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MID-CONTINENT BANKER
INCORPORATING MID-WESTERN BANKER
(ISSN 0026-29&X/
MAY, 1983
NORTHERN EDITION
PERSONNEL/PRODUCTIVITY ISSUE
Search Is O n for Commercial Lenders . . . .
Page 8
Removing Staff Fear
O f Productivity Q u e s t............ ........................
Designing a Compensation Plan for Execs. .
Productivity Up in Bank's
Reserve-Cash Department .............................
Deferred-Fee Director-Compensation P lan ..
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Federal Reserve Bank of St. Louis
P re v ie w s
Illinois
Page 54
Indiana
.....................
Page 58
m
Donald R. Lovett
Illinois BA Pres.
Joseph Bibler
Indiana BA Pres.
4'
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W h il e you ’r e
AT THE CONVENTION
PUT US ON YOUR
MEETING USX
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Look for these people from Commerce Bank
at this year’s convention. They help keep
banks of all sizes up-to-date on investments,
new methods and systems, regulations,
trends and everything involved in the
changing pace of banking today. Join them
at the Missouri Bankers Convention on
May 19-21.
MID-CONTINENT BANKER for May, 1 9 8 3
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Federal Reserve Bank of St. Louis
John Messina
Commerce
Bank
of Kansas City"
(816) 234-2000
10th & Walnut
Kansas City, Mo. 64199
3
MID-CONTINENT BANKER
Convention Calendar
(Incorporating MID-WESTERN BANKER)
Volume 79, No. 5
M a y, 1983
IN THIS ISSUE
FEATURES
6 THE BANKING SCENE
Making nonperforming-asset data public
8 COMMERCIAL LENDERS 'MOST WANTED'
According to executive-search-firm survey
14 PERSONNEL PRACTICES, PROBLEMS
As revealed in survey of bankers
18 'DEFERRED-FEE PLAN'
Way to compensate directors
20 EMPLOYEE-ASSISTANCE PROGRAM
A popular fringe benefit at one bank
24 PREEMPLOYMENT SCREENING TEST
Banks give it high ratings
26 MAKING SUCCESSFUL PRODUCTIVITY STUDY
Employee fear must be reduced first
31 STATE NEWS SECTION
News about banks and bankers
47 COMPENSATION FOR BANK EXECUTIVES:
Designing program for ’80s
50 DECREASE PERSONNEL; BOOST PRODUCTIVITY
How new equipment helped one bank
DEPARTMENTS
66
70
SELLING/MARKETING
BANKING WORLD
EDITORS
Ralph B. Cox
.........
Publisher
Lawrence W. C olbert
Assistant to the Publisher
Rosemary M cK elvey
Jim Fabian
..
Editor
Associate Editor
Eleanor W a in w rig h t . . Editorial Assistant
MID-CONTINENT BANKER Editorial/Advertising Offices
St. Louis, Mo., 408 Olive, 63102. Tel. 314/4215445; Ralph B. Cox, Publisher; Marge Bottiaux,
Advertising Production Mgr.
MID-CONTINENT BANKER is published monthly by
Commerce Publishing Co., 408 Olive St., St. Louis,
Mo. 63102.
Printed by The Ovid Bell Press, Inc., Fulton, Mo.
Controlled circulation postage paid at St. Louis,
Mo., and at additional mailing offices.
Subscription rates: Three years $27; two years
$20; one year $12. Single copies, $2.50 each.
Foreign subscriptions, 50% additional.
4
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Federal Reserve Bank of St. Louis
Commerce Publications: American Agent & Bro
ker, Club Management, Decor, Life Insurance
Selling, Mid-Continent Banker and The Bank
Board Letter.
Officers: Donald H. Clark, chairman emeritus,
Wesley H. Clark, president and chief executive
officer; James T. Poor, executive vice president
and secretary; Ralph B. Cox, first vice president
and treasurer; Bernard A. Beggan, David A. Baetz,
Lawrence W. Colbert, and William M. Humbert,
vice presidents.
May 18-20: ABA Corporate Planning/CFO Joint Semi
nar, Chicago, Hyatt Regency O’Hare.
May 18-20: Kansas Bankers Association Annual Con
vention, Topeka, Downtown Ramada Inn.
May 19-21: Missouri Bankers Association Annual Con
vention, Kansas City, Crown Center Hotel.
May 22-25: ABA National Operations/Automation Con
ference, Miami Beach, Fla., Miami Beach Conven
tion Center.
May 22-25: Robert Morris Associates FinancialStatement Analysis Workshop, Baltimore, Baltimore
Hilton.
May 22-25: Tennessee Bankers Association Annual
Convention, Nashville, Opryland Hotel.
May 22-27: Bank Marketing Association Essentials of
Bank Marketing School, Boulder, Colo., University
of Colorado.
May 22-June 3: Bank Marketing Association School of
Bank Marketing, Boulder, Colo., University of Col
orado.
May 28-June 2: National AIB Leaders Conference,
Washington, D. C.,Sheraton Washington.
June 2-3: Consumer Bankers Association Bank Produc
tivity Workshop, San Francisco, Sheraton Palace
Hotel.
June 5-10: Louisiana Bankers Association Bankers
School for Supervisory Training, Lafayette, Uni
versity of Southwestern Louisiana.
June 5-17: Stonier Graduate School of Banking, New
Brunswick, N. J., Rutgers University.
June 9-11: Association of Bank Holding Companies,
Annual Meeting, Nashville, Opryland Hotel.
June 9-11: Illinois Bankers Association Annual Conven
tion, Chicago, Chicago Marriott Hotel.
June 9-12:New Mexico Bankers Association Annual
Convention, Albuquerque, Four Seasons Motor
Hotel.
June 12-16: ABA Corporate Securities Workshop, Chi
cago, Hamilton Hotel.
June 14-17: Indiana Bankers Association Annual Con
vention, French Lick, French Lick Springs Resort.
June 15-18: American Safe Deposit Association Nation
al Education Conference, Green Bay, Wis., Down
towner Best Western.
June 20-21: Minnesota Bankers Association Annual
Convention, Minneapolis, Hyatt Regency Min
neapolis.
June 20-22: Wisconsin Bankers Association Annual
Convention, Milwaukee, Hyatt Regency Mil
waukee.
June 22-25: Michigan Bankers Association Annual Con
vention, Mackinac Island, Grand Hotel.
June 26-29: Bank Administration Institute Strategic
Planning, Denver, Fairmont Hotel.
July 10-15: ABA National Agricultural Bank Manage
ment School, Ames, la., Iowa State University.
July 10-16: ABA Business of Banking School, Norman,
Okla., University of Oklahoma.
July 17-23: ABA National/Graduate School of Bank
Card Management, Norman, Okla., University of
Oklahoma.
July 23-24: Consumer Bankers Association MicroComputers in Banking, Charlottesville, Va., Uni
versity of Virginia.
July 24-Aug. 5: Consumer Bankers Association Gradu
ate School of Retail Bank Management, Charlottes
ville, Va., University of Virginia.
July 27-30: Independent Bankers Association of Amer
ica Seminar/Workshop on One-Bank Holding Com
pany, Boston, Radisson Ferncroft Hotel.
July 31-Aug. 6: ABA Business of Banking School, Itha
ca, N. Y., Cornell University.
Aug. 7-12: Central States Conference Prochnow
Graduate School of Banking Postgraduate Course,
Madison, Wis., University of Wisconsin.
Aug. 7-13: ABA Business of Banking School, Ithaca,
N. Y., Cornell University.
Aug. 7-20: Central States Conference Prochnow
Graduate School of Banking, Madison, Wis., Uni
versity of Wisconsin.
Aug. 10-12: Central States Conference Prochnow
Graduate School of Banking Seminar for College
Faculty, Madison, Wis., University of Wisconsin.
Aug. 14-19: ABA National School of Real Estate Fi
nance, Columbus, O., Ohio State University.
Aug. 14-26: ABA National Trust School/National Trust
Graduate School, Evanston, 111., Northwestern Uni
versity.
MID-CONTINENT BANKER for May, 1 9 8 3
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Federal Reserve Bank of St. Louis
1-800-323-4747
‘ (within Illinois, call 312-490-6000)
THE BANKING S C E N E
By Dr. LEWIS E. DAVIDS
Illinois Bankers Professor of Bank Management
Southern Illinois University, Carbondale
Publishing Call-Report Data on Nonperforming Assets
R EC EN T ABA poll of bankers
found 92% either “strongly” or
“somewhat” opposed to the F D IC ’s
proposal to make information on non
performing assets more than 90 days
past due public on call reports. Only
1.6% “strongly” favored the proposal,
5.4% were “somewhat” in favor and
1% expressed no opinion. The regula
tion takes effect on June 30.
It’s interesting that the ABA didn’t
ask shareholders and large depositors
"Banks would prefer not to
provide disclosure, but, in their
need to raise capital, they
weighed
the
disclosure
tradeoff against their need and
voted to be listed on major ex
changes."
of banks (those with m ore than
$100,000 in deposits) for their reac
tions. I would guess the numbers
would be reversed for large depositors
and investors, though probably the
bulk of the citizenry has never given
thought to the subject or read a call
report.
One of the world’s largest banks,
headquartered in England, received
an inquiry from an academic historian
about the banking practice of a viceroy
to India who lived several hundred
years ago. The academic was trying to
verify certain records obtained from
other sources. The British bank’s re
sponse was that it never discussed the
accounts of any of its customers, even if
they had been deceased for centuries!
To a similar, but not identical, de
gree, such practices prevailed in the
U.S. before 1933, when, as a reaction
to numerous corporate failures, in
cluding banks, accompanied by subse
quent disclosures of questionable
practices, the Securities & Exchange
Commission and the Securities Act of
1933 came into being. The federal gov
ernment wanted to make sure that
people who were asked to invest in
public businesses would not be given
6
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Federal Reserve Bank of St. Louis
false information and would have suffi
cient information to enable them to
make rational decisions.
