayes, president, Financial F a c i l i ties C o rp ., G len Ellyn, 111. E F T must be utilized by banks as the technology becomes available, Mr. Mayes said. Some of the small M A YES er banks will take the slower road to E F T because of the uncertainties of E F T ’s developing tech nology. Bankers will be reluctant to put large amounts of money into equip ment that soon may become obsolete. Actually, they’ll be the last ones to in vest heavily in E F T , because many banks are content to merely keep up with their competition. Mr. Mayes said the short-term gains from E F T will be seen in expanded business from services such as over draft banking. As E F T use increases, incremental profitability will be created from a short-circuiting of credits with in the bank. But these benefits will be only temporary. One important factor in this tem porary benefit picture will be the switching of accounts from one bank to another. Boughly 5% of all switched accounts are changed annually because of convenience factors or dissatisfaction with service. But 95% of the switches are made because of change of resi dence. Bankers should keep these fig ures in mind when considering an in vestment in E F T , Mr. Mayes asserted. There is a question whether suffi cient capital is available to finance ex tensive E F T installations, he noted. Only 25% of the capital in U. S. banks is available for facility expansion and equipment acquisition, Mr. M ayes said. And much of this is in larger banks. In Illinois, for example, an average of $330,000 in capital is available for construction or extensive acquisition per bank. This won’t go very far, and it means that no other money is avail- W 20 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis able for operating equipment, branch construction, etc. Thus, there aren’t many dollars available to fund E F T , especially when the $50,000 average cost per automatic teller machine (ATM) is taken into consideration, Mr. Mayes said. Many banks, mostly the smaller ones, would be hard pressed to install more than one or two ATMs. Perhaps 50% of the intermediate-sized banks could install four to five units without in creasing capital, he continued. One method for examining E F T ’s impact on a bank’s physical plant and the size of its staff would be to take a directory and cross out the names of people whose work will be eliminated as well as departments that will be cut down as a result of an E F T installa tion, Mr. Mayes said. In so doing, one finds that the real estate and commer cial loan departments are little affected. The trust department realizes no change. The computer services depart ment, however, is enlarged. Cash dispensing is one of the main selling points of E F T , Mr. Mayes said, and reductions in physical plant needs —lobby and teller requirements—would involve more off-premise dispensing of cash through overdraft banking. The use of drive-up ATMs would lessen check cashing. The consumer credit de partment staff could be reduced be cause continuing personal interviews are not required with overdraft bank ing loans. E F T will enable a bank to realize temporary gains in the reduction of personnel and lobby space, Mr. Mayes concluded, but the gains will be short lived, for, as business increases, banks will find themselves again bursting at the seams as E F T increases their vol ume. Eventually, they will be forced to hire more people and construct more buildings, wiping out most of those hypothetical cost savings often cited for moving into E F T . ® • Liberty of Louisville, Credit Union Plan Joint Money Machine Venture L O U ISV IL L E —Liberty National and the Kentucky Credit Union League plan a cooperative effort whereby the bank will supply individual credit union members with plastic cards (possibly MONEY cards with CU identification) that will access Liberty Money ma chines. The Louisville Chapter of the CU league has 109 credit unions, with a combined membership of more than 125,000. Under the proposed plan, any indi vidual belonging to a CU in the league would be eligible to use the new cards to deposit to or withdraw from their CU accounts at any one of the 18 Money machines located throughout Jefferson County. Besides having access to the ma chines, CU members carrying the new cards also will be eligible to use retail point-of-sale (PO S) equipment that Liberty National intends to install in the future. New Automated System Begun At Frost Bank, San Antonio; Magnetic Tape Cassettes Used SAN ANTONIO— Frost National’s automated customer service center has begun implementing a network of proof and encoding systems to capture data automatically on magnetic tape cas settes. The service center handles data processing for 38 Texas banks. Melvin Johnson, vice president, au tomated customer services, says the new NCR 775 system speeds balancing and reconciliation procedures and al lows the bank to lower its processing charges to all the banks it serves. He also maintains that Frost Bank is the first in the nation to provide its cor respondent banks with this system. Boerne (Tex.) State is Frost’s first C. M. H olekam p (r.), pres., Boerne (Tex.) State, an d G eo rge L. Klein, cash., w atch Rosem ary Strube w ork at her new N CR 775 p roof m a chine with M ICR d a ta -ca p tu rin g ab ility. Proof and encoding d ata are recorded on cassette tap es and sent to Frost B an k's autom ated custom er service center in San A ntonio fo r processing. MID-CONTINENT BANKER for May 15, 1976 Correspond with us. J%\\ ' ' ■.>*•"■ 'S®? Reliability in banking since 1883 MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By keeping in touch, your bank and the Whitney can su ccessfu lly work together. Now, as for more than ninety years, the Whitney stands ready to go to work with correspondent banks, small and large, to achieve mutual progress. It’s time for us to get to know each other better. Correspond with us! 21 correspondent bank to take advantage of the service. According to Mr. John son, a unique aspect of Boerne State’s conversion to automation is that the bank changed from a manual account ing system on demand deposits to an automated accounting system. With the new system, all transactions are re corded on cassettes as a byproduct of normal proof operations. The cassettes are sent to Frost’s au tomated customer service center in San Antonio, where they are converted to larger magnetic tapes for processing on a central computer. Valuable pro cessing time on the central computer is saved, says Mr. Johnson, by recording the data on a magnetic medium and balancing it at the local bank. Mr. Johnson points out that an im portant advantage of using the datacapture feature with the proof system is the ability to update checking accounts with float analysis data from the cas settes. Frost Bank also plans to use the NCR 775 for processing savings accounts, all bank loans, for posting the general ledger and for float analysis on check ing accounts at the Boerne bank. Officers, Directors Reelected By MAPEX, St. Louis ACH ST. LO U IS—Officers and directors of Mid-America Payment Exchange (M A PEX ), the automated clearing house for the St. Louis zone of the Eighth Federal Reserve District, have been reelected for the coming year. They are: president, Lawrence R. Chapman, vice president, First Na tional, St. Louis; vice president, W il liam S. Badgley, chairman, First Na tional, Belleville, 111.; treasurer, Richard J. Gudinas, senior vice president, Boat men’s National, St. Louis; and secre tary, Harry J. Krieg, chairman, Cass Bank, St. Louis. Continuing in their capacities are: Donald W. Moriarty Jr., senior vice president and controller, St. Louis Fed; General Counsel R. William Breece Jr. of the law firm of Bryan, Cave, McPheeters & McRoberts; and Ed True, MAPEX executive director. Also reelected to the MAPEX board were Leigh A. Doxsee, vice president, Mercantile Bancorp., St. Louis; Pat Lea, president and chairman, First Na tional, Sikeston, Mo.; and George M. Ryrie, president, First National, Alton, 111 . Senator Thomas McIntyre To Speak at EFT Symposium CHICAGO—U. S. Senator Thomas J. McIntyre (D .,N .H .), who chairs the Subcommittee on Financial Institutions, has been scheduled as a featured speak er of a two-day symposium on E FT S sponsored by Payment Systems, Inc. Slated for the Hyatt Regency O’Hare May 24-25, the event is titled “E F T S — Be Prepared.” Senator McIntyre will address the audience on the Financial Institutions Act as it relates to E FT S. Another spotlighted speaker will be John Benton, executive director, Na tional Commission on E FT . Designed to provide information on the full range of E F T S developments, the symposium will address itself to financial institutions and others in volved in various stages of planning and implementation. Topics to be aired in clude: debit-card programs operating through bank-card associations and in dependents; off-premises banking, in cluding CBCTs, RSUs and ATMs; check-guarantee operations; outstand ing social security direct-deposit pro grams; and pay-by-phone programs. Also covered will be a review of re cent E F T S developments, EFTS-Commission progress and a status report of legal and regulatory issues. Payment Systems, Inc., is a New York City-based organization of re searchers and systems specialists that has served the industry since the early planning days of electronic banking. Its annual E F T S symposiums have been held since 1972. BMA Publishes Proceedings From Its EFTS Conference CHICAGO— Banking on E F T is a new publication from the Bank Market ing Association that outlines the pro ceedings of its recent Electronic Funds Transfer Conference. Included in the 114-page book are edited texts of key presentations, in tended to serve as a reference work to bank marketers and finance and opera tions people interested in current E F T implementation techniques and mar keting concepts. Included are outlines by 16 banking and financial authorities on topics such as planning for E F T , interpreting cur rent legislation and the future, com petition for financial services, shared M A P EX directors an d ad vise rs are show n at recent m eeting. L. to r., they are: R. W illiam Breece Jr., gen 'l counsel; Richard J. G u d in as, W illiam S. B a d gle y, G e o rg e M. Ryrie, Law rence R. C h ap m an , Pat Lea, Leigh A . Doxsee, H arry J. K rie g an d M A P EX Execu tive Director Ed True. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis facilities and two points of view on as set cards. Also covered are case his tories of CBCTs, current attitudes af fecting E F T S and putting your house in order for E FT S. Banking on E F T is available to BMA members for $20 a copy. Write: Order Department, Bank Marketing Associa tion, 309 West Washington Street, Chi cago, IL 60606. Bank Sets Up Display; Introduces City to ATM LOMBARD, IL L .— Bank of Yorktown has unveiled a display of its Yorktown Banker/24 machine in the town’s major shopping center. Purpose of the display is to illustrate to the public the use of the machine, which will be lo cated at the bank, a short distance from the mall. The Banker/24 is manufactured by Diebold, Inc., Canton, O. This is d isp la y of B ank of Y orkto w n , Lom bard, III., d em on stratin g a d v a n ta g e s of its new Y orktow n B a n k e r/ 2 4 m achine, w hich is m an u factu red by D iebold, Inc., C an ton, O . Purpose of d isp la y , w hich doesn't h ave fu n ction ing m achine, is to a cq u ain t to w n sfolk w ith device prior to its in stallation in b an k som etim e in sp rin g. The display relates many of the ma chine’s benefits and contains informa tive handout material. “We decided on a display about the Yorktown Banker/ 24 rather than displaying the machine itself, due to the high cost and physical difficulty of transporting a unit of its size,” said Edward J. Shaw, president. Designed by the marketing firm of Financial Shares Corp., Chicago, the display was opened at the shopping center, while introductory receptions were held at the bank for center mer chants and bank employees. The recep tions featured the random awarding of a variety of prizes to persons testing the machine. The public demonstration is slated to end sometime this spring. At that time, the Yorktown Banker/24 will be placed in the bank’s outer wall, which is located in the northwest corner of the shopping center. THESE GUYS WON’T LEAVE WELL ENOUGH Joe Blank, Mike Miller and Ron Deal. It seems they have a couple of key phrases that work consistently well. For us, ana our corre spondent banking friends. They go like this: W hat if? Why don’t we? Why not try this? (and) I wonder why nobody else thought of that? W e didn’t get to be the largest bank in the state by offering you the same tired solutions over and over again. W e keep it loose. Because every bank, and every banking problem, are MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis unique. And we’re flexible enough to find the best solution for you. Because we’ve got people who won’t leave well enough alone. Call us toll free. In Tennessee, 1 -8 0 0 -3 4 2 -8 2 4 0 . In other states, 1 -8 0 0 -2 5 1 -8 5 1 4 . First A m erican First American Center, Nashville 37237 FirstAmtennBankgroup Member FDIC 23 It takes m ore than petroleum to fuel the world’s energy capital. Helping on many levels is First City physical and human resources, a central vice is the result of more experience. national location, convenient port facili Understanding business as well as bank National Bank. Houston and the Texas Gulf C oast’s leadership in the petroleum industry goes undisputed. And though it all began back in 1901 with the discovery of the famous Spindletop Oil Field near Beaumont, it has taken more than just oil to build the energy capital of the world. Gulf Coast energy dominance is the product of a successful formula — a strong economic base, the right mixture of 24 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ties and the availability of technical and ing has helped us become . . . scientific personnel and services. Providing financial solutions in the A major financial strength behind energy field is a major part of First City Texas industry. National Bank. W hat we’ve learned is yours. F IR S T W e’re becoming involved with more C IT Y and more industries every day. And we’re N A TIO N A L proving to correspondents that more ser BAN K OF HOUSTON MID-CONTINENT BANKER for May 15, 1976 Congress To Hear Testimony On Condition Of Big Banks WASHINGTON, Jan . 13 the agency considers them to to bf - l their He said he would ask Smith to -c V>&> P) — Two congressional have a “relatively high pro- as* explain his office’s policing v j" Wr u O r / /* ->licy before the panel. , »-•els want to hear from the portion of classified loans” — w, C oV W e r.acV t f watchdog of the nation's loans where the possibility of s’ ■»# /> •nous statements s V ~ \ O V T° s about his agency’s reg- collection is considered to be - ty,. ” * l' 0/y Us£ / *’ele, Smith has r\V\Xe t ' S Wrt2, \';V> n polices. questionable. 'n'-lu!,,'c^ni 'non.,ff£ y a „ * "'ecifically G i>Ns'Vte e ' ' , V\\e William Proxm ire Both banks, the New York- ^ o u d '^ S J / nc A y sup^ S '‘rv>w xgS v \yco'I ' 1 \Tree^' ' w*............. - - h...,. M. tio„,i city ^ 63 Bank Holding Groups Receiving More Study . 4 c Ol ' — „ . M l p even b etter ___________ with prnbf |“The picture A .(\ \ a ghter now for debtii .. rV\°^' Brei of the ing sup ^ vVve ^ C° ' AC\e S ’ S p o r t s spur < 0S,Ne" ' ^ r*e *s a r e S/£ l p f ? ' ° r “c< ^ C ' th, »/.-d after he had acknowledged /<"> p i T I that many banks remain <— ’ \r | \ .C / V-' 0\ years in categor. V I - - . - . a e i . v e R te s ^ * ,« Fed’s rating systerr. H . O * * 1 _ \ p tV \ ” tbeV in4u«lrt That category - , i P r f t D ^ 1 rntoeot ° £ ' L bob'«"*^anc\a' c0" “an4 of four - indicates - T ^ - « « * 1 Govet<""to uss«W « - ” •>» * ”k nai> has une one uor m f 0 T ^ / ^ rcb 3 soU hees e a n 4 c m e lheV IOn in qu iry Ciobe-Deniocrai u, »„ SQ *Qtf0 ) and th4s c s ., n„„v Bank, ad r 0„o~. ns0/ir1a - tat they .• ile Citib a '/le i " 0'- o / ^ '■ e ^ S r e , > 0n >*nk. ^ ro tn C b a - . oller I archb to Wand *°J - ’“ "ace tep °'ls troth was°o«1 banh l *„v s ro\thi'*T" 4eputV presetian<1 h>s „ys ...... t ^ e s u h c o h ' ^ T t n Jan»- « 'M a t t e l vol^.loena and ■tn«« .„beoti" '‘"•The t>-_ esS ibave * r ba«V. ' " 5 c o i " f 'e' ieports _ mWee R Views of Comptroller's Office On Losses, Problem Banks, Agency Consolidation By H. JOE SELBY, First Deputy Comptroller of the Currency, Washington, D. C. HE TID A L WAVE of troubles precipitated by recent press ac counts seems to have abated, and yet our banking industry continues to search for a calm sea and prosperous voyage. For bankers, the single most worrisome factor in this quest remains, as it has been through the beginning of this decade, the state of our na tion’s economy. Several important economic indi cators show that the United States is emerging from the most severe eco nomic recession since the Great De pression of the 1930s. Nevertheless, the casualties of the recent economic tempest lay scattered on the landscape. It certainly should not be surprising that the storm of the ’70s weakened the foundations of many of the businesses upon which our economy depends. With this in mind, it would be un realistic to expect that the nation’s banks, particularly those larger insti tutions which are the principal credit sources of regional and national busi nesses, would not be affected. Despite these economic problems, the national banking system, which is supervised by the office of the Comp troller of the Currency, is sound and prosperous. Indicative of this strength is the remarkably resilient performance of the 10 largest national banks in 1975. T The banks hold about 40% of the as sets and deposits of all national banks. Outstanding loans for these 10 bank ing companies totaled $152 billion at year-end 1975. Total net loan losses of these banking companies for all of 1975 equaled $1.1 billion—or 0.7% of outstanding loans. Although these losses were above the historic annual figures since World War II, let us ask: • Did they severely impair capital? No. In fact, capital accounts of these 10 banking companies grew $1.4 bil lion in 1975. • Did they exhaust loan loss re serves? No. Loan loss reserves of these banking companies were strengthened in 1975 by some $206 million. • How were these losses absorbed? Entirely out of current earnings. Recog nizing the severity of the recession and the impact it was having on their loan portfolios, the 10 money-market bank ing companies individually, as well as in the aggregate, covered their entire 1975 loan losses from current earnings. And even after charging off some $1.1 billion in bad loans, these companies earned before-tax income of $2.2 bilMr. Selby’s remarks are taken from a speech given at a recent directors’ seminar sponsored by the Oklahoma Bankers Association. MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis lion. L et us broaden the question of bank condition to encompass the full spec trum of national banks. The term “prob lem banks” has been bandied about so often recently that it must now be con sidered a household word. The Comp troller’s Office considers 28 banks as problem banks. These 28 banks have total assets of $11.5 billion and de posits of $7.6 billion. Out of the 28, only seven exhibit weaknesses of suffi cient severity to threaten their imme diate liquidity and solvency. The re maining 21 banks have serious prob lems, which, if not corrected, could lead to insolvency, but there is no im mediate danger. The number of banks in peril of in solvency declined by one on February 16, when Hamilton National, Chatta nooga, failed. The bank’s insolvency largely was attributable to its involve ment in real estate mortgage loans originated in 1973 and 1974 by Ham ilton Mortgage Co., a non-bank sub sidiary of Hamilton Bancshares. A study of the origin of the classi fied loans found in the banking in dustry would indicate that these loans are not the result of bad decisions made in the past months, or even during the past year. On the contrary, 1975 was a year of marked retrenchment for the 25 "T h e needs o f the C o m p tro lle r's O ffice now h a ve been id e n tifie d , a n d the im p le m e n ta tio n o f ch a n g e h a s begu n " (A) Supervisory authority over a onebanking industry, and we continue to note again and again management’s bank holding company when the only positive steps to strengthen the condi subsidiary of the holding company is a national bank would reside in the tion of the banks under our regulatory Comptroller of the Currency’s office. jurisdiction. (B) Jurisdiction over mergers and I am further convinced of the sound ness and strength of the banking in similar types of acquisitions where the resulting bank is a national bank would dustry when I look back over the past few months. Even though the barrage be transferred to the multi-member of adverse press directed at both the board described under (3 ). 2. The bank examination and super regulator and the industry has abated, I note with particular interest the con visory powers of the Fed and the FD IC tinued confidence in the banking in dealing with state-chartered banks would be combined into a new office dustry. The adverse press began on January headed by a single administrator, the Federal Supervisor of State Banks. 11, with articles detailing specific data 3. A five-member Federal Banking from the reports of examination of two Board would be created with three of the largest banks in the world. The second big bomb was dropped on Jan ex-officio members: the Comptroller of uary 22, with an article detailing a the Currency, the Federal Supervisor problem bank holding company list of of State Banks (as described under the Federal Reserve. Each article at number 2) and a Fed governor des tempted to sensationalize and over ignated for this purpose by the Board of Governors. The two remaining mem dramatize problems which could best be defined as past history. The econ bers would be appointed by the Presi dent and confirmed by the Senate, one omy in January of 1976 was in the of whom the President would designate throes of a full-blown recovery. as chairman. The main problems confronting the 4. The Federal Banking Board would banking industry today are economyhave certain powers of oversight in related and the capacity of the system to shoulder the problems is a matter the examination and supervision of in sured banks. deserving of commendation rather than 5. The Federal Banking Board would condemnation. Even though we saw no major reaction from investors or de maintain close working relationships positors to the news articles, I earnestly with the Fed. 6. The Federal Banking Board would hope that our critics are ever mindful of the potential for unwanted reper pay all costs of examination and super cussions that could result from an over- vision incurred by the Comptroller of zealous desire to protect the public in the Currency and the supervision of terest. state banks and should have authority to defray the expenses of qualified state The federal regulatory trichotomy, under which the banking system of to banking departments which take over, day operates, is being closely scruti by contract, any of the examination or nized. The two banking and one over supervisory functions of the Federal Supervisor of State Banks. sight committees in Washington have The Fed, under the leadership of shown in the last few months a desire to probe every corner of the bank reg Arthur Burns, proposes a type of con ulatory structure with particular em solidation with the Fed ultimately gain ing the optimum. Chairman Burns, in phasis on some form of consolidation. testimony before the House subcom All of the three principal regulators have been represented at hearings be mittee, suggested two possible avenues for consideration. fore both branches of Congress. The first of these calls for the crea Ex-chairman of the FD IC , Frank Wille, presented his proposal and justi tion of a Federal Bank Examination Council to focus on the most critical fication to the Committee on Banking, need—namely, modernization of bank Housing and Urban Affairs of the U. S. examinations and vigorous follow-up Senate on December 8, 1975. Ex-Chairman Wille’s proposal contained the fol procedures to cure weaknesses that are lowing points: uncovered. The examination council 1. The Office of the Comptroller of would have authority to set standards and procedures that would apply to all the Currency would be continued with federal banking agencies. It would also two modifications: 26 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis review significant problem cases, when and as they develop. All three agencies would be represented on the council. Dr. Burns firmly believes consolida tion could— and I quote— “either de liberately or inadvertently frustrate monetary policy and destroy the ef fectiveness of the Federal Reserve in seeking to achieve the economic goals set by Congress.” Both the Fed and the FD IC have, in the proposals I have outlined, a recur ring theme. The theme is that of a need for regulatory change now or in the near future. The office of the Comp troller of the Currency takes a strong position that this, in fact, is not the appropriate time for drastic changes in the federal banking structure. Our posi tion on regulatory consolidation says, “In striving to foster a sound banking system based upon the greatest pos sible freedom of competition, this of fice would prefer to witness a compre hensive strengthening of government regulatory authority among the agen cies responsible for supervising finan cial institutions to promote the applica tion of agency discretion on a caseby-case basis in most areas of bank op erations.” Our experience in trying to enforce detailed statutes with universal appli cation persuades us that it is most dif ficult for the government, either through the Congress or the agencies, to design statutes or regulations that work ef fectively with all financial institutions. Rather, we think more elaborate en forcement powers, accompanied by general congressional policy directives, will lead to a more sensitive and re sponsive regulatory mechanism. Congress’ answer to the regulatory question appears to be consolidation of the three regulators into a single regulatory agency. If there has been a single, identifiable public objective with respect to government’s involve ment with banking in this nation over almost two centuries, it has been hos tility toward the concentration of fi nancial power, whether in public or private hands. The three-agency struc ture did not result from sheer acci dent, but rather from an inherent evo lutionary process which has fostered what we consider to be the best mech anism for sound regulatory responsi bility. W e would prefer to retain the current system, with its built-in capa bility to change, over scrapping an ef fective framework of regulatory con sciousness. The office of the Comptroller of the Currency, on March 25, weathered one of two major Congressional votes. On that day, the Government Operations Committee of the House of Representa(Continued on p ag e 42) MID-CONTINENT BANKER for May 15, 1976 How Did We Get in This Shape? E D IT O R S N O TE: In th e follow ing article, Mr. M atthew s explains how , during the last five years, everyone has b een living through a p eriod o f enor m ous econ om ic change. H e goes on to show how th ese changes have resulted in the banking industry’s experiencing unusual loan losses—losses consider ably a b o v e th e industry experience o f th e past 30 years. H e closes by giving ban kers som e advice on how to im prove their institutions’ earnings. OW CAN W E as bankers protect assets in a period of a rapidly de preciating currency, rapidly rising prices, loss of public confidence in gov ernment and consumers’ unwillingness or inability to increase spending? These are fundamental issues that have oc curred over the past five years. Critics of the banking industry say we bankers are to blame for allowing businessmen to become overextended. W e are being criticized for our credit analyses that led us into many loan situations. Before tackling some of these allegations, I think it would be meaningful to discuss some key eco nomic events over the last decade and explain their impact on the banking industry. In order to cover a vast amount of data, I have had to be over ly simplistic in making key points. W e had the longest economic expan sion in the history of the United States from 1961 to 1972. The last half of this period was characterized by dol lars piling up in the rest of the world as a result of overvalued dollars and, therefore, a relatively cheaper cost of foreign goods. Large trade deficits were common month after month. In “The Mouse on Wall Street,” one of the H By WILLIAM M. MATTHEWS JR. Chairman Union Planters Corp. Memphis characters says, “In essence, there must be a steady and fixed relationship be tween production and money, or money becomes of less and less use.” . . . This relationship was deteriorating. At the same time, the United States would not agree to change the convertibility rate of U. S. dollars to gold. The United States had promised time and again nev er to remove the convertibility of dol lars into gold at a fixed price. In a speech in December, 1961, President Kennedy stated to the National Asso ciation of Manufacturers, “This Ad ministration, therefore, during its term of office—and I repeat this and make it as a flat statement—has no intention of imposing exchange controls, devalu ing the dollar, raising trade barriers or choking off our economic recovery.” In “Atlas Shrugged,” one of Ayn Rand’s characters states, “Your wallet is your statement of hope that some " W h e re do w e go fro m h ere as an in d u stry ? C le a r ly , lo a n d iv e rsifica tio n is im p o rta n t. It a lw a y s h a s been. It a l w a y s w ill be. B a n k s th a t w e re o v e re x te n d e d in the re a l estate a re a m a d e a m ista k e . . . . The b a n k in g in d u stry has p ro te cte d its a sse ts in the tra d itio n a l sen se o f the term . Lo a n s h a v e been d o cu m e n te d a n d le g a l ste p s ta k e n to p ro tect c o lla te ra l, but in som e ca se s, co lla te ra l no lo n g e r has the econo m ic v a lu e it h a d w hen the lo a n s w e re m ade b e cause the eq u a tio n c h a n g e d ." MID-CONTINENT BANKER for May 15, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis where in the world around you there are men who will not default on that moral principle which is the root of money. That you will be able to ex change it for the product of other ef forts.” The magnitude of dollars held over seas became a serious problem by June, 1970, and we had the first devaluation since the 30s as a result of this con dition. In December, 1971, we had a second devaluation and, simultaneous ly, did a 180-degree turn on all pre vious promises by removing converti bility of dollars into gold and agreed to a floating exchange rate of the dollar to other key currencies in the world. At that precise moment, we knew that our rate of inflation would have to equal 20 to 30% over the next two to three years as the trade mechanism worked to in crease domestic prices as overseas dol lars were spent. Experience proved in flation would be worse than that. To stress the seriousness of the Eurodollar situation, President Nixon imposed a 10% surcharge on all imports in August, 1971, just prior to the second devalua tion. This effort to erect superficial economic barriers was short-lived and, of course, was abandoned with the 27 "A s b a n k e rs , w e m ust le a rn how to e a rn in a p e rio d w hen g o ve rn m e n t cannot p ro v id e the s ta b ility fo r the eco nom ic syste m w e w e re used to. W e m ust le a rn to p rice our p ro d u cts w ith in this e n v iro n m e n t to e a rn a sa tisfa cto ry re turn on sh a re h o ld e rs' in vestm en t. B a n k s m ust d e sig n th e m se lv e s to a v o id the ris k of in fla tio n ." establishment of floating rates. Milton Freidman wrote in 1963 in the book, “Capitalism and Freedom,” that there are four basic alternatives to achieving a balance in foreign trade. They are: 1. Pay off deficit trade balances in gold. This, of course, can only be tem porary in nature. 2. Enforce a domestic price defla tion by lowering the money supply as trade deficits are experienced. 3. Change exchange rates. 4. Impose tariffs on foreign goods. We used alternatives three and four. Deflation and resultant unemployment were not politically popular. The energy crisis was now on the horizon, and in April, 1973, Nixon gave his energy message. The effect of the energy crisis was to be felt that fall in the form of rising prices. In Octo ber, 1973, the oil cartel operated to rapidly increase the price of energy. The Federal Reserve was saying at that time that it would expand the money supply from 6% to 8% to offset the cost of energy. By April, 1974, the Fed reversed itself and implemented a policy of decreasing the real money supply. Although this action was taken to slow the rate of inflation, the de crease in the money supply occurred at a time when ownership of a tremen dous amount of dollars was changing from U. S. hands to Arab hands. Now two factors were at work to cause high inflation. The first was the tremendous number of dollars which had piled up in foreign hands from 1968 to 1972, and the second was the increase in the price of oil and its subsequent effect on total energy. Not only was money flowing out of the country, but the Fed was reducing total dollars avail able, which translates into less working capital for U. S. businesses. Can it be any surprise that we had a recession? It was also during this time that Nixon went on national television and de clared to U. S. businessmen that there would be no recession. The impact of the cost of energy af fected every businessman and individ ual in the United States, in effect, low ering the capital worth of the country, its businesses and its families by rais ing sharply the cost of production and consumption. When the cost of pro28 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis duction increases, the currency is fur ther devalued in effect as American goods become more expensive. These actions of the past five years have brought about the highest level of un employment since the ’30s, the highest level of inflation since the ’20s and the highest level of deficit spending by any government during any non-war pe riod. The banking system now is under at tack for making loans under loose terms. I would say that if you would trace any real estate project over the last three years, you would have had a loan problem regardless of loan pro cedures for two major reasons: first, price increases during construction as a result of inflation both in hard costs of materials and soft costs in labor and interest rates. Second, because of the recession, the project could not be rent ed, leased or sold at a price necessary to offset cost of construction. Who brought about inflation, unemployment and the recession? It certainly was not solely the banking industry. It is dif ficult to believe that there were no alternatives to the mismanagement we have seen over the past five years. It is difficult to believe that 9.2% unem ployment and 13% inflation were un avoidable if a longer-term perspective had been taken. The banking industry must antici pate some inflation and its effect on collateral because we have had inflation for years. However, we could not be expected to anticipate double-digit infla tion two years in advance. Deficit spending is another factor in depreciat ing the dollar. Were we as bankers to anticipate fiscal policy and its deficits as they have occurred and their effect on the value of the dollar? Given the events of the last five years, the banking system is now ex periencing problems in its loan port folio as a result of the cash flow changes of its customers. Also, of ma jor significance is that energy price increases have adjusted collateral val ues. Collateral that had substantial economic worth using old energy prices now has a reduced worth. In other cases, in the short run the current economics may question the project’s economic feasibility. In the short run, the collateral value of real estate and construction has changed dramatically because of these events. The simple an swer that the U. S. is overbuilt from a housing point of view is pure hogwash. Any reseach into number of family for mation and housing needs clearly shows substantial demand for housing. Energy costs and other inflation have shifted the supply curve, which appears to make demand look soft. It is not a question of a change in demand. It is a question of people not being able to afford housing with the current eco nomic equations. In the past, it was believed that banks could, more or less, pass on the effect of inflation because we are oper ating with both short-term liabilities and short-term assets. This works fine except when a large segment of the customer base is experiencing financial problems, such as the real estate area, and extends the maturity of their loans or changes the collateral value. Where do we go from here as an in dustry? Clearly, loan diversification is important. It always has been; it al ways will be. Banks that were overex tended in the real estate area made a mistake. It was the same mistake that Chrysler made by producing only large cars. I think the businessman must now recognize that the United States does not have or will not use economic clout in the international arena as it once did. There are not two world powers now, but five, not counting the Arab countries. As businessmen, we must recognize that the sense of govern ment was and is to allow the com petitive business system and free-enterprise economics to absorb economic shocks rather than using political mus cle to demand fair treatment. As ra tional American businessmen, we must face the fundamental fact that the government will not and cannot exert counter pressure to the same extent as had been the case in the past. This must be considered in our business judgments. I think American corpora tions operating in foreign countries have never been more vulnerable than they are today. As bankers, we must learn how to earn in a period when government can not provide the stability for the eco nomic system we were used to. We must learn to price our products with in this environment to earn a satisfac tory return on shareholders’ invest ment. Banks must design themselves to avoid the risk of inflation. Within pe riods of excessive inflation, the credit risk, as we have understood it in the past, becomes almost secondary. The key question becomes, how will infla tion affect my customers’ businesses? We don’t have to work harder—we must work smarter. * * MID-CONTINENT BANKER for May 15, 1976 Techniques for Saving Problem Loans That Can Benefit Bank, Customers ANKERS must be able to deal ef fectively with problem credits and workout situations to maintain a satis factory degree of risk in a loan port folio. Economic events of the past sev eral years have dramatically reinforced this fact. Problems, workouts and charge-offs have been frequent and much publicized. In this environment, the challenge has been the task of get ting “money good” by utilizing prin ciples and techniques that can strength en a weak loan and protect the bank’s assets. For that reason, let me review some of the methods of strengthening loans as well as some of the factors involved in an effective workout program. Each of the points that will be covered will undoubtedly be familiar to experienced lending officers, who probably have employed most of them at one time or another in either new or existing loan situations. However, it is frequently helpful to re-think several different but related approaches to any subject, if for no other reason than to remind our selves that alternatives usually are available if one approach is not suc cessful. Before considering the possible meth ods of salvaging or protecting a bank’s position in a marginal credit, let’s look at the statistics on why workout man agement is necessary in the first place. The simple facts are that businesses do fail and that banks do lose money. The record of business failures and bank charge-offs in the U. S. gives the statistical evidence on this point. In regard to business failures, Dun & Bradstreet in “The Business Failure Record” has reported that total dollar liabilities of bankrupt firms have risen steadily over the past five years, even though the number of bankrupt firms has declined somewhat. The number of bankrupt firms has declined from 10,748 in 1970 to 9,915 in 1974, while total liabilities have risen from $1.9 billion in 1970 to $3.1 billion in 1974. This represents an average liability fail- B By CLAUDE HIGGINBOTHAM Senior Vice President Wachovia Bank Winston-Salem, N. C. ure of $175,638 in 1970, rising to an average failure of $307,931 in 1974. These problems are similarly reflect ed in the record of net charge-offs by commercial banks. Net charge-offs for Fed-member banks rose from $801 mil lion in 1970 to $1.6 billion in 1974. These statistics are not given to sug gest that bank lending is an overly perilous endeavor. What these figures should convince us of is the importance of sound lending practices, including workout management, not just during economic declines, but in good times as well. Even if boom times and eu phoria return, at least some bad credits and workouts will always be with us. The first step in utilizing effective workout procedures is simply to know that a problem exists and to have some knowledge of the dimensions and causes of the deterioration. There are, no doubt, some borrowers who will voluntarily inform their banker when trouble appears, but most of the time we have to discover the facts ourselves. Doing so requires two things: (1 ) an organization that systematically reviews the credit strength of all new and exist ing borrowers, and (2) the ability of that organization to identify and inter pret the early warning signals of po tential loan problems. The first requirement, a review sys tem, may be structured in various ways, any of which may be most effec tive for a particular bank. For the pur pose of the present discussion, it is not necessarily