About that time, while working at
the largest bank in the U. S., I noted
its stock wasn’t listed on the New York
or any other stock exchange. I asked an
officer about this. His frank answer was
that exchanges required information
prior to listing and the bank didn’t feel
it was in its best interests to comply.
This attitude was prevalent at almost
every large bank. Note that it wasn’t
the federal government that insisted
on information, but privately run ex
changes.
Today a good number of bank HCs
are listed on national or regional ex
changes and provide compliance to
disclosure rules. The reason is simple:
Banks would prefer not to provide dis
closure, but, in their need to raise
capital, they weighed the disclosure
tradeoff against their need and voted to
be listed on major exchanges.
As a result of the Securities Act of
1933, an interesting phenomenon has
developed: a world-wide interest of in
vestors in American securities. I once
spoke to a distinguished European
professor who said the major reason
European, African and Asian wealthy
people were interested in investing in
American securities was that U. S.
firms provided greater disclosure than
did those of other nations. He was
more willing to accept financial state
ments of American firms subject to
SEC and New York Stock Exchange
disclosure requirements than state
ments of firms in his own country.
About 1977, Bank of America de
veloped a voluntary disclosure code
that opened its operations to public
scrutiny. The bank’s logic was that its
business was the public’s business. Its
management stated it thought disclo
sure was the best inhibitor to miscon
duct.
At that time, few banks were con
fronted with the amount of non
performing loans banks are saddled
with today. If the topic of disclosure
were to be raised today at the Bank of
America, the response probably would
not be what it was when the bank de
veloped its disclosure code.
Bankers, as a group, almost unani
mously believe the public will not
understand the significance of dis
closed data about nonperform ing
assets. They foresee misinterpretation
followed by ov erreaction to the
m edia’s treatm en t of inform ation
about past-due loans.
Bankers also are concerned that dis-
" . . . Bank of America de
veloped a voluntary disclosure
code that opened its opera
tions to public scrutiny. The
bank's logic was that its busi
ness was the public's business."
closure is limited to their sector of the
financial-institution industry. They
want it to be applied equally to S&Ls,
which, for the most part, are in worse
shape than banks. S&Ls are known to
be deeply in the red and thus are
candidates for liquidation or assump
tion. Yet they aggressively advertise
for deposits and offer rates in excess of
what commercial banks can offer. This
practice has resulted in funds being
taken out of sound institutions and de
posited in insured, but insolvent, in
stitutions, often for long periods of
time.
Bankers are disappointed that the
Federal Home Loan Bank Board is not
following the lead of the FD IC in re
quiring its members to report the sta
tus of their nonperforming assets.
With more than 90% of bankers
opposed to making information on
nonperform ing assets public, it ’s
embarrassing to note that there exists a
trem endous am ount of m is-com m unication on what inform ation
already is disclosed by banks. Publica
tions such as “A User’s Guide for the
Uniform Bank-Performance Report,”
the “Uniform Bank-Performance Re
port Peer-Group Report,” and per(Continued on page 17)
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MID-CONTINENT BANKER for May, 1 9 8 3
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Federal Reserve Bank of St. Louis
• (2 1 7 )5 2 5 -9 6 0 0
7
Executive-Search Firms Say:
Commercial Lenders Most Wanted;
'Hot Spot' Remains in Sun Belt
strong credit skills, loan-review and ing background who can double as a
credit-administration executives to controller has a good market with com
d eb t-restru ctu re p erson n el. She munity and rural banks.
There appears to Ms. Smith to be a
points out that the “workout man re
mains in high demand (but is in low greater demand for personnel in com
supply) because any financial institu munity and rural banks, but the major
tion that was at all aggressive over the ity of these openings represent re
past several years has credits that ne placements, not additions to staffs.
cessitate either restructuring or, in the Selective additions to staffs are being
made by those banks that weathered
worst form, liquidation of assets.
According to Linda Blue Smith, the recession without a large percent
president, Tom Hagan & Associates, age of problem loans and poor earn
North Kansas City, 1982 may have ings.
Demand is about equal among var
been the year of the “freeze” or at least
“frost’’ for bank-employment opportu ious categories of bank activities, with
nities in midwestern m etro p o lita n the exception of consumer/real estate
areas. Stressing that her comments lending, says John S. Dean, vice presiapply to her regional firm’s trade area, dent-bank/financial recruiting, S-H-S
Ms. Smith says layoffs and hiring Intern atio na] of W h eaton , In c .,
freezes (some selective) were quite Wheaton, 111. Even in those catego
prevalent for many major banks in ries, he continues, there seems to be a
1982. Those hardest hit were middle modest pickup in interest. Commer
managers on the retail side. Employ cial lenders always are in demand, and
ment for installment and real estate currently there is emphasis on indi
loan officers still is extremely soft, she viduals with experience in middlemarket and asset-based lending. Mr.
indicates.
The first quarter of 1983 has brought Dean notes there’s a steady demand
a strong market for CEOs with “clean for experienced auditors and control
up” experience, Ms. Smith continues. lers, and trust departments are looking
Senior lenders who can handle work for skilled investment managers and
out or problem loans also are much in business-development people.
According to Carol Park, banking
demand. In addition, she adds, an op
erations officer with a strong account specialist, Fanning Personnel, Kansas
City, the biggest demand today is for
seasoned commercial loan officers with
formal bank training. Loan-workout
experience, she says, makes an execu
'Q uality' Bankers Needed
tive even more attractive, and banks
The job market for entry-level personnel/middle managers still is
that never have had loan review de
tight, but competition for experienced commercial-bank personnel is
partments are actively recruiting loan
increasing. S&Ls, credit unions and other quasi-financial institutions
review officers.
are aggressively seeking commercial bankers to fill both operational and
In the operations area, says Ms.
lending positions.
Park, banks are seeking candidates
Continued specialization and sophistication of bank functions will
with strong diversified operations ex
demand a college-educated individual with strong administrative and
perience who are familiar with data
communications skills to fill future middle- and senior-management
processing and asset/liability manage
positions.
ment.
More organizations will develop a long-range human-resource plan
Donald N. Hanak, CPC, president/
and implement a program to attract, train and maintain individuals to
chief headhunter of the Arizona firm,
meet that plan. Quality is “in” with employers.
Dunhill of Phoenix, Inc., reiterated
the demand for commercial loan offic
— Linda Blue Smith
ers, in his case those with four or more
President
years experience in the $27,000Tom Hagan & Associates
$36,000 range. He adds that opportu
North Kansas City
nities are not in the vice-president or
HAT currently is the story on
bank personnel or human re
sources? What category of banker is
most in demand? Where are the “hot
spots” in the nation, those areas where
opportunities are greatest? What sala
ries are being offered? Is the hiring
rate up or down from a year ago?
In an effort to obtain answers to
these and other questions on person
nel, M i d - C o n t i n e n t B a n k e r editors
surveyed various executive-search
firms. These companies, sometimes
called “headhunters,” were candid in
their answers and provided what we
hope will be valuable information to
our readers.
As could be surmised from the lend
ing situation in many banks and as a
result of recent failures of two large
banks due mostly to bad loans, one of
the most sought-after persons is an ex
perienced commercial lender, espe
cially one with loan-workout experi
ence.
This was borne out by Susan Smith
D ixon, p resid en t, Sm ith/Larson
Corporate Search, In c., Oklahoma
City, who says that with regard to de
mand for bank personnel in the execu
tive category, the strong need appears
in the general-lending ranks — from
general com m ercial lend ers with
W
8
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Federal Reserve Bank of St. Louis
MID-CONTINENT BANKER for May, 1 9 8 3
assistant-vice-president category, but
offer jobs promotable to such.
Mr. Hanak says there also is in
creased demand in two other catego
ries. One is branch managers for inde
pendent banks in California. Salaries
are between $30,000-$40,000, and the
individuals must have both commer
cial- and consu m er-lend ing back
grounds. The other category, credit
analysts and auditors, has just become
“activ e,” according to Mr Hanak.
Salaries range from $28,000 to a high of
$36,000 for three to five years’ experi
ence.
Not only commercial loan officers,
but real estate loan officers and top
operational people for executive man
agement are wanted, says Jim W hit
worth, senior vice president-banking,
Omnisearch, Fort Worth.
Clients of T. Don Clark Personnel
Services, Inc., Fort Worth, according
to David Farmer, need the following:
middle-market commercial lenders
with good b u sin ess-d ev elo p m ent
skills; construction lenders with strong
experience in interim -construction
lending; loan review officers with good
commercial-credit skills; loan recovery
officers with heavy ex p e rien ce;
strateg ic planners with financialinstitution experience and executive
and professional lenders who have
ability to deal with professionals as
well as with up-scale borrowers.
On the other hand, the biggest need
by banks throughout the Midwest is
for qualified agricultural lenders, says
Malcolm Freeland of Freeland Finan
cial Service, Inc., Des Moines, la. The
demand far exceeds the supply, and he
believes this is because there are a lot
of problem loans brought on by the
current recession.
Mr. Freeland says other areas of
strong demand include asset/liability
managers, commercial lenders and
trust/investment people.
Areas where there is low demand,
continues Mr. Freeland, include in
stallment-lending and operations posi
tions. He believes this situation has
evolved because “more women have
entered the operations area, and they
are inclined not to move — probably
because of family ties. ”
Still another “wanted” category was
reported by Ray E . Makalous, partner,
Accounting & Financial Careers, Inc.,
Overland Park, Kan. Mr. Makalous
says the area of greatest demand and,
consequently, shortage of supply, is
for personal trust officers with four to
10 years of profitable trust-department
experience. Following closely on the
heels of trust officers in the shortage
category, he continues, are commer-
Penn Square 'Fallout'
One of the biggest news-making
events in banking during 1982 was
the failure of Oklahoma City’s Penn
Square Bank last July. Did this fail
ure affect the hiring situation in
Oklahoma and, if so, how? H ere’s
what Gary D. Koehn, president,
Koehn & Associates, Inc., Oklahoma
City, has to say:
“The collapse of Penn Square
Bank in this immediate market had
an effect during late summer and
early fall of 1982; and whereas there
still are some former Penn Square
officers in the market, they are not
having a major effect in the current
market. Many of these people still
are employed with the F D IC during
liquidation (of Penn Square) and feel
they can be more selective . . . so
long as they are guaranteed employ
ment with the F D IC .”
In general, says Mr. Koehn, de
mand in Oklahoma for bank execu
tives has softened somewhat because
of the general state of the economy,
but, at the same time, demand has
remained at a reasonable level for
two reasons: 1. Increased activity in
new bank charters within the state,
more specifically in the Oklahoma
City and Tulsa areas. 2. Many banks
had made some poor employment
decisions during the “boom” years
and now are searching for betterquality executives as replacements
for the poorly chosen employees.
The strongest demand, according to
Mr. Koehn, is in the commercial
lending area, which includes lending
officers, loan review ers, workout
sp ecialists and lend ing-d ivision
heads. He fully expects this demand
to remain the same into the last half
of 1983, when demand for officers in
other banking areas should increase.
cial loan officers with workout experi
ence.
“Hot S p ots.” In an executive-search
survey made last year by M i d C o n t i n e n t B a n k e r , the Southwest,
or so-called Sun Belt, was the “hot
spot” for bankers, the place to go for
jobs. Does that still hold true?
Ray Makalous of Accounting &
Financial Careers has noticed some
softening in the “hot spots” of Oklaho
ma and Texas. His firm is seeing an
increase in demand for bankers in
communities under 100,000 popula
tion in the Midwest.
David Farmer of T. Don Clark Per
sonnel Services maintains the banking
marketplace in the Sun Belt continues
to remain strong, particularly in Texas.
He says hiring did slow down in the
last three months of 1982, but has pick
ed up substantially in the first quarter
of this year and compares favorably
with 1982’s first quarter.
MID-CONTINENT BANKER for May, 1 9 8 3
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Federal Reserve Bank of St. Louis
The Southwest and Midwest are the
“hot spots,” according to Jim Whit
worth of Ominsearch.
“Despite cries of economic despair
from the Southwest that the ‘energy
boom is over and times are tough, ’ that
area still seems to be enjoying a better
economy than others, ” says Carol Park
of Fanning Personnel. “However,
throughout the Midwest as far as Illi
nois, we are seeing banks expand. Part
of this seems to be attributed to pas
sage of laws allowing multi-bank hold
ing companies.”
John Dean of S-H-S International
believes life-styles in the Sun Belt and
Rocky Mountain area still exert a
strong pull on bankers contemplating
relocation. However, he adds, jobs
available in those areas are not expand
ing as rapidly as in the past, and de
mand is only slightly stronger than in
the North and East.
Gary D. Koehn, president, Koehn
& Associates, Inc., Oklahoma City,
says he doesn’t know any real “hot
spots” in the U. S., but the Oklahoma
and Texas markets probably have re
mained stronger than most.
According to Donald N. Hanak of
Dunhill of Phoenix, the “hotbed” of
activity seems to be spread evenly in
the Southwest, Midwest, Southeast
and Rocky Mountain area.
Salaries/Inducem ents/H iring Rate.
Salaries being offered and paid, says
Gary D. Koehn of Koehn & Associates,
are in direct relation to the size bank;
i.e ., larger bank — higher salary;
medium bank — medium salary, etc.
With many new charters in his state of
Oklahoma, he has seen many belowmarket salaries being offered for offic
ers of these banks being chartered.
The reason given is that these institu
tions can’t afford competitive salaries,
but, as Mr. Koehn adds, “I wonder if
they can’t afford not to pay competitive
salaries.”
He says the hiring rate is down be
cause of the economy, and, as a result
of the economy, loan losses are up and
income down, causing many banks to
be cautious in hiring more than the
bare necessities.
Some fringe inducements still are
being offered to the much-needed,
quality executives, according to Mr.
Koehn. However, at levels below ex
ecutive management, fewer fringe in
ducem ents for lesser amounts are
being offered. He gave this example:
Front-end bonuses that were being
paid during 1981-82 will be more diffi
cult to negotiate, or banks will be less
willing to lend assistance in purchases
or sales of existing homes. Those want
ing to make changes during 1983, he
9
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For top level managers, you and the candidate
have as long as six months to try each other out.
For middle and junior managers, three months. If
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Federal Reserve Bank of St. Louis
believes, will find fewer inducements
available than were offered in recent
years.
The hiring trend and volume of new
orders for 1983 are quite encouraging,
says Linda Blue Smith of Tom Hagan
& Associates. Although it’s still a selec
tive marketplace, she points out, many
bankers seem to feel much more posi
tive than before about the future.
Ms. Smith went on to say that the
employer of a top-notch executive has
been more willing to consider new
fringe benefits to attract or keep this
level of individual — executive incen
tive com pensation, stock options,
guaranteed purchase of a residence,
bonus, etc. As she puts it, “We never
have found payment of full relocation
expenses for a senior officer to be a
problem.”
With the drop in interest rates, she
says, bankers are much more willing to
relocate. The thought of disposing of
real estate does not seem to be the
deterrent it was in 1981-82.
Susan Smith Dixon of Smith/Larson
Corporate Search sees hiring as down
from a year ago. Most institutions, she
points out are “trimming the fat” by
slimming existing staffs. This is attrib
utable to several things, including the
general shape of the economy and in
herent downturn in loan demand. On
the operational side, says Ms. Dixon,
many Oklahoma banks are becoming
more sophisticated in computer sys
tems as opposed to manual proce
dures, thus lowering the number of
required personnel. Additionally, she
has found that hiring in medium-sized
banks is greater than in large banks,
especially in the lending-area range of
$30,000-$50,000.
F rin g e inducem ents offered by
banks to upper-echelon executives
range from paid location expenses (in
clusive of mortgage-rate assistance in
the form of signing bonuses), bonuses
based on performances of employees
and performances of banks (return on
assets and return on equity), signing
bonuses of $2,000-$5,000 that are not
tied to mortgage assistance, as well as
autos and country-club memberships.
In some instances, says Ms. Dixon,
banks retain the services of a firm like
Merrill Lynch Relocation to buy an
executive’s house in his city of origin
and also pay closing costs on purchase
of a new home. She points out that it is
becoming easier, in general, to relo
cate executives as the mortgage rate
continues downward.
Several survey respondents main
tained the rate of hiring is up over a
year ago. Among them is Malcolm
Freeland of Freeland Financial Ser
Supply/Demand of Bank Executives
By John S. Dean
John S . Dean is vice president, bank!financial recruiting, S-H-S International of
Wheaton, Inc., Wheaton, III. This is an executive-search firm that conducts
recruiting fo r clieiits in the extended Chicago metropolitan area.
From the standpoint of hiring in banks, the supply of executives is a
good news/bad news” situation. The good news is that there is a large
number of applicants for every job opening. The bad news is that a high
percentage of applicants are minimally qualified by current standards.
Increased competition and a difficult economy have forced the bank
ing industry into a serious re-evaluation of its staffing requirements.
Many banks have been upgrading job specifications for executive posi
tions and releasing or reassigning incumbents who don’t meet high
standards. This process has added large numbers of marginal candidates
to a job market that currently is extremely quality conscious.
On the demand side, the bank executive looking for a new position
will find there also is good news and bad news. For the smart, aggressive
banker who has kept his professional skills finely honed, the good news
is a healthy demand for his services. For the banker, particularly in
middle management, who has grown comfortable and complacent, the
demanding nature of the current market is bad news indeed.
vice, who attributes this to problem
loans and the necessity to document all
loans fully, requiring extra man-hours.
As for salaries, Mr. Freeland says ag
lenders command the following: mini
mum, $18,000; medium, $26,000, and
senior ag lenders, $36,000. A few
senior ag lenders, he adds, receive as
much as $40,000-$43,000. The smaller
banks, according to Mr. Freeland,
usually have a top scale of around
$ 3 2 ,0 0 0 , and city -co rresp o n d en t
banks will run up to around $40,000.
On the subject of mobility, Mr.
Freeland says the spouse frequently is
a major influence, and this affects small
community banks in particular be
cause it often is not possible for the
spouse to get a job in the smaller
towns. For example, he says, the man
might be offered a job in a bank, but his
wife cannot get a job as a teacher or
registered nurse, and this affects the
couple’s total income. In some in
stances, he believes, the wife actually
is making more in her job than the
husband can make in the bank, and so
the couple will not move.
Carol Park of Fanning Personnel
says that during the first quarter of this
year, she has seen an increase in bank
hiring. This increase seems to be due
mainly to an improving economy and a
need for banks to be more competitive
and creative than in the past.
Salaries, according to Ms. Park, vary
greatly, depending on bank size and
specific responsibilities. Generally,
commercial lenders with formal train
ing and three-plus years on the plat
form are seeing salaries from $35,000$75,000. Loan-review salaries are in
the $ 3 5 ,0 0 0 -$ 4 5 ,000 range, and
MID-CONTINENT BANKER for May, 1 9 8 3
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Federal Reserve Bank of St. Louis
cashiers/controllers are starting at
$30,000-$50,000.
“Some banks,” says Ms. Park, “are
moving away from highly structured
salary practices. An increasing number
of banks are compensating some of
their personnel on a commission basis.
For example, some commercial lend
ers are paid a base salary plus a per
centage in the form of a year-end
bonus, which is based on profits of
their personal portfolios. The amount
of the bonus is based on the difference
between the revenue from the loan
and expenses of obtaining and servic
ing it.”
On the subject of relocation, Ms.