important how or by whom loans are reviewed, but it is important that they be reviewed in depth and at This article is taken front th e F e b ruary, 1976, issue o f Journal of Com mercial Bank Lending, published by R obert Morris Associates. MID-CONTINENT BANKER for May 15, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis regular intervals. If this system is well organized, has a capable staff and is supplied with sufficient information, it should be able to identify those loans that will require more than normal at tention. The symptoms of a problem loan vary, depending upon the situation, but almost no business completely fails without some early signals of distress. These signals may be financial or may take any of several other forms. The important point is that the bank be able to recognize problem symptoms and to identify that loan as one where remedial action is required Assuming that we have been able to determine that a problem exists and that possibly the bank’s loan is in some jeopardy, the first question is then “What do we do now?” Seldom is the answer to this question an obvious one, and in fact, the true dimensions of the problem may not be known at this point. Therefore, if time permits, the first requirement should be to get com plete and up-to-date information. This will involve getting new, more current financial information, making a current credit investigation, rechecking the loan documentation and calling on the borrower to get first-hand knowledge of the situation. In this process, the primary concern should be simply asking ourselves these questions: “Are we safe?” “Are we ‘money good’?” The answer to these questions will determine when and what is done next. Quite possibly, after reappraising the situation, you may decide that even1 though the problem does exist, you are safe and there is no immediate threat to the goodness of the bank’s assets. In that case, you may decide to begin dis cussing the problem at your next reg ularly scheduled call and to work along with the borrower in an attempt to find a satisfactory solution. The real value of a work-out system arises when the answer to those ques tions is negative (or at least not firmly 29 "D o not p ro cra stin a te ! If the p ro b le m e x is ts , it can just as e a s ily get w o rse w h ile y o u b u ry y o u r h e a d in the sa n d ." positive), and you decide that “No, I'm not really safe.” This is when the first principle of handling a work-out conies into play. That principle is simply to avoid both of the most natural reac tions, which are usually to either do nothing and hope the problem goes away or to do what may be too much and precipitously call your loan. Do not procrastinate! If the prob lem exists, it can just as easily get worse while you bury your head in the sand. So do not procrastinate— move! However, the other impulsive reac tion—to pull the string, to call your loan and demand payment—is not necessarily a good solution, for a num ber of reasons. From a credit stand point, precipitous action such as calling your loan could easily cause the bor rower’s business to fail immediately. Assets sold in forced liquidation sel dom bring as much as if disposed of in more orderly circumstances. Also, very real public relations aspects are in volved in this type of drastic action. No banker wants the reputation of being a “fair-weather friend,” and the fact is that salvaging an existing customer can be just as desirable as attracting a new borrower. This is the time to remember the two instances in your lending prac tice when you build real loyalty—when your customer is getting started and when he is in trouble. There are, then, important reasons for not overreacting to a problem cred it. In addition to the credit and public relations aspects, another consideration is that these situations present the real test of a good banker. Successfully pro tecting your bank, getting your money back and salvaging a customer all at the same time are enviable accomplish ments that allow a banker to do real service for his customer, his stockhold ers and his community. Our goals, therefore, in handling the initial reactions to a problem situation, are to keep from acting too precipitous ly and from procrastinating. Between these two poles several choices are usually available to us, and the trick is to calm down, think, plan and then take some deliberate action. Further more, we should be prepared to make more than one approach to the prob lem—to have alternative or related solutions to shore up a problem loan. In this regard, as we consider the various possible actions, keep in mind that they are not independent of each 30 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis other. Often several actions can be taken at the same time. The most im portant first step depends entirely upon the facts of the particular situation and often you need to be working in con sort with good legal counsel. A common first step for improving your position in a problem loan is to take collateral (or additional collater al). A prime goal here, of course, is to gain effective control of assets whose sale, if that becomes necessary, will re pay your loan. Another goal of securing your loan is to create some distinction between yourself and the other credi tors in the event the unhappy day ar rives when you sit down together at a creditors’ meeting. There are as many forms of collat eral as there are assets, and the exact method of getting secured will depend upon several factors, including legal considerations, the other creditors and your relative position. There are, how ever, certain general points to keep in mind when you begin searching for col lateral support. First, do not overlook anything and do not take anything for granted. For instance, do not always assume that you cannot take inventory because the trade will stop shipments. That is sometimes true, but not always, and you certainly should consider the pos sibility. Also, in a really serious prob lem, it is unlikely that you will find any good assets such as listed securities or cash value of life insurance that are not already encumbered, but it is always possible. You should investigate each and every possible asset for collateral strength and require that it be pledged. Taking inventory requires a UCC fil ing and that brings up an age-old problem—preference. In addition, you are confronted with the possibility of putting good money after bad. While there is no general rule as to when it is prudent to advance more funds, new loans into a problem credit should obviously be made carefully. At the least, you should be “money good” on any new money and hopefully you will also realistically acquire sufficient ben efit to strengthen your earlier advances. Additions to the effective capital base supporting your loan are another way to strengthen the bank’s position in a problem situation. This approach might involve the infusion of addi tional capital funds into the business. However, this possibility is often dif ficult to achieve, no matter how easy it is to suggest or even require. Often, therefore, a bank will need to be satis fied with increasing the effective, rather than the actual, capitalization by such devices as endorsements, guaranties and subordination agreements This ap proach is especially applicable in the case of closely held companies. In some cases, the addition of endorsements or guaranties alone will be sufficient to make the lender’s position secure. Subordination of existing or new ad vances made to the company by the stockholders or other parties can add to the effective cushion behind your loan. By agreeing not to be paid until after satisfaction of the bank’s claims, the subordinated lender can change an extended situation into a balanced one for the bank. Also, do not overlook the possibility of a trade or equipment supplier sub ordinating this position to the bank’s loan, especially if the supplier has high profit margins. He may be willing to subordinate his claim because of the future profit potential of this sales out let and his anxiety for the business to have the necessary funds from the bank to continue operations. So examine all of those “notes pay able—stockholders,” “due parent” and “due trade” accounts carefully. Do not be reluctant to require that such forms of third-party financing be made junior to your position in return for the bank’s willingness to go forward in a marginal situation. Whether you can secure your loan or get some form of outside support, a common requirement in any workout is to restructure the company’s financing package. There are, of course, a num ber of ways to do this. Sometimes the most important fi nancing problem may be that of hav ing inappropriate maturities on the existing debts. The borrower simply has too much current debt to be on a sound financial footing—he cannot re pay your 90-day note; but he does have sufficient cash flow, and a long term loan would be a satisfactory risk. Terming what was originally a seasonal working capital loan to a sick com pany is obviously not in your best in terest, but, when the borrower’s prob lems are simply borrowing too short, refinancing into a term loan can help both the company and the bank, espe cially if you also get a well-structured loan agreement and maybe some col lateral in the process. Restructuring your loan might also include bringing in a really long-term lender. This lender could be an insur ance company or perhaps an S&L, especially if the company has desirable real property that can either be mort(C ontinued on p ag e 68) MID-CONTINENT BANKER for May 15, 1976 Getting Out of a Problem Loan Situation Without Losing the Bank's Shirt E D IT O R ’S N O T E — This article is b ased on a talk given by Mr. Sinclair b efo re a m eeting o f th e Southeastern C hapter o f R obert Morris Associates, and the sp eech was reprinted in RMA’s official publication, “Jaurnal o f C om m ercial Bank L endin g.” N one o f the situations describ ed in the article oc curred at Atlantic Bank, w hich Mr. Sinclair joined early this year. ANDLING problem loans, or work outs, is a matter of unusual in terest these days because most of us seem to have as many problem loans as we have good loans. During the first 10 or 12 years I spent lending money, it was hard to make a bad loan. The continuing spiral of inflation and “good times” we enjoyed during the ’60s made it possible for many business men to prosper who really did not have sufficient management ability to succeed. Now the story is different. Almost every day newspapers report that such and such a bank has added X millions of dollars to its loan-loss reserve. Un fortunately, it appears that things may get worse before they get better. So the subject of problem loans and how to handle them suddenly has taken the spotlight away from bank marketing. Bankers and their advertising con sultants are spending an inordinate amount of time writing press releases that explain how everything is still OK in spite of those nasty rumors about big losses yet to come. Almost three years ago, I learned that the bank I was about to join had just received the preliminary report of an FD IC examination that would shake us to our foundations. In that report, F D IC and state examiners had classi fied loans totaling m ore than the bank’s H By ALFORD C. SINCLAIR President & CEO Atlantic Bank Jacksonville, Fla. entire capital structure. Two days later, on a Saturday afternoon, I hit town, went immediately to the bank and be gan a phase of my banking career that became terribly frustrating and, at the same time, tremendously rewarding. During the next several months, there were times when there were real ques tions as to whether our bank could sur vive. Several factors kept us alive: 1. A strong injection of capital to replace part of the $3.5 million special loan-loss reserve we had to set up. 2. An unusually strong and wellknown board of directors. 3. Great cooperation from state and federal banking authorities. 4. Tremendously hard work by the bank’s management team. MID-CONTINENT BANKER for May 15, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 5. Timing (perhaps most important) —our problems came to light six or eight months before the current re cession became a recognized fact—four to six months before money became so tight that many businesses could not borrow. Because of this fortunate tim ing, we were able to get many marginal borrowers to borrow from other banks before the other banks stopped making marginal loans. In a period of one year, through charge-offs, collections or transfers, we shrank our loan portfolio from $68,000,000 to $50,000,000. We shrank our bank’s staff from 195 to 164. As a result of charge-offs, our bank lost $1.5 million, after taxes, in 1973. W e were seven months into 1974 be fore we could establish a consistently profitable operating trend. Now we get around to the point of this article. What did we learn that might be worth passing on to other bankers? Before I get into loan work outs themselves, let me talk about profits, because earning money for bank Alford C. Sinclair, author of the accompanying article, has the fol lowing advice for bankers on handling problem loans: 1. Practice the fundamentals of good lending because prevention is the best cure. 2. Catch the bad ones as soon as you can. If you grade your loans on the front end, you can catch a lot of potential trouble and watch the low-quality loans more carefully. 3. Once a loan has turned sour, act quickly and decisively. A b a d loan is alw ays w orse than you think it is. Try to beat the other credi tors to what’s left of the borrower’s assets. Make paying your loan the borrower’s No. 1 priority. 4. Get a smart, aggressive, innovative lawyer to help you. If he does his job well, he will pay for himself several times over. But don’t leave him to his own devices. Harass him regularly. 5. Don’t let bad loans suffer from lack of proper attention from bank personnel. Keep the original officer involved if possible, but let a specialist ride herd over him. Then you ride herd over both of them. 31 stockholders really is what it’s all about. We learned there are lots of things we can do without. Over the last 40 years, bankers have become spoiled be cause of the foregone conclusion that banks m ake m oney. Well-run banks made lots of money, and poorly run banks didn’t make quite as much. It was quite a revelation to me to walk into a situation where a bank was losing its shirt and to discover just how diffi cult it can be to earn a decent profit in today’s business world. I suggest that bankers think about that, that they look around and tally up all the non productive ways their banks spend money, that they think about the con ventions, the entertaining, the contri butions, the people they keep on their staffs who aren’t producing and never will. " It's ra re that y o u r b a d lo an is y o u r b o rro w e r's o n ly p ro b le m . H e u su a lly o w es at le a st h a lf a d o ze n o th er cre d ito rs." These days we live by the cost/ benefit ratio. If an employee or a ser vice or a piece of equipment or an ac count doesn’t earn more than it costs, we get rid of it. It’s amazing how hard hearted one can be when his own sur vival and that of his institution are at stake. That makes it possible for a banker—not easy, but possible—to look one of his officers in the eye and tell him he can’t keep him on the payroll. So much for profits. What did we learn about loans? During those long cold winter months of 1974, a principle crystallized in my mind that I shall never forget. It is this—“A bad loan is always worse than you think it is.” Think about that. Can any banker think of one bad loan situation in which he was pleasantly surprised? Can he think of one bad loan situation when an endorser or guarantor called him up and said, “Hey, Jack, I just heard that Charlie Smith’s loan is past due. I ’m putting a check in the mail to you to day to pay it off.” During that time also, the bank I was with had our attorney draft a new guaranty form. It turned out to be con siderably longer than we had antici pated. We had to add more than a dozen clauses and paragraphs, gained from experiences in a dozen or more cases in which guarantors had taken us into court trying to renege on their promises to pay loans if the original borrowers couldn’t. The form looks tough and it is, but it’s not nearly as tough as fighting a guarantor through the courts for 18 months. 32 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Loans rarely become losses suddenly. Usually, the bank has some warning, such as the loan becoming past due, or the receipt of information that indi cates the borrower is in financial diffi culty. A bank might get a financial statement showing a bad year or a de clining trend in profits. Or what usual ly happens is that it doesn’t get a fi nancial statement at all when it’s sup posed to. When a borrower comes running through the front door waving his financial statement, it’s evident he had a good year. When a bank has to extract the statement from him or his accountant by main force, it’s equally evident that he had a lousy year and hates to face his loan officer with the bad news. One of the most important factors in the successful workout of any bad loan is an accurate appraisal of the borrower, his capabilities and his atti tude toward his indebtedness. Chances are you don’t have quite all the infor mation in your files needed to make that appraisal. Get it quickly—the borrower may be hard to find a week later. Check quickly to make sure you’ve per fected your liens; move quickly to get more collateral if it’s available. This is no time to dillydally. Take whatever you can get while it’s still available — a second mortgage on his home, assignment of cash surrender value of life insurance, his wife’s endorse ment, the endorsement of anyone else who would lend strength. I don’t believe in lending money on the basis of an accommodation endorsement, but in an emergency you should take any thing that may prevent or limit your loss. Scrutinize the borrower’s financial statement for assets that may cut your loss, even a little. Do you know how many good loans it takes to earn enough to fund a $10,000 loss? You should treat every loan workout with the enthusiasm you would feel if the borrower were trying to keep your personal money. If you do, it will give you the mental attitude necessary to do whatever has to be done to recover your loan. It’s rare that your bad loan is your borrower’s only problem. He usually owes at least half a dozen other credi tors. If you’re going to be successful in your loan-recovery efforts, you must be that borrower’s biggest problem. You must be the first thing he thinks about when he wakes up in the morn ing and the last thing he thinks about before he goes to sleep. The old saying about the squeaking wheel getting the grease was never more true than in loan recovery work. You must make your borrower want to find som e w ay to pay you, if he has to steal the mon ey from someone else to do it. You can’t create that kind of feeling in your borrower’s mind just by turn ing the file over to your collection lawyer with instructions to sue. What you must do is work hand in glove with your attorney to use every legal m eans available to force your borrower to pay you. Get an attorney who’s imaginative, who’s hard working, who’s willing to take a personal interest in your loan problems. Any deadbeat with half a brain can tie you up in court for months, even years. What you need to do to combat these delaying tactics is to dig around and find out w hat the borrower’s as sets are and w here they are. Attempt to get a judgment and levy on these assets. If you’re prevented legally from attaching his assets, your next step should be to get an injunction against him that will prevent him from dispos- " O ne o f the m ost im p o r tan t fa cto rs in the su ccessfu l w o rk o u t o f a n y b a d loan is an a ccu ra te a p p ra is a l of the b o rro w e r . . ing of or transferring these assets. Try to tie him up so tightly that he wants to get any court suits settled as quick ly as possible. Just because you’re in litigation with someone doesn’t mean you can afford to cut off communications with him. If you represent a big enough problem in a borrower’s mind, he nearly always will be willing to negotiate with you. You must be willing to negotiate. Some borrowers have the means to repay you immediately, but the vast majority don’t, and you must be willing to settle for a term pay-out. If you’re successful in your negotiations, your borrower will assign to you all his assignable as sets, will liquidate these assets and use the proceeds to pay you. You can’t create in the borrower’s mind a feeling of hopelessness. If you do he will give up. What you want to do is create in his mind a feeling that, if he follows your advice and instructions, he can get you off his back sometime in the foreseeable future. An example of this technique might be one of our several bad loans to stockbrokers. A bank I was with had been overindulgent in lending to stock salesmen to speculate in the market. When the crunch came, these guys were among the first to bite the dust. In one particular case, a broker owed us about $28,000, secured by some catand-dog stocks whose value had evap orated. W e bought a second mortgage loan on his house from another bank and started foreclosure proceedings, because it was an expensive house and MID-CONTINENT BANKER for May 15, 1976 CaU Chuck For profit Charles G. Meckfessel, C.PA., our Senior Vice President and Controller, spent years with a national account ing firm working with audits and tax planning for various companies. Now through the Fourth, he is available to help you with financial m anage ment, fax considera tions and profit planning. Whether it’s an unusual financial situation or a long range goal you want help reaching, call Chuck. S S 3 Who doesn't need a little more profit? I**«* Ikilsa, Oklahoma Member F D I C MID-CONTINENT BANKER for May 1 5 , 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Call Chuck, t%M>anker's banker. (91$ £87-9171 33 we were convinced that there was enough equity in it to get us out. Up to that time, we had been just one of several problems this fellow had. Sud denly we were about to take his house away and that really got his attention. He hustled around, got the house sold, got us paid off and is now living in an apartment, where he should be. Speaking of buying up a second mortgage brings us to the stickiest problem any loan officer ever faces. When a borrower gets in trouble, do you lend him more money to try to keep his business going, and if you de cide to, where do you stop? One trans fusion rarely is enough to keep a bor rower alive. Som etim es—some rare times, it is good business to lend more money to protect loans already outstanding. But in the great majority of cases, you’re simply chasing good money after bad. If you’re going to invest more money in a troubled business, for heaven’s sake install new management. Bad business loans occur because of bad judgment and bad financial manage ment by principals in the businesses. If you see a company demonstrating bad financial management, odds are that bad management practices perme ate the entire organization. This brings us to another of Sinclair’s axioms—“The same management that got a company into a hole can rarely get it out.” If you remember nothing else in this ar ticle, remember that and think about it. Think about the law of momentum. It takes a lot more muscle to stop some thing rolling in the wrong direction and start it rolling in the right direc tion than it does simply to k e e p it roll ing. It takes a lot more management skill to rescue a sick company and get it back on the right track. In nearly all cases I’ve seen, the ones who got a company in trouble just didn’t have the horsepower to effect its recovery. So if you’re going to invest more money in this company, insist on new manage ment. In many cases, this is beyond your power. If so, secure yourself as well as you can; start liquidating the borrower’s assets and hope he can hang on long enough to pay you out. At about this time, many borrowers begin to contemplate bankruptcy, eith er of their own volition or at the sug gestion of some friendly lawyer who is willing to make his services available to guide this fellow through bank ruptcy proceedings. If this happens, your best course of action is to sit down with the borrower and say, “Look, Jack, we’re not going to let you bank rupt, at least against us. We will find som e evidence that our loans were ob tained fraudulently, and we will not let you be discharged.” 34 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The great majority of borrowers in flate their personal financial statements and usually include assets that don’t really belong to them. When you point out these little examples of attempt to defraud, most borrowers will be brought around to their senses and will begin to concentrate on getting your debt paid. The privilege of having debts dis charged through bankruptcy proceed ings has been badly abused in this country, both by individuals and by businesses. It seems that bankruptcy is about to become as free of stigma as divorce, and that should not be allowed to happen. Any time a bankruptcy of any size occurs, a lot of people are hurt, and I don’t have any compunction about attempting to prevent these bankruptcies if borrowers have en gaged in riotous living, so to speak, and are simply trying to skip out on their obligations. One of the greatest qualities a loan officer can have is the ability to em pathize with his customers, to make these customers feel that he really wants to help them solve their prob lems. At the same time, he must let his customers know that he is no easy mark. One of the most frequent short comings I have found in officers sad dled with collection responsibilities is lack of persistence. In one of his books, Peter Drucker states that to be able to manage, a person needs a basic co m p e ten ce and a toill to perform . Stated an other way, the manager must have a certain amount of intelligence and training and after that his success or failure will depend on his determina tion to get the job done. Collecting loans is not easy work. It puts you in frequent conflict with bor rowers. It is frustrating, because it is rare indeed that you collect a loan easily and quickly. It makes you cyni cal, because you see people at their worst—people who you thought were honest citizens, but who turn out to have reached their choking points and are trying to welch on their debts. It takes a special kind of persistence to wade into this quagmire day after day and not lose your perspective. This brings us to the question, “Who should handle loan recoveries? Should a problem loan be left with the officer who made it or should it be reassigned to a special person or department?” There’s no simple answer to that question. What works best in one bank may not work best in another. To com pound the problem, with increasing frequency we find that the loan officer who made a particular bad loan has been fired or has moved on, so the loan has to be reassigned to someone else. Without offering a simple solution, let me offer a couple of principles that may help crystallize your thoughts on solving the problem in your bank: 1. If possible, the officer who made a bad loan should stay involved. After all, he should know more about the borrower than anyone else. He should be able to maintain contact and work closely with the borrower to solve the problem to the mutual satisfaction of the bank and the customer. Further more, the lending officer should have greater incentive than anyone else in the bank to get the loan collected. 2. On the other hand, the loan should not be left entirely in the hands of the loan officer. One reason is that he is not at all anxious to admit that this loan represents a big problem. He’s more likely to be willing to renew or extend the loan in the hope that, some how, everything will work out all right. Since things seldom work out all right if left to themselves, you need to as sign to a recovery specialist the re sponsibility for seeing that fast and forceful action is taken. This recovery specialist can join the loan officer in his collection efforts and can guide him in using the best techniques applicable to each situation. If administration of the entire loan portfolio, or at least the bad part of it, is your responsibility, then your job is to establish priorities and to make sure everyone concentrates his efforts in the most productive manner possible. To keep your priorities straight and make sure where you are in your collection activities, you need to get regular re ports, probably monthly, on the prog ress of the collection activities on ev ery active loan. You must make the decision when to curtail collection activity on a given loan. It’s almost as tough a decision as whether to lend more money to keep a sick business alive, but it’s also a de cision that has a marked effect on your bank’s profits. There’s no use flogging a dead horse, and sometimes it’s the better part of wisdom to file your judgments, then put your credit file away and not spend any more money on the collection effort for the time being. Before you do that, though, take a long look at that loan and satisfy yourself that you aren’t burying the loan simply to avoid any more embarassment to the officers who made the loan. This is also the time to con sider turning it over to a good collec tion agency on a contingency basis. You aren’t risking much because these kinds of loans seldom get paid anyway. Let me summarize what I’ve been saying: First, practice the fundamentals of good lending. (Continued on p ag e 42) MID-CONTINENT BANKER for May 15, 1976 Some ideas go on and on. Because they work. Take the idea of correspondent banking. We think it's a bigger, broader, m ore relevant co n cep t today than ev er before. F or the sam e reason that breathed life into the correspondent system in the first place: to let banks exten d their services without over-extending their resources.. Citibank is behind the system of corresponden t banking b ecau se w e know it works. B ecau se w e do a lot of things to help make it w ork —using the skills, the system s, the exp erien ce, the innovativeness that have m ade Citibank a leader in ev ery area of banking. W e're always ready to put our shoulder to your w heel. Just get in touch with your Citibanker, C orrespondent Bank D epartm ent, 3 9 9 Park A venue, N ew York, N.Y. 10022 —or call (212) 559-2411. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C IT IB A N K * Citibank, N.A. Member FDIC Take com m and of your Mortgage Loan business With our new Mortgage Loan Extended System Objective: Higher profits for your bank Recruit new customers with customized loan capability. an individual basis. Flexibility —Each investor can have a different interest The new Mortgage Loan Extended Automated Computer rate on his participation, based on 12 different prime rates. Software System puts you above the rank and file with Investor servicing unique versatility that means virtually customized loans: and participation accounting-daily reporting and pro visions for up to 999 participations per loan. Multiple Loan types for flexibility. 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H i M ailing A ddress: P.O . B O X 2269 □ O R L A N D O , F L O R ID A 32802 □ T E LE P H O N E (305) 831-3001 Or Call Toll Free (Outside Florida) 800-327-5352 In Florida Call Toll Free 800-432-5106 Thousands of Banks Now Use at least one of our Systems BANKERS BELIEVE IN US! S Y S T E M S MULTIPLE B A N K /A c c o u n ts Payable/Amortization Schedule/Bond Portfolio Analysis/Certificates of Deposit/Comm ercial Loan/ A V A IL A B LE : Corporate Trust/ Dealer Floor Plan/ Demand Deposit Accounting/ Financial M anagem ent/General Purpose Payroll/ Installment Loan/ Mortgage Loans/Personal Trust/Savings/Source Program Librarian/Supplies Inventory Control 36 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for May 15, 1976 What Loan Review Officer Should Consider In Determining Quality of Portfolio OAN R E V IE W is a vital function at every bank, whether it is done by the president, a committee or a loan review officer. According to Kenneth Brune, vice president and loan-review officer at First National in St. Louis, a loanreview specialist must strive to be prac tical rather than merely theoretical in his approach to his work. Loan officers, he says, often learn their trade either from textbooks or from other loan offi cers, and their knowledge sometimes is not entirely in tune with actual con ditions. Thus, it behooves the loan-review officer to attempt to analyze a loan in a slightly different light than did the officer who made the loan, he says. In many cases, signs of deterioration in a loan can be detected early enough to enable the loan-review officer to alert loan officers to take steps to keep po tentially weak loans from becoming problems. Mr. Brune makes a point of looking at the composition of a borrower’s debt to determine what portion consists of short-term notes payable relative to other current liabilities. He checks the composition of long-term debt and who holds it. It makes a difference, he says, if the long-term debt is held by the public, by banks or institutions, because this has a bearing on a firm’s ability to negotiate should a bad situation de velop. Also, debts remain fixed, whereas some assets are not carried at their current worth. Mr. Brune considers many inventories to be fixed—rather than current— assets because a firm usually cannot liquidate its inventories without replacing them over a period of time. He also looks for the relationship of cash and receivables to current lia bilities after subtracting any notes pay able. This is because cash and receiv ables are sometimes used first to service liabilities other than bank debt; thus, it is important for the bank to know the trend of this relationship, because, if the trend points toward deterioration, L the loan quality could also be deteri orating. Mr. Brune advises using the borrower’s financial statements to get a fix on the status of working capital. He says he is suspicious about the carrying value of fixed assets and, con sequently, a firm’s net worth. Some firms come up with substantial write downs of fixed assets, which may be a recognition of the impact of conditions that have been going on for a period of years. This throws doubt on the analysis done from earlier financial statements, upon which the loan might have been granted. Mr. Brune says it’s important to know interest rates paid on long-term debt and whether the rates are fixed or floating. Also, total interest paid is used in analyzing the income statement. If a firm has a good deal of floatingrate debt, higher prime rates could have a major bearing on the firm’s debt-paying ability, he says. Also, the rates paid are, in some measure, an indication of the quality of its debt. To determine a firm’s basic earning power—its net income from operations —Mr. Brune likes to determine a profit figure before deducting interest, depre ciation, lease expenses and income taxes. This is done because one firm might decide to purchase its equipment and its building, while another firm might decide to lease both items. The firms might produce the same product and sell the same number of units; however, one may have a higher net income from operations than the other. In determining cash flow, Mr. Brune takes net income after taxes, plus de preciation, minus capital expenditures and dividends. He subtracts capital ex penditures because inflation has raised replacement costs and new capital ex penditures are often essential to a firm’s growth or survival. He deducts divi dends because he says they are not as interruptible as people generally be lieve, since, in some cases, they are necessary to sustain the integrity of a firm’s equity securities. Subordinated debt is not as subordi nated as many believe, either, Mr. MID-CONTINENT BANKER for May 15, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Brune says. It has, as does any other debt, interest costs and payment of that interest may not really be subordinated —it must be paid in bad as well as good times. Nonpayment of interest on a subordinated debt issue may give the holders the right to take action, thus complicating the life of senior creditors. At First National, quarterly meetings are held with top management and loan division heads to review loans on the bank’s monitor list. At these meet ings, various goals may be set for the next quarter. Also, commitments to take remedial action are made by the divi sion heads responsible for the loans. The loan-review officer serves as a di agnostician and assists in recommend ing treatment, but the loan officer is the surgeon, Mr. Brune says. According to William Chapman, ex ecutive vice president and senior lend ing officer at First National in St. Louis, as a bank grows larger, it needs a more structured approach to loan re view. There are more loan problems today than in former times, due, in part, to pressure for growth. Another reason for increasing loan problems, he says, is the fact that theie is more delegation of authority to lessexperienced loan officers today than formerly. Various conditions prevented some banks from creating backlogs of experienced loan officers from which to draw when replacing those who retired. As banks keep growing, they need more loan officers, Mr. Chapman says. New officers often are given abbrevi ated training and, when they begin work, are spread thinner than their predecessors, partly because more at tention is given to cash management and the investment aspects of account relationships. Since they are all-purpose bank representatives, the loan training period is necessarily shorter, even though more concentrated. But often, banks have to put their new officers into action before they have time to become seasoned. Thus, the role of the loan-review offi cer is growing increasingly important to any bank, no matter what its size. 37 How to Avoid Losses On Home Improvement Loans By WILLIAM F. SCHUMANN, President, Insured Credit Services, Inc., Chicago S A R ESU L T of what the economy has been through during the crunch of the past two years, lenders have learned some valuable lessons that will be remembered for a long, long time. One of the most important is that a consumer loan portfolio must be both profitable and diversified to be successful. And senior management is increasingly recognizing that home im provement loans—perhaps more so than any other installment lending category piovide both profitability and diversi fication. Look at profitability. Compare yields on home improvement loans with other types of consumer paper—auto loans, for example. With the home improve ment loan, the lender obtains a higher rate from a more stable borrower and has far less collection expenses than with auto loans. And with insurance, either through the FHA Title I program or a privately operated plan such as that offered by Insured Credit Services, the property improvement loan port folio can be virtually loss-free. So you have higher yields, lower costs and minimal losses with the home improve ment loan—attractive from a profita bility standpoint. On the subject of diversification, I need only to mention the vulnerability of banks top-heavy in auto loans when the bottom fell out of the market at the height of the energy crisis. In many institutions, the runoff of outstandings was 4% or 5% each month. It doesn’t take many months like that to result in a loss of a quarter or a third of the portfolio. Either that or the credit stan dards are relaxed to maintain outstandings, and that creates even worse prob lems. The property improvement loan provides a clear opportunity for diversi fication and an attractive alternative to other types of loans with faster runoffs, like auto loans. In addition to economic factors in creasing the general desirability of home improvement loans for lenders, the inflationary aspect of the economy has affected loan size and loan terms. The average property improvement A 38 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis loan is getting larger, and repayment terms continue to get longer. As long as prices keep rising, that trend will continue. In just the last 10 years, the size of the average loan at Insured Credit Ser vices has more than doubled. In 1965, the average loan we insured was $1,138, but today, only 10 years later, our average loan is in excess of $2,450. Continuation of the trend is inevitable. Higher sales prices mean larger loans, and larger loans result in longer terms. How does this trend affect your op eration? What does it do to your bot tom line? In weighing the situation, there are two areas to consider— costs and risks. With regard to cost, larger loans and longer terms help the bottom line be cause fixed acquisition expenses amount to a smaller portion of gross income. It costs a lot more to process five $1,000 loans than it does to process one $5,000 loan. Yet, with comparable ma turities and interest rates, the gross in come on the five smaller loans is the same as the income on the large loan. So the one large loan results in more bottom-line dollars than the five smaller ones. The same principle is true for ex tended terms. With longer terms, fixed acquisition costs are spread over a broader time base and represent a lower proportion of gross income than is the case with short-term loans. So, purely from an expense or a cost stand point, larger loans and longer terms both tend to increase profits and add to the bottom line. With regard to risk, however, we have found that losses from large loans tend to be disproportionately high, which reduces profits. Just recently, we conducted an analysis of all the claims we had paid during 1975. Eight per cent of our claims by number involved large loans, and, by and large, I ’m referring to original advances of more than $5,000. But the dollars involved on these claims amounted to more than 24% of our total losses. In other words, there was a disproportion of more than three-to-one. Eight per cent of our loans, by number, generated 24% of our losses by dollar amount. What do these current trends in loan