Park says applicants today appear to be
more mobile than in recent years, with
lower housing interest rates being an
obvious factor. While it’s highly un
usual, she goes on, some banks will
buy the former home of the new execu
tive. Many pay all moving expenses
and hou se-h un tin g trips for the
spouse. Some banks, she points out,
offer a low interest rate for the new
home, while others offer “up-front”
money to defray expenses or higher
mortgage payments. Still other banks
will pay the new executive an extra
sum of money over a two- to-five-year
period to defray higher mortgage ex
penses.
“It is rare,” says Ms. Park, “to see a
senior position offered that does not
include a car, country-club mem
bership and even profit sharing.”
John Dean of S-H-S International of
Wheaton sees the hiring rate in banks
locally as being about the same as last
year, although requirements for filling
open positions have becom e more
11
stringent than before.
Banks, he continues, continue to
pay actual moving expenses and fi
nance a trip or two for the husband and
wife to house hunt. Extra inducements
such as large relocation bonuses,
purchase of a former home, mortgage
differential, etc., Mr. Dean reports,
still are reserved for higher-priced ex
ecutives ($75,000 and up in salary).
The exception to this rule, he adds, is
for large banks located away from ma
jor metropolitan areas where new ex
ecutives must be brought in from other
communities. In these cases, reloca
tion benefits may be broadened con
siderably.
“We have found an increase in our
recruiting activity for chief-executiveofficer and executive-vice-president
positions compared to a year ago,” says
Ray Makalous of Accounting & Finan
cial Careers. “Activity for middle-level
officers has remained constant. There
has been a significant reduction in de
mand for entry-level-trainee-officer
positions. We believe the increase in
demand for upper-level positions has
resulted from in creased bankownership changes and pressure on
profitability of banks during the period
of deregulation. Reduction in trainee
positions, we believe, is a result of cost
conscientiousness of banks.’
As to fringe ind u cem ents, Mr.
Makalous says that for top-notch qual
ified executives, he finds stock own
ership to be the prime fringe induce
ment. Ownership packages are offered
in a variety of methods, including out
right purchase, stock options, em
ployee stock-option plans, etc. Re
sponsibility and authority, he says, still
remain more important than benefits.
Mr. Makalous also points out that in
spite of the lowering of home interest
rates, he has found bankers tending to
be less mobile than some other profes
sional groups. Especially strong resist
ance to relocations seems to be evident
in metropolitan areas. Often a banker
in a rural community, says Mr. Maka
lous, realizes he must relocate to ad
vance his career, while a banker in a
metropolitan community hopes to im
prove his career with a local relocation.
Additionally, banks have not been as
progressive as some other industries in
offering attractive relocation packages,
which Mr. Makalous describes as
mortgage differential, purchase of a
home, temporary-housing allowance,
etc. However, he adds, he sees a trend
toward liberalization of benefits in
these areas.
With regard to salaries, Mr. Maka
lous doesn’t see a relationship between
salaries and bank size. As he put it,
“Salaries do tend to be higher in re
mote rural areas.”
According to Jim W hitw orth of
Omnisearch, money and opportunities
are reasons to relocate, but wives and
families are a big factor in whether
bankers decide to move.
In the salary area, Mr. Whitworth
says large banks offer $50,000-$65,000
a year; medium-sized banks offer a
$40,000-$50,000 range, and smaller
banks offer $30,000-$40,000.
Mr. Whitworth also says hiring is up
from last year because of holding-
Banking Career Specialists
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912 Baltimore
12
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
a division of BANK NEW S
Kansas City, MO 64105
company growth and increase in newbank charters.
An increased hiring rate was noted,
too, by Donald Hanak of Dunhill of
Phoenix, who attributes it to lower in
terest rates, more consumer spending
and S&Ls moving rapidly into the
commercial-loan area.
Smaller banks, he says, are getting
competitive in offering salaries that
will attract good employees. Bank per
sonnel, he adds, seem to be amenable
to relocation i f they can sell their
homes. On the other hand, banks —
from a real-estate standpoint — don’t
relish the idea of assisting a new hire.
“It seems ridiculous, he says, “since
banks are in the real-estate business.
And it also seems foolish not to ‘get
involved’ if they want to hire a No. 1
employee.”
W hat Lies A head? In the opinion of
Gary Koehn of Koehn & Associates,
this year should be a better year for
banks wanting to employ quality ex
ecutives.
“The quality individual,” he con
tinues, “still will be difficult to locate,
but I see less competition for the same
individual. Where the executive who
desired a change in recent years might
have had four or five offers to consider,
they might have only one or two dur
ing 1983. Beginning salaries and sala
ries in general will soften somewhat
during 1983, because I don’t believe
we will continue to see the large
growth in salaries witnessed during
the last couple of years. Employers
and recruiters as their representatives
will need to do a better job of recruit
ing and selecting, being careful not to
employ a candidate seeking a change
because he contributed to loan losses
or over-budgeted operations. Quality
recruitment and employment always
have been necessary, but more so dur
ing 1983.”
In her look ahead, Ms. Dixon says,
“It appears the caliber of banker is be
coming more professional. As we
‘shore up many financial institutions
with sound credit/loan administration
and lending personnel, we see the
level of ability becoming more sophis
ticated.
Ms. Dixon points out that the num
ber of college graduates who choose
banking as a career has decreased,
while demand for such individuals has
increased. Thus, as she puts it, “We
are not feeding a satisfactory number
of individuals into the system. Conse
quently, banks are searching outside
their specific environment for that per
son with strong analytical skills. A clas
sic case of supply vs. demand that has
not yet begun to even itself out.
MID-CONTINENT BANKER for May, 1 9 8 3
Many bankers,” in the opinion of
Ray Makalous of Accounting & Finan
cial Careers, “are eager to find people
who have creative ideas to introduce in
the deregulated environment. Other
bankers, however, seem to desire the
consistent, traditional nuts-and-bolts’
banker. It is apparent to us that there is
a place for both types of bankers in the
current marketplace.”
Finally, here’s what Donald K. Inderlied, consultant, Personnel Con
sulting Services, Inc., Erie, Pa., has to
say about banking’s future: “The bank
ing industry, or as it’s becoming more
widely known, the financial-services
industry, is undergoing dramatic shifts
in the areas of technological change,
deregulation, increasing consumer
sophistication, increasing com peti
tion, etc., just to name a few. These
changes have or will have a dramatic
impact on type and caliber of person
nel hired to staff institutions, but,
more specifically, the type of indi
vidual needed to manage the financialservices industry now and into the
foreseeable future. This can involve a
dramatic shift in emphasis as to skills,
decision-making ability and manage
ment style of individuals than tradi
tionally have run the banking/financial-services industry.
It will require individuals who are
Dramatic Personnel Changes Seen
In Financial-Services Survey
ORE dramatic changes in the
form of incentive-reward pay-out.
fin a n cia l-serv ices industry
• A cafeteria-style benefit program
than any comparable period in modern
is being used or anticipated by 15% of
history! That s the conclusion reached
the banks and S&Ls.
by Personnel Consulting Services,
• A utom ated h um an -resourceInc. (PCSI), Erie, Pa., as the result of a information systems (HRIS) now are
personnel-trend s study taken last
used or are expected to be used by
year. The survey was the first such 46.5% of the banks.
made by the firm in six years.
• Turnover remains in excess of
This special study of “Em erging
20% , although a slight decrease is
National Patterns and Practices in Per noted from 1980-81. Tellers remain a
sonnel Management” is based on sur high-turnover classification.
vey replies from 353 financial institu
• No bank or S&L reported union
tions. Of these, 211 were from com organizing activity in its institution or
mercial banks and 142 from S&Ls. Re in its respective area at the time of the
spondents range in size from $10 mil survey.
lion to more than $16 billion in assets
• Sixty-two percent of the banks and
and represent 44 of the 50 states.
21% of the S&Ls have automated teller
Number of employees in participat machines; 23% participate in some
ing institu tions range from 10 to form of shared network.
3 ,0 0 0 + .
• No clear trend has emerged re
According to a report issued by garding servicing ATM networks.
PCSI, these are major highlights of the
C on clu sion : Some clarification of
survey:
survey points is required, the firm
• Merit-based salary-increase pro points out. In the salary-increase area,
grams are most popular, with 1981
the survey indicated a 7%-9% average
average increases ranging from 7%- adjustment. Most experts in the field
9%.
today, continues the firm, indicate a
• Over 90% of survey respondents
significant decrease in m erit-p er
utilize some form of formal salary- centage adjustments since the begin
administration system.
ning of the year. Whereas early esti
• A majority, 81.9%, of participants
mates were for merit increases to aver
review salary grades at least once a age 9.5% + , actual numbers are more
year.
like 7.5%-8.5%. This is consistent with
• A majority, 80%, used salary sur indication in the PCSI 1982 compensaveys. Users of such surveys were most tion-of-bank-officers survey.
dissatisfied with lack of promptness of
In the area of union activity, says
survey results and job matching.
PCSI, although no one reported spe
• Only 10.2% of respondents have cific activity at the time of the survey,
begun to address the “comparable- there have been subsequent reports of
worth” issue.
activity in several parts of the country.
• In addition to base pay, 47% of
Future S h ock.’’ In reporting its sur
banks have some form of executive vey results, PCSI makes this forecast:
compensation.
The future will bring a more service• Cash remains the most common oriented industry to this country. We
M
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
adaptive to change; that is to say, have
the ability to anticipate and take
advantage of change rather than be
threatened by it; individuals willing to
take risks, albeit calculated risks; have
the ability to differentiate between
alternatives to develop strategies re
sponsive to the market. Most impor
tantly, it will require individuals who
can provide the degree of leadership
necessary to consistently reinforce
strategies of the organization and to
instill within individuals staffing that
organization a dedicated sense of
direction. — Rosemary McKelvey,
editor.
are turning into an information socie
ty. In terms of the work force, the fol
lowing trends are emerging: a more
knowledgeable work force, one con
scious of its rights and conscious of its
rewards for working for a particular
in stitu tio n ; m ore sp e cia l-in tere st
groups and a more participative man
agement style. All these things will
have to be balanced in the 1980s.”
The PCSI report also points out that
with a more knowledgeable and more
sophisticated work force, the need to
communicate an organization’s phi
losophy, goals, objectives and pro
grams becomes increasingly critical.
The challenge of communication will
be to make and keep an employee an
integral part of the team.
“What, then, are employees looking
for from their organizations?,” PCSI
asks. Its answer: “They want fair treat
ment, a pleasant place to work, a
chance to achieve their highest poten
tials and salaries commensurate with
their abilities. • •
Staff Reductions Made
At BancOhio, Columbus
Because of recent changes brought
about by deregulation, BancOhio,
Columbus, has escalated its planned
reduction of full-time employees. In
late February, the bank placed 3% of
its statewide work force on permanent
layoff, reducing the number of em
ployees to just over 5,800.
Employees affected by the adjust
ment will be eligible for reemploy
ment, based on individual eligibility,
as positions become available through
normal attrition. BancOhio is conduct
ing a special program of job-placement
counseling to assist laid-off employees.
The bank, with the largest retailservice network in the state, has for
some time been streamlining its deliv
ery system to provide more costeffective and efficient service.
13
Personnel Practices, Problems
Revealed by Banks
Participating in M CB Survey
Most Difficult Jobs to Fill: Officers, EDP Personnel
Eighteen of the banks responded in
is the category of person cal expertise on the part of applicants
nel most sought after by banks, but and qualified applicants snapped up by the affirmative; 16 in the negative.
Some banks said they use an employ
officers and data-processing personnelother types of industry.
ment pool set up by their HC. Those
are the most difficult types of person
2.
How has the growth of automa using “headhunters” stated they did so
nel for banks to recruit.
These and other facts were reported tion in banks (including use of ATMs) because that was the only way they
could fill some positions. Another said
by 34 banks from 14 Mid-Continent affected your bank’s hiring practices?
it uses headhunters as a last resort.
states in a personnel-recruitment sur
Lifteen banks replied there had
vey conducted recently by M i d - C o n been no effect from automation (some One banker stated: “Yes, but we don’t
like to. Experience with people re
tinent B a n k er .
of these banks are not automated).
Other generalities from the survey Seven banks responded “very little ferred by search firms has been poor.
We like to hire successful people who
tabulation:
effect” and five banks said automation
• Lew banks have changed their has slowed down the hiring process are satisfied in a current job but will
hiring practices due to increased auto because ATMs have eliminated some move to a new challenging opportunity
with us.
mation.
teller positions. Some bankers said the
• Almost all participating banks automation situation demands more
6.
Do you ever seek help from other
seek new employees from the “out expertise on the part of employees and
banks in obtaining new employees?
side.”
applicants with needed expertise are
• About half the responding banks difficult to locate.
Seventeen banks responded “yes”
make use of “headhunters.”
to
this question, while 15 said “no.”
• A slim majority of banks seek help
3,
What category of employee is
Several banks said they rely on their
from other banks in obtaining new em most sought after by your bank?
correspondent relationships to secure
ployees.
• Employee-referral programs are
Ten banks responded with “tellers. ” employees. Others said they let the
word be known that they are seeking
in use at half the banks.
O th er categories (in d escending
employees and the word gets to where
• Moving expense is the category order): bookkeepers, part-time tellers,
mentioned most by banks that assist officer trainees, secretaries and cleri it should go.
A banker in Illinois said: “We occa
new employees adjusting to new loca cal. A number of banks didn’t list any
sionally get the word around to other
tions.
category — they were seeking workers
• Most banks operate with full-time who would put in a day’s work for a bankers that we are looking for a cer
tain position to be filled. They, along
personnel departments or maintain
day’s pay!
with our correspondent banks, some
one-man departments on a full-time
times supply excellent leads.”
basis.
4.
Do you sometimes seek em
Another Illinois banker: “In our
• W alk-ins is the n um ber-on e
ployees — p articu larly for toparea, we have a good grapevine and
method of obtaining new employees.
management posts — from outside
The following questions were asked
know who’s looking. ”
your bank and/or outside your area?
More than one banker said his in
on the survey:
stitution never seeks personnel from
1.
What category of employee do Almost every bank (29) said “yes” to other local banks; they prefer to use
you find hardest to fill?
this question! Reasons for doing so in newspaper ads to get applicants.
clude: local population is small, the
An Indiana banker said he some
Some category of officer was listed bank is seeking a specific background
by 13 banks, data-processing people in an employee, it will get fresh ideas times exchanges job orders with per
by seven banks and three banks each from an employee from another area, sonnel directors of other banks, but
mentioned senior-management per back-up people at the bank are not usually for positions that are difficult to
sonnel and secretaries. Lour banks trained well enough to take over a fill.
said they had no difficulty filling any higher-level position when it opens.
7.
Do you have an em ployeeposition — primarily because they ex One banker said “It’s difficult to raise
referral
program?
perienced little turnover.
your own qualified employees!”
Low salary structure was listed most
Respondents were evenly split on
often as the reason positions are diffi
5.
Do you ever use an executive- this question. Seventeen have them
cult to fill. Other reasons: small labor search firm?
(although some are informal) and 17
pool in the bank’s area, lack of techni
T
14
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Federal Reserve Bank of St. Louis
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We help orchestrate banking success.
MID-CONTINENT BANKER for May, 1 9 8 3
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Federal Reserve Bank of St. Louis
15
• From a $41-million bank in Kan
sas — “The personnel area primarily is
handled by the assistant cashier from
the operations area. ”
• From a $68-million bank in Mis
souri — “We have a specialized hu
man-resources department at the HC
level and one person within our bank
handles the personnel function with
the assistance of the HC.
• From a $500-million bank in Mis
sissippi — “Our personnel department
has a human-resources staff responsi
ble for overseeing recruitment, selec
tion, training/career development,
performance evaluation, compensa
tion administration and employee rela
9.
Do you have a personnel or “hu tions. Staff officers make customer
man-resources” department whose calls but have no o th er banking
main job is to handle everything con duties.”
nected with hiring/firing and handling
• From an $80-million bank in Illi
personnel problems? Or does one of nois — “We have two people — one
your officers handle personnel in female, one male — in the humanaddition to other duties?
resources department. Both are in
volved
in all exit interviews to avoid
Twenty-four banks have a depart
any
discrimination
problems. Both
ment or an officer doing full-time per
sonnel work. Nine banks delegate per have other primary duties.”
• From a $ 114-million bank in Illi
sonnel work to an individual who also
performs other work. One bank said it nois — “We have no separate depart
ment. We have a personnel officer who
had no personnel operation at all!
has
a few other duties but pretty well
The following comments were sub
handles the receiving of applications,
mitted:
• From an $58-million bank in Mis interviewing, evaluation of personnel
souri
— “We have a full-time person and explains fringe benefits to new em
8.
If you do hire someone from out
ployees.”
side your area, what “extras” do you nel officer who administers payroll,
• From a $75-million bank in Kan
provide, such as moving expenses, in benefits and interviews/screens new sas — “One officer has the job of han
employees.
The
hiring/firing
of
people
centive compensation, help with sell
is the direct responsibility of the su dling personnel along with other
ing one home and finding another?
pervisory person involved. They seek duties. He interviews applicants, then
works with the head of the department
Moving expenses are provided by 21 advice from the personnel officer.”
of the responding banks, but only six
• From a $570-million bank in Texas needing help. After checking refer
banks help out with finding/financing/ — “We have nine full-time officers and ences, the department head inter
selling homes at either end of a move. employees in the personnel/training views eligible prospects.”
don’t have them. Some banks that
don’t have formal programs don’t need
them — their employees let them
know when a good applicant is avail
able.
A Kansas bank announces job open
ings at its staff meetings and encour
ages employees to make referrals.
Some banks pay for referrals — as
much as $200 per referral that results
in a new permanent employee. Other
banks give savings bonds or smaller
amounts of cash.
The personnel director of a bank in
Mississippi wrote: “W e ask our em
ployees to refer good prospects regard
less of openings. We look for quality
people and match them with current
or future requirements. This some
times creates temporary overstaffing,
but pays big dividends in the long
run.
A banker in Kansas wrote: “We do
not encourage employees to refer peo
ple — usually friends and relatives —
because (1) E E O objectives may suffer
and (2) employees in the same family
are not encouraged because of nepo
tism policies.”
Along the same line, a banker in
Arkansas says: “Such a practice might
be used against us in race/sex dis
crimination charges.”
home is disposed of.
A bank in Michigan provides “a
complete relocation program includ
ing a three-year mortgage-rate dif
ferential.”
A few banks reported that they help
a new employee find a house, but don’t
help with the financing.
An Oklahoma bank provides up to
120 days’ temporary lodging for a new
employee while he/she is looking for a
home.
Another Oklahoma bank is willing to
provide up to 15% of the first year’s
salary to help with relocation ex
penses.
Six banks provide no “extras,” primari
ly because they have not hired anyone
from outside their areas.
One banker in Missouri wrote: “The
bank provides sub-prime-rate loans
and no principal payments on new
homes until the employee’s previous
departments.”
• From a $200-million bank in Ten
nessee — “An assistant vice president/
personnel is responsible for staffing,
training, employee relations, benefits,
salary administration, E E O and af
firmative-action duties.”
productivity
is the key to profitable bank operation.
and A ssociates, In c. — M anagement Services
4 1 0 0 Spring Valley, Suite 9 0 1 , B o x 7 3
Dallas, T exas 7 5 2 3 4 ( 2 1 4 ) 3 9 2 - 2 5 5 2
(2 1 4 )3 9 2 -2 5 5 3
16
Sources of employees in descending
order of frequ en cy: W alk-ins (25
banks), staff referrals (17 banks), news
paper ads (10 banks), customer refer
rals (six banks), personnel agencies
(five banks), h eadhunters (three
banks). One bank recruits employees
at a local college and a banker from
Alabama states: “We knew their par
ents, we know their teachers, we know
them!”____________________
11. W hat do you consider the
greatest challenge or problem facing
banks today in the personnel field?