size and repayment terms mean to your bottom line? They can mean greater profitability because of broader spread ing of acquisition costs. But this is true only if lending procedures are modified to take these trends into consideration. Five, seven or 10 years is a long time to be sure a borrower won’t lose his job, have marital problems, or be come hopelessly over-obligated. Creditworthiness of the borrower must be analyzed much more comprehensively on large loans, and much closer col lection follow-up must be made on these loans with earlier personal contact for delinquent payments, if their profitability is to be maintained. Since I mentioned delinquency fol low-up, let me add that if I were asked to name the single greatest weakness in property improvement lending today, my immediate response would be the collection area. An improvement loan is not generally one that can be col lected by repossession. The approach must necessarily be one of showing the borrower how loan payments can be made, given his current financial position. W e’ve read the headlines about the big drop in unemployment rates and inflation rates, but those headlines are deceptive. Even optimistic projections peg the jobless rate at a minimum of MID-CONTINENT BANKER for May 15, 1976 RABBIT TRANSIT. An advanced check-clearing system that can dramatically improve Reserve Headquarters and your availability of funds. “Rabbit Transit.” It’s an improved system devised by First National Bank in St. Louis to expedite the clearing of cash letters. For you, it can mean two important things: better avail ability and bigger profits. Here’s how. We’re right in the heart of the nation. That’s more important than you might realize. Our location in the heart of Middle America permits ideal transportation into and out of St. Louis and pro vides a superior transportation network to all Federal Reserve cities. In addition, St. Louis is a Federal Reserve city which enjoys a proven advantage in mail times, and is less than one hour by air from Federal With their up-to-the-minute knowledge, our specialized staff can also make a complete and objective analysis of your check Our computer is clearing system after an totally dedicated. appropriate test period. Then, It’s the latest Burroughs they’ll present a written recom computer system with IPS and mendation of how it can be MICR technology. handled with increased speed It’s used exclusively by our and efficiency. transit operation. And delays Phone (314) 342-6222 do not occur because of con for your own transit analysis. flicting priorities or competi tion for computer time. For a copy of our Avail Our Proof-of-Deposit ability Schedule, to arrange for system computes float on each an analysis of your check item processed by endpoint clearing system, or for more and time of day. information about “Rabbit Full-time specialized staff. Transit,” phone us now. Or contact your Correspondent This staff monitors out going transit and keeps current Banker at 510 Locust, St. Louis, with any changes in transporta Missouri 63101. tion scheduling. Volumes and endpoints are monitored con First National Bank tinually so cash letters clear in St.LouisP/^ efficiently. Member FDIC H I I H I International Airports in Chicago and Kansas City. MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 39 7% during 1976. At these rates, ef fective adjustment of a delinquent ac count requires a real selling job in practically all cases. There is tremendous profit leakage in delinquency. Yet time and time again, lenders use the collection de partment—one of the most vital opera tions in the bank— as little more than a training ground. Far too often we see adjusters with no experience, completely uninformed as to collection techniques, with prac tically no training and very little knowl edge of over-obligation, marital prob lems or unemployment and the effect these things have on loan repayment. The adjuster is simply handed a port folio of delinquent accounts and told to go out and collect them. The claim survey I referred to earlier shows that overloading or unemploy ment was the primary reason for de fault in 61% of all of our losses last year. Further, we found that nearly all of our defaults occurred within the first six payments, regardless of term. Whether the original maturity was 36 months, or 84 months, more than half of our claims developed within the first year of repayment. Undoubtedly, some of these losses could have been avoided by experienced, well-trained adjusters. With the trend toward even larger loans and even longer terms, now is the time to re-evaluate collection proce dures, screen collection personnel and give the collection department the rec ognition it so well deserves. I mentioned earlier that in light of the trend toward larger loans and longer terms, closer analysis must be made of the borrower’s credit-worthi ness. In our claim files, we see a num ber of characteristics occurring over and over. These trends are particularly noticeable in larger loans. The first and most frequently found characteristic is that analysis of income and outgo by the credit officer at the time of approval is superficial. The crux of a sound credit decision is an in-depth determination of the borrower’s capacity to repay. Far too frequently, we see consideration given only to fixed month ly obligations, with no knowledge of family size, and no analysis of monthto-month living expenses, like automo bile maintenance, utility bills or gro ceries. With loan requests in the $5,000, $7,000 or $10,000 range, a thor ough review of the applicant’s financial condition is an absolute must! A second characteristic is location of the improved property in a question able area, or out of the bank’s general trade area, where there is no familiarity with land values or neighborhood con ditions. It just doesn’t make sense for a lender to extend credit to borrowers residing 50 or 100 miles from the bank. 40 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis He doesn’t know enough about an area that far away, and the loan simply can’t be serviced reasonably. A third characteristic is a lack of background information on the bor rower or a case of the lender not taking the time to determine past credit his tory. Today’s situation makes it impera tive to obtain an up-to-date picture of pay habits and character. And I can’t tell you how many claims we’ve paid where the credit was bought on the basis of a two- or three-year-old bureau report with no direct checking or even a verification of employment and mort gage data. Finally, in our large claims, we have recently found a disproportionate num ber of borrowers employed in less than stable occupations, or occupations sub ject to economic influence. I ’m not ad vocating that loan requests from these applicants be rejected. All I ’m suggest ing is that when you have a self-em ployed borrower, look at his financial statement. When you have a salesman, look into whether he will have an in come in good times and bad, or wheth er he has set aside some type of reserve if demand for his product dries up. Credit risks frequently can be mini mized and losses can be avoided. Just know your borrow er! Get a complete picture of his financial condition, con duct a thorough investigation and then make a professional analysis of the facts at hand. Information followed by in vestigation, followed by analysis, will eliminate 90% of the problems in any home improvement loan portfiolio. Let’s take a brief look at current leg islative trends. W e’re all familiar with the consumerist direction that legisla tion has taken over the last several years. W e’ve had Truth in Lending, Truth in Advertising, Fair Credit Re porting, Fair Collection Practices, Equal Credit Opportunity and a host of others. All of these laws have had an impact on consumer credit generally. But I’d like to single out two as specifically affecting the home improvement lend ing field: the National Disaster Protec tion Act and the proposed FTC regula tion eliminating holder-in-due-course. The National Disaster Protection Act requires on all secured loans that the lender determine whether or not the improved property is located in a flood hazard area, and if so, the borrower must have flood insurance to obtain the loan. Further, any loan, secured or un secured, which is insured by the gov ernment must be in compliance with provisions of the Flood Insurance Act. To date, this act has not been en forced. But what happens when that time finally comes? Are the examiners going to classify all Title I loans where there isn’t evidence of compliance with the Flood Insurance Act, and if default results, will the FHA determine that the claim is ineligible in the event of non-compliance? This law ultimately will have farreaching implications in the property improvement lending field. The proposed FTC regulation abol ishing holder-in-due-course is the sec ond major regulatory action affecting property improvement lending and, as of May 14, the watchword for lenders became “know your dealer.’’ At that point, lenders with indirect programs had better operate with so phistication and with thorough con trols, rather than the “seat-of-the-pants” type of operation which may have been acceptable in the past. Because, as of May 14, the borrower can raise the same defenses against the lender as assignee of his home improvement con tract that he can raise against the dealer. After having insured more than a billion dollars in property improvement paper, we’ve picked up a number of danger signals or “red flags” with re gard to dealers and, in view of the added importance of dealer relation ships generated by the new regulation, I’d like to run through them. • Watch out for a dealer who is new in town and has been all over the country, but suddenly decides your area is where he wants to spend the rest of his life. Not only that, he’s taken a liking to you personally and he wants to open a $10,000 checking account and give you all of his home improve ment paper. Avoid him like the plague. He’s setting you up. • Watch out for the dealer who has floaters for salesmen—here-today-andgone-tomorrow people who have worked all over the country and are living in motels or furnished apartments. • Watch our for the dealer who has an inordinate number of complaints or who settles his complaints slowly. • Watch out for the dealer whose phone-in applications vary significantly from customers’ written applications you receive with contracts; where debts are left off or where income is in creased; or where the fact that the ap plicant has seven children is conve niently omitted when the deal is phoned in. • Watch out for the dealer who gives you a continued stall on updating financial statements, who shows a de terioration in his financial picture, or whose credit rating reflects increasingly slow trade payments. • Watch out for the dealer who argues unduly on rejects—who just won’t take no for an answer. • Watch out for evidence of any of the other more traditional gimmicks— model homes, referrals, kickbacks, par MID-CONTINENT BANKER for May 15, 1976 Protecting You And Your Customers THAT'S OUR BUSINESS! There's some RISK in every loan your bank makes . . . an installment loan, commercial loan, farm loan, mortgage loan . . . the list of possibilities is endless. However, these risks can be eliminated, in most instances, when your lending officers have available to them a variety of insurance lines that offer protection against the borrow er's inability to repay, for whatever reason. Our team of SPECIA LISTS, pictured here, is trained to help you recognize every possible "gap" you might have in your bank's insurance program. Call on them . . . any time . . . anywhere. They're anxious to serve the needs of your bank and your customers. PAUL V. H ELE IN President JU L IA N PAUK Vice-President JO H N D. C A U LF IE LD Vice-President JA M ES W . FIN G ER Field Representative D O U G LAS H ELE IN Field Representative JA M ES D. MYERS Field Representative S erv in g B anks in K ansas—M issouri—Illinois—K en tu ck y d u ra n c e E N T E R P R I S E S Complete Insurance F o r All Financial Institutions 5811 Hampton Avenue, St. Louis, Mo. 63109 *General Agents for MID-CONTINENT BANKER f o r May 15, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Phone 314 VE 2-2717 SECU R ITY BENEFIT LIFE INSURANCE COMPANY 41 selling, dump jobs, hidden consolida tions, etc. Abolishment of holder-in-due-course doesn’t mean that dealer business should be thrown out the window, but it does mean that greater effort is going to be required to maintain a profitable operation. It will be necessary to watch the financial condition of a dealer. Occasional visits to a dealer’s show room are a must, and spotchecking of at least a portion of his retail customers is a necessity if you are to stay on top of your dealer operation. The marketing area is the real key to where property improvement financing will be in the years ahead. In the past couple of years, practi cally all lending institutions have con cluded that their future success is de pendent on cultivating the retail cus tomer. And numerous studies have shown that consumer loyalty is directly proportional to the number of services used at the bank. No other type of loan has the mar keting potential of the home improve ment loan, because no other type of borrower can be developed as easily for collateral business. The fact that prop erty improvement borrowers are homeowners makes them the type of cus tomer toward whom the whole retail concept in marketing strategy is di rected. When you help an individual in the financing of his home improve ments, you are handed a perfect op portunity for cross-selling other services. Which consumer classification needs all financial services? The homeowner. He needs the savings account and the checking account, and the homeowner is the safe deposit box user and the po tential trust customer— and the home owner will be a repeat borrower. A home improvement loan is a prime method of introducing the customer to your institution, and it gives you a per fect opportunity to lock him into more of your other services. Timing makes increased home im provement lending activity inevitable. Those born in the post-World War II baby boom are now forming families. Literally millions of people, under dif ferent economic circumstances, would be moving from their starter home to a larger one as their family grows; but, with the current mortgage money situa tion and skyrocketing housing costs, they can’t afford to do this. As a result, these people will be expanding their homes and improving the livability of their surroundings. Everything points to much greater activity in home improvement financ ing. Certainly, there are problem areas. But the favorable factors in home im provement lending outweigh the un favorable ones. The potential of the home improve 42 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ment loan field is enormous! Timing is perfect and the profitability can’t be matched. Success is limited only by a banker’s willingness to go after the business. With a strong, active property improvement financing program, the borrower profits, the community profits and the lending institution profits. * * Problem Loan Situation (Continued from p ag e 34) Second, catch the bad ones as soon as you can. If you grade your loans on the front end, you can catch a lot of potential trouble and watch the lowquality loans more carefully. Third, once a loan has turned sour, act quickly and decisively. A h ad loan is alw ays w orse than you think it is. Try to beat the other creditors to what’s left of the borrower’s assets. Make pay ing your loan the borrower’s No. 1 pri ority. Fourth, get a smart, aggressive, in novative lawyer to help you. If he does his job well, he will pay for himself several times over. But don’t leave him to his own devices. Harass him reg ularly. F ifth, don’t let bad loans suffer from lack of proper attention from bank per sonnel. Keep the original officer in volved if possible, but let a specialist ride herd over him. Then you ride herd over both of them. All of us in the banking profession are going to emerge from this recession with more wisdom than we had before. Those who gain the most wisdom are, in the long run, going to make more money and achieve more job satisfac tion. Those are two very worthy ob jectives. * * View (C ontinued from p ag e 26) tives failed to muster sufficient votes to issue a subpoena requiring the office to produce documents containing confi dential information. The request, if ful filled, would have required us to furnish the examination reports on the 61 largest banks for the past 10 years, plus any related correspondence. In response to a request for these docu ments from a subcommittee, we counteroffered with a suggestion which would have allowed the General Accounting Office to conduct a full-scale perform ance evaluation of our office. The com mittee refused the offer and pursued the route of subpoena. The office of the Comptroller of the Currency and the other bank regula tory agencies have recognized the need to modernize procedures, and we in the Comptroller’s Office have accepted the mandate with both fervency and zeal. I am sure many bankers are aware of the Comptroller’s contract with the firm of Haskins & Sells. He felt that an outside firm could better assess the need for change and oversee its ulti mate implementation. The needs of the Comptroller’s Office now have been identified, and the implementation of change has begun. * * Taylor Named to Additional Posts By Comptroller of the Currency Thomas W. Taylor, director of con sumer affairs with the Comptroller of the Currency, has been named to the additional posts of associate deputy comptroller and as the representative to the National Commission on EFTs. Mr. Taylor replaces Russell C. Browne, adviser for payments systems, in the associate deputy comptroller post. Mr. Browne has indicated he will return to the financial service industry. Mr. Taylor began his career as an assistant national bank examiner, Re gion Four (Cleveland), in 1962, and later was named an assistant in trusts. In 1963, he was elected associate in trusts and commissioned a representa tive in trusts. Mr. Taylor was appointed deputy regional administrator in 1972, and was chosen by the Comptroller to establish and head the Consumer Af fairs Division in 1974. O p en to Residents: Historic Art Contest 'Preserves' Local Sites Winchester (Ky.) Bank held an his toric art contest for all area residents who are members of the Winchester Artists Guild. According to bank of ficials, the contest was underwritten because it was felt “the historic sites of Winchester should be preserved for future generations.” The works were done with a realistic approach and in oil, watercolor or acrylic, on canvas or paper. Of the win ners, 2,000 sets of four prints of each landmark will be produced and 1,000 of those will be distributed by the Clark County Band Boosters, who will receive 50% of the net proceeds. The other half of the proceeds will go to the Winchester/Clark County Heritage Commission. Winchester Bank will assume the cost of distributing the additional 1,000 sets and all originals will be displayed locally. The prints will be available in late May or early June. Artists with winning entries received a $250 award for each subject won. MID-CONTINENT BANKER for May 15, 1976 NATIONAL DETROIT CORPORATION 1\ r ] Parent Company of L> 1 NATIONAL BANK OF DETROIT CONSOLIDATED BALANCE SHEET-March 31, 1976 ASSETS Cash and Due from Banks (including Foreign Office Time Deposits of $700,243,801) ............................. Money Market Investments: Federal Funds S o ld ......................... Other Investments........................... A. H. Aym ond $1,976,714,552 494,399,133 754,122,613 33,990,701 1,282,512,447 Loans: Commercial..................................... Real Estate Mortgage..................... Consumer ....................................... Foreign O ffice ................................. 1,818,590,414 810,921,300 228,397,107 439,836,721 ' 3,297,745^542 Less Reserve for Possible Loan Losses ......................................... 50,552,042 3,247,193,500 Bank Premises and Equipment (at cost less accumulated depreciation of $37,912,419)................... : ............... Other Assets ....................................... Total A sse ts..................... 66,628,124 131,179,742 $7,202,077,606 David K. E a s lic k President—The Michigan Bell Telephone Company C h a rle s T. Fish er, III President A. P. Fontaine Former Chairman— The Bendix Corporation R ich a rd C . G ersten berg Director and Former Chairm anGeneral Motors Corporation Martha W. G riffiths Griffiths & Griffiths Jo h n R. Ham ann President The Detroit Edison Company Robert W. Hartwell President—Cliffs Electric Service Company Jo s e p h L. H udson, J r. W alton A. Le w is President—Lewis & Thompson Agency, Inc. Don T. M cK on e President— Libbey-Owens-Ford Company $1,610,060,648 384.684.091 1,313,177,974 743,614,763 700,760,949 163.439.091 1,028,645,730 5,944,383,246 $580,387,295 100, 000,000 136,983,340 Former Chairman—National Bank of Detroit Peter J . M onaghan Monaghan, Campbell, LoPrete & McDonald Arthur R. Se d er, Jr. President— American Natural Gas Company Robert B. Se m p le Chairman—BASF Wyandotte Corporation Nate S . Sh a p e ro Honorary Chairman and Director and Chairman of Executive Committee— Cunningham Drug Stores, Inc. G e o rge A. Stin son 817,370,635 6,761,753,881 Chairman—National Steel Corporation Peter W. Stroh President—The Stroh Brewery Company Jo h n C . Suerth Chairman—Gerber Products Company Robert M. Su rdam Chairman of the Board Norm an B. W eston Vice Chairman of the Board 75,000,000 AD VISO RY MEMBERS Ivor Bryn 175,000,000 192,641,068 (2,317,343) Former Chairman—McLouth Steel Corporation 440,323,725 $7,202,077,606 Assets carried at approximately $430,000,000 (including U.S. Treasury Securities carried at $51,000,000) were pledged at March 31, 1976, to secure public deposits (including deposits of $131,765,802 of the Treasurer, State of Michigan) and for other purposes required by law. Outstanding standby letters of credit at March 31, 1976, totaled approximately $19,100,000. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H arry B. C un nin gham Honorary Chairman of the Board— S. S. Kresge Company E llis B. Merry Deposits: D em and.......................................... Certified and Other Official Checks Individual Savings........................... Individual T im e ............................... Certificates of Deposits................. Other Savings and T im e ................. Foreign O ffic e ................................. MID-CONTINENT BANKER for May 15, 1976 Former Chairman—National Bank of Detroit Chairman— The J. L. Hudson Company LIABILITIES AND SHAREHOLDERS’ EQUITY Shareholders’ Equity: Preferred Stock—No Par Value........ No, of Shares Authorized 1,000,000 Issued — Common Stock—Par Value $12.50 . . No. of Shares Authorized 10,000,000 Issued 6,000,000 Capital S urplus............................... Retained Earnings........................... Less: Treasury S tock51 ,404 Common Shares, at cost Total Liabilities and Shareholders’ Equity Chairm anConsumers Power Company Henry T . Bodm an 255,600,000 220,754,988 476,354,988 21,494,253 Trading Account Securities................ Investment Securities—At Amortized Cost: U.S. Treasury................................... States and Political Subdivisions. . . Federal Agencies and Other............ Other Liabilities: Short-Term Funds Borrowed.......... Capital Notes ................................. Sundry Liabilities ........................... Total L ia bilities................... BOARD OF DIRECTORS W illiam M. Day Former Chairman—The Michigan Bell Telephone Company Ralp h T. M cElven ny Former Chairman— American Natural Gas Company G e o rge R u sse ll Former Vice Chairm anGeneral Motors Corporation 43 Commercial Lending: Putting the Problems in Perspective H ESE ARE, indeed, difficult times in which to be a banker. We find ourselves assailed from all sides. Al though we would surely acknowledge that some of the criticisms directed at us are warranted, others just as surely have been contrived for publicity or political purposes. Robert Morris Associates, as the na tional association of commercial bank loan and credit officers, is concerned when banking is under attack. Natu rally, that concern is heightened when the assaults are directed particularly at commercial lending activities. Certainly, we must confess that the past three years of economic turmoil not only have been trying, but un pleasant for many bankers, much as they have been for other industries. We all have suffered through an incredible inflation, followed by the worst reces sion since the 1930s. Of course, the problems of our cus tomers, individuals, businesses and gov ernment have been passed through to us. In the process, we have made some mistakes, and some losses have been sustained. Much has been made of the prob lem banks on the now famous—or in famous—“lists” leaked or otherwise published. There are some 14,300 banks in the United States. Perhaps on all lists combined there may be an aggregate of 300 problem banks. Therefore, one must assume that an overwhelming majority, over 97%, are not only without abnormal loan losses, but also are capably managed. Very little is made of that fact by the sen sation seekers. Clearly, the greatest challenge to the stability of commercial banking today stems not from the poor financial con dition and performance of some bank T 44 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By ROBERT A. YOUNG* President Robert Morris Associates customers, but from misinformation which is, with increasing frequency, being disseminated regarding the fi nancial condition and performance of the banks themselves. The banking business, and particular ly commercial lending, is a risk busi ness. When we extend credit to small business, minority business or large en terprises to increase productive capac ity and foster the creation of jobs, we take risks. When we finance the purchase of consumer goods and finance real estate developments to house our neighbors, we undertake risks. Where there are risks, there certainly are going to be losses. Last year, bank loan losses totaled an estimated $3 billion or less than 1% of outstanding loans. We might deduce, therefore, that the remaining 99% must be acceptable loans. Ranks must make every effort to maintain sound credit standards. No one would disagree on this point. Nev ertheless, we must not be forced to raise our standards so high that only Mr. Young also is president, North w est National, Vancouver, Wash. the highest-grade company or the strongest individual or municipal bor rower can obtain needed funds. Understandably, banker morale may be low now because of the assaults we are suffering at the hands of some of the media and some politicians. But the vast bulk of our assets is good, and the great majority of our banks are any thing but sick or in problem categories. Our free enterprise system, which seems to be the principal target of our detractors, has served the people of this country well. W e must not only defend it, but must promote the per petuation of that free economic so ciety. Our banking industry, too, has served our neighbors, our economy and our country well. The fundamental strength of our banking system cannot be denied, de spite the denigrating rhetoric from Washington. Let us take our case, the facts, to the public. Those facts need exposure; they can stand scrutiny. Despite the recent problems of some banks, not one penny has been lost by a depositor. Our banking system not only has seen our customers, large and small, through the recession, but it now stands ready to spearhead the recovery. We must stress the positive with pride in the work we have done. We will continue to discharge our obliga tions to a free America as we have for 200 years. Our critics shall not intimi date us. It is my feeling that when historians look back objectively upon the 1970s, they will be impressed by how ef fectively bank regulators, banks and bankers performed during a period of sharp depression sired by a fiscally in duced inflation of unprecedented pro portions. * * MID-CONTINENT BANKER for May 15, 1976 Rally 'round the men from Commerce Bank May 2-4 —Nebraska Bankers Convention, Lincoln —P. V. Miller, Jr., Fred N. Coulson, Jr., Tom C. Cannon, Edwin B. Lewis May 2-4 —Texas Bankers Convention, El Paso—P. V. Miller, Jr., Fred N. Coulson, Jr., Visit the midwest's most experienced correspondents at your state convention. Tom C. Cannon, John M. McGee May 16-18 —Arkansas Bankers Convention, Hot Springs —P. V. Miller, Jr., Fred N. Coulson, Jr., Tom C. Cannon, H. C. Bauman May 11-13 —Oklahoma Bankers Convention, Oklahoma City —P. V. Miller, Jr., Fred N. Coulson, Jr., Tom C. Cannon, H. C. Bauman y * ; May 5-7—Kansas Bankers Convention, Wichita —P. V. Miller, Jr., Fred N. Coulson, Jr., John C. Messina, Ben F. Caldwell, Frampton T. Rowland Jr., W. Thomas Falls, Jr. u z t May 16-18 —Missouri Bankers Convention, St. Louis —James M. Kemper, Jr., P. V. Miller, Jr., Fred N. Coulson, Jr., Larry E. Lumpe, John C. Messina, George W. Porter June 3-5 —Colorado Bankers Convention, Colorado Springs —P. V. Miller, Jr., Fred N. Coulson, Jr., Tom C. Cannon, John M. McGee June 10-12 —New Mexico Bankers Convention, Las Cruces —Fred N. Coulson, Jr., Tom C. Cannon, John M. McGee MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C o m m erce of Kansas City NA Ba n k Member FDIC 10th & Walnut Phone AC 816-234-2000 45 Despite Problems, U. S. Banking Strong, S a y Continental's Anderson, Perkins HE AMERICAN banking system is alive and well, and while it faces some uncertainties in 1976, the indus try as a whole entered the year with the largest capital and reserve positions in recent history. Roger E. Anderson, chairman, and John H. Perkins, president, Conti nental Illinois Corp. and Continental Il linois National, Chicago, gave a sum mary of the state of the industry re cently. “The public is now well aware that some banks have been experiencing problems the past two years,” they said. “These problems have been wide ly reported and discussed, although it is debatable how much public under standing has resulted from this cover age. “The problems in large part grew out of the worst and most prolonged re cession in 40 years. With some time, and with patience on the part of indus try observers in and out of government, banks will work out their problems ef fectively,” they said. The cases of serious problems have been isolated, Mr. Perkins added. “There are more than 14,000 com mercial banks in the U. S., practically all of which are sound, solid and wellmanaged. Also, many of these banks reported earnings increases for 1975, with some having record margins, and bank earnings over the years have been excellent.” Mr. Anderson noted that in a period of difficult, although improving, eco nomic conditions, Continental Illinois Corp. reported record earnings for 1975, up 24% over those of the pre vious year— said to be the highest earn ings percentage increase among the top 10 bank HCs. Continental also is said to have recorded the highest earnings increase for the first nine months of 1975 among the top 10, up 29% over the same period a year earlier. Mr. Anderson also pointed out that Continental continued to maintain its “traditionally strong” reserve position, “historically one of the best ratios in the industry.” The corporation’s current loan valuation reserve of $162 million represents 1.33% of all outstanding loans of the corporation, said to be the highest such proportion among major bank holding companies. He reported that, compared with preliminary figures on loan losses re leased by banks, Continental’s charge- T 46 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A N D E R SO N PER K IN S offs of $68.9 million for the entire year, while sizable, was the second-lowest such amount recorded by the top 10. “The confusion and concern about the state of the industry may be the result of misunderstanding of the re cent substantial loan loss provisions banks have made and the charge-offs they have incurred,” Mr. Anderson said. “Certainly the large numbers indicat ing reserves and write-offs might make the unfamiliar observer of the industry concerned, but these numbers must be kept in perspective before people rush to any conclusions,” he urged. Since most banks have been adding to their loan valuation reserves quarter by quarter and year by year, he said, most banks have a substantial reserve against which they charge actual loan losses. All top 10 bank HCs made loanloss provisions in 1975 that exceeded their highly publicized actual chargeoffs. “At Continental,” he added, “it is significant that this reserve, both in total and as a percentage of loans, was higher than at year-end 1974.” Mr. Perkins said that, “all things considered, the performance of the banking system during the severe eco nomic downturn was impressive and encouraging despite all of the adverse attention given to it. This was espe cially noteworthy considering the fact that this economic downturn came on top of some financial excesses gener ated by a long period of economic buoyancy.” Mr. Perkins added that the publica tion of so-called “problem lists” of banks has added to the misunderstand ing of the industry’s problems and how the system functions. It is noteworthy, however, he said, that in spite of fever ish attention given to problems, public confidence has been maintained and no depositors have been hurt. "All that can be achieved through the publication of such lists is the fur ther impairment of public confidence,” he said. “And when such lists are a year or two old, with many statements based on even earlier examinations, the picture becomes even more distorted. The really newsworthy item is that the system has taken hold of its problems and faced them in a forthright and statesmanlike manner, to the benefit of the entire economy. “Instead of widespread panic and forced liquidation, the banking sys tem has maintained credit in difficult situations so that time could be given to work out the problems. Indeed, this is exactly what is happening, and the general situation is showing steady im provement. The Chicago banker, who is chair man of the ABA’s Government Rela tions Council, said that what is referred to as the classified loan situation— which is the basis of the problem lists — also deserves greater attention. "Our experience has been that it pays off to stick with classified loans,” he continued. “Most of these can be worked out and do not result in losses. We are seeing this now throughout the industry, including the real estate in vestment trust area. It is this kind of policy—helping businesses work out their problems—that enables customers to work through periods of adversity.” Banks have had problem loans since day one, said Mr. Perkins, and will continue to have them. “This is desir able. The very nature of banking im plies a basic risk of recovering funds extended. But it also is banking’s re sponsibility to supply the capital and credit needed for the American economy, and we should continue to follow that principle in good times as well as bad. The only other alternative is to lend only to the very strongest com panies, and I hardly think this is what our critics want.” Mr. Perkins said he also is disturbed by the calls for major restructuring of the federal bank regulatory agencies. “Some evolutionary—not revolutionary —modifications in the agencies and laws that govern financial institutions may be desirable, and some are already in progress. The regulators themselves have already done a lot of this. The real danger is some radical move in to day s feverish federal legislative area which would lead to impossible legisla tion in the guise of reform, such as one to a monolithic regulatory agency for banking which has been disastrous in other regulated industries.” • • MID-CONTINENT BANKER for May 15, 1 976 around money the finest is ST 1 A U T O M A T I C COIN W R A P P E R 5 2 6 Amounts and denominations automatically in d icate d by patented “ red bordered windows” . 