We are anxious to help you become a more
productive bank.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
10. Where do you obtain most of
your employees?
• The selection process to obtain
trainable or qualified people who will
fit our organization.
• Providing adequate training to
employees who are seeking improve
ment and opportunity to advance.
• Maintaining productivity com
mensurate with compensation.
MID-CONTINENT BANKER for May, 1 9 8 3
• Staying aware and keeping up
with the rapid changes taking place —
both in banking and personnel.
• To obtain and retain employees
who possess the capabilities for longrange potential; to use them to the full
est advantage to meet the challenges
we will be faced with during the ’80s
brought about by the many changes
taking place in banking.
• In cen tiv e-co m p en sa tio n pro
grams and stabilizing the cost of ben
efits without reducing them.
• To maintain a non-discriminatory
work environment that insures that
like situations are treated consistently
so there are few, if any, costly legal
consequences or employee morale
problems.
• To obtain motivated, qualified in
dividuals at salaries that banks can pay.
• Instilling loyalty and putting the
bank first in all transactions.
• Trying to avoid over-automation.
We must learn to use machines to
serve human needs, not to master
them!
• Moving away from the old way of
doing the job and involving the worker
in achievement of the organization’s
goals. Communication is a problem
because department goals have to be
explained in a way that will encourage
employees to want to be a part of some
thing bigger and more important.
• Rebuilding a staff from a clerical,
labor-intensive-oriented organization
to one that can cope in a highly tech
nical age.
• Retaining trained personnel.
• Inability to pay wages comparable
to those paid by the private/government sectors.
• Lack of experienced officers.
• Complying with government reg
ulations.
• Providing good training and edu
cational programs to enable employees
to keep abreast of the many changes
facing financial in stitu tion s. E m
ployees need to be well informed so
they can anticipate and respond to the
needs of customers. — Jim Fabian,
senior editor.
T
High Level of Hiring Reported
In Financial-Services Field
HE financial-services industry recruited one quarter of all senior
executives during 1982, according to Korn/Ferry International's
44th quarterly National Index of Executive Vacancies. Listed under this
industry are commercial banks, thrifts, investment banking firms and
insurance companies.
This high level of hiring,” says Korn/Ferry’s chairman, Lester B.
Korn, “reflects the hotly competitive and rapidly changing nature of the
financial-services field.”
The index points out that demand for financial executives earning
more than $75,000 a year rose to 26% of total executive demand by
year-end 1982. This places it one point above the 1981 year-end figure
and two points above 1982’s third quarter.
“Demands for financial executives have continued and demand for
senior-level executives has increased,” says Windle B. Priem, managing
director of Korn/Ferry’s financial services division. “Since middlemanagement positions are remaining on hold, no dramatic economic
changes seem imminent in early 1983. However, the diversified scope
of commercial banking and other financial institutions throughout the
country should offer new opportunities at many levels by mid-1983.”
Headquartered in New York City and Los Angeles, Korn/Ferry Inter
national specializes in management search at the senior level.
The National Index of Executive Vacancies is based on a quarterly
survey of Korn/Ferry International’s 750 clients, which are among the
nation s largest corporations and nonprofit organizations, including gov
ernment agencies, universities and cultural institutions.
to disclosing what already is public in
formation!
Few individuals would spend $25
for a peer report. Still, the information
is widely disseminated in the invest
ment-analysis community as well as
among correspondent banks. If this in
formation is easily obtainable by pro
fessionals, shouldn’t the general public
be privy to the information in a con
densed, modified form?
The argument that the general pub
lic might misunderstand the informa
tion appears valid. However, I submit
that the same argument could be used
for most entries on the call report, en
tries that have been publicized for gen
erations.
A disturbing thought: More than
Nonperforming Assets
(C ontinued fr o m page 6)
formance reports of banks all include
detailed analyses of loan-loss reserves
and loan mix at commercial banks.
Anyone with $25 can obtain a raft of
information along these lines. More in
formation already is publicly available
than that called for by the F D IC ’s call
report; thus, one must wonder why
more than 90% of bankers are opposed
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BANK POSITIONS
CEO — $40MM community b a n k ..........
President — $20MM ruralbank ..............
Second Officer — $9MM rural b a n k ___
Sr. Commer. Loan — $100MM
community b a n k ...................................
Operations Officer — $70MM
community b a n k ...................................
Marketing Officer — $50MM rural bank
Jr. Agriloan — $15MM ruralbank .........
Asst. Controller — $300MM urban S&L
$50K
$36K
$22K
$45K
$36K
$35K
$17K
$33K
Additional opportunities are available for experi
enced junior and senior bank officers in the
midwestern states. Contact:
TOM HAGAN & ASSOCIATES
of KANSAS CITY
P.0. Box 12346/2024 Swift
North Kansas City, MO 64116
816/474-6874
SERVING THE BANKING INDUSTRY
SINCE 1970
90% of responding bankers were not
conversant with the fact that “Uniform
Bank-Performance Reports” are in the
public domain! Banks are sh o rt
sighted in not drawing the most recent
bank-performance reports about their
competitors!
Since this information is offered by
the Federal Financial Institutions Ex
am ination C oun cil, rep resen tin g
federal regulators, information also
should be made available by other
types of financial institutions.
Banks are highly leveraged quasi
public institutions. In lending deposi
tor’s funds to borrowers, they would
be remiss in not obtaining sensitive
financial information from borrowers.
Depositors — not withstanding FD IC
insurance — should be able to have
comparative information conveniently
available, although most probably
could care less.
It’s natural for individuals and in
stitutions to be reluctant to engage in
disclosure. It also is true that some
arguments raised against disclosure
are valid, for the most part. The other
side of the coin, however, is that a
reasonable am ount of disclosu re
should be in the public interest if it
permits the marketplace, instead of
regulations, to become the equating
force. Every financial institution has
an obligation now to start to educate
financial reporters about the technical
ities and costs-to-benefits of disclo
sure. • •
17
'Deferred-Fee Plan':
A W ay to Compensate Directors
By James C. Kauss
HE KEY to the future success of
your bank is attracting and retain
And
ing high-quality executives. Your
Jon J. Meyer
bank’s most important assets are its
employees, especially those in deci creases, their compensation typically
sion-making roles. Most executive- follows. New types of compensation
compensation programs are designed programs are being designed to attract
to attract and retain these key execu qualified directors. This article dis
cusses various forms of director com
tives.
However, talented executives are pensation — both new and old.
not the only ones for whom there is an
increased demand. W e are seeing
"Under a deferred-fee plan,
more and more competition for qual
ified outside members of boards. An a director has the opportunity,
interesting phenomenon occurring in
on a year-by-year basis, to
the banking industry concerns new
compensation programs to attract and defer all or a portion of direc
retain high-quality outside directors.
tor fees. Election to defer can
There are several reasons for the in
change annually, and partic
creased competition for outside direc
ipation in the plan is optional
tors.
First, responsibilities and complex for all directors. Unlike IRA or
ities of director functions are increas
Keogh plans, there are no
ing rapidly. This increases the busi
maximum limits on amounts
ness expertise required of directors.
Second, legal liabilities of the board that can be deferred."
and its directors are increasing.
Third, there is a demand for new
In side d irectors. Typically, inside
types of directors, including academ
ics, professionals, females and minor and outside directors receive separate
ities, to give the board a well-rounded forms of compensation. Historically,
the banking industry has relied on
quality.
As demand for qualified directors in- sound base-salary and fringe-benefit
T
JAMES C. KAUSS is a senior manager in the
Chicago human resources consulting practice of
Peat, Marwick, Mitchell & Co. He has been with
the firm almost eight years, working with numer
ous banks in improving their human-resource
programs, and he specializes in the executivecompensation areas of salaries, management in
centives and long-term capital accumulation. He
is a CPA.
JON J. MEYER is a senior manager in the em
ployee benefits consulting department of the Chi
cago office of Peat, Marwick, Mitchell & Co. and
its communications coordinator. Since joining the
firm in 1972, Mr. Meyer has been responsible for
diagnostic reviews, general consulting, employee
communications and actuarial studies of em
ployee-benefit plans of several clients in the Mid
west region.
18
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
programs to compensate their execu
tives and their inside directors.
However, as banks are finding it
more difficult to compete for executive
talent, some of these programs are
being enhanced or improved. More
and more banks now are developing
annual management-incentive plans
(not to be confused with Christmasbonus plans) to provide variable com
pensation in return for meeting prede
termined objectives.
Recently, there have been consider
able enhancem ents in the capitalaccumulation (long-term compensa
tion) area. A leader in this area is the
new incentive stock option (ISO) cre
ated by the Economic Recovery Tax
Act of 1981, which is bein g im
plemented by banks of all sizes.
Improved compensation programs
in the banking industry will continue
as competition for high-quality execu
tives, including inside directors, in
tensifies. And the bulk of improve
ments will be in the areas of annual
management-incentive and long-term
capital accumulation.
O utside D irectors. Compensation
programs for outside directors are con
siderably different from those for in
side directors. Whereas inside direc
tors participate in salary, incentives,
capital accumulation, benefits and per
quisites, outside directors historically
have had to rely on annual fees or
meeting fees. However, just as there
have been improvements for inside
d irecto rs, we see some positive
changes in com pensating outside
directors.