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D O W N E Y Y OUR D E A L E R OR COM PANY • MID-CONTINENT BANKER for May 15, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis COIN W R A P P E R Basic coin wrapper in extra strong kraft stock. Printed in 6 ' different standard colors to d iffe re n tia te denominations. T rip le d e sign atio n through colors, prin tin g and letters. Tapered edges. B A N D IN G S T R A P S SEE T H E C. L OLD S T Y L E S E N D FOR FREE HANNIBAL, S A M P L E S MISSOURI D E P T . MC 47 The 4ProbIem-Bank’ Situation: How Do We Avoid a Repeat? OLLOW IN G is part two of a series of comments—on loan losses, prob lem banks and banking problems in general—made by presidents of bank ing associations in the Mid-Continent area. Part one appeared in the May 1 issue and featured remarks by presi dents of the following associations: Louisiana, Missouri, Kansas, Texas, Ar kansas and Oklahoma. F HORACE W. BROOM, president, Ala bama Bankers Association, and presi dent, Citizens Bank, Hartselle: ALABAMA has been fortunate in the -¿V recent past, because it has not seen the loan losses that many of its neigh boring states have experienced. There have been isolated cases and isolated losses, but there have not been suffi cient loan losses in any one bank to cause worry. This has been due partial ly to the fact that Alabama has not suffered as much from the economic setbacks many states have experienced. But I feel Alabama’s good fortune was mainly due to good management in its banks. It would be difficult for federal or state regulators to prevent loan losses in banks. These agencies cannot come into banks and operate them. When they try to regulate with laws, they in terfere with the normal flow of busi ness. There has been a tendency in the past few years for banks to want to grow at any price. Because of this tend ency, some banks may have been lax in making loans. They were not as conscious of profits as they should have been. I think the recent economic ad justment has made us more aware of the necessity of the good, sound, sub stantial growth that will build strong banks. One of the biggest problems facing 48 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis banks today is too much control by government. Banks and other financial institutions are being regulated to the point they are told to whom to make loans and to whom not to make loans, with total disregard for the standards of credit. The public is being told that there is no need to deal with sound banks, because the government will take care of the public if their banks fail. Through regulation and too much government control, the prudent, sound, conscientious banker who is in terested in his customer and his com munity is being replaced by Congress. W. E . HOWARD JR,, president, Mis sissippi Bankers Association, and president and CEO, Commercial Na tional Bank, Laurel: A J OST O F TH E problems the banking industry has experienced dur ing the last year and a half have been in connection with the drastic turn down in the nation’s economy. Some of the problems have been caused by poor management decisions, but, still, the economy was the major cause. Losses have been suffered by banks in Mississippi to a higher degree during this period than they would normally have been; however, we have been most fortunate in that few banks have suffered significantly high loan losses during this period. As for the future, I think bankers will be more analytical in their loan de cisions than perhaps some have been in the past. At the same time, however, I believe that most bankers will not overreact to the problems of recent months and be so selective in their credits as to not adequately serve their communities. • * ARTHUR F . BUSBOOM , president, Il linois Bankers Association, and presi dent, Bank of Rantoul: ISTORY will show that banking, during the past several months, has gone through one of its most trau matic periods. Failures occurred, loan losses were heavy, capital shortages sur faced and the recession left many other scars. Solutions to many problems have been found, but other difficulties re main. Our industry will benefit from the lessons learned and the experiences will help it avoid the same mistakes in the future. Some congressmen, in their attempts to remedy inequities that they indicate exist within the financial industry, have authored proposed legislation that con sists of many imbalances and is unac ceptable to banking. Banking is not against needed reforms, but bankers in sist on playing on a level field. The changes must be fair to all customers of all financial institutions. The primary reasons why banks in Illinois suffered extraordinary loan losses in the recent past included em phasis on growth and disregard for credit principles; inflation combined with recession; out-of-area loans made to compensate for deposit growth, which was mostly in time money. In some instances, the desire to pay stockholders continued dividends might have caused management to extend risks on loans. Management made loans that were not of bank quality. Other reasons included poor credit administration; concentration of credit in one industry, or one type of credit; some lack of director interest as to the quality of loans; and risk diversification principles not always being observed. Bankers are well aware that the pub lic wants strong financial institutions; therefore, in order to minimize losses in the future they will concentrate on servicing customers in their own areas, H MID-CONTINENT BANKER for May 15, 1976 W. E. H o w ard Jr., pres., M ississippi B an kers A ssn., and pres. & C EO , C o m m ercial N at'l, Laurel. J a c k O . W eatherfo rd , pres., Tennessee Bankers Assn., and ch., M urfreesboro Bank, H orace W. Broom , pres., A la b a m a B an k ers A ssn., and pres.. C itizen s Bank, H artselle. W ayn e Stew art, pres.. N ew M exico Bankers A ssn., an d pres., First N at'l, A lam o go rd o . C. Lloyd G riffis, pres., In d ia n a Bankers A ssn., and pres., O ld -First N at'l, Bluffton. diversify, make sure their loans are of the highest quality and follow prudent banking and credit principles. In order to make sure the loan-loss situation does not recur in the future, bankers must return to a policy of ask ing more questions. They must rely on up-to-date financial information, includ ing profit-and-loss statements and cash flow— and they must diversify credits. Profits must be retained to establish stronger reserves for bad debts and other contingency reserves to protect against the possibility of future loan losses. Regulators worked to avoid loan losses by being critical of marginal credits, concentrations and disregard for prudent banking concepts. They de manded corrective attention from di rectors and active management, along with necessary charge-offs. They also requested new capital when necessary. Regulators can examine, make recom mendations and demand compliance, but they can never make loan judg ments. They should be given greater au thority for removing incompetent man agement when the directors fail to per form. Regulators should concentrate on loan and investment portfolios and ex Did holding companies have any thing to do with loan losses? Hold ing companies depend on dividends from affiliates for their existence. The demand for dividends is annual and active bank management feels it must meet this demand. In the past two years, inflation caused bank deposits to increase at a much faster pace than was either projected or antici pated. These deposits, for the most part, were placed in either savings or time certificates. Rankers had to offset the high rate of interest paid for these increased sav ings by seeking loans, and at the high est return possible. HCs demanded the annual dividend, which forced bank management at times to take marginal loans. Management expected the infla tionary boom to continue and antici pated no difficulty with collections. The economic turndown caused the mar ginal loans to surface, along with other bad loans and investments. The HC usually had a debt to ser vice, thus it had to demand the annual dividend. The dividend and the loan losses drained needed capital funds and supervisory authorities had no recourse but to ask for new capital. In summary, I hope that bankers will A rth u r F. Busboom , pres., Illin ois A ssn., and pres.. B ank o f Rantoul. amine banks as often as necessary to correct any distressed loan or invest ment situations as soon as they are de tected. I do not believe the state banking commissioner could have done any more than he did to avoid the loss situ ation. The commissioner cannot predict a recession or general economic turn down, nor can he substitute his judg ment for that of bank management in extending credit. His office does not have a large enough staff to examine a bank’s note case every day of the year. The commissioner’s office provides counsel and encourages careful and reasonable credit extensions, but it can never substitute its judgment for that of bank management. The commissioner can do no more than the federal regulators, unless he is given the authority to immediately re move inactive or incompetent manage ment and directors when a bank’s own board refuses to fulfill its responsibility. MID-CONTINENT BANKER for May 15, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bankers 49 heed the warnings that have been sounded and, together with regulators and legislators, will work in harmony to strengthen our industry. Subsequently, our obligations to our customers will be fulfilled. * * C. LLOYD GRIFFIS, president, In diana Bankers Association, and presi dent, Old-First National Bank, Bluffton: T IS TR U E that banks in Indiana, as well as in the rest of the country, have absorbed more than usual loan losses during the past two years. These losses are primarily the result of an in flation-caused recession, the length and depth of which we have not experienced for 40 years. We should also take note that, during this period of time, most banks in Indiana, as well as throughout the country, have managed to increase their valuation reserves for loan losses sub stantially and, at the same time, most banks have shown increases in earnings. Many people outside banking seem to have forgotten that the lending of money is not a science, but an art. I believe it would have been a discredit to the banking system of this country if banks had not experienced some sub stantial loan losses during the past re cession. The lending of money in and of itself is a risky business and is sub ject to the business cycle to much the same extent that manufacturers, re tailers and other businesses are affected. I believe that state and federal regu lators have done excellent jobs—under the circumstances of the past couple of years—in preventing massive bank failures and the loss of public confi dence, which might well have served to topple the financial system of the country. This does not mean that these agencies should have acted to avoid or prevent loan losses. In my opinion, it is the duty of regu lators to protect the interests of the public as far as their deposits in fi nancial institutions are concerned. It is not their function to protect directors or shareholders from poor management, nor is it their function to assure share holders that it is not possible to lose money on stock, any more than it should have been the responsibility of the Securities & Exchange Commission to guarantee shareholders of Penn Central or W. T. Grant that losses would be avoided. Many regulators have statistics avail able regarding the most recent recession that will enable them to better analyze future trends within the economy and within the banking system. These regu lators are working to establish early I 50 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis warning systems and data banks that will result in an econometric model that should furnish better insights into the business cycle. This does not mean that the business cycle can be elimi nated, or that such information will eliminate loan losses. Much has been written regarding the role of bank holding companies in recent loan experience. It probably is true that a few HCs became involved in ventures beyond their areas of ex pertise and paid a price for it. On balance, though, banking has come through its experiences in good shape and has proved its ability to be a viable part of our free-enterprise sys tem in bad times as well as good. * * JACK O. W EATHERFORD, president, Tennessee Bankers Association, and chairman, Murfreesboro Bank: D VERSE economic conditions and a 10% constitutional interest ceiling were the primary reasons for banks in Tennessee to suffer extraordinary loan losses in the recent past. These con ditions caused regional banks to pursue high return investments out-of-state and forced them to assume an overly ag gressive posture on state-wide and re gional expansion. To reverse the situation, banks in Tennessee are assuming a more con servative and realistic credit policy. In order to make the loan-loss situa tion unlikely to recur in the future, banks should continue a realistic credit posture and generally stay within the field with which they are familiar, i.e., commercial and residential lending within their own market areas. This posture would minimize the REIT-type of investment that has caused so much trouble in the recent past. In the name of more competitive banking, I feel the Comptroller and the Fed encouraged aggressive expan sion without being realistic as to capital structure and management capability in many instances. This was particu larly true in state-wide branching ob jectives as well as regional expansion of HCs. Regulators should be aware of a need for proper capital structure to support the respective banking markets, and consider bank management capa bilities before urging aggressive re gional expansion. Also, as we overplay “consumerism,” I feel these regulatory authorities should objectively analyze the needs of and cost to the consumer and ap proach new services with a proper balance of these needs and costs to consumers. Having experienced several bank failures over the past three years, the banking system has adjusted well A without loss to depositors. Now, I feel this banking system is a foundation on which to build, considering the neces sity of strength compatible with service. An increased number of banking units, in the name of competition, will not provide this. I do not believe that the Tennessee state banking commissioner could have helped avoid the loan-loss situation, at least, not with the present structure. The bulk of problems in Tennessee were among national banks that are not subject to the state commissioner of banking. However, I do not feel the problem was in the nature of the char ter, but in the posture of credit com mitments, most of which were in the national banking system through re gional development. I believe the state banking commis sioner can do something now to im prove the situation in Tennessee. Through his influence and coordination with other banking agencies, I feel a posture of strength should be developed in the state banking departments by virtue of planned staff training, com petitive staff salaries with the banking system and removing political influence from the office of the commissioner of banking, insofar as possible. I do not feel the commissioner’s appointment should be concurrent with the term of the governor. I believe the HC movement had an influence on loan losses. In a competi tive effort to aggressively overexpand HCs, unwise acquisitions were made, improper attention was given to the primary purpose of banking and the stance of this fast acquisition resulted in improperly trained staff organiza tions. In summary, I feel the banking sys tem is generally able to handle eco nomic growth and I view commercial banking in Tennessee in most instances to be committed to serving its com munity. The dual banking system is very meaningful in that it provides a system more sensitive to the community needs than would a completely federal ized system. The dual banking system should be preserved. * • WAYNE STEWART, president, New Mexico Bankers Association, and president, First National Bank, Ala mogordo: T3A N K IN G in New Mexico has just -L ' experienced one of its greatest growth years in history. The composite deposit growth was nearly 13%, with some communities showing increases up to 35%. New Mexico has great diversity in its economy. 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Exclusively yours for three months in your trade area. ★ ★ ★ ★ ★ ★ ★ ★ ★ PnjeAtUfe ßuye/iA P.O. 107 BOX 150 WILDER PHONE STREET (312) AURORA. 892-2256 ILL. 60507 Representatives fo r Columbia R ecords and other fin e National Brands Licensed Distributor of Officially Recognized Commémoratives of the American Revolution Bicentennial Administration, License No. 76-19-0562 MID-CONTINENT BANKER for May 15, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 51 government spending, or copper, oil and gas, uranium, potash and agricul ture. Without exception, the strongest growth was in those areas of the state where energy-related products such as oil, gas and uranium are produced. Although the demand for many of our products and services is directly related to the national economy, the concentrations of energy-related prod ucts and government spending have somewhat isolated New Mexico from the deep depression felt through the nation. If there were problems in banking in New Mexico, they would have been in those areas with high dependence on agriculture and cattle feeding opera tions. There is little doubt that in 1974 and 1975 substantial losses were in curred by these banks, as well as their borrowers. Most cattle losses were sus tained in 1974 and followed by poor crops and poor prices in 1975. Banks active in this type of lending have established substantial reserves to ac commodate these conditions, and his torically have done an excellent job in salvaging their customers. Banking, as an industry, has just passed through the most difficult eco nomic period since the 1930s; however, banking need not be singled out as a problem industry. Nearly all industries related to providing the needs of the consuming public, such as the appli ance, automobile, garment and recrea tion industry sustained tremendous losses during the 1974-75 depression. Bankers have worked with their cus tomers to prevent massive business fail ures and bankruptcies. Supervisory agencies, such as the comptroller, FD IC and Federal Reserve, “classified” many of these outstanding obligations as “substandard” and, as a result, these loans were charged against the banks’ capital in determining capital adequacy as defined by the various regulators. Had the bankers of the nation pan icked in response to these loan classi fications, massive business failures would have resulted, compounding our nation’s economic problems. Banks kept our industries alive and able to re spond to the business recovery which began in the summer and fall of 1975. Publishing of the now famous list of “problem banks” cast upon the banking industry a shadow which will be diffi cult to overcome. Public confidence in banks is still strong as reflected by the continued growth in deposits of com mercial banks. The greatest concern to banking today is not loss of public con fidence, but the clamor of certain poli ticians for reform even though the problems of banking are more related to the economy of the country, rather than the quality of regulation. The Comptroller’s office and the 52 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FD IC , with the responsibility of regu lating the majority of the banks in the nation, have been professional in their approach to bank regulation. Each agency has, as it should, protected the interest of the depositor at the expense of the banks. The FD IC has assessed the banks to provide not only the re serves which may be required to pro tect the depositor against loss, but also to pay the cost of supervising the banks. The Comptroller assesses all na tional banks a sufficient amount to pay the cost of operating the agency. I know of few other agencies of govern ment which assess those they supervise and operate with little or no cost to the government. Reform of the regulatory agencies by politicians would not have prevented the recent banking problems, and in fact, could have compounded the prob lems had banks been forced to li quidate many of their so-called “sub standard loans.” Improvements in ex amining procedures being initiated by the Comptroller’s office should further improve the quality of bank regula tions, but, in my opinion, the establish ment of the Federal Banking Commis sion could set the industry back for many years to come. I do not wish to imply the banking industry is “lily white” and not in need of further regulation in certain areas. Banks which have permitted uncon trolled transactions with major stock holders, directors and officers have failed. U. S. National in San Diego is a classic example of uncontrolled in sider transactions. I do not mean to imply that banks should not loan money to stockholders, directors and officers within the limits allowed by law; in fact, these loans should be of the high est quality in the bank portfolio. The Comptroller’s “statement of in terest” required of all directors is a meaningful step forward. Other means of identifying this type of transaction must be implemented with adequate powers to the regulatory agencies to assure prompt and forceful corrective action. Although insider transactions and self-dealing have been the most signifi cant problems in banking, there are other areas where concern should be expressed. There seems to have been a desire since 1969 to see which can become the largest bank, or bank holding com pany, in the state or the nation. Ac quisitions were often made at prices far in excess of the fair and reasonable market value of the bank being ac quired by the holding company. After adding numerous small banks to the “lead bank,” the holding company found itself well represented through out the state. Instead of devoting efforts to im proving the quality of banking, HCs began to look for diversification, much as conglomerates of general industry had in years gone by. This led them into R EITs, a problem area which will take banks and HCs years to over come. Chartering of banks has been re strictive, yet adequate to assure a competitive environment. If banking as an industry wishes to maintain the respect of the people, the image it has enjoyed in the past, it must not only provide a competitive banking atmo sphere, but limit its activities to those directly related to banking. We must not be negative in our approach to regulatory reform, but ag gressively seek means of controlling in sider and self-dealing transactions. We must also restrict other activities to those directly related to banking and only after showing expertise, adequacy of capital and a public need should banks be permitted to venture into other commercial activities. Does all of this relate to banking in New Mexico? I think so. As previously stated, we must encourage and support meaningful changes in our industry. This means strengthening the position of the commissioner of banking, who regulates over half of the banks in New Mexico by assuring an adequate budget to develop a professional staff. We should also continue to oppose massive changes which would eliminate the Comptroller’s office, and yet encourage close monitoring of all officer and di rector activities. Entry into new ventures should be highly restrictive and closely regulated until the banking industry has had the opportunity to restore its capital position. * • Central Bank Opens Drive-Up A t top, D ave Baker, v.p ., Southw est Federal S&L, W ichita, polishes the nam e plate of the new C en tral II d rive -u p facility of C en tral Bank, W ichita, w hile B ank Pres. Robert Lan gen w alter supervises. The reason fo r Mr. B aker's interest is that he coined the C en tral II nam e. A s can be seen in the low er photo, the d riveup is a detached fa c ility w ith three lanes and p a rk in g space. Beryl C am ach o serves as its m an age r. MID-CONTINENT BANKER far May 15. 1 976 Two Assem blies for Bank Directors in the Bicentennial Year The 25th at The Broadm oor, Septem ber 4-71976 in C olorado Springs, C olorado The 26th at Pinehurst Hotel and C ountry Club in Pinehurst, N o rth Carolina, Novem ber 4-7,1976 Sponsored by The Foundation o f The Southwestern Graduate School o f Banking https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Registration In addition to registering for the Assembly with the Loundation, directors should reserve their accommoda tions directly with the hotel. The Loundation has reserved rooms for the Assembly. The $300 director’s and $100 spouse’s registration fees cover pre and post-Assembly materials, lectures, dis cussion sessions, tours and receptions. A $25 deposit which is applied toward the total registration fee is re quired with each registration. Directors are responsible to the hotel for their accommo dations and expenses. Hotel accommodation forms will be sent registrants from the Assembly office, which registrants should return to the hotel. The Assembly at the Broadmoor will be on the Euro pean plan. The Assembly fees will cover the meals indicated in the program. T H E BROADM OOR C O L O R A D O SP R IN G S, C O L O R A D O R E G IS T R A T IO N FO R M T W E N T Y - F IF T H A S S E M B L Y F O R B A N K D IR E C T O R S The Broadm oor Colorado Springs, Colorado September 4-7, 1976 N A M E : _______________________________________________ . N a m e ca l l e d b y : . B us i ne ss A d d r e s s : __________ ________________________ Company .Ph on e. P.O. Box City, State, Zip P r o f e s s i o n o r P r i n c ip l e B us in es s I n t e r e s t ________ H om e Address: .T itle. ___________________________ ___ .Ph on e. Zip S p o u s e will A t t e n d ? ________________________________ . I f y e s , s p o u s e ’s n a m e : ___ B a n k D i r e c t o r s h i p held i n : ________________________ P r e s i d e n t : ____________________ _____ S iz e o f B a n k ? ______________________________________________ N u m b e r o f D i r e c t o r s o n B o a r d : . __________________ _______N u m b e r o f y e a r s o n B o a r d ? . __________________________ B a n k A d d r e s s : _______________________________ _ _ _ _ P.O. Box City State Zip D i r e c t o r s C o m m i t t e e s o n w h i c h I ha v e s e r v e d : . Main I n t e r e s t : C r e d i t A r e a . ______________________________ T r u s t A r e a ______________________________ O t h e r E a r l i e r A s s e m b l i e s A t t e n d e d : ________________________________ __________________________________________________ D e p o s i t ( $ 2 5 . 0 0 ) A t t a c h e d : ---------------- T o t a l r e g i s t r a t i o n fe e ( $ 3 0 0 ) e n c l o s e d : ___________ S p o u s e ’s r e g i s t r a t i o n f e e ( $ 1 0 0 ) e n c l o s e d : _________ (P le as e m a k e c h e c k s p a y a b l e t o : T h e F o u n d a t i o n o f t h e S o u t h w e s t e r n G r a d u a t e S c h o o l o f B a n k i n g . Mail t o : T h e A s s e m b l i e s f o r B a n k D i r e c t o r s , P .O . B o x 1 3 1 9 a t S . M . U . , Da llas, T e x a s , 7 5 2 7 5 . ) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis What is the Assembly? The Assemblies for Bank Directors are designed to increase the director’s understanding of how he can serve his bank; to indicate the ways in which the director can best serve as a representative of his bank in the com munity; to provide better understanding of and respect for bank management’s functions; and to acquaint the director fully with issues of critical interest to his bank and banking. Twenty-three Assemblies were held from 1968 through 1975, and three are scheduled annually, 1976 through 1980. For 1976 and 1977 the programs of the Assem blies have been substantially modified in response to changing conditions in the economy and the banking system, with emphasis placed on director contributions to superior bank performance. During following years each program will be designed in response to changing conditions, and to contribute to further development of directors’ abilities to contribute to their banks. Any inside or outside bank director, advisory director, prospective director or senior bank officer is invited to attend the Assemblies, and past registrants are invited to attend again occasionally. Bank directors, senior officers, senior level bank supervisors and bank educators through out the United States have acclaimed the Assemblies program. The Assemblies are endorsed by the American Bankers Association, the Independent Bankers Associa tion, the Conference of State Bank Supervisors, and by various state and regional banking associations. Faculty of the Twenty- Fifth Assem bly D IR E C T O R W illiam H. Baughn, Dean, School of Business, Univer sity of Colorado, Boulder, Colorado; and Director, Ston ier Graduate School of Banking FA CU LTY H. C. Carvill, Executive Manager, Arkansas Bankers Asso ciation, Little Rock, Arkansas Edward B. Close, Jr., Partner, Hughes and Dorsey, Den ver, Colorado A lb ert H. Cloud, Partner, Peat, Marwick, Mitchell & Company, Dallas, Texas James H. Denm an, President, Citizens State Bank, Neva da, Missouri Robert Y . Em pie, President, Stock Yards Bank, O kla homa City, Oklahoma H arry Gatton, Executive Vice President, North Caro lina Bankers Association, Raleigh, North Carolina Joe T . G illila n d , Executive Vice President, Oklahoma Bankers Association, Oklahoma City, Oklahoma James S. Hall, President, First Arkansas Bankstock Corporation, Little Rock, Arkansas R o y D. Hartm ann, Executive Vice President, Security Pacific National Bank, Los Angeles, California Thom as E. Hays, Jr., President, First National Bank, Hope, Arkansas Harold R. H ollister, Senior Vice President, United Missouri Bank of Kansas City, N.A., Kansas City, Mis souri C. C. Hope, Jr., Executive Vice President, First Union National Bank of North Carolina, Charlotte, North Carolina D enton R . Hudgeons, Executive ^Vice President, New Mexico Bankers Association, Santa Fe, New Mexico Richard B. Johnson, President, The Foundation of The Southwestern Graduate School of Banking, Dallas, Texas https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Oran H. Kite, Chairman of Loan Policy Committee, Retired, Republic National Bank, Dallas, Texas; and Chairman, Commercial Banking Major, Southwestern Graduate School of Banking Mike McGowan, President, The National Bank of McAlester, McAlester, Oklahoma C. O. Maddox, Jr., Chairman of the Board and President, The Peoples Bank, Winder, Georgia A. A. Milligan, President, Bank of A. Levy, Oxnard, Cali fornia Jo hn H. Perkins, President, Continental Illinois Nation al Bank and Trust Company, Chicago, Illinois F ra n k A. Plummer, Chairman of the Board, First Ala bama Bank, N.A., Montgomery, Alabama James B. Powers, Chairman of the Board and President, Planters National Bank and Trust Company, Rocky Mount, North Carolina Will Mann Richardson, Senior Vice President and Trust Officer, Citizens First National Bank, Tyler, Texas J. D. Schierm eyer, President and Chief Executive Officer, National Bank of Commerce, Lincoln, Nebraska James E. Sm ith, Administrator of National Banks, Comptroller of the Currency, Washington, D. C. Gerald R. Sprong, President, American National Bank, St. Joseph, Missouri C. H. Starks, President, Citizens State Bank, Keenes-' burg, Colorado W ilbur Stevens, Partner, Elmer Fox and Company, Denver, Colorado Eugene L . Swearingen, Chairman of the Board and Chief Executive Officer, Bank of Oklahoma, Tulsa, Oklahoma Q uinton Thom pson, Regional Director, Federal Deposit Insurance Corporation, Dallas, Texas B. Fin le y Vinson, Chairman of the Board, First National Bank, Little Rock, Arkansas Norman A . Wiggins, President, Campbell College, Buies Creek, North Carolina Schedule & Events T W E N T Y -FIFT H A S S E M B L Y FO R BANK D IRECTO RS The Broadmoor C o l o r a d o Spri ngs , C o l o r a d o Septem ber 4-7, 1 9 7 6 W illiam H. B a u g h n , D i r e c t o r D IR E C T O R S ’ PROGRAM TIM E TOPIC OR A C T IV IT Y SPEA KER Saturday, September 4 3 :3 0 - 5 :0 0 5 :0 0 - 5 :1 5 5 :1 5 - 5 :4 5 6 :1 5 - 7 :1 5 7 :1 5 - 9 :3 0 p .m . p.m . p. m . p.m . p .m . Registration TH E FO UN D ATIO N AND T H E A S S E M B L Y T H E CHAN G IN G F IN A N C IA L S T R U C T U R E Reception B. F i n l e y V i n s o n J o h n H. Pe rk in s B a n q u e t and T a l k - R E G U L A T I O N A N D B A N K I N G ’S F U T U R E J a m e s E. S m i t h R E C E N T D E V E L O P M E N T S IN D I R E C T O R L I A B I L I T Y T H E EC O N O M Y AND T H E BA N K IN G O U T L O O K C R E D IT A D M IN ISTR ATIO N Coffee E d w a r d B. C lo s e, Jr. T o B e S e l e c te d R o y D. H a r t m a n n Sunday, September 5 8 :3 0 - 9 :0 0 9 :0 0 - 9 :3 0 9 :3 0 -1 0 :0 0 1 0 :0 0 -1 0 :1 5 1 0 :1 5 -1 2 :1 5 1 2 :3 0 - 2 :0 0 2 :0 0 - 6 :3 0 6 :3 0 - 7 :3 0 a .m . a.m . a.m . a.m . p .m . p.m . p .m . p .m . D is cu ss io n G r o u p s L u n c h e o n and T alk - M A N A G E M E N T Open Reception Frank A. Plumm er M AN A G IN G B A N K IN V E S T M E N T S E F T S A N D ITS I M P L I C A T I O N S C A P IT A L N EE D S AND PLAN N IN G Coffee H a ro ld R. H ol li ste r J. D. S c h i e r m e y e r J a m e s S. Hall Monday, September 6 8 : 3 0 - 9 : 0 0 a.m . 9 :0 0 - 9 :3 0 a .m . 9 : 3 0 - 1 0 : 0 0 a.m . 1 0 : 0 0 - 1 0 : 1 5 a.m . 1 0 : 1 5 - 1 2 : 1 5 p .m . 1 2 : 1 5 - 6 : 3 0 p .m . 6 : 3 0 - 9 : 3 0 p .m . D is cu ss io n G r o u p s Open Chuck Wagon O uting Tuesday, September 7 8 : 3 0 - 9 : 0 0 a.m . 9 : 0 0 - 9 : 3 0 a.m . 9 : 3 0 - 1 0 : 0 0 a.m . 1 0 : 0 0 - 1 0 : 1 5 a.m . 1 0 : 1 5 - 1 2 : 1 5 p .m . 1 2 :1 5 p.m . BO AR D FU N C T IO N S AND C O M M IT T E E O R G A N IZ A T IO N A N A LYZIN G BANK O PERA TIO N S T H E D I R E C T O R ’S R O L E IN B A N K A U D I T S Coffee G e n er al D i sc u ss io n G r o u p s Sp eci al D isc u ssi o n G r o u p s A. Trusts B. N e w B a n k s B. F i n l e y V i n s o n Gerald R. Sprong A l b e r t H. C lo u d H u c k , R i c h a r d s o n , Wiggins D e n m a n , H ay s, M c G o w a n , Thom pson C onclusion o f Assem bly SPOUSES’ PROGRAM TIME TOPIC OR A C T IV IT Y SPEAKER Saturday, September 4 6 : 1 5 - 7 : 1 5 p .m . 7 : 1 5 - 9 : 3 0 p .m . R eception B a n q u e t and T a l k - R E G U L A T I O N A N D B A N K I N G ’S F U T U R E J a m e s E. S m i t h W H A T B A N K I N G IS A B O U T T R U STS AND YO U Sherry E u g e n e L. S w e a r i n g e n Will M a nn R i c h a r d s o n Sunday, September 5 1 0 :0 0 -1 0 :3 0 1 0 :3 0 - 1 1 :3 0 1 1 :3 0 -1 2 :0 0 1 2 :3 0 - 2 :0 0 a.m . a.m . p .m . p .m . L u n c h e o n and T a l k - M A N A G E M E N T Fran k A. Plu m m er Monday, September 6 9 : 0 0 - 1 1 : 3 0 a.m . 6 : 3 0 - 9 : 3 0 p .m . T o u r and B runc h C h u c k W agon O uting CO U N SELO RS H. C. Carvill J a m e s H. D e n m a n R ob ert Y . Empie H a r ry G a t t o n J o e T. Gilliland T h o m a s E. H ay s, Jr. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C. C. H o p e , Jr. D ento n Hudgeons O r a n H. K i t e M ike M c G o w a n C. O . M a d d o x , Jr. A . A . Milligan J a m e s B. P o w e r s Will M a nn R i c h a r d s o n C. H. S t a r k s W il b u r S t e v e n s E u g e n e L. S w e a r i n g e n Q uin to n T h o m p so n N o r m a n A . Wiggins Schedule & Events T W E N T Y -S IX T H A S S E M B L Y FO R BAN K D IRE C T O R S P i n e h u r s t H o t e l & C o u n t r y Club Pinehurst, N o rth Carolina Novem ber 4-7, 1 9 7 6 C. C. H o p e Jr., D ire cto r * D IR EC T O R S’ PROGRAM TIME TOPIC OR A C T ! V IT Y Thu rsday, N ovem ber 4 3 : 3 0 - 5 : 0 0 p.m . 5 : 0 0 - 5 : 1 5 p.m . 5 : 1 5 - 5 : 4 5 p.m . 6 : 0 0 - 7 : 0 0 p.m . 7 : 0 0 - 9 : 0 0 p.m . Frid ay, N ovem ber 5 8 : 3 0 - 9 : 0 0 a.m . 9 :0 0 - 9 :3 0 a .m . 9 : 3 0 - 1 0 : 0 0 a.m . 1 0 : 0 0 - 1 0 : 1 5 a.m . 1 0 :1 5 - 1 2 : 0 0 p.m . 1 2 : 0 0 - 2 : 0 0 p.m . 6 : 3 0 - 7 : 3 0 p. m . 7 : 3 0 - 9 : 0 0 p.m . Satu rd ay, N ovem ber 6 8 : 3 0 - 9 : 0 0 p.m . 9 : 0 0 - 9 : 3 0 a.m . 9 : 3 0 - 1 0 : 0 0 a.m . 1 0 : 0 0 - 1 0 : 1 5 a.m . 1 0 : 1 5 - 1 2 : 0 0 p.m . 1 2 :1 5 p.m . SPEA KER R egistration T H E FO UN D ATIO N AND T H E A S S E M B L Y M A R K ETIN G AND T H E BA N K D IR E C T O R R eception B. F i n l e y V i n s o n C. C. C a m e r o n Dinner and T alk - N E W H O R IZ O N S J a m e s E. S m i t h L E G A L R ESP O N S IB IL ITIES O F D IR E C T O R S William H. B o w e n LOAN P R O B L E M S T O D A Y - W H A T T H E D IR E C T O R S H O U L D K N O W A N D DO J o h n G . M edlin T H E FU N C T IO N S AND C O N T R IB U T IO N S O F R E G U L A T IO N Coffee D i sc u ss io n G r o u p s K e n n e t h A . R an d a l l L u n c h e o n and T alk - R E A L E S T A T E P R O B L E M L O A N S AND T H E F U T U R E R eception Dinner R i c h a r d L. K a t t e l WHAT M AN AG EM EN T EX P E C T S FROM A D IRECTO R WHAT A D IRECTO R SHOULD E X P EC T FROM M ANAGEM ENT T o Be A n n o u n ce d E d w i n L J o n e s Jr EV ALU ATIN G M ANAGEM ENT Coffee F ra n k A. Plum m er Jr D i sc u ss io n G r o u p s I n f o r m a l D i sc u ss i o n s a n d R e c r e a t i o n Sunday, November 7 8 : 3 0 - 9 : 0 0 a.m . 9 : 0 0 - 9 : 3 0 a.m . 9 : 3 0 - 1 0 : 0 0 a.m . 1 0 : 0 0 - 1 2 : 0 0 p.m . ( C o f f e e served in M e et i n g R o o m s ) C A P I T A L N E E D S IN B A N K I N G ECO N O M IC PR O SP EC T S AND T H E BAN K IN G O U T L O O K M O N E T A R Y PO L IC Y G e n e r a l D is cu ss io n G r o u p s A. B. C. F re d e ric k D eane, Jr. T h o m a s I. S t o r r s R o b e r t P. B l a c k PLANNING, M A R K ETIN G AND D IR E C T O R M A N A G E M E N T R E L A T IO N S - Jones, Plu m m er, Storrs T R U S T B U S I N E S S - F o r t e s c u e , M c I n t y r e , Wiggins L E G I S L A T I O N A N D P O L I C Y - Black, Kim brel, Randall, Sm ith SPOUSES’ PROGRAM TIM E TOPIC O R A C T IV IT Y Thu rsday, N ovem ber 4 6 : 0 0 - 7 : 0 0 p.m . 7 : 0 0 - 9 : 0 0 p.m . D i n n e r an d T a l k - N E W H O R I Z O N S J a m e s E. S m i t h W H A T B A N K I N G IS A B O U T TR U ST S AND YO U S h e r r y a nd L u n c h e o n R eception Dinner F ran k A. Plu m m er N o r m a n A. Wiggins SP E A K E R R eception Frid ay, N ovem ber 5 1 0 :0 0 -1 0 :3 0 1 0 :3 0 - 1 1 :3 0 1 1 :30- 1 :3 0 6 :3 0 - 7 :3 0 7 :3 0 - 9 : 0 0 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a.m . a.m . p.m . p.m . p.m . COUNSELORS Hug h M. C h a p m a n Hug h P. F o r t e s c u e Harry G a t t o n * C h a r l e s W. M c C o y J o h n W. M c I n t y r e R e x J. M o r t h l a n d C l i f t o n A . P o o l e , Jr. J a m e s B. P o w e r s * C h a r l e s E. R i c e Philip F . Se a r le D o n a l d L. T a r l e t o n B. F i n l e y V i n s o n N o r m a n A . Wiggins * * A ls o m em b ers o f th e Steering C o m m i t t e e o f the 2 6 t h A ssem bly. The Board of The Foundation of The Southwestern Graduate School of Banking James H. Denman, President, Citizens State Bank, Neva da, Missouri Leonard W. H u ck, Executive Vice President, Valley Na tional Bank, Phoenix, Arizona Richard B. Johnson, President, The Foundation of the Southwestern Graduate School of Banking, Southern Methodist University, Dallas, Texas Robert W. Kneebone, Consulting Vice President, Texas Commerce Bank, Houston, Texas Murray Kyger, Chairman of the Executive Committee, First National Bank, Fort Worth, Texas Kenneth A. Randall, Chairman of the Board and Chief Executive Officer, United Virginia Bankshares, Inc., Richmond, Virginia DeW itt T . R a y, Sr., Investments, Dallas, Texas Will Mann Richardson, Senior Vice President and Trust Officer, Citizens First National Bank, Tyler, Texas Robert Stewart, Jr., President, Bank of the South west, Houston, Texas Eugene L. Swearingen, Chairman of the Board and Chief Executive Officer, Bank o f Oklahoma, Tulsa, Oklahoma Ronald A. T erry, Chairman of the Board and Chief Executive Officer, First Tennessee National Corporation, Memphis, Tennessee B. Fin le y Vinson, Chairman of the Board, First National Bank, Little Rock, Arkansas Faculty' o f the Twenty/- Sixth Assem bly D IR E C T O R C. C. Hope, Jr., Executive Vice President, First Union National Bank of North Carolina, Charlotte, North Carolina FA CU LTY Robert P. B lack, President, Federal Reserve Bank, Rich mond, Virginia W illiam H. Bowen, President, Commercial National Bank, Little Rock, Arkansas C. C. Cam eron, Chief Executive Officer, First Union National Bank of North Carolina, Charlotte, North Carolina Hugh M. Chapm an, Chairman of the Board, Citizens and Southern National Bank, Columbia, South Caro lina Frederick Deane, Jr., Chairman of the Board, Bank of Virginia, Richmond, Virginia Hugh P. Fortescue, Corporate Executive Officer-Trust, Virginia National Bank, Richmond, Virginia H arry Gatton, Executive Vice President, North Caro lina Bankers Association, Raleigh, North Carolina Richard B. Johnson, President, The Foundation of The Southwestern Graduate School of Banking, Dallas, Texas Edw in L . Jones, Jr., President, J. A. Jones Construction Company, Charlotte, North Carolina Richard L . Kattel, Chairman of the Board and President, Citizens and Southern National Bank, Atlanta, Georgia Charles W. M cCoy, Chairman of the Board and President, Louisiana National Bank, Baton Rouge, Louisiana https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Jo hn W. M cIntyre, General Vice President-Trust, C iti zens and Southern National Bank, Atlanta, Georgia John G. Medlin, President and Chief Operating Officer, Wachovia Bank and Trust Company N.A., Winston-Salem, North Carolina R e x J. Morthland, Chairman of the Board and Trust Officer, Peoples Bank and Trust Company, Selma, Alabama F ra n k A. Plummer, Chairman of the Board, First A la bama Bank, N.A., Montgomery, Alabama C lifto n A . Poole, Jr., Regional Administrator of National Banks, Fifth National Bank Region, Comptroller of the Currency, Richmond, Virginia James B. Powers, Chairman of the Board and President, Planters National Bank and Trust Company, Rocky Mount, North Carolina Kenneth A. Randall, Chairman of the Board and Chief Executive Officer, United Virginia Bankshares, Inc., Richmond, Virginia Charles E. Rice, President and Chief Executive Officer, Barnett Banks of Florida, Inc., Jacksonville, Florida Philip F. Searle, Chairman of the Board and Chief Exe cutive Officer, Flagship Banks, Inc., Miami Beach, Florida James E. Sm ith, Administrator of National Banks, Comptroller of the Currency, Washington, D. C. Donald L . Tarleton, Regional Administrator of National Banks, Sixth National Bank Region, Comptroller of the Currency, Atlanta, Georgia B. Fin le y Vinson, Chairman of the Board, First National Bank, Little Rock, Arkansas Norman A . Wiggins, President, Campbell College, Buies Creek, North Carolina Registration In addition to registering for the Assembly with the Foundation, directors should reserve their accommoda tions directly with the hotel. The Foundation has reserved rooms for the Assembly. The $300 director’s and $100 spouse’s registration fees cover pre and post-Assembly materials, lectures, discussion sessions, tours and receptions. A $25 deposit which is applied toward the total registration fee is re quired with each registration. Directors are responsible to the hotel for their accomo dations and expenses. Hotel accomodation forms will be sent registrants from the Assembly office, which registrants should return to the hotel. T H E P IN E H U R S T H O T E L & C O U N T R Y C L U B P IN E H U R S T , N O R TH C A R O L IN A The Assembly at the Pinehurst will be on the American plan, and the quoted daily rates will include standard breakfasts, luncheons and dinners. The Foundation will pay the hotel an additional amount to provide supplements to all meals. R E G IS T R A T IO N FO R M T W E N T Y - S IX T H A S S E M B L Y F O R B A N K D IR E C T O R S Pinehurst Hotel & C o u n try C lub Pinehurst, N orth Carolina November 4-7, 1976 N A M E : _______________________________________________ N a m e called b y : B u s i n e ss A d d r e s s : ___________________________________ Company ______P h o n e . P.O. Box City, State, Zip P r o f e s s i o n o r Pr in cip al B u s i n e ss I n t e r e s t ________ . T i t l e ________ H o m e A d d r e s s : ______________________________________ ______ P h o n e . Zip S p o u s e will A t t e n d ? _________________ _______________ If y e s , s p o u s e ’s n a m e : __ B a n k D i r e c t o r s h i p he ld i n : _________________________ President: ______________________________________ _____ S iz e o f B a n k ? ______________________________________________ N u m b e r o f D i r e c t o r s o n B o a r d : ___________________ _______N u m b e r o f y e a r s o n B o a r d ? ____________________________ B a n k A d d r e s s : _______________________________________ P.O. Box City State Zip D i r e c t o r s C o m m i t t e e s o n w h i c h I h av e s e r v e d : _ M ain I n t e r e s t : C r e d i t A r e a _______________________________T r u s t A r e a ______________________________ O t h e r _________________________________________________ E a r l i e r A s s e m b l i e s A t t e n d e d : ___________________________________________________________ ___________________________________________________________________ D e p o s i t ( $ 2 5 . 0 0 ) A t t a c h e d : __________ T o t a l r e g i s t r a t i o n f e e ( $ 3 0 0 ) e n c l o s e d : ___________ S p o u s e ’s r e g i s t r a t i o n f e e ( $ 1 0 0 ) e n c l o s e d : _________ ( P l e a s e m a k e c h e c k s p a y a b l e t o : T h e F o u n d a t i o n o f t h e S o u t h w e s t e r n G r a d u a t e S c h o o l o f B a n k i n g . Mail t o : T h e A s s e m b l i e s f o r B a n k D i r e c t o r s , P .O . B o x 1 3 1 9 a t S . M . U . , D al la s, T e x a s , 7 5 2 7 5 . ) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T H E A S S E M B L IE S F O R B A N K D IR E C T O R S Southern Methodist University P.O. Box 1319 Dallas, Texas 75275 A D D R E S S C O R R E C T IO N R E Q U E STE D https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A B A 's First Conference on Cities To Feature Representative Reuss HAIRMAN Henry S. Reuss (D., W is.) of the House Banking, Cur rency and Housing Committee has been scheduled to address the opening ses sion of the ABA’s first “Conference on Cities.” His topic will be a congres sional view of the banking industry and community development. The conference is slated for the L ’Enfant Plaza Hotel in Washington, D. C., May 24-25. Banker registration for the event has been limited to 275 due to available space at the hotel. Designed for CEOs, the conference is being sponsored by the ABA’s Urban and Community Affairs Committee. Other spotlighted speakers include: • George H. Dixon, chairman and president, First National, Minneapolis, who will discuss that city’s urban re development program. Mr. Dixon has been nominated by President Ford as deputy secretary of the Treasury. • Mayor Peter Flaherty of Pitts burgh. He will identify selected prob lem areas and banker involvement in housing, education and business de velopment. • Richard Netzer, urban economist and dean, Graduate School of Public Administration, New York University, who will head a panel presenting a range of alternatives for financing ser vices to the public. • James F. Bodine, president and CEO, First Pennsylvania Bank, Phila delphia, who will discuss the relation ship between private development and public finance and alternative forms of local government. • J. C. Baillargeon, chairman and CEO, Seattle Trust, and Thomas J. Stanton Jr., chairman and CEO, First Jersey National, Jersey City, N. J., who jointly will discuss housing, community and business development in downtown areas. Mr. Stanton is chairman, ABA Urban and Community Affairs Commit tee. • Benjamin H. Paddock III, presi dent, City National, Detroit. He will consider the topic of human resources development: health services, crime control, local transportation and educa tion. Conference registration opens at the L ’Enfant Plaza Hotel 3 p.m., May 24. A 5 p.m. reception May 25 will con clude the program. For additional information, contact Thomas I. Ahart, director, Urban and C Community Affairs Committee, Ameri can Bankers Association, 1120 Con necticut Avenue, N. W., Washington, DC 20036. # 9 KC City Hall Final Payment NABW Tri-Regional Conference Set for St. Louis in May " Is the city's credit ratin g O K ? " K a n sa s City M ayo r C h a rle s W heeler (I.) asks Jerom e H. Scott Jr., president, United M issouri Bank. The occasion w a s the fin al paym ent by the city on its 29-story city hall, w hich w as built in 1936 at a cost of $8 m illion. The bank had served a s p a y in g a g e n t for the bond issue, and Mr. Scott is seen here receivin g the fin al paym ent d u ring a bo nd -b urnin g cerem ony. Bank-Developed ATM System Franchised to Local S&L ARDMORE, OKLA.—A joint effort between a bank and an S&L in this community has resulted in the installa tion of remote electronic banking facil ities in two shopping centers. The system was developed by Lin coln Bank, which has operated an ATM on its premises for some time. Due to ST. LO U IS—The 1976 Lake, Mid west and North Central Regional Con ference of the National Association of Bank-Women Inc., has been set for Stouffer’s Riverfront Towers here May 26-28. Patricia Bartsokas, assistant vice presi dent-marketing, First National, Belle ville, 111., is chairman. Vice chairman is June Darby Ellison, advertising and public relations officer, Mercantile Ban corp., St. Louis. Honorary chairman is Ruth A. Bryant, vice president, Federal Reserve Bank of St. Louis and a former NABW president. The conference is expected to attract several hundred women bank executives from a 12-state area. Conference theme is “Spirit of ’76,” and attention will be focused on banking issues facing the industry and the nation. Managementand banking-oriented sessions will be held. Among the speakers scheduled are W. Liddon McPeters, ABA president elect, and Congresswoman Leonor Sulli van, first woman elected to Congress from Missouri. M akin g p lan s for N A B W Tri-R e gion al C onference in St. Louis M ay 2 6-28 are (from I.) Patricia B artso kas, ch.; Ju n e D arb y Ellison, vice ch.; Ja n e t G. Pender, N orth C en tral re gio n al vice president (R V P); M arilynn Eschenberg, Lake RVP; Pau lin e Deines, M idw est RVP; an d Ruth B ryant, ho no rary ch. MID-CONTINENT BANKER for May 15, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the anti-branching regulation in Okla homa, the bank turned over operation of the new system to Lincoln Savings & Loan, which has created Lincoln Money Services to run the remote fa cilities terminal system under license from the bank. The system is said to be the first un manned automated banking system in the state to be on-line, and is consid ered to be the forerunner of future un manned terminals. The ATM facilities will complement POS terminals now being installed in stores. 61 MR I • i I H H H U i LEFT: from l.r Ruth Ko lp in, C a rth a g e B ro ad castin g Co.; R. C rosb y Kem per, H C ch.; an d W illiam K n igh t, C a rth a g e . CEN TER: Ed w ard K. Pow ell, H erm ann Lum ber Co.; Robert Ph illips, pres., United M issouri B ank, M ilan; an d Thom as B aird III, Concrete Co., Sp rin gfield . RIG HT: Nearly 5 0 0 Don Schooler Jr., pres., United M issouri B an k, Sp rin gfield ; Mrs. Schooler; K ath y C la rk e , Sp rin g fie ld ; Robert L. H a w kin s Jr., d ir., United M issouri Bank, Jefferson C ity; Mrs. H aw kin s. Bused' to Springfield For United M o. Bancshares M eeting By DANIEL H. CLARK Editorial Assistant EARLY 500 investors, business leaders and bank executives board ed chartered buses in Kansas City and Kirkwood, April 21, and began a jour ney to Springfield for the annual meet ing of United Missouri Bancshares. The meeting was held April 22 at the Howard Johnson’s Motor Lodge, but prior to their arrival in Springfield, those on the bus that left United Missouri of Kirkwood stopped in Jefferson City for a tour of the Main Bank and Facility of United Missouri Bank. After the tour, all were invited to the home of Mr. and Mrs. John Kreighbaum, the bank’s president, for cocktails and luncheon. Those who took the Kansas City buses N visited United Missouri Bank, Carthage, en route. Afterwards, Mr. and Mrs. Gil Roper held a cocktail party and lunch eon. At the meeting in Springfield, HC Chairman R. Crosby Kemper told those in attendance that electronic funds transfer (E F T ) software is under de velopment for use in the Kansas Cityand St. Joseph-area United Missouri banks. It is hoped, he revealed, that the software will be in use by year-end in affiliate banks. Mr. Kemper indicated that Umbert, the live bengal tiger that has served as the symbol for the HC and its affiliate banks, will become “friendlier” in the future. The live tiger will be replaced with a cartoon version. In addition, Mr. Kemper had the following news for those in attendance: • The HC’s earnings for first-quarter 1976 were up 8% over the same period last year. Net income was $2,293,000, a gain of $170,000. • Total first-quarter assets of the HC reached $1,004,392,000, up 7.3% from a year ago. • To maintain profits in its trust op erations, United Missouri Banschares will limit those operations to its banks in Kirkwood, Kansas City and Carth age. • United Missouri Bank of Jefferson County, Arnold, has received regulatory approval to install a banking facility in Ziegler’s Super Market, which is located on Highway 231 at Lower Tenbrook Road. The facility should be in opera tion by July 1, Mr. Kemper said. A luncheon followed the meeting, and three speakers were on hand: Harry M. Cornell Jr., president, Leg gett & Platt, Inc., Carthage; Louis Fox, president, Associated Wholesale Gro cers, Inc., Kansas City; and Irvine O. Hockaday Jr., president, Kansas City Southern Industries, Inc. • * P ip fp i ► ■s r^ :; : t..-d https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis *Wt ‘ $ LEFT: from I., H o w ard F. R a n d a ll, Friend Tire Service, Monett; O . E. P arscale, dir., G illio z B ank, Monett; an d J a c k L. Fo x, b an k pres. CEN TER: Jo h n K ram er, pres., United M issouri Ban csh ares; Don W essel, Sp rin gfield ; an d Jerom e H. Scott Jr., pres., United M issouri B ank, K an - 62 JSk .A sa s C ity, an d H C dir. RIG H T: C o p p e r Stinson; W ad e R. Stinson, pres. & C EO , United M issouri B ank, St. Louis; C la re G enovese; an d Peter J. G enovese, pres. & C E O , United M issouri Bank, Ferguson. MID-CONTINENT BANKER for May 15, 1976 Can a smaller bank be comfortable in the leasing business? Of course it can. With us. For 20 years the leasing expert for select banks midwest and south. W e k now le a sin g th e w a y you know b ank in g. T he d o cu m e n ta tio n n e c e s s a r y for le a sin g . T h e leg al a s p e c ts . T h e co m p le x a c c o u n tin g p r a c tic e s . T his is o u r b re a d an d b u tte r. F o r 2 0 y e a rs w e ’ve w o rk ed w ith sm a lle r b an k s th e w a y y o u ’d w a n t u s to. A ctin g as le a s e u n d e r w r i t e r ... o r i n v e s t o r .. .o r a s a c o n s u lta n t in s tru c tu rin g th e le a s e . A lw ay s p ro te c tin g th e b ank an d its c u s to m e rs. E v en if y o u r le a s e o p p o rtu n itie s a re only o c c a s io n a l, s e e o u r p la n s n o w . Fin d out how w e h elp w ith le a s e s from $ 5 ,0 0 0 to $ 5 0 0 ,0 0 0 . H ow w e tra v e l n a tio n w id e, a ssistin g o u r b an k c u s to m e rs to m ak e e x tr a p ro fits. W rite . O r ca ll toll fre e to d a y : (800) 558-9840 * FIRST RATIONAL LEA SIN8 C0BP. 161 W. Wisconsin Avenue Milwaukee, Wisconsin 53203 * FN L 6 0 1 - 1 0 7 MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Branches in Principal Cities. For calls originated in Wisconsin, call collect [414) 272-2374. 63 O n t h e C o v er Dramatic dusk-view of Mercantile Trust’s banking headquarters (in foreground) and new Mercantile Tower, 35-story steel and glass office structure to be dedicated May 20. Tower, which houses departments of bank, Mercantile Mortgage Co., offices of parent HC Mercantile Bancorp, and tenant space, features unusual design, providing as many as 16 corner offices per floor instead of usual four. In addition to corner articulation, structural frame provides bold design that brings wind-resistant capability to corners of building, rather than weaving it through elevator shafts and other services in building s core. 64 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mercantile Tower To Be Dedicated In St. Louis May 20 EDICATION ceremonies for Mer cantile Tower in downtown St. Louis will be held on May 20. The 35-story steel and glass building is the first unit of Mercantile Center, which, when completed, will cover a six-block area and will include a hotel, shops and three more high-rise commercial towers. The $30-million Tower houses vari ous departments of Mercantile Trust that previously were located in several buildings in the downtown area. The Tower also domiciles the offices of Mercantile Bancorp, and affiliate firms, such as Mercantile Mortgage Co. The Tower is adjacent to Mercantile Trust’s banking operation, which re mains in the doric-columned building at the corner of Eighth and Locust streets. The bank and Tower buildings are connected by a pedestrian walkway on the second and third levels. Also adjacent to both structures, and con nected by a walkway, is the recently opened Mercantile parking garage, which has a capacity of 385 vehicles. Mercantile Tower stands 455 feet tall and is topped by a 30-foot pent house containing servicing equipment. The Tower rests on eight piers, each driven 53 feet into the ground. Some 6,200 tons of structural steel went into the building, along with 220,000 square feet of glass and almost 100 D tons of travertine marble imported from Italy. Plans for Mercantile Center were an nounced in October, 1972, and con struction of the Tower began in the spring of 1973. Initial occupancy of the Tower began last September and all departments were in their new quar ters by early 1976. Mercantile Trust and Mercantile Bancorp, occupy floors three through 19, with the remaining space leased to tenants. Main entrance to the 760,000-squarefoot tower is on Seventh Street. The street floor includes a large vestibule leading to banks of elevators, a restau rant and shops. The podium (mez zanine) level is reached by escalators and gives access to a large open area suitable for displays. The podium was the site of an exhibit entitled “The Art of the Japanese Package” staged in co operation with the St. Louis Art Muse um last February. Also on the podium level is a “Fingertip Banking” auto matic teller machine operated by Mer cantile Trust. Executive offices are located on the 14th floor, as is a unique multi-media/ presentation room that is equipped with audio-visual facilities. Mercantile Center is expected to be developed over a 10-year period with in a six-block area bounded by Wash- MID-CONTINENT BANKER for May 15, 1976 ington Avenue, Locust Street, Broad way and Eighth Street. The 800-room hotel is planned for the eastern portion of the property, with the three highrise towers (24, 27 and 51 stories) planned for the middle portion of the site. These buildings, plus retail stores, shops and landscaped open spaces, will be connected by enclosed walkways that will form a pedestrian level above street grades. Developer of the Center is Mercan tile Center Redevelopment Corp., which was formed under Missouri statutes as a joint venture by the bank and Crow, Pope & Land Enterprises of St. Louis. Each firm holds a 50% share in the venture. At the time of the announcement of plans for the Center, Donald E. Lasater, chairman of both Mercantile Trust and Mercantile Bancorp, and a director of Mercantile Center Rede velopment Corp., noted that the Center would have a rejuvenating effect on the entire downtown area of St. Louis in terms of increased employment, property values and general business activity. He said that one of the fundamental purposes of the project was to go beyond the essential requirement of providing the community with a need ed forward economic thrust. “It is, therefore,” he said, “also our goal that the practical imagination ex pressed by the size, scope and physical and visual impact of the Center will stimulate all citizens toward a more aggressive and positive attitude on be half of St. Louis. “We want everyone to take a bit of community pride in this project,” he said, “as well as benefit from its development. In addition, we want the nation to know this Center exists in St. Louis.” Sverdrup & Parcel & Associates, Inc., St. Louis, are supervising and coordi nating architects and engineers for Mer cantile Center. Thompson, Ventulett & Stainback, Inc., Atlanta, are the proj ect’s master plan and design architects. TOP: Office of M ercantile Trust President H a r rison F. C o erver on 14th floor o f M ercantile Tow er has v ie w w in d o w s on three sides, kelly green rug. V iew includes M ississippi River, locks. SE C O N D FROM TO P: A unique fe atu re of the execu tive floor of M ercantile Tow er is this presentation room w ith w a lls o f red oak. M otorized front p an els are open to re ve al re arprojector screen an d ch alk b o ard . SE C O N D FROM BO TTOM : H ea d q u arte rs office of M ercantile B ancorp., H C w ith 26 affiliates, anchored by M ercantile Trust, St. Louis. BOTTOM : Podium level of Tow er is used for special d isp la y s and is reached from street level b y escalato r. In center is M ercantile Trust "F in gertrip B a n k in g " ATM. MID-CONTINENT BANKER for May 15, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 65 Applying Marketing Techniques To Debt-Instrument Sales By Frederick Deane Jr., Chairman & CEO, Bank of Virginia Co., Richmond T ODAY, as a rapidly changing and increasingly more competitive finan cial environment unfolds, our planning procedures certainly must involve use of more extensive and innovative meth ods of generating equity and debt cap ital. The reasons are clear. Equity and debt capital in greater amounts is required to support the credit expansion necessary to the na tion’s economic growth and social well being. Indeed, it’s anticipated that we will be hard pressed to keep pace with the projected credit and investment capital needs of both the private and public sectors. Notwithstanding, bank ing will require additional capital to support adequately our own growth and development as an aggressive, fullservice competitor in an emerging en vironment characterized, as we all rec ognize, by new rules of the road. Most especially, banking will need larger amounts of equity and non equity capital to facilitate: • Continued growth of existing bank-related affiliates in their capacity as specialized lenders. • Additional geographic expansion and product diversification, both in the bank and bank-related areas. • Funding of the potentially staggerMr, D eane joined B ank of V irg in ia -C e n tra l in R ic h m o n d , fla g sh ip b a n k o f B an k of V ir g in ia C o ., in 1953. A t 39— in 1965—he w a s elected pres, an d chief ad m in istra tive officer of the p are nt firm . In 1973, Mr. D eane a s sum ed his current posts o f ch. & C EO of the H C an d also ch., B ank o f V irg in ia -C e n tra l. 66 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank of Virginia Co., a Richmond-based multibank bolding com pany with 13 Virginia banking affiliates and 136 statewide offices, registered with the SEC last March for a $ 10-million self-sale of cap ital notes. If the sale is approved, plans call for a duplication of a 1975 sale as respects marketing strategy and note characteristics. ing costs associated with a transition to an electronic banking age. In looking ahead, therefore, it seems clear that our need for capital—whether debt or equity—should intensify. So will the competition for this precious commodity, with the result that it may prove more costly to acquire. Most cer tainly, banks and bank holding com panies will be disclosing more informa tion about our operations to obtain cap ital. Finally, the capital acquisition game will be made harder by our industry’s collective performance over the past two or three years. Simply said, the “bloom is off the rose” with respect to the holding company movement. We no longer are the darlings of the mar ketplace. Winners in the chancy game of capital acquisition will be those in stitutions with proved, solid and con sistently excellent performance. Consequently, our response—as in dividual banks and as an industry—will be to heighten efforts to acquire tradi tional sources of capital funds that, first, provide flexibility as regards timing, and, second, provide optimum cost sta bility. No less, our response will be to: • Seek capital outside traditional money centers, particularly in our own markets where we have the advantage of being well known or at least better known. • Experiment with new methods of attracting equity or debt capital. • Accordingly, push for necessary legislative and regulatory changes that facilitate innovation. The purpose of this article is to dis cuss the generating of new sources of non-equity capital. In particular, it is to discuss Bank of Virginia Co.’s ex perience with the self-sale of capital notes as an innovative method of rais ing non-equity capital. Innovation, of course, implies some thing new. Actually, neither capital notes nor the self-sale concept is new. Both approaches have been around for some time. What is innovative, however, may be the demonstration that subordinated debt can be marketed successfully to consumers as investors in a regional holding company’s own back yard. The key word here is m arketed. Our suc cessful experience can be traced to a decision—an innovation in philosophy— to apply marketing techniques to the sale of debt instruments. W e treated them as a product, just as in a savings account or an auto loan campaign. Our first experience with the self-sale of capital notes occurred in 1970. We selected the self-sale route because we believed it would be less expensive both in terms of interest paid and actual sales expense. W e offered $6 million with three ma turities (five, 10 and 15 years) at rates ranging between 7/2%-8%. The greatest response (75% of sales) was in the fiveyear maturity. Our 1970 sale, which was completed within six weeks, was MID-CONTINENT BANKER for May 15, 1976 marketed through direct mail, news paper advertising and bank-office lobby sales involving personal solicitations by 100 bank officers. During the third week of this sale, the Comptroller of the Currency or dered the two national bank affiliates in our statewide multibank holding company to stop selling since it violated the Glass-Stegall Act. The basis for the alleged violation was the use of ban k officers to sell parent company notes. The Federal Reserve Board, which exercised authority over our parent company and our “flagship bank, re mained silent until the final day of our 1970 sale. We then were told we could not do what we had done, though what we had done need not be altered. What we had done, of course, was to easily sell $6 million in capital notes through our affiliate banks within our principal m arketplace— and by our selves, not through a broker. With modifications, we repeated this performance in mid-1975. Accordingly, we: • Registered with the Securities & Exchange Commission for a $ 15-million sale, with the expectation of marketing at least $10 million. The leeway was desired in case the sale went over ex ceptionally well. • Offered the capital notes at 9% in consumer denomination multiples of $500 with a seven-year maturity. We also included a repurchase agreement allowing noteholders, under certain conditions, to sell back part or all of their holdings at specific periods over the seven years. • Licensed six HC officers to sell the notes in Virginia. Certain members of this group also were licensed as sales men in other states. • Utilized direct mail and news paper advertising heavily. Most im portant, we avoided customary “tomb stone advertising” and promoted our note issue with easily understood copy employing good graphics. Our promo tional material— in a very positive^manner—highlighted the note issue’s 9% rate. W e satisfied fully all SEC disclo sure requirements, including the neces sity of differentiating between subordi nated debt and a deposit account in sured by the FD IC . But ive m a tk eted the rate, and the ad d id not look like a legal notice. Our licensed salesmen were just that —salesm en. They contacted old (1970) noteholders and asked them to ex change their maturing debt issues for the new ones. They responded by tele phone to Virginia and surrounding state prospects making inquiries as a result of newspaper advertisements. And they called on prospects targeted through preparation of researched customer lists—what bank marketers call “seg mented marketing.” The 1975 note sale was started in late May and closed out in early No vember. Proceeds totaled $12.6 million. Some 75% of the sales were to Virgin ians, and we were surprised at the large number of substantial sales to consum ers. Prior to the sale, a question was raised concerning the ethics of selling a capital instrument without the assist ance of underwriters to a presumably uninformed public. Let me respond to this point. First, the note issue was aimed at a specific market— the small individual MID-CONTINENT BANKER for May 15, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis saver-investor— as indicated by the fol lowing features: • The offering of monthly or semi annual interest payments. • The fact that the issue was of fered in low-denomination multi ples ($ 5 0 0 ). • The rate was set well above the rate available to investors at thrift institutions, the primary competing form of investment. • The repurchase option, at par, and with no loss of principal or in terest. Indeed, if noteholders so de sire, we must redeem up to 10% of Every banker has them—problem loans with seem ingly insufficient or unsatisfactorily controlled col lateral. And because business will be looking to their banks more and more for expansion capital, the prob lem will be compounded, not simplified. Douglas-Guardian has been in the business of uncomplicating inventory collateral for banks and their customers for over 50 years. We simply bring our Traveling Credit to the situation in the form of Field Warehousing. We are doing it every day for banks just like yours. We would like to work with you on your current “ problem child.” Together we might be able to turn him into a little angel. Douglas-Guardian Warehouse Corporation P.O. Box 52978, New Orleans, La. 70152, Phone (504) 523-5353 Offices in 15 principal cities 67 the original issue per year mini mum. Second, we complied with all rele vant disclosure reqxiirements and pro ceeded in the sale with no complaint from federal or state regulatory author ities. Third, our own well-informed officers explained the prospectus to the public. Here, then, is our experience over the past five years with two parent com pany capital note issues aimed at con sumer investors. To summarize, the lessons we learned were: 1. A cost-stable source of funds is available to be tapped locally (region ally). 2. Self-sale is a relatively inexpen sive method of attracting these funds. 3. The key to success is selling—that is, applying marketing techniques and offering a competitive rate. Self-sale of capital notes is one meth od of raising non-equity capital. It is one method of dealing with our need to generate more equity and debt capi tal for the future needs of our industry and the many publics we serve. While it merits your attention as a program that was successful in our market, and perhaps meriting imitation, it more im portantly should earn your considera tion as but one in a number of new methods by which needed capital can be acquired. * * Techniques (Continued from p ag e 30) gaged or refinanced. However, do not expect such lenders to take on a prob lem— they’re interested only to the ex tent you would be if you were making that maturity loan. If refinancing is not appropriate, either by yourself or others, then you might consider retrenching. This solu tion is often used in a declining sales and earnings situation where you have been unsuccessful in getting manage ment to do anything about its basic problem. The company is going down hill, and your goal is simply to get out long before it reaches bottom. In this instance, you reduce your exposure at appropriate intervals until you are paid -—of course, before management finds it necessary to close shop. You simply require systematic reductions in your loan, whether or not you actually term or schedule your notes. Another possibility is to bring in a commercial finance firm. This method, is most appropriate in the case where a company’s business is basically sound but the current debts are too heavy and neither you nor anyone else feels that a term loan is appropriate at this time. The object here is to continue Prestige Programs Pay Specialists in □ Credit Life Insurance □ Credit Disability Insurance □ Personalized Claim Service □ Sales Training by Experienced Personnel More Money in Your Pocket 1300 North Meacham Road Schaumburg Illinois 60172 U 3 .IFE CREDIT LIFE Insurance Company 68 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis lending, secured by the company’s cur rent assets so that, if further problems develop, the loan will be self-liqui dated as such assets run down. To do so, however, you need the direct con trol and expertise that a commercial fi nance company or factor is better able to provide. After setting up a receiv ables or inventory loan, you often par ticipate with the commercial finance company. Another possibility to be considered is another bank. The ethics of inter bank inquiries should always be ob served, but banks do sometimes dis agree on what is an acceptable risk. And, remember, losing business is sometimes the best job you can do for your bank. No banker wants anyone else’s problems, and certainly not a po tential charge-off, but the fact is that banking is a competitive business and your aggressive competitor may some times step in just when you want out. Also, if asked, don’t hesitate to give your borrower the address of your com petitor! One additional approach should be mentioned. Quite often, the borrower just does not listen to your sugges tions, much less become cooperative, and your efforts are not accomplishing anything. One way to get his attention is to “turn the value,” so to speak, by bumping your rate on other fees. This not only gets his attention, but it serves your bank properly in that the com pany seldom qualifies for the lower rate extended earlier. You are taking more risk and should be paid accord ingly. This approach may also have one of two other laudable aspects. It may make the borrower more eager to take those steps which will return him to a more acceptable credit and thus quali fy him for the former charges. Second, it might make him more sensitive to the overtures of another lender to re place you, which may be the solution you want. Oftentimes, it is not enough or not appropriate to restructure the com pany’s debts; what is really needed is to restructure the company itself. This is particularly true when you are con vinced that the basic problem is man agement. In this case, a useful step might be to suggest that management bring in an outsider— a consultant. A good pro fessional consultant will not only give the company management assistance but, more importantly, can provide a new, objective view of the situation and, hopefully, would feel free to ex press a considered opinion of what the problem is. Even if you have correctly identified the problem as being man agerial in nature, it is not always as easy for the banker to communicate MID-CONTINENT BANKER for May 15, 1 976 that fact as it is for an outsider, espe cially for long-time customers. The key to suggesting the use of an outsider is in identifying the right con sultant for the particular situation. If you can suggest the right firm or indi vidual for your customer, many times the consultant will be able to provide the assistance necessary to turn the sit uation around. Another solution is to suggest the disposal of assets. In this instance, your intention is, not only to help the com pany in putting itself on a more sound footing, but also to get your loan re duced from all or part of the proceeds. This method can range from selling specific assets to a planned, partial liquidation of the business. Specific as sets that can be sold may include ex cess inventory, surplus land, etc. A further step might be the disposal of entire operating units, including wholly or partially owned subsidiai'ies and, in this instance, the logical can didates are those that either are not really essential to the main thrust of the business or that threaten to bring down the rest of an otherwise good company. Again, this solution might have two distinct benefits—it can help channel the company’s efforts in a more productive direction and it can help raise some much-needed cash that can be applied to your loan. Another method of restructuring your problem credit is to promote a merger, sale or even a final, full liquidation of the business. If you can help find the right partner for a merger or sale, it is often the best way out for everyone concerned. It can be a quick, rela tively painless way to solve the basic problem but still continue the business. Although this solution can be quite difficult to accomplish, especially when the economy is in poor shape, there are times when the perfect solution is to arrange a marriage with a strong, expansion-minded partner. There are also times when the best solution is to quit trying—to liquidate the business entirely. The problem may be so fundamental that all other solu tions are not promising, and no one would be interested in the business as a whole. Then the answer might be to convince the company to liquidate, to sell the assets in as orderly a fashion as possible, pay the debts and let the stockholders use remaining capital in a more productive way. Most of the methods of working out a problem deal with the various means of supporting or protecting your loan to get “money good” while you and the company try to reach solutions leading to a satisfactory continuation of the business. You should not forget, howMID-CONTINENT BANKER for May 15, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis If you look better, you’ll feel better, and if you feel better, you’ll work better. Wear the best in business fashions FASHIONS FOR BUSINESS 404 S. Wells • Chicago 60606 • (312)922-8448 69 ever, that one other much more direct method exists—your right of offset. It is time to offset when the situation is hopeless and you can see no possibili ties of salvaging the customer. Your primary concern is to get your money back and to preserve the assets of your bank. This situation may arise after you have tried all other approaches or it may arise because of some catastrophic or fraudulent event suddenly becom ing evident. In either event, if it is the only way to rescue even part of your loan, then do not hesitate—offset. All good bankers are aware that there are public relations aspects to handling problem loans. At the same time, however, your No. 1 priority must be the preservation of your bank’s assets. If offset is necessary to accom plish this, then use it. If adequate review systems exist, and appropriate actions are taken along the lines suggested, then the incidence of bankruptcy, formal and informal credi tor agreements and arrangements will be minimized. The necessity for handling problem loans and workouts is a fact of life in banking, and not just during times such as we are experiencing now. W e do ourselves, our stockholders and our cus tomers a good service by being pre pared to deal with problems as they arise. The first step in being prepared is to be aware of the options available to us in formulating the most effective means of attacking an individual prob lem. Even though several different ap proaches for working on problem loans have been discussed here, it is actually fairly rare that a single solution will completely solve a problem. However, Think of the advantages of renting a new, completely furnished and fully equipped financial facility! • Start business immediately at your new location... • Establish traffic flow before your permanent struc ture is completed ... • Rent a site and test your expansion plans! Financial Facilities portable modular units can everT be customized to match your main structure. it is also rare when some combination of loan protection and salvage tech niques will not materially improve the bank’s position. Workouts are usually possible, even in some fairly advanced cases of busi ness decline, when the banker knows his borrower, has an effective plan to suggest and deals fairly but forcefully with the critical aspects of the marginal credit. When taking intelligent risks, there fore, a good lending officer will identi fy potential problem situations and know those loans in depth. When prob lems first appear, such an officer will avoid impulsive reactions and will neither procrastinate nor overreact. In stead, he or she will calm down, re view the situation in depth, plan the solution and any possible alternatives, and then act—to protect the bank’s position and to salvage the customer’s business. Successfully handling prob lem loans and getting “money good”— these are the most skillful parts of the lending game—they make bankers out of loan officers. * • Mo. Young Bankers Conf. To Use 'Lending' as Theme OSAGE BEACH—“Lending” will be the theme of the 12th annual seminar of the Missouri Young Bankers. They will meet June 16-18 at Tan-Tar-A Resort here. Keynoting the first day of the semi nar, June 16, will be Economist Mor gan Maxfield, president, Great Mid western Corp., Kansas City. On June 17, James D. Baker, senior A variety of floor plans Units include deluxe features: • Air Conditioning • Electric Heat • Kitchen Area • Carpeting • Desks, Chairs and Files • Drive-Up Window • Cash Safe • Hold-Up and Burglar Alarm System s • Camera • Teller’s Counters and Check Desk • Teller’s Undercounters with Coin Chests • Night Depository (Optional on 600P) • One Hour Fire Rating • Site Planning • Insurance 'R ent fully e quipped u n it by th e m o n th fo r a n o m in a l a m o u n t! Designed by Mayes, Williams & Partners, Architects A.I.A. Planners of over 300 Financial Institutions. 70 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Model 1300P L A J ENTRY (24ft- x56 tt) A Complete Analysis of Your Needs Without Obligation. CALL FINANCIAL FACILITIES at 312/858-1950 799 Roosevelt Road Glen Ellyn, III. 60137 F F M cCLU RE TIEMEYER MEYER B A KER vice president and economist, Fidelity Bank, Oklahoma City, will take a look at “Bank Management and the Bole of the Lending Function.” Later in the day, he will moderate a panel discus sion on that topic. Panel members will include John W. Rogers, deputy re gional administrator of national banks, 10th National Bank Region, and Dar rell Meyer, president, Butler State. That evening, there will be a cock tail party followed by a banquet. Scheduled as the after-dinner speaker is Larry Wilson of the St. Louis Foot ball Cardinals. The seminar’s final day will spotlight Robert J. McCoy, senior vice president of First National, Joplin. He will con duct a “Cash Flow Case Study,” while Kermit Hansen, chairman, U. S. Na tional of Omaha, will be the event’s final speaker. The Young Bankers chairman is John W. McClure, assistant vice president, Mercantile Trust, St. Louis, which he joined in 1971. He began in personal loans and was transferred to the cen tral group of the banking department one year later. In 1974 Mr. McClure was elevated to his present position. In the central group, he heads division B, which covers correspondent banks and corporate accounts in Missouri and Kansas. Kenneth R. Tierneyer is vice chair man of the Young Bankers. He entered banking in 1968 at Colonial Bank, Des Peres, as a new business representative. One year later, he was promoted to as sistant vice president-installment loans, and in 1974, was named vice presidentcommercial loans, his present position. MID-CONTINENT BANKER for May 15, 1976 AIB's 76th Convention Will Meet in St. Louis Over Memorial Day ST. LOU IS— More than 1,500 bank ers are expected to attend the 76th A1B convention, to be held here May 30June 2. Site will be the Chase-Park Plaza Hotel, according to General Chairman Clarence C. Barksdale, chair man and CEO, First National, St. Louis. Tentative program plans include a fellowship gathering, a national public speaking contest, a midway and recep tion on Sunday, May 30. The first gen eral business session will be held the following morning. Keynote speaker will be Larry Wilson, chairman, Wilson Learning Corp., Minneapolis. Other events planned for Monday, May 31, include concurrent sessions led by professional educators and adminis trators from large AIB chapters and an evening cruise on the Mississippi River. Tuesday’s events include a leader ship session, various luncheons, AIB management simulation and district meetings. The final day’s events will include a session on AIB trends, opportunities and priorities in the morning and a sec ond general business session in the af ternoon, which will include installation of officers and a bicentennial salute. The president’s ball will be held that evening. Assisting Mr. Barksdale with general arrangements are the following vice chairmen: Merle M. Sanguinet, chair man and president, St. Louis County National, Clayton, Mo.; Charles L. Daily, chairman, Edgemont Bank, East St. Louis, 111.; and Arthur G. Zinselmeyer, president, Hampton Bank, St. Louis. Convention secretary is Ruth A. V ice chairm en of A IB convention com m ittees pose w ith Ch. C lare n ce C. B a rk sd a le (c.), ch. & C E O , First N at'l, St. Louis. They are (from I.): M erle M. Sa ngu inet, ch. & pres., St. Louis C o u n ty N at'l, C la yto n , Mo.; A rth u r G. Zinselm eyer, pres., H am pton Bank, St. Louis; Mr. B ark sd ale ; C h a rle s L. D aily, ch., Edgem ont Bank, East St. Louis, III.; and Richard L. Jo h an n e sm a n , s.v.p., M ercantile Trust, St. Louis. W R IT T E N LO A N P O L IC Y P rin cip als assistin g in p lan n in g of A IB con vention in St. Louis include (b ack row , from I.) G eo rge T. G uernsey III, e.v.p., M anchester Bank, St. Louis; Joe H. Steele, exec, dir., St. Louis A IB Ch ap ter; John Poison, v.p., G ran ite C ity (III.) Trust; N orm an J. Tice, pres.. City Bank, St. Louis; W ilson T. Bell, pres., Big Bend Bank, W ebster G roves, Mo. Front row : Ed w ard C. Berra, e.v.p., Southw est B ank, St. Louis; H enry G. Stahl, s.v.p., Boatm en's N at'l, St. Louis (convention treas.); Eileen Y ou n g g re n , C a ss B ank, St. Louis; Ruth A . Bryant, v.p., St. Louis Fed (convention sec.); H a rry J. Kre ig, ch., C ass Bank, St. Louis. Bryant, vice president, Federal Reserve Bank of St. Louis, and treasurer is Henry G. Stahl, senior vice president, Boatmen’s National, St. Louis. Theses by Four Area Bankers Added to ABA Library Theses from the National Graduate Trust School of the American Bankers Association have been added to the ABA Library and the library of North western University, Evanston, 111. The additions raise to 46 the number of theses available on loan to ABA members and present and former Na tional Trust School/ National Graduate Trust School students. Theses by Mid-Continent-area bank ers chosen by the ABA are: “Forced Heirship and Community Property in Louisiana Estate Planning,” Walter E. Busby, assistant vice president and trust officer, Capital Bank, Baton Rouge; “The Uniform Probate Code: Is It for Oklahoma?” by Betty H. Dalrymple, vice president and trust officer, First National, Bartlesville, Okla.; “Auto mation of the Federal Estate Tax Re turn and Allied Documents,” Charles L. Yager, assistant trust officer, Mercan tile Trust, St. Louis; and “Analysis of Bank Holding Company Act Provisions Relating to the Fiduciary,” John E. Yorke, examiner, Kansas City Fed. A thesis is required for graduation from the National Graduate Trust School. The school’s library thesis com mittee makes selections for permanent inclusion in the libraries based on ade quacy of research, organization, read ability, grammatical form and sound ness of conclusions. The theses will be available at both libraries in mid-summer. MID-CONTINENT BANKER for May 15, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Every Bank Should Have One! The Bank Board And Loan Policy' Provides the Information Needed to Formulate a Written Loan Policy or Update an Existing One! A must fo r b an ks, this 2 8 -p a g e m an ual tells w h y all b an ks should h ave written loan policies an d how they can form u late or update such p olicies to serve as g u id e s fo r lending officers an d to help protect the b an k from m akin g costly com m itm ents. The m anual presents the loan policies of tw o w e ll-m a n a ge d b an ks an d con tains a ratin g fo rm u la for secured and unsecured loans, con d itional sales con tracts, a ll m o rtgage s, governm ent and m unicipal bonds and governm ent a g e n cy securities. Topics sp otlighted include: • Conditional Sales Contracts • All Mortgages • Loans for Education Also included are sections on who should have lending authority, lending procedures, loan limits, credit depart ment responsibilities and loan examiner responsibilities. Can your bank afford to this manual? be without (Missouri banks add Price: $2.90 4'/2% tax) ORDER TODAY! (Sorry, no billed orders) The BANK BOARD Letter 408 Olive St., Suite 505 St. Louis, M O 63102 71 LEFT: Bicentennial records w ere used to create g o o d w ill and ga rn e r checking accounts at First N at'l, W oodstock, III. From I., A n ne Pooler, D aniel E. Stegm aier an d Je a n Griffin d isp la y three records offered as prem ium s. Mr. Stegm aier is cash.; Mrs. Griffin is v.p. RIG H T: B ank of Lisle, III., d onated "A m erica S in g s" record prem ium s to local p u blic lib rary. Show n at presentation a re (from I.) Leonard P. Ponte, b ank e.v.p.; Lib rarian Ja n e Sh aw ; an d Banker Sh ari Stadw iser. dent Robert LaVoy. The two agree that the record promotion constituted an appropriate way of observing the bi centennial and gaining new business for the bank. “Our radio spots included musical bits from the records and many of the 100,000 people in our trading area were exposed to our commercials,” said Jean Carney, assistant vice president. “We were especially pleased with the customer comments.” In Woodstock, 111., the marketing team at First National wanted new checking account customers and used the bicentennial records to help get them. As a part of its promotion, the bank offered the records for $1.76 each to senior citizens and music students with no qualifying deposits. This was done as a community service, according to Daniel Stegmaier, cashier. “We think it is important that our customers know we want to be part of the community,” he said. Each of the bank’s 60 employees was given a free recording to make them familiar with the records and stimulate interest in boosting the promotion. As a community service, Bank of Lisle, 111., presented the public library with several sets of the records. In ad dition, announcement of the records’ availability was made in the bank’s direct mail program. According to Len Ponte, executive vice president, the results of the record promotion indicate that “people of all ages and social groups in the bank’s trade area are inspired by good music and the results of our promotion indi cate that America is singing for its 200th birthday.” Prestige Buyers’ promotion package includes statement inserts, counter cards and advertising layouts. The three bi centennial-related records are manufac tured by a division of Columbia Records. • * “E F T can create new sources of revenue and reduce operational costs for banks,” he continued. “The mer chant will benefit from more efficient and more cost-effective business pro cedures, and the consumer will find shopping and banking faster and more convenient.” In listing specific benefits to install ment lending departments, Mr. Reyn olds said that electronic banking can enhance the profitability of small-ticket installment loans. He believes this will be possible because the one-time ap plications required for debit-card ac counts will reduce loan start-up costs. He added that by introducing E F T ser vices, banks will be better able to com- pete with other banks and nonbank fi nancial institutions for retail and com mercial banking customers. He listed reduction of paper as one potential savings with E F T and point ed to the growing number of personal checks by saying that, by conservative estimates, commercial banks will be processing 40 billion checks a year, within the next five years, at a cost of more than 200 each. Mr. Reynolds suggested that install ment bankers can help develop E F T services in areas such as pricing and ad vised them to charge the proper price for the proper product. Another way to help create a posi tive environment for the growth of E F T , according to Mr. Reynolds, is to America S in g s' Bicentennial Records Offered by Financial Institutions S INGING stars such as Kate Smith, Robert Goulet and the New Chris ty Minstrels have been attracting new accounts and deposits for banks. The stars appear on a series of bicen tennial-related ‘“America Sings” records being offered as premiums by financial institutions. The record promotion is packaged by Prestige Buyers, Aurora, 111. First American Bank, Aurora, 111., offered customers a choice of one of three official bicentennial commemora tive records for only $1.76 when they opened new accounts or added $17.76 to existing accounts. Anyone buying a CD received a free record. The bank, which had never made much use of premiums, has taken a second look at the value such a promo tion can bring, according to President Richard Peabody and Senior Vice Presi- Key Role in EFT Is Seen For Installment Bankers By Interbank President Installment bankers can play a key role in electronic funds transfer services offered by banks, John J. Reynolds told the ABA’s National Installment Credit Conference last month. Mr. Reynolds is president and CEO, Interbank Card As sociation, New York City. He explained that sound business principles and prac tices on the part of all retail bankers are essential to development of work able E F T services. 