In the past, the banking industry has
i-elied on three types of compensation
elements for outside directors: annual
retainers, meeting fees and, more re
cently, committee fees. In a recent
Peat, Marwick, Mitchell & Co. survey
of the Chicago-area financial industry,
we found that many of the survey sam
ple paid all three types of compensa
tion, which is in contrast to the historic
system of either annual retainer fees or
meeting fees.
W e also made two additional
observations from the survey.
First, the size of outside director
fees basically is related to bank size.
The larger the bank, the higher the
director fees. This concept is consis-
MID-CONTINENT BANKER for May, 1 9 8 3
tent with inside director’s and other
executive employees’ compensation
levels, which usually are proportional
to the asset level of the bank.
Second, like compensation for in
side directors and other employees,
outside director fees are increasing ev
ery year. And we think they will con
tinue to increase as competition for
quality directors continues.
In addition to the historic forms of
com pensating d irecto rs, new ap
proaches are turning up. One area re
ceiving the most attention is that of
deferred compensation.
Deferral of the tax bite is a universal
problem, especially for those in the
upper tax brackets. The federal gov
ernment has helped taxpayers in this
area by making IRAs (individual retire
ment accounts) available to all wage
earners, even if they are covered
under a qualified retirement plan, and
by increasing the maximum limits
under Keogh plans. Uncle Sam also
eased the pressure to defer by reduc
ing the maximum tax rate on ordinary
income from 70% to 50%.
We believe that IRA and Keogh
plans can prove beneficial and that
such plans can be effective tax shelters
for some directors. In the case of many
directors, however, the problem we
see is that only a limited amount of
director fees can be deferred due to
the maximum limitations.
As a result, a number of banks have
begun to offer their directors deferred
opportunities through a deferredcompensation program referred to as a
“deferred-director-fee plan.” This is a
non-qualified deferred-compensation
plan recognized by the Internal Rev
enue Service in Revenue Ruling 71419 as a legitimate tax-deferral plan.
Under a deferred-director-fee plan,
a director has the opportunity, on a
year-by-year basis, to defer all or a por
tion of director fees. Election to defer
can change annually, and participation
in the plan is optional for all directors.
Unlike IRA or Keogh plans, there are
no maximum limits on amounts that
can be deferred.
Amounts deferred under the plan
are available to directors on their res
ignations from boards for any reason.
In the event of a director’s death, the
deferred compensation is distributed
to the designated beneficiary.
From a bank’s standpoint, a key
advantage of a deferred-director-fee
plan is use of the directors’ cash during
the deferral period, since such a plan is
unfunded. In turn, directors’ deferred
fees are credited, on paper, with in
terest at some predeterm ined rate
during the deferral period.
(C ontinued on page 48)
Banks Not Keeping Up With Industry
In Compensating Outside Directors
ANKS have a long way to go to ings.
catch up with industry in com
M eth o d s o f C o m p e n s a tio n . Al
pensating outside directors. Although
though cash compensation remains the
banks appoint more outside directors
most prevalent method of compensat
than industry, they lag in fees paid and ing directors for their services, says
other types of payments commonly
Meidinger, additional elements are
awarded board members.
continuing to be incorporated as a part
So concludes Meidinger, In c., a of the total compensation package for
Louisville-based consulting firm in outside directors. They are:
management of human/financial re
• Deferred compensation.
sources. It bases the above opinions on
• Benefit Plans — group travel in
a d irectors’ com pensation survey,
surance; matching educational or char
which was done as part of Meidinger s itable donations; accidental death/disannual survey of compensation prac memberment insurance; group life in
tices at the top 200 banks in the U. S.
surance; group medical/hospitalization
The banks were identified in the
insurance; pension plan.
“Annual Scoreboard of 200 Banks,”
• Reimbursement of meeting ex
published by Business W eek.
penses.
According to the survey, financial
• Directors/officers liability insur
institutions pay outside board mem ance.
bers less than manufacturing and non
D eferred C om pensation. Meidinger
manufacturing companies — in annual points out that an increasing number of
retainers, per-meeting fees and com companies are offering outside direc
m ittee com pensation. H ow ever,
tors the option of deferring all or part of
Meidinger says, a greater percentage
their cash compensation. Eligibility
of financial institutions pay both an generally is limited to outside board
annual retainer and a per-meeting fee.
members. Deferral options range from
The survey also showed that while requiring the director to defer all com
cash compensation was the most wide pensation or none to allowing the
ly used method of payment, banks are
director total discretion in his election.
offering other benefits as part of the
Many companies credit the deferredcompensation package. Among those compensation account with interest,
benefits are the option to defer all or rates of interest being equal to various
part of th e ir cash com pensation,
economic indices.
group-travel insurance, reim burse
Over-65 D irectors. Until two years
ment of meeting expenses and liability ago, says Meidinger, deferring com
insurance. A small number of banks pensation until retirement had some
offer retirem ent plans, the survey drawbacks. Directors’ fees and other
shows.
self-employment pay were considered
Meidinger points out that forms of current earnings when paid regardless
outside-director compensation usually of when they were earned and, there
consist of one or more of the following:
fore, reduced social security benefits.
• Annual retainer.
This offset no longer is applied if the
• Per-meeting fee.
amounts were earned before retire
• Committee-meeting fee.
ment. However, it continues if the fees
• Committee-chairman fee.
are earned after retirement. There
A n n u al-R etain er F ee. These pay fore, the social security payment is re
ments ranged from $1,000 to $15,000,
duced for any director over 65 current
with a median of $4,500. O f the top 200 ly taking fees. As a result, continues
banks surveyed, 17% don’t pay annual Meidinger, many directors over 65 are
retainers to outside directors.
deferring their fees until they reach
Per-M eeting F ee. Fees paid outside age 72, when there no longer is a re
directors for attending board meetings duction for current earnings.
ranged from $75 to $1,300, with a me
As demands for “professional” direc
dian of $350. Fourteen percent of the tors increase in all sectors of business,
top 200 don’t compensate directors for Meidinger believes it will be necessary
attendance at board meetings.
for banks to revise th e ir boardCom m ittee-M eeting F ee. These fees com pensation practices. It would
ranged from $75 to $1,000, with a me appear that banks not only will have to
dian of $300. Only 12% of the top 200 adjust fees upward, but will have to
banks don t compensate outside direc offer greater diversification in pay
tors for attendance at committee meet ment methods. • •
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
B
19
E m p lo y e e -A ssista n c e P ro g ra m Is P o p u la r
F rin g e B e n e fit fo r B a n k 's E m p lo y e e s
Full-Time Counselor Serves 2,000-Member Staff
N EM PLO YEE-assistance pro
gram (EAP) was initiated at
Citizens Fidelity Bank, Louisville,
mid-1981. The following interview
with its coordinator, Ken Thompson,
vice president, provides insights into
the purpose and benefits of the pro
gram.
* * *
MCB: Why did Citizens Fidelity start
an EAP?
Mr. Thompson: Because bank man
agement realizes that employees are
the bank’s greatest resource. Often
personal problems are manifested at
work in job dissatisfaction, illness, ab
sences, tardiness, low job performance
— even accidents. So, in addition to a
human concern for the welfare of each
member of the staff, Citizens Fidelity
believes that personal problem-solv
ing is good business.
MCB: What’s the primary purpose of
EAP?
Mr. Thompson: To provide a simple
and effective method for those who
need help to find it. Participants may
initiate their own contact or be re
ferred by fellow employees or their
supervisors. The personal lives of all
employees are their private business,
so participation in our EAP is both
voluntary and totally confidential. No
record of contact, counsel, referral or
treatment is entered in personnel files
or divulged to anyone.
MCB: What’s the history of employeeassistance programs?
Mr. Thompson: Such service pro
grams began in the early 1940s when
the nation’s workforce experienced all
the changes and demands of the war
years: added shifts; women entering
the workforce; husbands, fathers and
boyfriends gone to war; national secur
ity at stake; shortages; demand for in
creased productivity, and day care for
children of working mothers.
Those were the days when Alcohol
ics Anonymous began to gain recogni
tion and when the malady of stress be
came widespread.
Many of those conditions are again
present. The only things new about
our current problems are the smallersize family unit and the number and
complexity of the substances being
abused.
A
20
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
MCB: What is the bank’s main benefit
in providing this service?
Mr.
in Thompson: In addition to reduced
absenteeism and the other things
already mentioned, the most measur
able benefit is reduced health cover
age utilization! Medical expenses have
been out of control. The typical mind
set today is: “I don’t have to take care of
my body; there’ll always be a doctor
around to fix it up. And since I have
medical insurance, it won’t cost me
anything.’’ This attitude has resulted
in Americans paying a $300-billion
annual medical bill. Citizens Fidelity’s
part is more than $1 million each year
for its nearly 2,000 employees.
MCB: How does EAP help the bank
contain medical expenses?
Mr. Thompson: It promotes greater
productivity and eliminates waste by
teaching exercise, nutrition, relaxation
techniques and stress management.
The bank has a “quiet room’’ — an
employee lounge with panoramic de
cor and the sounds of rain, wind,
waves, etc., piped in via stereo. Life is
complicated today and our lifestyles
reflect this. It’s been estimated that as
much as 70% of all illnesses are stressrelated.
Many EAPs are concerned only with
alcohol abuse. We have fashioned our
KEN THOMPSON
program to be holistic, concerned with
the total well being of individuals:
physical and mental health, lifestyle,
habits, exercise, diet and personal
problem-solving.
Naturally, when stress is eliminated
from an individual’s experience, he’s
less likely to need medical care, which
has a direct result on the bank’s medi
cal-expense outlay. In the past 12
months, when we could have expected
a 20% increase in medical-coverage
cost, we have stemmed this rise, even
though we have covered more em
ployees and rates have increased!
MCB: What is the policy of Citizens
Fidelity’s EAP?
Mr. Thompson: It’s simple. The pro
gram is voluntary. All information is
confidential. Employment and promo
tion are in no way jeopardized by par
ticipation.