72 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for May 15, 1976 maintain trouble-free customer services, such as accurate statements. Mr. Reynolds turned to existing E F T services— automated teller and cash dis pensing machines, automated clearing houses and local bank debit cards. He noted that a national E F T interchange system known as Signet is being de veloped by Interbank, licensor of the Master Charge card to more than 7,300 banks. The system will be accessed through debit cards bearing the Signet logotype. As Mr. Reynolds explained, an initial application of the Signet program will be to provide check guarantees at par ticipating merchant locations. Signet will enable member financial institu tions to provide consumers with 24hour-a-day, nationwide access to their funds on deposit in banks, with other services to follow as local needs expand to a national interchange level. ■ STER LIN G EM EN S JR. has joined Industrial State, Houston, as executive vice president. He entered banking as a janitor at First National, Lubbock, in 1948, advancing to senior vice presi dent before he left there in 1968 to become president, First Metropolitan Bank of Jefferson Parish, Gretna, La. In 1970, Mr. Emens helped organize and build Greensgate Bank, Houston, where he served as president and CEO until going to Industrial State. NOW YOU MAY NEVER HAVE TO BUY T-BILLS AGAIN . . . TRUST FOR SHORT-TERM U.S. GOVERNMENT SECURITIES Companion to Money Market Management, Inc. Invested exclusively in U.S. Government Securities maturing in one year or less. * Provides the yields of various government issues with different maturity dates. ’ No minimum holding period. ’ Stability of principal — constant net asset value $1. * Portfolio priced at amortized cost. * Provides first day’s interest; dividends 365 days a year. * Telephone transfer of monies. ' No charges to buy. No charges to sell. * M inimum investm ent: $100,000—90 day accum ulation period. All expenses waived until Jun e 1, 1976. For more complete information on TRUST FOR SHORT-TERM U.S. GOVERNMENT SECURITIES management fees and expenses, call our Bank Service Desk. Ask for our literature and prospectus. Be sure to read before you invest. Call toll free: 800-245-2423. FEDERATED SECURITIES CORP. Distributor Dept. ST-4 421 Seventh Avenue, Pittsburgh, PA 15219 v V Howtoheadoff yourbank’s big-budget competitorwho just launched a great newad campaign: Deal with us for asong. Financial institutions in practically every state are using original or customized music from Audio Sellers as the foundation of campaigns, that are working—bringing in new customers, cross-selling existing customers and grabbing off greater and greater shares-of-market. Audio Sellers, unlike many "jingle houses,” offers you more than one-shot jingles and musical signatures. We offer you a gigantic library of complete, award-winning campaigns. In every musical styling from Bluegrass to Boogie. At prices even the “little” adver tiser can live with. Let's talk about your needs . . . CALL US TOLL FR E E : 1-800-633-3976. Complete campaigns, jingles and musical sigs for banks and S&L’s. Produced in our own studios in Nashville, Tennessee, the music capital of the world. MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 73 M ARTIN PA N EYKO O IERKS C R A W FO R D RAU LO C K E Convention 'First-Timers' These new faces wilt be representing city-correspon dent banks at state conven tions this year. • James W . Crawford Jr. is an as sistant vice president in the corre spondent bank department at Deposit Guaranty National, Jackson. He joined the bank in 1971 in the auditing de partment. Tennessee Convention Mississippi Convention • Larry Martin joined First National, Memphis, in 1969 and joined the cor respondent bank division last January. He has served in the branch system, the consumer credit area and the retail credit division. • Stephen H. Paneyko is an assistant vice president at Citibank, New York City. He joined the bank six years ago, coming from Philadelphia National. He travels in eight states. • David A. Dierks is an assistant vice president at First National, St. Louis. He joined the bank in 1969, coming from Ralston Purina Co., Pittsburgh, where he served as operations manager. • James J. Rau joined First National, St. Louis, in 1967, serving in the ED P department. He transferred to the cor respondent banks department in 1972 and is now an assistant vice president. W A LZ 74 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis R EIN H A R D T • David A. Dierks joined First Na tional, St. Louis, in 1969. He is now an assistant vice president in the corre spondent banks department. He will also attend the Mississippi convention. • Peter Locke is an assistant vice president at Citibank, New York City, which he joined in 1971. He has served as a corporate lending officer in ad dition to his present position. • Mike Fowler is an assistant cashier in the regional division at Citizens F i delity, Louisville. He joined the bank in 1973, coming from Citizens & Southern National, Atlanta. No photo available. • Michael J. Walz joined Citizens Fidelity, Louisville, in 1966 as a com puter operator. He currently is a vice president in the correspondent banking division. • Frank O. Kenner joined Citizens Fidelity, Louisville, in 1974 as a vice president in the international depart SHU RTLEFF A C K ER M A N N ment. He is presently senior loan officer in the regional division. No photo avail able. • Ken S. Reinhardt Jr. joined Citi zens Fidelity, Louisville, in 1967 as a control clerk in the data center. He presently is an assistant vice president in the correspondent banking division. • Bill Shurtleff joined First National, Memphis, in 1970 and has served in the branch system, bond department and as coordinator of “First Association” bank club. He joined the correspondent department last June. Illinois Convention • Albert J. Ackermann is a corre spondent bank officer at Boatman’s Na tional, St. Louis. He joined the bank in 1973 and has served in the trust di vision and banking department. • Stephen R. Green joined the credit department of Mercantile Trust, St. Louis, last year and was assigned to division A of the central group, banking department, last July. • Robert J. Mathias joined Mercan tile Trust, St. Louis, in 1974, as a member of the operations improvement program. Last year he joined the central group of the banking depart ment, assigned to division A. (Continued on next page) G REEN M A T H IA S MID-CONTINENT BANKER for May 15, 1976 THE BANKER’S NEWS OLDPROSJOINMB&TTEAM! BANK EDITION VOL. I, ISSUE I MEMPHIS, TENNESSEE Pictured with Earl H. Triplett, president of Memphis Bank &Trust, (seated) are MB&T correspondent bankers, Lynn Hobson, Jim Newman and Gus Morris. Memphis, Tenn. Earl H. Triplett, president of Memphis Bank & Trust, announced that James M. Newman, Jr., and C. G. (Gus) M orris, both form er vicepresidents and Correspondent Bank Department managers for Union Planters National Bank, Memphis, have been elected iice-presidents of Memphis Bank & Trust, and have joined with MB&T vice-p resid en t, Lynn Hobson, in assuming correspon dent banking responsibilities. Newman joined UP in 1946, was elected a vice-president in 1960, and was appointed head of the correspondent bank department in 1968. Morris had been with UP for 29 years, and entered the Corres pondent Bank Department in 1957. He was elected vicepresident in 1966 and served as manager of the Correspondent Bank Department from 1972 until November, 1975. Triplett said, “We are d e lighted to have men of the calibre of Jim Newman and Gus Morris join our correspondent bank staff. They are well-known and highly respected by bankers through out the country, and their addi tion to this department puts added emphasis on our growth in cor respondent banldng.” ALL-STAR TEAM WILL ATTEND CONVENTIONS Together with Lynn Hobson, Jim Newman and Gus Morris will be attending the upcoming bank convention in your state. Look for Lynn, Jim and Gus. They want to share that famous Memphis Bank & Trust hospitality with all their banking friends. Correspondent Bank Department MEMPHIS BANK©*TRUST Memphis, Tennessee 38101 WATS Line: Tennessee—1-800-582-6277 / Other States—1-800-238-7477 MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MEMBER FDIC 75 • John Marshall McGee serves the correspondent division of Commerce Bank, Kansas City, as a correspondent banking rep with responsibilities in Texas and New Mexico. • Robert E. Taubenheim is an as sistant vice president in the western territory for First National, Chicago. He serves New Mexico and seven other western states. Indiana Convention • Richard Zahn joined Continental Illinois National, Chicago, in 1974 and was assigned to the midwestern division of correspondent banking in 1975. W AKEM AN JO H N S O N bama, Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma and Texas as a unit head. ZAHN C O O P ER • John Cooper is an associate region al banking officer at First National, Louisville. He joined the bank as a trainee in 1969. He handles credit analysis and is active in AIB activities. • Constantine F . Boas is a vice presi dent at Citibank, New York City, which he joined in 1958. He has held various positions in the retail/ wholesale trade department, spending eight years in Venezuela and Jamaica. BOAS N IC H O L S • W. Barrett Nichols joined Citizens Fidelity, Louisville, in 1974. He is an assistant cashier in the regional di vision. He was formerly with First Na tional, Louisville. • James Wakeman joined the corre spondent department at Citizens F i delity, Louisville, early this year. He was formerly in the BankAmericard department. He joined the bank in 1967. New Mexico Convention • Bradford M. Johnson is an account officer at Citibank, New York City. He joined the bank four years ago and serves in the South and Southwest dis trict, r e p r e s e n tin g Oklahoma, New Mexico and Texas. • Stephen H. Paneyko joined Citi bank, New York City, in 1970. He has held positions in the forest products department-NBG, Gulf/Southwest dis trict-division I, western district-division I. JO N E S PORTER • G. Jeffrey Jones is an assistant vice president at First National, St. Louis, which he joined in 1974 as a cash man agement officer. He was transferred to the West Coast Regional Office last September. • George William Porter is a cor respondent banking officer for Com merce Bank, Kansas City, which he joined in 1973 as a management trainee. He serves in northern Missouri. Alabama Convention • Bill Shurtleff joined First National, Memphis, in 1970 and has served in the correspondent area since last June. He is a graduate of the University of Tennessee, Knoxville. • Stephen H. Paneyko is an assistant vice president at Citibank, New York City, which he joined in 1970. At present, he represents the states of Ala 76 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M cGEE 'Freedom C o lle c t io n ': Historic Document C o p ies A re Donated to Schools Bound copies of “The Freedom Col lection,” a number of replicas of famous historic American documents, have been donated to area schools by Sugar Creek (M o.) National. The collection is comprised of docu ments such as the Constitution, the Gettysburg Address and the Bill of Rights. All area students in the fifth, sixth and seventh grades received the books. In addition, anyone opening a new account at Sugar Creek National re ceived a copy of the collection. M. J. Ku klenski (I.), pres. S u g a r C ree k (Mo.) N at'l, presents copies of "The Freedom C o l lection," com pilation of re plicas of fam o u s A m erican historical docum ents, to students from area schools, w h ile Fran k O rn d o ff (r.), p rin cip al. S u g a r C reek School an d C a rlisle School, looks on. Bank d onated copies of collection to each 7th, 8th and 9th g ra d e r in are a, also to an yon e open in g new account a t bank. Virgil H. Disney Dies PARK R ID G E , IL L .— Virgil H. Disney, 62, director of special re search studies, Bank Administration Institute, died April 18 ( Easter Sun day) after a short illness. Mr. Disney joined the BAI in 1970. After graduating from the University of Missouri-Columbia with a degree in electrical engineer ing, he worked as a test engineer for General Electric Co., was with sev eral midwestern engineering firms, where he helped develop guided missies, aircraft and aircraft-control equipment, and with the Illinois In stitute of Technology Research In stitute. TA U B EN H EIM MID-CONTINENT BANKER for May 15, 1976 “Our best promotion ever! 66We had tremendous response and appreciation from customers and from our community.” “Never have I seen a promotion attract the interest that this one did! ” Paul L. Rimes Executive Vice President Southern National Bank Hattiesburg, Miss. In full-color, these 8x 10 Family Portraits can he made avail able to your customers ABSOLUTELY FREE! Yes, the above quotations from Missis sippi banker Paul L. Rimes are character istic of what financial executives are saying about the Olan Mills Family Portrait Pro gram . . . and you’ll want to know more about this highly successful public relations idea and how it will benefit YOUR insti tution. Olan Mills Studios offers your institution a LOW-COST plan, proven in hundreds of institutions, which will enable you to offer the one thing that has enduring appeal to EVERY family . . . a beautiful, full-color family portrait, ABSO LU TELY FREE! It is a portrait that will be cherished now and treasured through the years. These portraits can be offered to present customers as a goodwill gesture . . . to prospects for opening a new account . . . to the public in connection with branch openings, anniversaries and seasonal cele brations, i.e., Christmas, Easter or Valen tine’s Day. Best of all, our skilled representatives will provide, at no extra cost, detailed plans, including advertising and promotion al materials, to make your promotional pro gram a successful one. If building business and goodwill are im portant to your institution, you’ll want to find out more about the Olan Mills Family Portrait Program. You, too, will be amazed at the response from your customers and from your community. Call or write Olan Mills Family Portrait Treasury = = = E S S MID-CONTINENT BANKER for May 15, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1101 Carter Street Chattanooga, Tennessee 37402 Phone (615) 622-5141 77 we came in 2 4 8 th and that’s not bad out of 14,000! * Of all the banks in the nation, United American Bank is the 248th largest. We’re proud of that for more reasons than one. • We’re the only Knoxville bank to be ranked in the nation’s top 300. • We’re the only independent bank in Tennessee to make the list. • We’re the only bank in Tennessee to jump 38 places in growth in just one year. Eight other banks in Tennessee are listed among the nation’s 300 largest. Five of them dropped in the ratings last year. One maintained its previous standing. The other two moved up one place each. We jumped 38 places! No wonder we’re proud we came in 248th. Ja ke F. B u tcher C h airm a n and C hief E xe cutive O ffic e r Thanks to you we’re growing bigger and better every day to meet the needs of tomorrow. O k UNITED A M E R IC A N BANK, N.A. Knoxville, Ten nessee / M em b er FDIC the bank of tomorrow with the spirit of the past. * According to the AM ERICAN BAN KER ranking by deposits, December 31, 1975. 78 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for May 15, 1976 Tennessee Convention President Chairman Nashville, May 23-25 Headquarters-HYATT REGENCY HOTEL PROGRAM MONDAY, MAY 24 9 :3 0 a.m.—Joint Meetings, State and National Bank divisions. Noon— Men’s Luncheon. W EA TH ERFO RD M ITCH ELL TBA Pres. Ja c k O. W eatherford is ch. & C EO , M ur freesb oro B ank, w hich he joined in 1949. He a d va n ced to his present position in 1970. He is a form er ch., TBA State Division. TBA ch. is W. W. M itchell, ch. & C EO , First N at'l, M em phis, w hich he joined in 1935. He is a fo rm er pres., Robert M orris A sso ciates, an d is a dir., M em phis Branch of the St. Louis Fed. Exec. Vice Pres. President-Elect 2 p.m.— Board of Directors meetings. TUESDAY, MAY 25 7:45 a.m.— Independent Bankers Division Breakfast. BUSINESS SESSION, 9:15 a.m. Call to Order— JACK O. W EA TH ERFO RD , president, Ten nessee Bankers Association, and chairman and CEO, Mur freesboro Bank. Welcome— RICHARD FULTON , mayor of Nashville. Report of the ABA Vice President for Tennessee— W. E. N EW ELL, ABA vice president for Tennessee, and chair man, First National of Sullivan County, Kingsport. President’s Message—JACK O. W EA TH ERFO RD. Address— “The Scene This Morning”—W IL L IS W. A LEX ANDER, executive vice president, American Bankers As sociation. G ILLIA M W ILLSO N Robert M. G illiam is TBA e.v.p. an d treas. He is a past pres., Southern Conference of B an kin g A sso ciatio n E x ecutives. H u gh M. W illson, TBA pres.-elect, is pres., Citize n s N at'l, A thens, and a dir., M onroe County Bank, Sw eetw ater. He is a form er dir., N a sh v ille Branch, A tlan ta Fed. 1st Vice President 2nd Vice Pres. Address— STEPHEN GARDNER, vice chairman, Federal Re serve System, Washington, D. C. Report of the Board of Directors—W. W. M ITC H ELL, chair man, Tennessee Bankers Association, and chairman and CEO, First National, Memphis. Election of Officers. Adjournment. 12:30 p.m.— Board of Directors Luncheon. 6 p.m.— Reception. 7 p.m.— Banquet. Convention Speakers B U LLIN ER FILLEB RO W N TBA 1st V.P. Ja c k R. Bulliner is pres, First State, H en d er son, w hich he joined in 1948. He w a s pres., Y o u n g B an kers D iv., 1963. Se rv in g a s TBA 2nd v.p. is T. Scott Fillebrow n Jr., v. ch., First A m erican N at'l, N a sh ville, w hich he joined in 1950. He serves on the TBA Federal Leg islative Comm . MID-CONTINENT BANKER for May 15, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis G A R D N ER A LE X A N D E R 79 Division and Board Meetings To Feature Noted Speakers Convention Headquarters The TBA State Bank Division will meet concurrently with the National Bank Division on Monday morning, May 24, at 9:30 in Regency III. Har lan Matthews, treasurer for the state of Tennessee and member of the State Board of Equalization, will address the joint session. At 10:15 a.m., the joint meeting will be adjourned and the State Bank Divi sion will convene its business session, which will feature addresses by Ten nessee Commissioner of Banking Joe Hemphill and Roy E. Jackson, FD IC regional director. Presiding will be Ben S. Kimbrough, State Bank Division chairman, and president, First Trust, Clarksville. The National Bank Division will be addressed by Jeffrey J. Wells, vice pres ident and manager, Nashville Branch of the Atlanta Fed, and Virgil H. Moore, chairman of the division, and president, First Farmers & Merchants National, Columbia. The Independent Bankers Division breakfast will be held at 7:45, May 25, in Regency IV. Charles O. Maddox Jr., president of the Independent Bankers Association of America, and president, Peoples Bank, Winder, Ga., will speak at the breakfast. Presiding will be Divi sion Chairman C. G. Williams, presi dent, Bank of Commerce, Morristown. Two Board of Directors meetings are planned during the convention. The first will be on May 24 at 2 p.m. in Suite 4-A and the second will be the next day at 12:30 p.m. at the same lo cation. Luncheon will be served during the latter meeting. Newly elected mem bers of the board and new division chairman are urged to attend the lunch eon. N ew 2 5-story H yatt Regency N ash v ille is located in heart o f dow ntow n fin an cial d is trict, ad jacen t to state C ap ito l. Hotel, w ith 500 room s, is said to offer city's largest con vention facilities. G ran d ballroom holds 1,500 for m eetings, 1,100 for banquets. Every room in hotel has vie w of city as w ell as indoor ga rd e n court lobby. Re volvin g lo u n ge is at top of hotel, w hich observes its first an n ive rsary this month. Golf and Tennis ■ DAVID RODDEY has been elected executive vice president at Commerce Union Bank, Memphis, while Forrest N. Jenkins has been named vice presi dent, and Bruce Smith has been ele vated to assistant vice president. P. O. Box to o Murfreesboro, Tenn. 37130 ( 615) 893-1000 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Three directors of the Tennessee Bankers Association will retire this year: Jake F. Butcher, Dewey Morris and Charles P. Wilson. Mr. Butcher is CEO and executive committee chairman, United American Bank, Knoxville. He founded and op erates an Amoco Oil distributorship that serves nine counties in Tennessee and is a co-founder of the C&C Bank ing Group. Mr. Butcher also sits on the board of the Roane-Anderson Economic Council. Mr. Morris entered banking in 1954 at his present institution, First National, Clarksville, advancing to president in 1972. He is a past president of the Bank Administration Institute’s Nash ville Chapter and a member of the Montgomery County Industrial Board. Mr. Wilson joined his bank, Com mercial Bank, Paris, in 1964 as assist ant vice president and was named its president in 1973. Prior to that, he had served Commerce Union Bank, Nash ville, 1960-64, and advanced to assist ant cashier. A lawyer, Mr. Wilson has taught business law courses in Paris. The golf and tennis tournaments will be held Monday, May 24, at the Belle Meade Country Club. Golf Tournament sponsor will be the Appalachian Na tional Life Insurance Co. Arrangements for golf should be made with one of that company’s representatives. Those wishing to participate in the tennis tourney should check at the registration desk for information. Murfreesboro Bank & Trust Company 80 Butcher, Morris and Wilson To Retire From TBA Board BU TCHER M O RRIS W ILSO N ■ R O BERT L. HUFFMAN has been named senior vice president, C & I Bank, Memphis. Also promoted at the bank were Jack Bray, to vice president and cashier; Sarah Burchfield, to assist ant vice president, personnel division; and Twila Wood, to assistant cashier and branch operations manager. ■ R IC E V IL L E BANK plans to move its Main Office from Main Street to Highway 11. ■ EAST RID G E CITY BANK has re ceived FD IC approval to open a branch at 3616 Ringgold Road. MID-CONTINENT BANKER for May 15, 1976 Nashville Brass, Opry Show To Be Banquet Features Danny Davis and the Nashville Brass are slated as the featured entertainment for the banquet to be held the evening of Monday, May 24. After dinner, the band will perform in concert, followed by a dance. Costumes depicting any period from the Revolutionary War era to the “fabulous ’50s” are suggested for that evening. Tuesday evening’s banquet will be held at Opryland U. S. A. After the reception and banquet, there will be a brief ceremony for new officers and directors of the TBA, followed by a special performance of Opryland’s “Lib erty Show,” a bicentennial presentation featuring a cast of more than 40. Buses will begin departing the Hyatt Regency for Opryland at 4:30 p.m. ■ w i l l i a m M cW i l l i a m s has joined United American Bank, Knox ville, as executive vice president, cor porate group, which includes the na tional account and correspondent bank divisions. Mr. McWilliams formerly was with Bank of Virginia, Richmond, where he was vice president in charge of correspondent banks and regional accounts and then senior vice president with responsibility for the corporate banking division. He also once was as sistant vice president, Wachovia Bank, Asheville, N. C., where he spent more than five years in corporate accounts and correspondent banking. Mr. Mc Williams is a graduate of the School of Law at Washington & Lee Uni versity, Lexington, Va. M cW i l l i a m s Women's Entertainment A number of women’s activities have been planned for this year’s Tennessee Bankers Association convention. Buses will leave the Hyatt Regency at 10 a.m. May 24 for a tour to The Hermitage and Tulip Grove. A special luncheon will be given at the Cabin by the Spring at the Hermitage and buses will return at about 3 p.m. On Tuesday morning, May 25, at* 9:30, the women will meet in the Davidson Room of the Hyatt Regency for coffee and sweet rolls. A presenta tion, “The Civil War Ladies of Nash ville,” then will be given by Mrs. W il liam Coke of the Junior League of Nashville, Inc., in cooperation with the Metropolitan Historical Commission. At 12:30 p.m. May 25, buses will be gin leaving for a brief tour of the gov ernor’s mansion. Registration Hours The TBA convention registration desk will be open as follows: Sunday, May 23— 1-6 p.m. Monday, May 24— 8.30 a.m.-4 p.m. Tuesday, May 25— 8 :3 0 a.m.-3 p.m. During their 15th annual conven tion April 13-14 in Nashville, the Young Bankers Division of the Tennes see Bankers Association elected Lee Beeman as president. He is president, Liberty Bank of Tennessee, Athens. Robert J. Williams, cashier, First Na tional, Savannah, the immediate past president, was elevated to chairman of the division, and the following were elected as officers: Tom Holland, vice president and cashier, Union National, Fayetteville—president-elect; and Jim Henry, president, Oakland Deposit Bank—vice president. The following were named as new directors of the Tennessee Young Bank ers: John McGuffin, vice president and cashier, Greene County Bank, Greeneville— Group 1; Jake Cantrell, execu tive vice president, Dayton Bank— Group 3; Barry Taylor, vice president and cashier, First State, Kenton— Group 5; and Jim Caperton, assistant cashier, First National, Shelbyville— Group 7. ■ F IR S T CITIZENS BANK, Cleve land, is opening a branch at 423 North Ocoee Street. ■ PIO N EER BANK, Chattanooga, has received the Greater Chattanooga Area Chamber of Commerce’s first Arthur T. Vieth Memorial Award for its pro-free enterprise advertising program. The award is named after the long-time University of Tennessee at Chattanooga professor who was a Hamilton County councilman and who taught the C. of C.’s “Understanding Economics” course for many years. At the award presen tation, a chamber spokesman pointed out that, through the bank’s excellent ad campaign, Pioneer has helped dis pel many myths about the private en terprise system. N ew officers of Y o u n g Bankers Division of Tenn. BA meet after their election at d ivisio n 's 15th a n n u a l convention in N ash v ille (from I.): Jim Henry, pres., O a k la n d Deposit B an k—v.p.; Robert J. W illiam s, cash.. First N at'l, Sa va n n a h —ch.; Tom H ollan d, v.p. & cash., Union N at'l, Fayetteville—pres.-elect; and Lee Beem an, pres., Liberty B ank of Tennessee, A th en s—pres. ca sey ■ F IR S T AMERICAN NATIONAL, Nashville, has announced the following promotions: James DeBow Casey and James A. Jackson, to vice presidents; Larry E. Brown and E. Earl Scott, to assistant vice presidents; Wynn W. Dixon Jr., to administrative officer; Daniel L. Billingsley, Martha Ann Mar shall and Walter Spencer, to banking officers; Barbara Whitaker Brake and Bobby R. Carpenter, to marketing of ficers; and Joyce W. Brewington, to administrative assistant. Pictured at presentation of first M em orial A w a rd to Pioneer n o o ga, are (I. to r.): G eo rg e G ra d y E. G ant, C h a tta n o o ga C. W. C a rd in , C. of C. pres.; and Vieth. MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Tennessee Young Bankers Pick Officers, Directors A rth u r T. Vieth Bank, C h a tta M. C la rk , ch.; of C.: Richard Mrs. A rthur T. These are new ly elected directors of Y ou n g B ankers Division of Tenn. BA (from I.): John McGuffin, v.p. & cash., Greene C oun ty Bank, G ree n eville—G roup 1; Ja k e C an trell, e.v.p., Dayton B an k—G roup 3; Jim C ap erton , a.c., First N at'l, Sh e lb y ville—G roup 7; and Barry Taylor, v.p. & cash., First State, Kenton—G roup 5. 81 jVlississippi A G reat Place To Live A friendly smile is still a familiar sight to see in Mississippi. And with good reason. The people of Mississippi have plenty to smile about. They’re proud of their State’s natural beauty and abundant resources like timber, minerals and clean water. They know the best is yet to come for Mississippi and its people. *5$And the people at First National Bank stand ready to help Mississippi reach its potential.^ After all, First National has been helping Mississippians put money to work in their State since 1889.^ We think Mississippi is a great place to live. If you want to find out more about Mississippi, its people and its resources, First National is the best place to get the story. r i First N a tio n a l B a n k Jackson, Mississippi Member FDIC BRANCHES: Amite County Bank, Gloster/Liberty: Commercial National Bank. Greenville/Leland; First National Bank, McComb; The Bank of Greenwood. Greenwood: Tylertown Bank. Tylertown 82 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for May 15, 1976 Mississippi Convention President Biloxi, May 22-26 Headquarters—Biloxi Hilton & Broadwater Hotels PROGRAM FIRST SESSION, 9:15 a.m., May 24 HOW ARD W. E. H o w ard Jr., M BA pres., is pres. & C EO , Co m m ercial N at'l, Laurel, w hich he joined as a d ir. in 1954. He w a s nam ed v.p., 1959, an d près., 1965. Mr. H o w ard is a g ra d u a te o f the School of B an kin g of the South an d a p ast m em ber of the M BA exec. comm. Vice President Call to Order and Invocation. Executive Committee Report—W. E. HOWARD JR., president, Mis sissippi Bankers Association, and president and CEO, Commercial National, Laurel. Resolutions— O’D E L L A. SANDERS, committee chairman, and presi dent and CEO, Tunica County Bank, Tunica. Financial Report— RAY K. SM ITH, Mississippi Bankers Association treasurer, and president and CEO, First National, Greenville. Chair of Banking Report—DR. HARVEY S. LEW IS, head of chair of banking, University of Mississippi. Young Bankers Section Report—C E C IL R. BURNHAM, president, Young Bankers Section, and executive vice president, Truckers Ex change Bank, Crystal Springs. Standing Committee Reports. SECOND SESSION, 9:30 a.m., May 25 M ITCH ELL Se rving as v.p. of the M BA is Jo h n H. M itchell Jr., v. ch. & C E O , N at'l B an k of Com m erce, Starkville. He entered b a n k in g at G re n a d a B an k in 1950, g o in g to his present b an k 10 y e a rs later as e.v.p. H e a d va n ced to pres, in 1964. Mr. M itchell is a fo rm er Y o u n g B an kers pres. Treasurer President’s Address—W. E. HOWARD JR. Report on School of Banking of the South—ORRIN H. SWAYZE, Jackson, director emeritus, School of Banking of the South. Meeting of Mississippi Members of American Bankers Association— LEO W. SEAL JR., American Bankers Association vice president for Mississippi, and president and CEO, Hancock Bank, Gulfport. Discussion— J. C. W H ITEH EAD , member, American Bankers Associa tion Governing Council, and chairman, president and CEO, Bank of Mississippi, Tupelo. Presentation of 50-Year Club Certificates. Address—W . LIDDON M cPETERS, American Bankers Association president-elect, and president, Security Bank, Corinth. Necrology Committee Report—ORRICK M ETCA LFE, committee chairman, and chairman, Britton & Koontz First National, Natchez. Resolutions Committee Report— O’D E L L A. SANDERS, committee chairman. Report of Nominating Committee. Election of Officers. Convention Speakers SM ITH M BA treas. is R ay K. Smith, pres. & C EO , First N at'l, G reen ville, w hich he joined in 1957. He w a s elected to his present b an k post in 1972 an d has ch aired the fo llo w in g M BA com m ittees: U niform Consum er C red it C o de , Installm ent C red it an d B ank M anagem ent. MID-CONTINENT BANKER for May 15, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M cPETERS SE A L W H ITEH EA D 83 For the first vention w ill atten dan ce, B ilo xi Hilton time in 30 years, the M ississippi B ankers A sso ciation con be held in a new location in B ilo xi. To h an dle the la rg e sp ace has been reserved at tw o ad jacen t hotels, the (I.) and the B ro ad w ater Beach (r.). A ll 300 room s of the Miss. BA Convention In Biloxi, May 22-26 Features McPeters' Talk B IL O X I—The Mississippi Bankers Association’s 88th annual convention— “Bicentennial Bankers’ Bash”—is sched uled for May 22-26, with the Biloxi Hilton and Broadwater Beach hotels slated to share duties as headquarters for the event. A featured speaker during the con vention will be W. Liddon McPeters, American Bankers Association presi dent-elect, and president, Security Bank, Corinth. On hand to address the annual banquet will be Governor Cliff Finch. The MBA tennis tournament will be gin at 9 a.m. Saturday, May 22, and will be held at the Broadwater and Hilton courts. A women’s doubles will be held if registration warrants. The golf tournament is set to begin at noon that day at the Broadwater Golf Course, and a shotgun start will be used this year. Specializing in Louisiana and Mississippi Municipal Bonds Hattier, Sanford &Reynoir INVESTMENT BANKERS W h itn e y B u ild in g , N ew O rle a n s, La. 70130 (504) 525-4171 84 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Hilton and 260 room s at the B ro ad w ater Beach are reserved for bankers. Center photo show s pool are a at Hilton. M eetings and en tertainm ent are expected to be fa irly even ly b alan ce d betw een the tw o hotels. At 2 p.m., registration for the con vention will open in the Hilton Lobby and continue throughout the afternoon. Topping off the day’s events will be a party in the Hilton Ballroom sponsored by First Mississippi National, Hatties burg. Party time is 6-8 p.m. Registration will open at 9 a.m. Sun day, May 23, in the Hilton Lobby. At noon, the finals of the tennis tourna ment will be held at the Hilton tennis courts, followed at 3 o’clock by the Central Bank of Birmingham party on the second floor of the Hilton. At 5:30 Sunday afternoon, the De posit Guaranty National of Jackson party is scheduled for poolside at the Broadwater. The executive committee/ past presidents’ dinner is slated for 8 p.m. in the Broadwater Coronet Room, while from 10-12 midnight in the Hilton Ballroom, the National Bank of Commerce of Memphis party will be held. Monday, May 24, will begin when the registration desk opens at 9 a.m. in the Hilton Lobby. Fifteen minutes later, the first general business session is scheduled to begin in the Hilton Grand Casino. A party sponsored by First National of Jackson will be kicked off at 11 a.m. in the Hilton Ballroom. Hancock Bank, Gulfport, will open its oyster bar on the second floor of the Hilton at 4 p.m. From 6:3 0 -7 :3 0 that evening, the MBA will hold its cocktail party in the Hilton Ballroom, followed by “Billy’s Bicenten nial Bash” at 7:3 0 in the Hilton Grand Casino, the “Bash” will be a “seafood spectacular” featuring entertainment by the “America, Let’s Celebrate” musical show. Tuesday, May 25, will start with an 8 o’clock breakfast for graduates of the School of Banking of the South in the Broadwater Crown Room A. Presiding will be Leon C. Williamson, SBS ex ecutive trustee, and president and CEO, Southwest Mississippi Bank, Magnolia. Convention registration opens at 9 a.m. in the Hilton Lobby on May 25, followed at 9 :3 0 by the second general business session in the Broadwater Cor onet Room. The women’s social hour and luncheon is slated for an 11:30 start in the Hilton Ballroom and will feature a show by the Gulf Coast Craft Guild. From 11:30 a.m. to 1:30 p.m. there will be a stag luncheon, courtesy of Union Planters National, Memphis. It will be held in the Broadwater Crown Room. The May 25 evening’s events are set to start at 4 p.m. with the oyster bar of Hancock Bank, Gulfport, in the Broad water Coronet Room. At 7 :3 0 will be the annual banquet in the Broadwater Crown Room. Names of winners of the golf and tennis tournaments will be an nounced, and Governor Cliff Finch will address the convention. In addition, of ficers will be introduced and installed, followed by adjournment of the con vention. The executive committee breakfast will be held at 8:3 0 May 26 in the Hil ton Dunes Room. It will be followed by an executive committee meeting. Active Markets Mississippi Municipal Bonds O flv ls a n i C o m p a n y JA C K S O N , MISS. In v estm en ts LA M A R LIFE BLDG. P H O N E 353-6326 LESTER ALVIS LESTER ALVIS, JR. FERRILL BATTLEY MID-CONTINENT BANKER for May 15, 1976 Our Annual Report for the Y ear1 9 7 5 ... salutes the Bicentennial Year, and is dedicated to the various agencies of the Federal Government that maintain staffs, offices and facilities in our South Mississippi region. We would be pleased to send you a copy. Just write our president, Leo W. Seal, J r ., P.O. Box 4019, Gultport, Mississippi 39501. Hancock Bank New Light on Modern Banking MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member f d i c 85 Their credit life teacher is the best. Last year ex-Standard Life salesmen wrote more than $15,000,000 of credit life premiums for their companies. And we’re proud of them. We’re glad to see other companies in the credit life field, even when they’re staffed with ex-Standard Life representatives—because Standard pioneered credit life insurance in this area, and we’ve been the pacesetters ever since. That’s because we take credit life seriously. We’ve never considered it a sideline. And we’re proud to point out that Standard Life writes more credit life than any company in our area. In fact, most of the new things in the field were created by Standard. So, you can bet those salesmen know credit life. They learned it from the Standard in the business. Now, they only have one problem. We’re continuing to set the pace. And they’ll have to work very hard just to keep up. Contact our home office for more information. Standardlife Insurance Company/Jackson, Mississippi 86 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for Mav 15, 197 6 Bank of Mississippi Observes Centennial, Plans New Building TU PELO —A bank that began March 31, 1876, as Raymond, Trice & Co. in nearby Verona today is observing its centennial as Bank of Mississippi, with headquarters here. The move from one city to another in 1886 was occasioned by the laying of railroad tracks in Tupelo and was facil itated because of the bank’s perpetual charter. Before the move, the bank changed its name to Bank of Lee County to reflect more properly the bank’s role in its county. The name was changed again, in 1899, to Bank of Tupelo when its administrative offices were constructed in Tupelo’s central business district. As early as 1904, Bank of Tupelo began acquiring community banks through purchases or mergers and, dur- A lth ou gh B ank o f in Tupelo, is 100 m odern outlook is sketch o f its future to cost $7 m illion, 1978. M ississippi, head q u artered y e a rs old, its th o ro u gh ly evidenced by this artist's home. M ultistory b u ild in g, w ill be com pleted in e a rly B re akin g g ro un d for new B an k of M ississippi b u ild in g are its board and senior m anagem ent (I. to r.): Jo h n W. R ial, e.v.p. and d ir. and project co o rd in ator; E. L. Jo yn e r, d ir.; J. E. Staub, dir. em eritus; J. C. W hitehead, ch. & C EO ; C h au n cey G o d w in , board b ld g . comm, ch.; Ja m e s W. C o llin s, pres. & dir.; and Fran k Riley, dir. ing its first 100 years, has grown into a $200-million-asset bank, serving 14 northern Mississippi communities with 26 banking locations. The latest name change, to its pres ent form of Bank of Mississippi, took place in 1966, along with the same change for all banks in its system. A new symbol was adopted—a Tupelo gum tree encased in the outline of the state of Mississippi. At its centennial celebration March 31, the bank had assets of $201 million and deposits of $179.5 million. It has eight banking offices in Tupelo and serves 13 additional northern Missis sippi cities— Booneville, Bruce, Ecru, Fulton, Grenada, Houlka, Houston, Mantachie, Nettleton, Olive Branch, Sherman, Vardaman and West Point. At the celebration, widows of former bank chairmen joined Mrs. J. C. Whitehead, wife of the present chairman, and Mr. Whitehead and President James W. Collins in cutting a three-tiered cake in Tupelo. Similar cake cuttings were held in each of the bank’s com munity banking centers. Another highlight of the centennial observance was a ceremonial ground- breaking for the bank’s planned sevenstory administrative headquarters. The $7-million, multistory administration building is scheduled to be completed early in 1978. Mr. Collins took over the presidency of the Bank of Mississippi system last January 29, advancing from executive vice president. He joined the bank in 1966, coming from Union Planters Na tional, Memphis, where he worked in branch administration and commercial credits. Mr. Whitehead had been president since 1961 and chairman since 1974. He retains the latter post as well as that of CEO. These three B ank of M ississippi em ployees w ere ju d ged "b est d resse d" in costum es of 100 y e a rs a g o at b an k's centennial p arty. W omen staff m em bers picked out patterns and b ough t m aterial to create their costumes. ■ H. L. RANKIN SR. has retired as president, Citizens Bank, Columbia, and has been named chairman. Suc ceeding him as president is Ben M. Rawls. Mr. Rankin had been the bank’s president since 1950, while Mr. Rawls, who is an attorney, was named a bank director in 1958 and was elected vice president in 1961. He advanced to ex ecutive vice president in 1975. o m p l e t e C orrespondent overage IN B an k o f M ississip pi's centennial ca ke is cut by Mrs. J. C . W hitehead, assisted by Mr. W hiteh ead, b a n k 's ch. Lo o kin g on are: Mrs. Lena Betts (I.), Mrs. N. B. M cG au gh y (c.), Mrs. Fred Joh nson (3rd from r.), J. W. C o llin s, pres., and Mrs. Iris Robinson. Latter is 3 0 -ye ar retired em ployee w h ile Mrs. Betts, Mrs. M cG au gh y an d Mrs. Jo h nso n are w id o w s o f form er ban k chairm en. Mr. W hitehead an d Mr. C o llin s sport b eard s g ro w n fo r b a n k 's lO O th -ann iversary celebration. MID-CONTINENT BANKER for May 15, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis EAST AN E X P A N D IN G M ISSISSIPPI M A RKET Merchants & Farmers B a n k m e r id ia n , m iss . C apital, Surplus and Reserves Exceed $5,600,000.00 87 A LLEN C O O P ER Mr. C oop er joined Gulf National, Gulfport, in 1926, going to the old Pearl River County Bank as bookkeeper in 1929. He transferred to Bank of Picayune in 1930 as bookkeeper and as sistant cashier, joining First National, Picayune, in 1947 as cashier. Mr. Cooper advanced to president in 1963, remaining in that post until his retire ment 10 years later. Information about Mr. Kahlmus wasn’t available at press time. Lauded for Beautification Bicentennial Book Is Displayed Allen, C o o p e r & Kahlmus To Leave Exec. Com m ittee Three bankers are retiring this year from the Mississippi Bankers Associa tion executive committee. They are Max T. Allen Jr., president, Mississippi Bank, Jackson; P. G. Cooper, president (retired), First National, Picayune; and M. F. Kahlmus, president, Merchants & Farmers Bank, Meridian. Mr. Allen began his banking career with a bank in Jackson in 1950. He joined Mississippi Bank in 1954 as vice president, advancing to president in 1959. Mr. Allen attended the Stonier Graduate School of Banking at Rutgers University, New Brunswick, N. J. Deposit G u aran ty P la za , site of Deposit G u a r anty N at'l, Jackso n , has received the M arch beautification a w a rd from Keep Ja c k so n Beau tiful, Inc. J. H. Hines (r.), b an k ch., ad m ires the a w a rd , w hich w a s presented to the bank by H. J. M assey (I.) of Keep Ja ck so n Beauti fu l's executive board. M. D. Ellis (h old in g book at r.), pres., First United B ank of M ississippi, M eridian, intro duces a bicentennial book w hich w ill be on d is p la y to the public throu gh ou t 1976. To be used in conjunction w ith a d isp la y of a replica of the Liberty Bell, the book is fo r residents to sign , then it w ill be sealed and d onated to the M eridian Public Lib rary. ■ JASPER COUNTY BANK, Bay Springs, has received FD IC approval to open a branch just west of Heidelberg. ■ FLORA J. RIM M ER has been elect ed senior vice president and trust of ficer of Canton Exchange Bank. She has been with the bank since 1950 and currently serves as membership chair man, National Association of BankWomen, South Mississippi Group. Y our Canton Business Invited CANTON EXCHANGE CANTON, BANK WE WELCOME THE OPPORTUNITY TO SERVE YOU MISSISSIPPI "In Ou r 96th Year" BRANCH OFFICES: MADISON—RIDGELAND— EAST CANTON SHOPPING CENTER Common Capital . , rn . $ 450, 000.00 r i f . earned Surplus $ 1, 550, 000.00 Colorado, North Carolina A re Assem blies Sites x , . lotal Resources ° ver $33.000-000-00 MEMBER FEDERAL DEPOSIT IN S U R A N C E C O R P O R A T IO N For Every Banking Service SeCURITY CflflKCORINTH, MISSISSIPPI 88 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M E M B E R F .D .I.C , The 25th and 26th Assemblies for Bank Directors will be held in Colorado and North Carolina in September and November, respectively, according to the Foundation of the Southwestern Graduate School of Banking at Southern Methodist University, Dallas. The 25th Assembly will be at the Broadmoor in Colorado Springs Sep tember 4-7. It will be directed by W il liam H. Baughn, dean, School of Busi ness, University of Colorado-Boulder, and director, Stonier Graduate School of Banking at Rutgers University, New Brunswick, N. J. The 26th Assembly, which will be at the Pinehurst (N. C.) Hotel & Country Club, November 4-7, will be directed by C. C. Hope Jr., executive vice president, First Union National of North Carolina, Charlotte. MID-CONTINENT BANKER for May 15, 1976 How can we help you? Let us count the ways. 1. In d u stria l d e v e lo p m e n t. 2. In te rn a tio n a l b a n k in g . 3. P e tro le u m . 4. R e a l estate. 5. E le c tro n ic data p ro c e s s in g . 6. A u to m a te d In v e s tm e n t P ro g ra m . 7. In ve s tm e n ts . 8. T ru s t. 9. C o rp o ra te p la n n in g . 10. B u s in e s s d e v e lo p m e n t. S e r v ic e s in all o f th e s e a re a s a n d m a n y o th e rs a re a va ila b le to y o u th ro u g h o u r C o rre s p o n d e n t B a n k D e p a rtm e n t. W e in v ite y o u to call o n th e e x p e r ie n c e a n d k n o w le d g e a s s e m b le d b y M is s is s ip p i’s la rg e s t a n d s tro n g e s t b a n k in g s ys te m . W h e n y o u n e e d h e lp in M ississip p i y o u ca n c o u n t o n us. DEPOSIT GUARANTY NATIONAL BANK Main Office: Jackson, Mississippi; Grow with us; Member F.D.I.C.; Branch Banks: Greenville Bank, Greenville, LeFlore Bank, Greenwood; Mechanics Bank, McComb; City Bank & Trust Co., Natchez; Farmers Exchange Bank, Centreville; Monticello Bank, Monticello; Newhebron Bank, Newhebron, and offices in Clinton and Pearl. MID-CONTINENT BANKER for Mav 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 89 Alabama Convention Alabama Bankers to Ponder Num ber O f Issues at Puerto Rico Convention N ENJOYABLE and informative program is planned for the Ala bama Bankers Association convention, which will be held May 18-22 at the Puerto Bico Sheraton Hotel in San Juan. A number of guest speakers from the financial field are slated to be on hand: James E. Vance, senior vice pres ident, First National, Birmingham, will give a savings bond report and Ronald E. Barnes, president, Transitions, Inc., will address the convention, as will George A. LeMaistre, FD IC director, Washington, D. C. Douglas Mims, Alabama superintend ent of banks, Ross Byrd, Ala.BA E F T S specialist, and Senator Wendall Mitchel of Luverne will speak during the second day’s activities. Scheduled speakers for the event’s final day will be Monroe Kimbrel, president of the Atlanta Fed, and W. Liddon McPeters, ABA president-elect, and president and CEO, Security Bank, Corinth, Miss. Mr. Kimbrel is a past president of the American Bankers Association. On hand to welcome the conven tioneers during the first business ses sion May 19 will be Julio A. Torres, president of the Puerto Rico BA. An address by Salvador Casellas, treasurer of Puerto Rico, also is planned for that session. A highlight of the convention ac tivities will be the May 18 pre-conven A tion tour to St. Thomas, which is a free port. A post-convention tour to St. Thomas also is planned. On the evening of May 18, a buffet dinner of Puerto Rican dishes will be held at 8 p.m. in the Sheraton. Dinner music will be by a steel band, followed by an after-dinner stage show with limbo dancers and King Voodoo, who handles fire and dances on broken glass. Dancing for convention dele gates, “until the wee hours,” will fol low. The women’s luncheon will begin at 12:30 May 19 in El Convento Hotel, which is situated in Old San Juan. The hotel takes its name from a convent for which the building was erected over 200 years ago. After lunch, the women will be able to tour the streets and shops of the district. The correspondent bankers will host cocktails at the Sheraton’s pool from 7-8 p.m. Wednesday and Thursday evenings. No banquets have been planned so that conventioneers may sample the wares of the area restau rants. Friday evening, May 21, cocktails will be served at 7 o’clock, followed by a sitdown dinner. After-dinner en tertainment will be provided by the Areyto dance group, a ballet folklorico featuring colorful costumes and excit ing choreography stemming from tra ditional Puerto Rican themes. Dancing W O O DROW BROOM SN ELL LeM AISTRE during and after dinner will be to the music of the Jimmy Stevens Orchestra. Presiding during convention business sessions will be Ala.BA President Hor ace W. Broom, president, Citizens Bank, Hartselle. He joined his bank in 1950 and advanced to president in 1969. Prior to that, he worked at Citi zens Bank during summers while at tending college. He is a past chairman of groups I and II of the Ala.BA. Expected to succeed Mr. Broom as association president during the con vention is Robert H. Woodrow Jr., chairman and CEO, First National, Birmingham, the current Ala.BA first A la b a m a b an ke rs w ill be m eeting at the Puerto Rico Sheraton Hotel, situated on the A tla n tic O cean. It is expected that the hotel w ill be la rg e enough to house a ll d elegates. 90 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER f o r May 13, 1976 vice president. He joined his bank’s trust department in 1947 and was named assistant trust officer and cor porate trust head three years later. Mr. Woodrow was elected bank chairman and CEO in 1972. In addition, he has attended the Stonier Graduate School of Banking, Rutgers University, New Brunswick, N. J., and is a director of Alabama Bancorp., Birmingham. Current second vice president of the association is Charles S. Snell, presi dent, Citizens National, Shawmut. He is a graduate of Auburn University and served in the Alabama public school system for 11 years prior to joining his bank. Mr. Snell also has served two terms as a member of the Alabama House of Representatives. * * VANCE B A RN ES BYR D M cPETERS offer rapid, verbal authorization of pur chases made with bank charge cards. Citizens & Southern National, Fulton National and Trust Co. Bank have signed up as initial participants in the “Buy Line” program. Each bank will establish individual relationships with merchants wishing to be equipped with Transaction telephones, and merchants won’t have to administer applications from consumers. Shop owners also will maintain full discretionary control over the system’s use. The Transaction telephones use elec tronically encoded “dialing cards” to es tablish direct contact with bank com- Let our billion dollar organization help your bank profit. Call Sam Malone (205/328-0300), a member of our correspondent banking team. First Alabama Bancshares, Inc. Affiliate Banks First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama Transaction Telephones Allow Banks in Atlanta To Offer Check Program ATLANTA—By taking advantage of American Telephone & Telegraph tech nology, a number of banks here have announced plans to offer a low-cost check-guarantee system. Using existing bank cards, the system is said to elimi nate problems for merchants and con sumers in purchases made by personal check. The AT&T Transaction Telephone is the heart of the system. Merchants will be able to lease the telephone sys tem from Southern Bell and can use the devices as normal telephones or for transmissions of electronic data. “Buy Line,” as the program is called, will guarantee personal checks pre sented to merchants and reportedly will Bank of Montgomery, N.A. Bank of Birmingham Bank of Huntsville, N.A. Bank of Tuscaloosa, N.A. Bank of Dothan Bank of Selma, N.A. Bank of Gadsden, N.A. Bank of Athens, N.A. Bank of Baldwin County, N.A. Bank of Guntersville Bank of Hartselle Bank of Phenix City, N.A. Bank of Mobile County RrsyVIabam a MID-CONTINENT BANKER for May 15, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis puters, which have 100-word vocabu laries. When the computer responds to a merchant inquiry, verbally authoriz ing or denying a transaction, the com puter is programmed to give the trans action an identifying code number, which the merchant records on the check or credit-card charge slip. The complete process is said to take less than 30 seconds. There will be no charge to customers for membership in the program, and customers will be able to use “Buy Line” without applying for an additional card, if they have a checking-account access card with a participating bank. 91 B ut fo r the touch of a vanished hand . . . T ennyson. PRA IRIE H E R ITA G E * H as your correspon den t’s hand vanished? A rnold and P en w ell . *The title painting from the Citizens Prairie Heritage Collection of 15 watercolors by Rob O’Dell. The collection is available on loan for special bank showings. CONTACT: Dale P. Arnold 217/424-2061 or Allan S. Penwell 217/424-2054 LAN D M AR K MALL DECATUR, ILLINOIS THE CITIZENS NATIONAL BANK AN E X T R E M E L Y H E L P F U L BANK. 92 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for May 15, 1976 Illinois Convention President St. Louis, M ay 23-25 Headquarters-STOUFFER'S RIVERFRONT INN TEN TATIVE PROGRAM FIRST SESSION, 9:30 a.m., May 24 Presiding—ARTHUR F. RUSBOOM, president, Illinois Bankers Asso ciation, and president, Bank of Rantoul. Presentation of Colors. BU SBO O M IB A Pres. A rth u r F. Busboom is pres., Bank of Rantoul, an d ch., G ifford State. He is past pres.. C h a m p a ig n County Bankers Federation, IB A 's G roup Seven and East C en tral Illin o is C h ap ter, B ank A d m in istratio n Institute. Invocation—TH E REV EREN D DANIEL C. O’CONNELL, president, St. Louis University. Welcome—JOHN H. PO ELKER, mayor of St. Louis. Address—JOHN B. ANDERSON, Republican congressman from Illi nois. Address—P IE R R E R EN FR E T of Boston Associates, Inc. 1st Vice Pres. Presentation—W ILLIAM A. GLASSFORD, director, Banking Profes sion Political Action Committee (BancPac), Washington, D. C. American Bankers Association Annual Meeting and Elections—JOHN R. MONTGOMERY III, American Bankers Association state vice president, IBA second vice president and president, Lakeside Bank, Chicago. Report of Nominating Committee— DONALD R. LO V ETT, chairman, president and CEO, Dixon National. Door Prize Drawing. Adjournment. L IV A S Y Ray G. L iva sy , IB A 1st v.p., is pres., M illikin N at'l, D ecatur, w hich he joined in 1965 a s e.v.p. He a d va n ced to pres., 1966. Pre v io u sly he had been w ith Illin o is Bell Telephone, Peoria, an d B ank o f Illin o is, De catur, 1958-1965. He also is ch., M illikin M o rtga ge Co., Decatur. 2nd Vice Pres. SECOND SESSION, 9:30 a.m., May 25 Presiding— ARTHUR F. BUSBOOM. Panel Discussion— Report on IBA E F T S Feasibility Study— DANIEL N. QUIGLEY, vice president, National Boulevard Bank, Chicago, moderating. Address—“Energy Alternatives and the Nuclear Option”—V ILLIAM C. G ERSTN ER, executive vice president, Illinois Power Co., De catur. Door Prize Drawing. Adjournment. THIRD SESSION, 2 p.m., May 25 Presiding—ARTHUR F. BUSBOOM. IBA Annual Meeting and Business Session. Election of Officers. Constitutional Amendment on Change of Election of Officers. M O N TG O M ER Y Se rvin g as IB A 2nd v.p. is Joh n R. M ontgom ery III, pres., Lakesid e B ank, C h ica g o , w hich he joined in 1966. Prior to that, he had served N orthern Trust, C h ica g o , 1952-65. He is state v.p., A B A , and has attended the IBA Trust Developm ent School. MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Adoption of Proposed Resolutions. Annual Reports—ARTHUR F. BUSBOOM and R O BERT C. SCHRIM PLE, executive vice president, Illinois Bankers Association, Chicago. Adjournment. 93 vention banquet will start at 7 o’clock in the Grand Ballroom and Stan Ken ton’s Orchestra will provide the enter tainment. • • Stan Kenton, View of Energy Situation Are on 1976 IBA Convention Schedule VARIETY of social and business events, from Stan Kenton’s Or A chestra to a view of the energy situa tion by William C. Gerstner of the Illi nois Power Co., Decatur, have been scheduled for this year’s Illinois Bankers Association convention. Dates for the event are May 23-25 at Stouffer’s River front Inn, St. Louis. Convention registration and exhibits will open in Stouffer’s North Exhibit Hall at noon May 23. During that af ternoon, a 1:30 executive committee meeting is tentatively scheduled for the President’s Suite, while, at 3 o’clock, a Council of Administration meeting is planned for the Daniel Boone Room. Final event of the day will be the past presidents’ and past treasurers’ din ner at 6 p.m. in the Eugene Field Room. First on the agenda for Monday, May 24, is the Graduate School of Banking breakfast at 8 a.m. in the Daniel Boone Room, followed at 8:30 bv the opening of the registration desk and exhibit hall. The convention’s first general session will begin at 9:30 a.m. and will feature a presentation of colors by the Scott Air Force Base Color Guard and an invocation by the Reverend Daniel C. O Connell, president, St. Louis Univer sity. Providing the convention welcome will be John H. Poelker, mayor of St. Louis. There will be speeches by Con gressman John B. Anderson (R.,I11.) and Pierre Renfret of Boston Associates, Inc., and a BancPac presentation (Bank ing Profession Political Action Commit tee) by its director, William A. Glassford of Washington, D. C. The 50-Year Club luncheon is sched uled for noon May 24 in the Daniel Boone Room, while a women’s lunch eon will be held from 11 a.m. to 4 p.m. at another site. Registration and exhibits will open at 8:30 the morning of Tuesday, May 25, and the second general session will start one hour later in the Mississippi and Illinois rooms. That session will fea ture a panel discussion and report on the IBA E F T S Feasibility Study, with Daniel Quigley, vice president, Nation al Boulevard Bank, Chicago, as mod erator. A representative of Peat, Mar wick, Mitchell, the firm that conducted the study, also will be on hand. An ad dress will be given by William C. Gerstner, executive vice president, Illi nois Power Co., Decatur. Mr. Gerstner’s topic will be “Energy Alternatives and the Nuclear Option.” A speaker’s table reception is slated for 11:30 a.m. in the Lewis and Clark Room, followed at noon by the con vention luncheon in the Missouri and Meramec rooms. Guest luncheon speak er will be William Colby, former CIA director. The third general session will begin at 2 o’clock that afternoon. At 6 p.m. May 25, a speakers’ table reception will be held in the Lewis and Clark Room, while a reception will be gin in the west assembly area. The con ARE YOU IN T E R E S T E D IN E.F.T.S.? We have the only complete computer software* and marketing program for sale (The first IBM 3614 customer usage automated teller machine in the world) Rich Completes His Year As Treasurer of IBA G. Wallace Rich is completing his year as IBA trea surer. He entered bank ing at his present i n s t i t u t i o n , First National, Cobden, in 1950, advancing to CEO six years later. Mr. Rich has been active in the IBA for a number of years, having served as president of Group 10 and on the IBA’s Agriculture and Bank Man agement committees. Backlund, Lemmerman To Rum for IBA Offices The Illinois Bankers Association’s of ficial nominees for second vice president and treasurer, respectively, for 197677 are B. F . Backlund and Jack D. Lemmerman. Mr. Backlund entered banking as head examiner, South Central District, Nebraska Banking Department, in 1955. He joined Dunlap (111.) State, 1957, as CEO, going to Glasford State as CEO in 1965. In 1970, Mr. Backlund joined his present bank, Bartonville Bank, as president. He also is a director of State Street Bank, Quincy, and Wyoming Bank. Mr. Lemmerman, the IBA treasurer nominee, has been with National Bank of Monmouth 29 years and has been president since 1966. He is a past pre sident, Warren-Henderson County Bank ers Federation, and of IBA Group Six. He has chaired the IBA Committee on Bank Management and is on the asso ciation’s Council of Administration and its Executive Committee. Mr. Lemmer man is a director of the Bank Admin istration Institute’s Western Illinois Chapter. Contact G. Thom as Andes, Executive Vice President F IR S T NATIONAL BANK OF 19 Public Square BELLEVILLE Belleville, Illinois 62222 Phone (618) 234-0020 * Fully compatible with CICS and ETAM. LEM M ERM AN 94 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B A C K LU N D MID-CONTINENT BANKER for May 15, 1976 Our idea of correspondent banking: THE COMMITTEE OF ONE. O ur people are real, live, experienced corresp on d en t professionals, with y e a rs of co rresp on d en t banking behind them . So, since th e y are n ’t shiny new m an ag em en t train ees or ju s t goodwill am b assad o rs, th e y h ave th e a u th o rity to o k ay loans or services on th e sp o t. W ith o u t goin g th rou g h a co m m ittee. WE CALL YOU BY NAME NOT BY PHONE. B e ca u se we w ork person to person, eye to eye, w ith th e m an ag em en t of ev ery co rre s pondent bank, rig h t th ere at th e co rresp on d en t bank, th in g s g e t done faster. Friendlier. WE'RE THE BANK FOR THE NEW DOWNTOWN. N B B is th e b ig g est bank on M ichigan Avenue. The hub of C h icago ’s new ch an g in g skyline. B u t w e’ll exten d th e New Dow ntown to w herever you are. WE'RE BIG ENOUGH TO SERVE YOU, BUT SMALL ENOUGH TO TAKE CARE OF YOU. T h a t’s w hy we can give you l it e r a l ly d o z e n s of s e r v i c e s . L ik e lo a n p a rtic ip a tio n s . B o n d p o rtfo lio a n a ly s is and advice. Safe-keeping of securities^ C redit inform ation. U se of our c o m p u te rs . E x e c u tiv e se a rc h . A nd m ore. I t ’s all p a rt of being w h a te v e r k in d of b a n k y o u need us to be. BANKER TO BANKER. NOT BANK TO BANK. Nib The bank for the New Downtown NATIONAL BOULEVARD BANK OF CHICAGO 400-410 N o rth M ich igan A ve., C h icago, 111. 60611 MID-CONTINENT BANKER for May 15, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Ph on e (312) 467-4100 M em ber F D 1C 95 W e w ant the best for you. □ One way to make it happen is with our person-to-person correspondent banking service...administered by bankers who believe in practicing good service, as well as talking about it. We call that quick Louisville Trust Bank response. It’s also efficient, as rapid as possible, regardless of the current difficulties. □ A t Louisville Trust Bank, our correspondent banking team is backed up by the cooperation of every other full service specialist in our bank. □Yes, you can find everything you’re looking for in one convenient correspondent arrangement. Don’t worry about lost time when you work with our banking team, headed up by Frank Nichols, Vann Doyle and Jim Burkholder. □To make your business grow, Louisville Trust Bank offers you the best of experience, sensitive service, and understanding...the type of service you need. □ If you’re too busy to call on us, give us a phone call and we ll stop in to see you. We’d like to bring the best of Louisville Trust Bank to your bank. To start the ball rolling, call 502/589-5440 and ask for Frank or Vann or Jim in our Correspondent Banking Department. Louisville Trust Bank O n e Riverfro n t Plaza • Lo u isville , K e n tu cky 40202 • 502/58 9 -5 4 4 0 Member Federal Reserve System. Federal Deposit Insurance Corporation 96 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for May 15, 1976 Indiana Convention President FRENCH LICK, June 16-17 Headquarters-FRENCH LICK-SHERATON HOTEL PROGRAM FIRST SESSION, 9:30 a.m., June 16 G R IFFIS C. Lloyd G riffis, assn, pres., is pres. & C EO , O ld -F irst N at'l, Bluffton, w hich he joined in 1963. He is a form er IB A treas. and v.p. an d is a past ch. of the le g islative com m ittee an d a p ast pres., Region O ne. Vice President Call to Order and President’s Message— C. LLOYD G R IFF IS, president, Indiana Bankers Association, and president and CEO, Old-First Na tional, Bluffton. Report of Nominating Committee. Election of Officers. Treasurer’s Report—WAYNE E. FIR ESTO N E, treasurer, Indiana Bank ers Association, and president and trust officer, State Bank, Rensselaer. Address—“Abraham Lincoln”— RICHARD BLAKE. Address— OTIS R. BOWEN, governor of Indiana. Address— LARRY O BRIEN, executive director, IN D EX Automated Clearing House, Indianapolis. Adjournment. SECOND SESSION, 9:30 a.m., June 17 Call to Order— C. LLOYD G R IFFIS. Meeting of Members of American Bankers Association. FARRELL IB A v.p. is W illiam C. Farrell Jr., pres. & C EO , Elston Bank, C ra w fo rd sv ille . A b an ker since 1947, he h eaded corporate b a n k in g d iv. (in clud in g corres. b an ks d iv.) at A m erican Fletcher, In d ia n a p o lis, w hen he joined Elston B ank in 1969. Address—“Banking—What Now”— GEORGE W HYEL, Governing Council chairman, American Bankers Association, and vice chairman, Genesee Bank, Flint, Mich. Address—“The Economy/American Style”—EU G EN E A. LEONARD, first vice president, St. Louis Fed. Address—“Practical Ideas for Competing With S&Ls and Credit Unions” —JAM ES J. HUBBARD, Hubbard & Associates, Wheaton, 111. Adjournment. Treasurer Convention Speakers FIR ESTO N E W ayne E. Firestone, pres. & t.o., State B ank, Rensselaer, serves as IB A treas. He entered b a n k in g in 1952 an d is a p ast pres., IB A Region Tw o, BAI Tippecanoe C onf., an d Independent Bankers of Ind. Mr. Firestone attended the School of B an kin g , U niversity of W isconsin, M adison. MID-CONTINENT BANKER for May 15, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LEO N A R D HU BBARD 97 Special Convention Speaker IBA French Lick Convention June 16-17 Has Banking/American Style Theme HEN TH E INDIANA BANKERS Association convention is held at the French Lick-Sheraton Hotel June 16-17, “Banking/American Style” will be its theme. Kicking off the first business session will be a speaker who knows a lot about America, Abraham Lincoln, as portrayed by Richard Blake. He also will present his address, “A Look at Lincoln,” to the women’s luncheon June 17 at noon. Other speakers slated for the first business session, which will begin at 9:3 0 a.m. June 16, will be Otis R. Bowen, the governor of Indiana, fol lowed by Larry O’Brien, executive di rector of the IN D EX automated clear ing house, which is headquartered in Indianapolis and serves banks in the Seventh Federal Reserve District. On hand to address the second busi ness session at 9:3 0 the morning of June 17 will be George Whyel, ABA Governing Council chairman and vice chairman, Genesee Bank, Flint, Mich. Eugene A. Leonard, first vice president, St. Louis Fed, will speak on the econ omy, while James J. Hubbard of Hub bard & Associates, Wheaton, 111., will present some “Practical Ideas for Com peting with S&Ls and Credit Unions.” The convention banquet will take place on the evening of June 16 and will feature an after-dinner speech by J. Lewis Powell, management consul tant, lecturer and writer from Alexan dria, Va. His topic will be “The Price Tag of Freedom.” On Thursday evening, the festivities will begin with a garden party on the lawn of the Sheraton. Entertainment will be by the Jasper High School Band, which will perform patriotic songs. After dinner, the University of Indiana’s Belles of Indiana will sing. The men’s golf tournament will take place Wednesday at the Hill Country Club and the Valley Country Club. The women’s golf tourney is slated for the following day at the Valley course. A putting contest will be held Thursday for the non-golfers, and a tennis tour nament is scheduled for both days of the convention. Chairman of the convention program committee this year is William F. Stose, president and CEO, Salem Bank, Go shen. Serving on the committee are the following: Robert S. Dunevant, president and CEO, Farmers & Merchants State, Ol denburg; Edward J. Bennett, Jr., ex ecutive vice president and cashier, Merchants National, Indianapolis; Gor W 98 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis don E. Smith, chairman, president and CEO, Shipshewana State; Marion R. Klipsch, president, trust officer and CEO, Citizens State, Petersburg; George A. Cox, president and CEO, Bargersville State; Rex Stoops, presi dent and CEO, Hamilton County Bank, Cicero; and Arch C. Voris Jr., president and CEO, Citizens National, Bedford. Chairman of the women’s entertain ment committee is Mrs. Howard Bren ner of Tell City. Committee members include Mrs. Paul Shaffer, Fort Wayne; Mrs. James G. Riddle, Linton; Mrs. Gerald S. Simo, Mrs. Robert C. Laue and Mrs. Robert C. Nelson, all of In dianapolis; Mrs. William King, Rich mond; Mrs. C. Lloyd Griffis, Bluffton; and Mrs. Kent Simpson, Salem. ° * Voss, King Run for IBA Posts, Directors-at-Large Nominated The IBA nominating committee has made the following selections for IBA officer positions for 1976-77: William C. Farrell Jr., president, Elston Bank, Crawfordsville—IBA pres ident; Tom G. Voss, president and CEO, Seymour National— IBA vice president; William H. King, president, Second National, Richmond—IBA trea surer. Nominated for direct or s-at-large are Lyle Brighton, executive vice president, assistant trust officer and CEO, Owen County State, Spencer; William R. Irwin, executive vice president, Farm ers Bank, Frankfort; and Robert E. Price, president, trust officer and CEO, Central State, Connersville. Since tthe In d ia n a convention w ill h ave the theme of "B a n k in g , A m erican Style." A b ra h a m Lincoln w ill be on hand to ad d ress the first business session June 16 an d the w om en's luncheon the sam e d ay. Lincoln is p ortrayed by Richard Blake. m DENNIS J. W ITH EM has been elect ed president, First National, Monticello, succeeding Gerald Lowring, who re signed. Prior to his appointment, Mr. Withem was vice president, Dulaney National, Marshall, 111. SI CITIZEN S BANK, Jeffersonville, has named Wanda Bolton, Marcia Meredith and Joy Reif assistant cash iers; Vivian Raisor, manager, Wall Street Drive-In; and Marie Bennett, Pat Hazard and Bea Worch, assistant managers, respectively, of Hallmark, Greentree and Allison Lane Banking centers. Convention Program Com m ittee M em bers of the IB A convention p ro gram committee met in In d ia n a p o lis to discuss p lan s for the convention (seated, from I.): Robert C. N elson, IB A e.v.p.; IB A Pres. C. Lloyd Griffis, pres., O ld -First N at'l, Bluffton; Com m ittee Ch. W illiam F. Stose, pres., Salem B ank, G oshen; Rex Stoops, pres., H am ilton C ounty Bank, Cicero; an d A rch C. V oris Jr., pres., C itizen s N at'l, Bed fo rd . Stan d in g , from I., are G era ld S. Sim o, IB A ad m in, asst.; Ja n N. Z ig le r, IB A sec.; G eorge A . C o x , pres., B a rg e rsv ille State; M arion R. Klipsch, pres., C itize n s State, Petersb u rg; G ordon E. Sm ith, ch., pres. & C EO , Sh ip sh ew an a State; Ed w ard J. Bennett, e.v.p., M erchants N at'l, In d ia n ap o lis; an d Robert S. D unevant, pres., Farm ers & M erchants State, O ld en b u rg. MID-CONTINENT BANKER for May 15, 1 9 7 6 J. RoyShoffner, President of Dura-Line Corporation explains production processes to Jim McKenzie, Asst. Cashier Liberty Bank; Bobby Jenkins, Vice President of Middlesboro’s National Bank; and Murphy Brock, Liberty Vice President. MID-CONTINENT BANKER for May 15, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Liberty National Bank and Trust Company of Louisville 99 Have you heard the one about the traveling banker? He travels a lot . . . covered most of 5 states and well over 100,000 miles last year to help more bankers do more things than they'd ever done before. It's a way of life for Bob Rook. He knows his business; been doing it now for over 21 years. And, he knows the best way he can help other The F IR S T bankers with their business is to be on the spot with assistance when they need it. Get acquainted with Bob Rook. He's backed by the largest bank in the Texas Panhandle and ready to work for you. Give him a call at the First in Amarillo, or take a look out your window . . . he just may be passing by. Member FDIC national Bank o t Rmarillo P. 0. Box 1331, Amarillo, Texas 79180, (806) 376-5181 i 00 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for May 15, 1976 New Mexico Convention President Las Cruces, June 10-12 Headquarters Hotel—Holiday Inn PROGRAM FIRST SESSION, 10 a.m., June 11 Call to Order—WAYNE STEW ART, president, New Mexico Bankers Association, and president and CEO, First National, Alamogordo. National Anthem— DR. GARY STORY, Las Cruces. Invocation—TH E R EV EREN D CARL G. AMUNDSON, pastor, Holy Trinity Lutheran Church, Las Cruces. Address of Welcome— ¿ALBERT JOHNSON, mayor, Las Cruces. Response—W. R. NICKS, president-elect, New Mexico Bankers As sociation, and president and CEO. Citizens State, Springer. Address—JER R Y APODACA, governor of New Mexico. Address—“E F T S —A Businessman’s Perspective”— H. R. LIV ELY, di rector of public affairs, general credit office, Sears, Roebuck & Co., Chicago. STEW A RT N M BA pres, is W ayne Stew art, pres. & C EO , First N a t'i, A la m o go rd o . He b e g a n his b an kin g career in 1950 a t P an h an d le State, B o rger, Tex., g o in g to his present b o nk in 1956. Mr. Stew art h as been a dir., El Paso Branch, D a lla s Fed, since 1972. SECOND SESSION, 9 a.m., June 12 President-Elect Call to Order—WAYNE STEW ART. American Bankers Association Meeting— CHARLES K. JOHNSON, ABA state vice president; New Mexico member, ABA governing council, and president, First National, Artesia. Report of the Executive Vice President— DENTON R. HUDGEONS. Recognition of 25- and 50-Year Club Members—WAYNE STEWART. Address—“A View From the Comptroller”— Comptroller of the Cur rency JAM ES E. SM ITH, Washington, D. C. Report of the Audit Committee— ROY E. H U DD LE JR., committee chairman, and vice president and cashier, First National of Rio Arriba, Española. Report of the Resolutions Committee— DALLAS A. JOHNSON, reso lutions committee chairman, and president, Farmers & Merchants Bank, Las Cruces. President’s Annual Report—WAYNE STEW ART. Report of the Nominating Committee— HENRY JARAMILLO JR., nominating committee chairman, and president, Ranchers State, Belen. Election of Officers. Presentation of Past President’s Pin and Certificate. Remarks by New President—W . R. NICKS. Selection of 1978 Convention City. Announcements. Adjournment. N IC K S Se rving a s NM BA pres.-elect is W. R. N icks, pres. & C E O , C itize n s State, S p rin g er. Mr. N icks entered b a n k in g in 1941 at Fort W orth N at'i, g o in g to C itize n s N a t'i, Lubbock, Tex., 1949, an d to his present b an k in 1962. He has been a registered N M BA lo b b yist for severa l years. Treasurer Principal Convention Speakers PETTY R alp h F. Petty Jr., pres., B an k o f Sa nta Fe, is assn , treas. He b e g a n his b a n k in g career in 1970 a t Security B ank, Ruidoso, w h ere he attain ed the position o f v.p. cash. Mr. Petty joined his present b a n k in 1972, a d v a n c in g to e.v.p. in 1973. APO DACA MID-CONTINENT BANKER for May 15, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LIV E LY SM ITH P rin cip al sp eak ers on the p ro gra m for the N M BA convention include Je rry A p o d a ca , g o v. o f N ew M exico; H. R. Live ly, d ir. o f p u blic a ffa irs, g en era l credit office, Sears, Roebuck & Co., C h ic a g o , a n d C om p troller o f the C u rren cy Ja m e s E. Smith. 101 Business, Sports & Fun Are Scheduled June 10-12 For Las Cruces Convention LAS CRUCES—A combination of business, sports and fun events are on the schedule for the 65th annual con vention of the New Mexico Bankers As sociation June 10-12. Headquarters is the Holiday Inn. Speakers on hand for the event will include Governor Jerry Apodaca and Las Cruces Mayor Albert Johnson, who STATEMENT OF CONDITION THE FIRST N A T IO N A L B A N K OF ARTESIA, NEW MEXICO A t close of Business March 31, 1976 RESOURCES Loans and Discounts ........................ $16,911,148.09 Overdrafts ............................................ 21,157.32 Stock in Federal Reserve Bank . . 30,000.00 Banking House Furniture & Fixtures 493,750.00 U. S. Bonds .......... $1,999,905.14 O ther U. S. O bligations ........ 994,887.74 O ther Bonds .......... 8,598,506.23 26,897,836.98 Federal Funds Sold 6,500,000.00 Cash and Due From Banks ........ 8,804,537.87 Income Earned, N o t Collected . O ther Assets ...................................... 449,126.18 9,586.66 TOTAL...................... $44,812,605.23 LIABILITIES C a p ita l .................................................. $ 1,000,000.00 Surplus .................................................... 1,000,000.00 Undivided Profits and Reserves . . 2,392,954.68 Special Reserves .......................... 170,847.91 Income C ollected, N o t Earned . . . 322,873.17 Deposits .................................................. 39,925,929.47 TO TAL ............................................ $44,812,605.23 OFFICERS CHAS. K. JOHNSON, President C. F . HAMMETT, Sr. Vice-President VERNON WATSON, Vice-President DAVID T. SIMONS, Vice-President GEORGE H. FERRIMAN, CashierTrust Officer FLOYD E. HALL, Asst. Vice-President ROBERT ASLINGER, Asst. Vice-President BRENT HAMMETT, Asst. Cashier B ILL R. CARPENTER, Asst. Cashier will provide the local view. The national scene will be covered by Comptroller of the Currency James E. Smith; Robert L. Hanzlik, president, American Physi cal Fitness Foundation, Palo Alto, Calif.; Will Mann Richardson, senior vice president and trust officer, Citizens National, Tyler, Tex.; and H. R. Lively, director of public affiairs, general credit office, Sears Roebuck & Co., Chicago. The convention committees’ dinner will be held in the Holiday Inn’s Dona Ana Room at 6:3 0 p.m. June 9. Enter tainment will be by The Duo. Registration for the convention will open at 8 a.m. Thursday, June 10, in the Holiday Inn Lobby. Those wishing to enter the men’s golf tournament may tee off between 8 a.m. and 1 p.m. at the Las Cruces Country Club. Lunch will be served at the country club and tournament winners will be able to claim their prizes at the convention registration desk. The past presidents’ luncheon is slated for the Dona Ana Room of the Holiday Inn at noon, with entertain ment by Guy Webb. The reception the evening of June 10 will begin at 6 o’clock on the Patio. Providing the entertainment will be the Twilight Trio. Activities on Friday, June 11, will begin with the 8 a.m. prayer breakfast in the Rio Grande Ballroom. Entertainment prior to the business sessions will be provided by David Hogue of Las Cruces on the organ. The women’s golf tournament is slated to begin at 8:3 0 a.m. June 11 at the Las Cruces Country Club. Pre ceding the tourney will be a continental breakfast. From 8 :3 0 -1 0 :3 0 in the morn ing, the women’s tennis tournament will be held at New Mexico State Uni versity. It also will feature an 8 a.m. continental breakfast. The Rio Grande Ballroom of the Holiday Inn will be the site for the women’s luncheon, which will begin with a social period at 11:30 Friday, June 11. Will Mann Richardson will The officers, directors and employees of FIRST NATIONAL BANK IN ALAMOGORDO are proud that our president, Wayne Stewart, has served the New Mexico Bankers Association as presi dent during the year, 1975-76. We appreciate the assistance and cooperation given to Mr. Stewart by New Mexico bankers during his term of office in his efforts and program on be half of the New Mexico Bankers Association. W ayne Stewarf 102 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Special Convention Speakers H A N Z L IK G iv in g the ad d ress a t the Ju n e 11 p ra y e r b re a kfa st d u rin g the N M BA convention w ill be Robert L. H a n zlik , pres., A m erican Ph ysical Fitness Foundation, Palo A lto, C a lif. W ill M ann R ichardson, s.v.p. & t.o.. C itize n s N at'l, Tyler, Tex., is scheduled to ad d ress the w om en's luncheon Ju n e 11. give the luncheon address, and winners of the women’s golf and tennis tourna ments will be awarded. Entertainment will be by the Sweet Adelines of Las Cruces. The president’s luncheon is slated for noon Friday in the Aggie Hall of the Howard Johnson’s Motor Lodge, and the Bicentennial Barbershoppers will entertain. Those invited to the presi dent’s luncheon are the executive council, committee and group chairmen, trust division officers, ABA-New Mexico officers, convention speakers and other invited guests. The men’s tennis tournament is set to begin at noon at the Lions Park Tennis Courts, with prizes awarded at the tourney’s end, while the women’s bridge tournament is scheduled for 2 :1 5 -4 :3 0 p.m. in Aggie Hall, Howard Johnson’s Motor Lodge. Kicking off the social events of the evening of June 11 will be a cocktail party on the Holiday Inn Patio from 6-7:30 p.m., courtesy of State National, El Paso. Following that will be a buffet supper in the Rio Grande Ballroom, with dancing to the music of the Butter field Stage Band. Saturday, June 12, will begin with a buffet breakfast from 7-8:30 a.m. in the Rio Grande Ballroom. Sponsoring the b r e a k f a s t w ill b e C itiz e n s B a n k , Farmers & Merchants Bank and First National of Dona Ana County, all of Las Cruces. The final business of the convention will be the meeting of the executive council at 2 p.m. Saturday in Room 175 of the Holiday Inn. Saturday evening’s social events will begin with a 5 o’clock cocktail party on the Patio, sponsored by E l Paso National. The banquet is set to start two hours later in the Rio Grande Ball room, with an invocation by the Rever end Carl G. Amundson, pastor, Holy Trinity Lutheran Church, Las Cruces. MID-CONTINENT BANKER for May 15, 1976 Now, at a Special LOW Price . . . This 3-Volume Marketing Library All Three Manuals ONLY $25.95 1. How to Plan, Organize & Conduct Bank Anniver saries. . . . T h e com plete guide to procedure when 96 pages, 16 illustrations; starts by telling you premium terms and the history of incentives, roams holding a form al opening, an open house, any through such topics as trade area studies, tying in kind of bank celebration; 166 pages, many illus w ith current events, getting new business from old trations; 12 chapters starting w ith “F irst Things customers, m otivating staff m em bers and conclud F irst,” ranging through “Add a L ittle Pizazz and Oom -pah,” concluding w ith “E x p ect the U nexpect ing w ith a series of six case histories of actual bank ed”; eight appendices containing actual plans, promotions that obtained exceptional results. R eg u lar P rice: $10.95 budgets, programs used by banks in actual cele brations; a com pletely factual, step-by-step howto-do-it book now in its second printing. Regular Price: $16.00 2. How to Write Bank Publicity and Get It Pub lished. . . . T h e com plete guide to procedure in w riting publicity releases and how to prepare them so th at new spaper and m agazine editors will use them ; 61 pages; 12 chapters w ith titles such as “C onstructing the News Story,” “Placing the News Story,” “H andling ‘Sticky’ Situations,” “D ealing with News M edia”; another com pletely factual, step-by-step how -to-do-it manual. Regular Price: $5.25 3. How to Plan, Organize and Conduct an Incentive Campaign. . . . M id-Continent Banker’s new est how -to-do-it m anual; a com plete guide to proce dure in evolving an effective incentive cam paign to MONEY BACK GUARANTEE—If not com pletely satisfied, return within 10 days for full refund. -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - i M ID -C O N T IN E N T BANKER 408 Olive St., St. Louis, Mo. 63102 Please send us by return mail: — copies, Bank Celebration Book @ $16 each — copies, Bank Publicity Book @ $5.25 each — copies, How to Plan an Incentive Campaign @ $10.95 each — SEND ALL THREE BOOKS AT THE LO W PRICE O F $25.95 □ Check enclosed ............................. Name ............................................................ Bank Street i [ Title ............................. .......................................................................................................... ........................................................................................................ C ity, State, Zip .................................................................................... (Please send check with order. In Missouri, add 4 /2 % tax.) sell bank services and/or increase bank deposits; MID-CONTINENT BANKER for May 15, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 103 From the Mid-Continent Area Alabama ■ AUBREY CARMACK has been elected senior vice president, First Ala bama Bank, Montgomery, while W il liam E. Epperson and M. Ernest Rich ardson Jr. have been named vice presi dents. Jerry Thompson has been ap pointed an assistant branch manager. First Alabama Bank has been named runner-up for the Marketing Firm of the Year award, which is presented by the Birmingham Chapter of the Ameri can Marketing Association. ■ F IR S T NATIONAL, Birmingham, has announced the promotions of John F. Abele to assistant cashier and as sistant manager, Vestavia Hills Branch, and of Raymond J. Reinhardsen Jr. to assistant cashier, construction loan de partment. ■ BANK O F H U N TSV ILLE has elected the following directors: William T. Hedden, owner and manager, Farm ers Tractor Co., and C. M. Russell, owner, Star Market. Arkansas ■ GARY H. K E L L has been named senior vice president, L. E. Lay & Co., a wholly owned subsidiary of First Ar kansas Bankstock Corp. (FA B C O ), Little Rock. Lay presently services more than $130 million of mortgage loans, has offices in Little Rock and North Little Rock and plans to open one in Hot Springs soon. Mr. Kell was with Lomas & Nettleton Co., where he was vice president and Arkansas branch manager the past seven years. ■ M O BILE DATA CEN TER, INC., has reached an agreement to become a wholly owned subsidiary of First Na tional, Mobile. Regulatory approval is pending. Mobile Data Center is an Ala bama corporation providing customized computer services to businesses and professions. Its president and founder, Enoch L. Brantley, will remain in his position there and the center will con tinue to operate as in the past. e i n i h ■ GORDON CHAPMAN has joined Union National, Little Rock, as senior vice president and branch administra tor. He is responsible for all branch of fice operations, the UNB auto bank and all teller activities in the Main Of fice. Mr. Chapman formerly was senior vice president, manager, administrative group, and cashier, Commercial & In dustrial Bank, Memphis. Before that, he was associated with First National, Memphis. e m ...the BtSI M illiter lu u y iseemehetiees 30 FLOORS OF DRAMATIC SUITES & MASTER BEDROOMS Spacious suite with its own ailelectric kitchen/bar, theatrical vanity, carpeted mosaic bath. Some suites with Bidet and Grand Piano. Complimentary continental breakfast served in your suite. CHAPM AN ■ CHARLES STEW ART, assistant vice president and urban affairs officer of First National, Little Rock, has been named as recipient of the “Mrs. David D. Terry Award” of the Arkansas Con ference on Social Welfare and the Ar kansas Chapter of the National Associa tion of Social Workers. The award, which was established by Mrs. Terry, is presented annually to a person who makes “outstanding efforts on behalf of the people of Arkansas in achieving the goals of social welfare.” Mr. Stewart, whose present job relates bank resources to social problems encountered in an urban environment, serves as liaison between business and other communitybased organizations. ■ W ORTH EN BANK, Little Rock, has agreed with Integrated Resources, Inc., New York City, to sell its headquarters, 1 3 0 0 N. A S T O R ST. C H I C A G O , ILL . 6 0 6 1 0 William C. Wolf, General Manager ( 3 1 2 ) 943-1111 W h ere you dine in elegance at S de PARIS STOR TO W ER \ H 104 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis O T E L S HARROW SMITH COMPANY Union N atio n a l B ank B ld g. 5 0 1 /3 7 4 -7 5 5 5 Little Rock, A rk a n s a s J. E. W O M ELD O RFF, Exe cu tive V ice President AIID-CONTINENT BANKER for May 13, 1976 Latin America in Chicago the Fabco Building, to the firm and lease back the building for 25 years. Consummation of the sale is planned for June 1. Presenting Illinois ■ DANIEL N. Q U IG LEY has been promoted to executive vice president at National Boulevard Bank, Chicago. Kenneth A. Lindstrom has been named senior vice president, cashier and secre tary, while Marshall A. Warshauer has been elevated to senior vice president and trust officer. Mr. Quigley joined the bank in 1974 and heads the personal bank, operations and consumer credit departments. Mr. Lindstrom, who has responsibility for the bank services and comptroller’s departments, joined Na tional Boulevard Bank in 1966 and Mr. Warshauer, who joined the bank in 1957, heads the trust department. T BANKERS T a kin g p a rt in ribbon-cutting cerem ony d u rin g o p en in g o f C h ic a g o Representative Office of B anco do B rasil a re (from I.) Luiz C a rlo s do N ascim ento Silv a , office head; Luiz Benjam in de A lm e id a C u n h a, B ra zilia n consul in C h i c a g o ; an d A n ge lo C alm on de Sa, b an k pres. a CHARLOTTE H. BURZLAFF has been named vice president and cashier of Plum Grove Bank, Rolling Meadows. She goes there from American Na tional, Chicago, where she had served since 1949. B ROY C. PETERSO N has been ele vated to senior vice president in charge of the data processing division of Lin coln National, Chicago. He formerly was vice president and cashier. LIN D STRO M Q U IG L E Y ■ OW NERSHIP of Lake View Bank, Chicago, has been transferred to Wil liam N. Lane, chairman, General Bind ing Corp. Mr. Lane also owns the fol lowing Chicago banks: Northwest Na tional Bank of Chicago, Pioneer Bank and Northbrook Trust. Lake View Bank previously was owned by N L Indus tries Inc., but changes in the Bank Holding Company Act of 1970 re quired the company to divest itself of the bank. ■ TIM OTHY O. D U FFY has been elected president, Bank of Winfield. He formerly was executive vice presi dent. Prior to joining the bank in No vember, Mr. Duffy was with Bank of Northfield, an affiliate bank, as senior vice president. B ROLAND F. PO RTER, vice presi dent and trust officer, Drovers Na tional, Chicago, has been advanced to senior vice president and trust officer, while Joesph P. Valenti has been pro moted from vice president to senior vice president. Richard P. Griffith, cor respondent representative, has been named an assistant cashier. Messrs. Porter and Griffith joined the bank in 1974, while Mr. Valenti joined Drovers National last year. B R O BERT VERH EYEN, executive vice president, Bartonville Bank, has been elected president of the Illinois Bankers Association’s Marketing & Pub lic Relations Division. Other division officers are Ernest A. Malone, assistant vice president, Millikin National, De catur—first vice president; G. Thomas Andes, vice president and cashier, First National, Belleville— second vice presi dent; and Karen Reeves DeLee, Illi nois Bankers . Association, Chicago— secretary. B MARTIN J. NOLL has joined Capi tol Bank, Chicago, as executive vice president, with overall responsibilities for operating and administering the bank. He comes from Chicago’s Ameri can National, where he was second vice president in the correspondent banking division. He joined that bank in 1968. MID-CONTINENT BANKER for May 15, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A Sensible Risk | Management Program In One Step- By-Step Practical Desk Top Reference Guide. Now every commercial banker can understand, plan and monitor a sensible program of Risk Management. This new, concise manual helps you measure all the loss exposures you face...shows how to reduce needless and costly insurance gaps or overlaps...aids you in establishing a full-dimensional risk manage ment program, including loss funding, to conserve your bank assets and get more for your insurance and protection dollar. This unique manual - (which is bv the same publisher o f the Risk and Insurance Manage ment Guide For Savings Institutions) - takes you step-by-step through every area of Risk Management planning - in simple terms, with specific examples. You needn't be an insur ance agent to understand it. Yet every section reveals new, proven ways to reduce your risks, losses and problems and is constantly kept up to date. THE RISK AND INSURANCE MANAGEMENT GUIDE •Complete Loose-Leaf, Tab-D ivided, Section Indexed •Ten issues of “ R isk M anagem ent News" •Guide U pdates F or T h e First Y ear * 1 0 0 .° ° HOW YOUR GUIDE STAYS UP-TO-DATE You will be autom atically billed $ 5 0 .0 0 annually for continuing service beyond the first year to keep your guide current. 10-DAY TRIAL OFFER T ak e 10 days to exam ine this vital m anual at your leisure. If you are not satisfied, simply return the guide at no cost or obligation. > <P Mid-Continent Banker 408 Olive St. S t . L o u i s , Mo. 6 3 1 0 2 Please send me T h e Risk and Insurance M anagem ent Guide for B ankers. The $100.00 initial price includes the first ten issues of “ R isk M anagem ent News" plus all revisions and additions to the Guide. I understand if I am not completely satisfied I may return the Guide within ten days and my money will be refunded. Please include appropriate sales tax. □ C heck enclosed, please ship postage paid. □ Bill me and add $2 .5 0 to cover postage and handling. □ Please send me further inform ation. Nam e........... T itle ............. Institution.. Street.. City..... ..Zip., 105 McDivitt, Arquilla Named Dirs. R. L. M aes (I.), v. ch., H eritage Pullm an Bank, C h ic a g o , and W alter Ehrm ann (r.), b a n k ch., co n gratu late tw o new b an k d irs., G eo rge A rq u illa Jr. (2nd from I.), pres., Burnside C o n struction Co., and Ja m e s Alton M cDivitt, form er astro n au t w ho now is pres., Pullm an Stan d ard . ■ AMERICAN NATIONAL, Chicago, has expanded its correspondent depart ment. Ted C. Axton has been named second vice president and Benson R. Culver has been appointed corre spondent banking representative. Mr. Axton, who joined the bank in 1968, will have responsibilities in Illinois, while Mr. Culver will work in Indiana. He joined the bank in 1974. The fol AXTO N cago, as vice president, commercial loan department. He previously was vice president, commercial banking, Main Bank, Chicago, and prior to that, had been assistant vice president with Union Commerce Bank, Cleveland. ■ F IR S T NATIONAL, Pekin, has moved into its new multi-level build ing. The new quarters feature a chil dren’s window with an electronic lift that brings youngsters up to eye level with the teller, a “drive-under teller” area with eight stations and an afterhours bank. First National also has a new logo that features a reproduction of the Liberty Bell. ■ ROELAND PARK STATE, Shaw nee Mission, has changed its name to MidAmerican Bank & Trust Co. ■ UNION NATIONAL, Wichita, has named Robbin G. Brown credit officer. He has six years’ loan office experience. ■ JOHN S. F IE L D S, senior vice presi dent, Southgate Bank, Prairie Village, has been named head of the newly created corporate, correspondent bank ing and national accounts division. He has been with the bank 10 years and formerly had charge of the installment loan division. The latter now is headed by Senior Vice President Harry F. Har rison Jr., who goes there from Westport Bank, Kansas City, Mo. He had been at that bank 18 years and was a vice president. ■ NORMAN W. ARNOS JR. has joined Michigan Avenue National, Chi https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A . D w igh t Button (I.), ch.. Fourth N at'l, W ich ita, looks on as Jo rd a n L. H ain es (2nd from I.), pres.; Ja c k N. A llen (2nd from r.), v.p.; an d Robert W. A sm a n n , s.v.p., a d m ire the " A rch i tectural A w a rd of Excellen ce " w hich the b an k received from the A m erican Institute o f Steel Construction for the b an k's h ead q u arters, Fourth Fin a n cial Center. ■ VERM ILLIO N B A N K S H A R E S , INC., has received Fed approval to become a one-bank HC through acqui sition of Vermillion State. In a related action, the Fed approved the HC’s ap plication to acquire the assets of Ver million Valley Insurance Agency in Vermillion and, thereby, to engage di rectly in general insurance agency ac tivities. Fed permission was granted because Vermillion has less than 5,000 population. Bank Has 'Golden Touch' C U LV ER lowing have been promoted to second vice presidents: Ronald Bean, G. Law rence Bliss, Berthil W. Ivarson, Richard G. Rand, Edwin S. Lacy and Fredrik C. C. Schokking. Named business ser vices officers were Kevin J. Caulfield and Timothy J. Pettit; Ronald A. Gold and Ronald M. Hem, trust officers; and Adam Robins has been elected a loan officer. 106 Fourth Center Wins Award ■ CAPITAL of Haven State has been increased from $75,000 to $100,000 by a stock dividend. G lenn Irick, e.v.p. & dir., d ata p rocessin g, First N at'l, G reat Bend, presents the b an k's first G olden Touch electronic fu n ds tran sfe r card to D ale W eller, ch. These card s, encoded w ith custom ers' nam es an d sp ecial num bers, enable card holders to d eposit to or w ith d raw from their First N at'l checkin g or s a v in g s accounts electronically at a n y of the b an k's com puter term inals located in p a rticip a tin g retail stores. A ccord in g to Mr. W eller, the G olden Touch system w ill be offered to other m erchants and fin an cial institutions in K an sas. MID-CONTINENT BANKER for May 15, 1976 Kentucky Louisiana ■ F IR S T NATIONAL, Louisville, has named Leslie H. London and Holman R. Wilson vice presidents. Mr. London, who is in charge of planning and de velopment of consumer banking ser vices, joined the bank in 1965. Mr. Wilson joined First National in 1970. He heads office space planning, Head quarters Office. ■ W ILLIA M W. D ELO N EY has been named assistant vice president, national accounts, at First National Bank of Commerce, New Orleans, and Robert L. Browning has been elected an inter national banking officer. Patricia Kerth has been elevated to banking officer, while Larry L. Schupbach has been ap pointed petroleum engineering officer. In other promotions at the bank, James E. Wallace has been advanced to data services officer and Chester A. Wood, to bond investment officer. ■ C I T I Z E N S F I D E L I T Y BANK, Louisville, has named Selden “Buck” Harris, manager, BankAmericard, and Craig Stanley, correspondent division, vice presidents. Bobby Campbell, Old Third Street Road Office manager, Phil Line, Rolling Hills Office manager, and Susan Nichols, Riverfront Office man ager, have been elected assistant cash iers. ■ CALVERT BANK, Calvert City, is moving its Main Office from 128 Main Street to Fifth and Cedar streets and is opening a branch at the old location. ■ F IR S T NATIONAL, Henderson, has elected George E. Warren president and CEO. He formerly was executive vice president. Mr. Warren also is exec utive vice president of Sebree Deposit Bank. ■ M ICHAEL A. CONNER has been named president of Hebron Deposit Bank, succeeding Vaughn Hempfling, who has been elected chairman. Mr. Conner, formerly executive vice presi dent, has been with the bank since 1964. In other appointments at the bank, Robert Ruebel, vice president and cashier, has been named board sec retary, and Ruby Reed has been ele vated to vice president. ■ THOMAS R. BRU M LEY has suc ceeded L. B. Nofsinger as president and CEO of First State, Greenville, after Mr. Nofsinger requested that he be relieved of some duties. He will con tinue as vice chairman and trust officer. Mr. Brumley formerly was president, American Bank, New Albany, Ind. ■ VERNON BANK, Leesville, has re ceived FD IC approval to open a branch at 100 South Third Street. ■ PLAQUEM INE BANK is moving its Main Office from 419 Church Street to the corner of Fort and Eden streets. ■ CENTRAL LOUISIANA BANK, Marksville, plans to open a branch in Effie. ■ G IL B E R T L. PARKS has been ap pointed personnel director of Bank of New Orleans. He has 10 years’ per sonnel experience. Died: Charles A. Henricks Jr., presi dent, Guaranty Bank, Gretna, at his home. He joined the bank at its 1951 founding as vice president and cashier. Two years later he was named presi dent. He began his banking career with Whitney National, New Orleans. Missouri New Mark Twain National Opens April 2 in Ladue LAD UE—Mark Twain National, newest subsidiary of Mark Twain Bancshares, opened here April 2 with capital and surplus of $400,000 each and un divided profits of $200,000. It’s the only national bank here. ■ Ribbon-cutting to open new M ark Tw ain N at'l, Ladue, is done officially by Robert C. Butler (6th from I.), pres. Pictured, I. to r., are: Robert Renz, v .p ; Jo h n P. D ubinsky, pres., M ark Tw ain B an csh ares; H a rla n Steinbaum , pres., M edicareG lase r C orp .; Edw in G. Hudspeth, v.p.; John O 'S h a u g h n e ssy, adm in, asst, to pres.; Mr. Butler; Sanford J. Spitzer, v.p.; A lvin J. Sitem an, pres., Sitem an O rg a n iza tio n , and ch. of b a n k's a d viso ry b o ard ; Jo sep h Forshaw III, pres., Forshaw o f St. Louis; Stanley Lo p ata, pres.. C arb o n lin e Co.; A d am A ron son , ch., M ark Tw ain B an csh ares; G erald T. Dunne, p rofessor of la w , St. Louis U n iversity; A lb e rt G . W atkins, d ivisio n al sales m gr., Tim e m a g a zine; Jo h n Ross, e.v.p., Porta Fab, d ivision of Keene C o rp .; an d Je ra ld Hinton, cash. Mr. Dunne form erly w as gen 'l counsel an d v.p .. Federal Reserve, St. Louis. Robert C. Butler is president and continues as director and executive committee member of the parent com pany. Mr. Butler has been a St. Louisarea banker 20 years and with the Mark Twain Group since 1969. Other officers are: vice presidents, Edwin G. Hudspeth, Sanford J. Spitzer and Robert J. Renz; and cashier-secre tary, Jerald B. Hinton. The bank and HC are located on the first floor of a three-story building, which has been renamed the Mark Twain Building. The unusual lobby has trees, plants and flowers from the Mis souri Botanical gardens, which have featured Mark Twain National as an outstanding example of practical utili zation of such plantings. The bank featured the term “time” in its opening promotion, saying, “Mark Twain bank in Ladue has more tim e for you” and backed up this statement by offering all kinds of timepieces at reduced prices to those opening ac counts. ■ MYRON R. MANN has been named executive vice president-administration at Second National, Ashland. He has served with the Cleveland Fed as as sistant vice president and, most recent ly, as vice president of operations, sys tems and branch administration with Financial Computer Services. ■ FLO RISSA N T BANK has promoted two officers and named a new assistant cashier. Roy F. Laramie, assistant vice president, was named vice president. Carl W. Peters, assistant cashier, was named assistant vice president, and Mrs. Mary A. Hook was named an assistant cashier. ■ DAVID ROSS has been elected president of Bank of McCreary County, Whitley City, succeeding C. C. Shep herd, who has retired. Mr. Ross joined the bank 15 years ago as a teller, while Mr. Shepherd had been with the bank since 1947. He has opened an insurance agency. ■ G. L. THOMAS has been named president and a director, Laurel Bank, Kansas City, succeeding Clark G. McCorkle, who continues as chairman. Mr. Thomas joined Laurel Bank in 1971, advancing to executive vice president in 1973. This is lobby of new M ark Tw ain N at'l, Ladue. Note unusual use of p lants an d trees and m odern art w orks h a n gin g on w alls. MID-CONTINENT BANKER for May 15, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 107 ■ EARL HALDEMAN III has joined First National, St. Louis, as commer cial banking officer, regional banking division. He will work in the areas of agriculture and agribusiness. Prior to joining First National, Mr. Haldeman was assistant vice president-agriculture, First National, St. Joseph. First in St. Louis also has announced the election to its board of John Peters MacCarthy, president and chief operating officer of St. Louis Union Trust, an affiliate. Mr. MacCarthy has been named an ad visory director, while August A. Busch III, president and CEO, AnheuserBusch, Inc., has been elected a di rector. B F IR S T UNION, INC., St. Louis, has named the following directors: Charles F. Knight, chairman and CEO, Emerson Electric Co.; David E. Bab cock, chairman, May D e p a r t m e n t Stores Co.; Darryl R. Francis, presi dent (retired), St. Louis Fed; and Vir gil V. Grant, executive vice president, Caterpillar Tractor Co., Peoria, 111. W. H. N A U N H EIM B A LFRED R. “BO” NAUNHEIM has been elected president of Charter Bank of Overland, succeeding his brother, W ebe H. Naunheim, who continues as chairman and is the new president of Bank of Ladue. “Bo” Naunheim also serves as chairman of Charter Bank of Jennings and will continue in that capacity. A former Missouri Bankers Association president, “Bo” Naunheim also is executive vice president of First National Charter Corp., Kansas City, affiliate HC for the three banks. K N IG H T GRANT a COM M ERCE BANCSHARES, INC., Kansas City, has received Fed approval to affiliate with Commerce Bank of Grandview. The HC also has one charter pending, Commerce Bank of New Mark. a F IR S T NATIONAL, St. Peters, is seeking regulatory approval to build a new headquarters building. Brown to Chair Mayor's Bali Jam e s E. Brow n (c.), pres., M ercantile Bancorp., Inc., St. Louis, receives co n gratu latio n s from St. Louis M ayor Jo h n H. Poelker (r.) an d Don ald R. M orris, pres., St. Louis A m b assad o rs. The occasion w as Mr. Brow n's installation a s hon. ch. o f the M ayo r's Bicentennial A m b a ssa d ors B all on M ay 7. M ercantile Trust, the H C 's lead b an k, w as host to a special cock tail reception preceding the b all. 108 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A. R. N A U N H EIM B AARON E. PH ILLIPS, bookkeep ing department manager, First North west Bank, St. Ann, has been elected assistant treasurer, and Bert A. Raia, in stallment loan department, has been named assistant vice president. Mr. Phillips formerly was with First State, Wellston, affiliate bank, while Mr. Raia formerly was manager, C.I.T. Financial Services, Inc., St. Charles Branch. In addition, James P. Davis, president, Community Title Co., has been named a director of First Northwest Bank. B TER RY R. POST has been advanced to vice president and personal trust of ficer at United Missouri Bank, Kansas City. Myron L. Wheeler has been named personal trust officer, while the following have been named assistant personal trust officers: Stephen J. Campbell, Gary L. Sloan and Norris E. Greer. David L. Roberts has been elected estate planning officer. At the affiliate HC, United Missouri Bancshares, Inc., Kansas City, Jerry Rice has been promoted to assistant comp troller. B W E B E H. NAUNHEIM has been elected president and a director, Bank of Ladue. He succeeds John Fox, presi dent since 1974. Mr. Fox has been elected chairman, succeeding Howard Baer, who retired from the post last year, but remains on the board. Mr. Naunheim remains chairman, Charter Bank of Overland, and is a director, First National Charter Corp., Kansas City-based bank HC that acquired Bank of Ladue April 7. Mr. Fox retired in 1970 from St. Louis’ Mercantile Trust, where he was CEO. Big Bend Bank Opens Facility W ebster G rove s M ayor Ja c k C oope r w ield s the scissors to officially open Big Bend B an k's new d riv e -u p / w a lk -u p b a n k in g fa cility . H o ld in g the ribbon are W ilson T. Bell (r.), pres., an d Earl E. W alke r, dir., w h ile other directors (from I.) look on: Robert E. C h a p m a n , A n d re w E. Sh eahan, D onald B. G erber, W illiam H. C h ap m an an d Paul Schattgen. The new b u ild in g features fou r d rive -u p stations an d tw o inside tellers w indow s. MID-CONTINENT BANKER for May 15, 1976 ■ DANIEL E. SINGER has been named vice president at Boatman’s Na tional, St. Louis. Elected assistant trust officers were William Goessling and Michael P. McDonough, while John H. Matthews has been elevated to install ment loan officer and Robert L. Seper, to assistant cashier. Mr. Singer joined the bank in 1972; Mr. Goessling, in 1975; Mr. McDonough, in February; and Messrs. Matthews and Seper, in 1973. S IN G E R N IEH O FF ■ CYRIL A. N IEH O FF, executive vice president and cashier of Florissant Bank, has been appointed to a twoyear term as the Bank Administration Institute’s state director for Missouri. Mr. Niehoff has been with the bank over 40 years. In the BAI post, he is responsible for promoting activities and serving as liaison officer among BAI chapters, district directors, n a t i o n a l headquarters and other banking organi zations. ■ F IR S T NATIONAL, Kansas City, has announced the promotions of Craig Bouise to deputy controller; Fred Adams, to data processing officer; Les Wainright, to assistant cashier; and Steve Pohle, to assistant trust officer. Oklahoma has named Stanley Lybarger assistant vice president. ■ ROGERS COUNTY BANK, Claremore, has opened its new quarters. The building has brick parapet walls, a bronze finished metal fascia and solar bronze windows. A walk-up is located in its vestibule, but motor banking ser vices will continue in the refurbished existing location. A highlight of the bank’s interior is a number of paintings of local scenes by a bank employee, Betty Knott. The building design, con struction management and furnishings were by Bunce Corp., St. Louis. ■ W ILLIAM F. W ATT has joined Bank of the Southwest, Houston, as senior vice president and marketing division manager. He formerly was vice president and marketing, corporate planning and deposit management divi sion head at Citizens Bank, Flint, Mich., and before that was marketing officer in charge of product manage ment at National Bank of Detroit. Michael E. Patrick has been named vice president at Bank of the South west. He manages the credit depart ment. ■ GEORG E H. CLAY, retired presi dent of the Kansas City Fed, has been elected a director of Ameribanc, Inc., St. Joseph. He joined the Fed in 1958, advancing to president in 1961. Prior to that, he had been vice president of administrative services and a director of Trans World Airlines. ■ R O BERT LAND has been appointed vice president and data processing man ager at Bank of Oklahoma, Tulsa. He has been in the data processing field since 1955 and previously was with National Bank of Detroit and University Computing Co. In addition, Bank of P A T R IC K SN YD ER ■ W ILLIAM E. SNYDER, corre spondent banking section head at Ama rillo National, has been promoted to vice president. He joined the bank as data processing manager in 1968 and transferred to the marketing depart ment in 1970. I W A TT ■ PAUL J. LOGAN, vice president, retail banking division, First City Na tional, El Paso, has tieen named audi tor, while R. E. “Ed” Lain, senior vice president of the bank’s HC affiliate, First City Bancorp, of Texas, Inc., Houston, has been elected a bank di rector. Elevated to assistant cashiers at First City National were James F. Mc Dermott, BankAmericard, and Larry W. Goodman, installment loan collec tions. MID-CONTINENT BANKER for May 15. 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ■ FRANK D. PH ILLIPS has been named president and chief operating officer, Capital National, Austin. He also has been elected a director. Mr. Phillips most recently has been with a major Austin bank. He began his career with C IT Financial Corp. and also has worked for the Ford Motor Credit Co. in its Michigan headquarters and in Dallas. P H ILLIP S Oklahoma ■ F ID E L IT Y BANK, Oklahoma City, has named Larry Fenity and Tim Potts assistant cashiers. Both have been with the bank since 1975. ■ W. C. MAHALEY JR. has been promoted to vice president, factoring and commercial finance division, First National, Dallas. The following have been named assistant vice presidents: Dennis H. Alberts and Eugene McElvaney III, correspondent banking; Steve C. Beckham, L. Scott Luff and Wayne A. Tenney, north Texas metroplex; Ruben M. Trevino and Charles C. L. Boortz, real estate; Donald M. Johnston and Kim A. Uhlemann, special industries; Leland C. Clemons, nation al; Jack S. Correro, factoring and com mercial finance; J. Rodney Smith, cred it; Jerry D. Branum, personnel; Her bert Muse Jr., controller’s; Terry M. Boone, municipal bonds; M. Scott Turrentine, operations; Gerard Roussel, Paris Branch; and Ernest E. Sheppard, corporate and correspondent depart ment, America’s area, international services. ■ RICHARD AGHAMALIAN has been appointed assistant vice president at Fort Worth National. Prior to join ing the bank, Mr. Aghamalian was vice president, Arlington Savings, and loan officer, Southern Trust, Arlington. ■ CHARLES J. KOPYCINSKI JR. has been promoted from assistant cashier to auditor of Cullen Center Bank, Houston, while Mike Brummerhop, credit department head, and Robert Nelson have been named assistant cash iers. 109 Bank's Deposits Assumed HOUSTON— The deposit liabil ities of South Texas Bank have been assumed by the newly chartered South Loop National, which has opened in the failed bank’s former quarters. South Texas Bank was closed by the state banking commissioner Feb ruary 25 and the FD IC was named as receiver. In addition to assuming $7,108,100 in deposits, South Loop Na tional has agreed to pay a purchase premium of $120,000. Heading the purchasing group is William T. Keenan, a Houston banker who served in January as a temporary employee of the Franklin Bank re ceivership, which was conducted by the FD IC here. ■ KEN NETH E. OLDHAM has been named president, Highlands State, while Marvin Gillespie has been elected chairman. Don Lang, the former chair man, has resigned and will remain as a director. Mr. Oldham, formerly first vice president, joined the bank in 1962, and Mr. Gillespie had been president of the institution since joining it in 1968. * JIM FLO R ES has been promoted from vice president and assistant trust officer, First National, Odessa, to vice president and trust officer. In other ad vancements at the bank, Bill Ward, auditor, has been named comptroller; Oscar Juarez, assistant cashier, to au ditor; Frank Deaderick and Dan Thompson, assistant trust officers, to trust officers; and Troy Barrientes has been named assistant cashier. ■ T E X A S A M E R IC A N BANCSHARES, INC., Fort Worth, has re ceived Fed approval to acquire Gal leria Bank, Houston. ■ JOHN E L L IO T T has been elevated to trust officer at Lubbock National, while Don G. Furr and Joe R. Horkey have been named directors. Mr. Furr is chairman and CEO, Furr’s Cafeterias, Inc., and Mr. Horkey is president, Horkey Oil Co., Horkey LP Gas Co., Inc., and Plains Gas. FURR HORKEY 1 10 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ELLIOTT ■ L E S L IE C. L E W IS has been ad vanced to senior vice president and trust officer of Texas Commerce Bank, Houston, while David C. Shannon has been named vice president. Promoted to assistant vice presidents were Melvin C. Payne, chemical; John M. Bondur, personnel; Thomas R. Cox, metropoli tan; Claude E. Conrad, data services; and J. Mark Schultz, item processing. At the bank’s affiliate HC, Texas Com merce Bancshares, Inc., Houston, a merger agreement has been reached with Bexar County National, San An tonio. Approval is pending. ■ W. B. D W IRE JR. has been elected executive vice president of Allied Citi zens Bank, Kilgore. He formerly was vice president, First National, Hender son. J. Wilson Horn has been elected vice president at Allied Citizens Bank and will head the installment lending department. He previously was manag er of the Baytown Office of Beneficial Finance. Len J. Pyeatt, formerly of East End State, Houston, has joined Allied Citizens Bank as assistant vice president. ■ HOUSTON NATIONAL has an nounced the following appointments: W. Kyler Craven, to senior vice presi dent and international banking head; Kenneth H. Kennedy, to trust officer, personal trust; Carlos M. Leach Jr., to assistant vice president, commercial banking group, metropolitan depart ment; and Anne V. Mrok, to marketing officer/advertising manager. ■ ANGUS M. ANDERSON has been named assistant vice president-commer cial and real estate loans, Fair Park National, Dallas. He has over four years’ experience in the banking and mortgage industries. ■ TE M PL E P. BOW EN, vice presi dent in charge of time deposits at Continental National, Fort Worth, has retired. He joined the bank in 1929 and will continue as consulting vice president. Mr. Bowen headed time de posits for the past 10 years. ■ J. STEPH EN W INSTON has been elected assistant vice president at Houston Citizens Bank, while Jerry Dil lingham and William R. Williams have been named administrative officers. ■ TH E F E D has approved a move by Republic of Texas Corp., Dallas, to acquire First Bank, Lufkin; First Na tional, Henderson; and First Bank, Groveton. The HC also has agreed in principle to acquire First National, Brownwood, flagship bank of U. S. Bancshares, Inc. Approval for that move is pending. ■ GREGORY I. KRAMER has been named vice president and cashier of Cypress Bank, Houston. He will be in charge of the bank’s basic operations. Patsy Emory has been elected assistant vice president and will be in charge of purchasing, advertising and CDs. ■ NATIONAL BANCSHARES CORP. of Texas, San Antonio, has received permission from the Comptroller of the Currency to relocate its subsidiary, Churchill National, San Antonio, to the corner of Ramsey Road and San Pedro Avenue. The bank will continue opera tions at its present location until the new building is completed, sometime in early 1977. • Index to Advertisers Alvis & Co. .................................................. 84 Assemblies for Bank Directors ................ 53-60 Astor Tower Hotel ...................................... 104 Audio Sellers ................................................. 73 Bank Bank Bank Bank Board Letter .................................... 71 CelebrationBook ................................. 103 Incentive Campaign .......................... 103 Publicity Book ................................... 103 Canton (Miss.) Exchange Bank ................ 88 Citizens National Bank, Decatur, III.......... 92 Commerce Bank, Kansas City ................... 45 Commercial Nat’l Bank, Kansas City, Kan.. 106 Continental Bank, Chicago ........................ 9 DeLuxe Check Printers, Inc........................ Deposit Guaranty Nat’l Bank, Jackson, Miss............................................. Douglas Guardian Warehouse Corp............ Downey Co., C. L ........................................... Durham Life Insurance Co.......................... Farmers Grain & Livestock Hedging Corp.. Federated Securities Corp............................ Financial Facilities .................................... First Alabama Bancshares .......................... First American Nat’l Bank, Nashville ....... First City National Bank, Houston ............ First National Bank, Alamogordo, N. M. .. First National Bank, Amarillo, Tex. ............ First National Bank, Artesia, N. M............ First National Bank, Belleville, III............... First National Bank, Jackson, Miss............ First National Bank, Kansas C i t y ................ First National Bank, St. Louis ............ 39, First National Bank of Commerce, New Orleans ............................................. First National City Bank ............................ First National Leasing Corp........................ Flo-Go Signal System ................................. Florida Softwares Services, Inc................... Fourth National Bank, Tulsa ....................... 15 89 67 47 13 6 73 70 91 23 24 102 100 102 94 82 11 112 3 35 63 8 36 33 Hancock Bank, Gulfport, Miss...................... 85 Harrow Smith Co.......................................... 104 Hattier, Sanford & Reynoir ........................ 84 Insurance Enterprises, Inc.......................... 41 Liberty Nat’l Bank & Trust Co., Louisville . 99 Liberty Nat’l Bank & Trust Co., Oklahoma City .......................................... 2 Louisville Trust Bank, Inc............................ 96 Memphis Bank & Trust Co........................... Mercantile Bank, St. Louis ........................ Merchants & Farmers Bank, Meridian, Miss............................................. Murfreesboro (Tenn.) Bank & Trust Co. ... 75 5 87 80 National Bank of Detroit ............................ 43 National Boulevard Bank, Chicago ............ 95 National Stock Yards National Bank ....... I l l Olan M ills ...................................................... 77 Prestige Buyers ........................................... 51 Risk Insurance Management Guide .......... 105 Salem China Co. .......................................... Security Bank, Corinth, Miss...................... Standard Life Insurance Co., Jackson, Miss. Struven, Inc., G. Carlyle .............................. 17 88 86 69 Third National Bank, Nashville ................... US Life Credit Life Insurance Co. ............ United American Bank, Knoxville, Tenn. .. Whitney National Bank, New Orleans ....... Ziegler & Co., B. C. 7 68 78 21 10 MID-CONTINENT BANKER for May 15, 1976 Now! all together n € lc o m e > t o j i n n ’ v convention & While you enjoy work sessions, fun a n d fellowship, rest assured that greet you a n d share in the arrangem ents. In the meantime, other authoritative officers who know the sco re will b e b a c k at the bank, a va ila b le a s your alw ays-ready se co n d staff at 618- 271- 6633. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 'YOUR BANKER'S B A N K " .. . 7 Ju s t across the river from St. low's THE NATIONAL, STOCK YARDS NATIONAL BANK O F N A T IO W A l C IT Y NATIONAL STOCK YARDS. ILLINOIS S2C7I Mamïcr OtpOî* ïRSaf«#OI C3fp0 W ork with a banker who knows what his bank can do for you. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A t First National Bank in St. Louis, our corre spondent bankers are trained in what our bank can do for you. Across the board. Departm ent by department. T he result is men with solid experience and individual authority. So they can make fast decisions for you on their own. T h ey ’re backed by a bank with strong, steady growth. A nd total banking capabilities including overline loans, bond departm ent services, computer ized check collection, cash m anagem ent system s. Plus our annual correspondent sem inars where you can exchange ideas and learn about new profit opportunities. G et to know your First National correspondent banker. H e knows his bank. H e’d like to put us to work for you. First National Bank in St.Louis Hgr^g i IHi Member FDIC I
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