The program consists of free, ac
cessible and totally confidential help;
problem and need identification; and
counseling or referral to any number of
pre-screened local resources.
MCB: What are the other aspects? You
mentioned a holistic approach.
Mr. Thompson: In the information
area, we conduct noontime “brownbag” programs for employees. Recent
topics have included single parenting
and two-career couples. A local profes
sional with topical expertise makes
these presentations.
We distribute pamphlets on various
topics. We obtain them from local hos
pitals. We reproduce them and use
them as payroll stuffers.
We have a lending library. Em
ployees can sign out books on bed wet
ting, child rearing and jogging, to give
a few topics. Our library serves as an
outreach feature — it encourages em
ployees to come in to seek information
and from there they often arrange for
counseling.
In the area of continuing programs,
we will start a pre-retirement-planning program this year. We have con
ducted sessions on stress management
and half the bank’s staff has attended
the three one-hour sessions on their
own time. A new course is planned on
stress that’s to be titled “Stress Revis
ited.” It will include values clarifica
tion and behavior modification. And
MID-CONTINENT BANKER for May, 1 9 8 3
Meeting all the demands of your best
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Associates Commercial Corporation Business Loans
20 N. Clark St. Chicago, IL 60602 (312)781-5827
Business Loans Offices in Atlanta, Boston, Charlotte,
Chicago, Cleveland, Dallas, Denver, Detroit, Houston,
Kansas City, Los Angeles, Miami, Nashville, New York,
Oklahoma City, Philadelphia, St. Louis and Tampa.
Associates Commercial Corporation is a subsidiary of
Associates Corporation of North America, a Gulf + Western Company.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
we re also providing a course on house
hold money management. Lastly, on a
continuing basis, we have a self-ad
ministered program for employees
who choose to quit smoking and need
help with their resolution.
In the health area, we have offered
major health screenings for such things
as hypertension, hearing, diabetes,
glaucoma, etc. The EAP wellness
effort, together with a revised health
plan with built-in wellness incentives,
brought measurable results in 1982.
Last year our medical coverage in
cluded more people and yet the inci
dences of health claims were lower
than the previous year. There were
fewer employees hospitalized and the
average length of hospital stay was re
duced.
MCB: Are EAPs cost-justified?
Mr. Thompson: It’s estimated that ai
firm can save up to $4 for every $1 itt
invests in an EAP, but this is difficultt
to measure. Certainly, the benefitt
from removing stress on the job iss
worth the financial investment. The3
number of EAPs probably has doubled1
in the last three years. Sixty percent off
the Fortu ne 500 com panies have3
EAPs.
MCB: Where is your EAP office located?
Mr. Thompson: It’s right across the3
street from the corporate headquarters. That’s a plus factor, because the
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further away such an office is, the few
er employees will take advantage of
the service. It’s a one-person office; no
one sees anyone else who is there,
since individuals enter by one door
and leave by another,
MCB: Is the service limited to employees?
Mr. Thompson: No, their families are
eligible.
MCB: How do you get employees to
come to you?
Mr. Thompson: There are various
ways to attract employees. Depart
ment supervisors are trained to detect
em ployees with problem s. Supervisors are encouraged to recommend
that such employees visit me. But one
of the best ways of attracting people is
to post signs in restrooms calling atten
tion to new or existing services our
EAP offers. We place the signs on pa
per-towel dispensers.
MCB: What do these signs say?
M r. Thompson: One is headlined
“Personal problems are usually deci
sions waiting to be made.” At the bot
tom of the sign is this question: “May I
help?’ followed by my name and ex
tension number.
Another sign reads: “Work prob
lems can be solved when shared. L et’s
talk it over.” Other signs deal with
money problems, stress and alcohol
ism. Each sign includes an invitation to
come in and “talk it over.’
M CB: How did you get involved in this
service?
Mr. Thompson: I ve been with the
bank for almost 25 years in marketing
and, as an avocation, I have had pastor
al training and about 20 years of coun
seling experience. Over the years, em
ployees would unofficially tend to look
me up if they wanted to share a prob
lem. I guess I inadvertently became an
in-house chaplain!
A few years ago, I suggested to our
management that a program be formal
ized and cited medical coverage cost
containment as sufficient justification.
The program was launched July 1,
1981, and the numbers support the
wisdom of the decision. I have seen
more than 17% of our staff on an indi
vidual basis since that time.
Employees see our EAP as an em
ployee benefit and managers also see it
as a management tool. • •
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"THE DIRECTION C O N N E C TIO N "
M E E T O U R IL L IN O IS T E A M A T T H E
IL L IN O IS C O N V EN T IO N JU N E 9-11
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Kansas City, Missouri 64106 • (816) 842-8842 • (800) 821-5434
23
P re e m p lo y m e n t S c re e n in g T e st
R e c e iv e s H ig h R atin g s
F ro m B a n k s M a k in g U s e o f It
ORE THAN 200 banks are mak
ing use of a paper-and-pencil
test designed to determine a propensi
ty for dishonesty in individuals ap
plying for jobs at banks. The test was
introduced by the Bank Administra
tion Institute a year ago.
Called Bank Personnel Selection In
ventory, the test is designed to profile
attitudes and opinions of job applicants
in the areas of dishonesty, drug abuse
and violent behavior to determine the
risk of fraud or theft. Tests are adminis
tered on-site by bank personnel and
scored within minutes over the phone
by the BAI.
According to Kurt Elster, BAI hu
man resources director, the test has
proved effective for banks. One bank
has used 2,000 tests in the year they
have been available and reordering by
many banks is increasing.
Among the values of the test, Mr.
Elster says, is the fact that it deter
mines which applicants are highly
tolerant of theft, have a propensity for
violence and are likely to be using
drugs.
The test uses situational ethics to
show trends toward dishonesty. Most
people who are dishonest think that all
people are dishonest; thus, they don’t
hide the fact that they have stolen from
an employer, although they usually
admit stealing only small amounts,
Mr. Elster says. It usually can be sur
mised that an individual who steals at
all will steal much more than he will
admit to.
Conversely, most people who are
honest think everybody is honest, he
says.
The test measures the probability of
honesty on a 0-100% basis. Anyone
scoring below a cutoff figure — usually
70% — is not hired. A person scoring
80% can be considered to be one who
would not steal eight times out of 10.
Mr. Elster says a score of 95% isn’t
considered vastly different from a
score of 75%. Passing the test is what
counts.
The BAI recommends that the test
be administered as the last stage in the
preemployment screening process.
24
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Reasons for this recommendation in
clude the fact that tests are purchased
by banks and it doesn’t make sense to
test any but final applicants. Most
banks interview an applicant after an
employment form has been submit
ted, administer the test and then make
a final selection from those who have
passed the test.
Mr. Elster says the test has been
judged to be nondiscriminatory. No
differences are detected in attitudes of
minorities, although women some
times are more truthful than men in
answering questions. A major bank
found that the test had no adverse im
pact on minorities.
According to Mr. Elster, primary
reasons for using the BAI test are as
follows:
• It’s the most effective method
known to screen out dishonest people.
Most threats to banks come from the
inside, not the outside. A reference
check seldom does the jo b when
attempting to determine the honesty
of an applicant.
• Using the test sets a climate for
combatting theft. Word gets around
that the bank is acting in a responsible
manner in regard to curbing theft.
(The BAI recommends that the test not
be given to individuals already on the
payroll.)
• Use of the test signals manage
ment’s concern about honesty among
employees. They are less likely to
spend time thinking up ways to de
fraud the bank if they realize manage
ment in concentrating on eliminating
dishonesty.
• Difficult topics can be handled
better with a test than with an inter
view. If an applicant were asked point
blank if he stole from his employer in
the past, the credibility of the inter
view would be destroyed.
It’s interesting, Mr. Elster says, that
banks have found that some applicants
who have appeared eminently qual
ified to work at the bank have failed the
test.
More than 50% of the applicants tak
ing the BAI test at Manufacturers
Bank, St. Louis, have failed it, says
Charles H. Buxton, vice president.
The bank, which is located in an in
dustrial area of the city, began using
the test because it wanted to be more
thorough in its employment screen
ing. The bank has used between 50 and
100 tests.
Value of the tests was brought home
recently when five new people were
hired without taking the test. Two
were discharged within the trial period
due to propensity for violence. These
two were asked to take the test after
this propensity became evident and
they failed the test. Now all applicants
for jobs of teller level and below must
take the test before they are hired.
The bank makes a practice of hiring
off-duty policemen as security guards.
One individual had worked in this
position for some time. He retired
from his police job and applied for a
messenger job at the bank. He seemed
a natural, since he was familiar with
the bank and had been on the payroll
as a part-timer for some time. But
when he took the test, the results indi
cated a high propensity for dishonesty.
He wasn’t hired.
M anagem ent at H oosier State,
Hammond, Ind., appreciates the test,
partly because it is much more con
venient and less costly than the liedetector-test procedure used previ
ously in screening applicants.
The bank has administered nearly
50 tests in the past year and results
have been in line with those achieved
with the lie detector.
A bank spokesman says that every
applicant who passed the test has
worked out well, even though some
MID-CONTINENT BANKER for May, 1 9 8 3
who scored lower than the recom
mended cut-off number have been
hired.
The test is being used by Heritage
Bacine Corp., a bank HC in Racine,
Wis., as a means of tightening up pro
cedures, says Gary Pape, vice presi
dent.
The HC has used more than 30 tests
in the past year and every applicant
taking the test has passed, although a
few were borderline cases. Those few
were not hired, but not because of
their test scores, Mr. Pape says.
The HC gives the test to all finalists
and expects to continue using them.
American National, Midwest City,
Okla., began using the tests a year ago
because things w ere happening
around the bank that management
couldn’t account for. It was felt that a
test of the type made available by the
BAI would correct the situation, says
John Wright, vice president/cashier.
Some of the 75 applicants taking the
test so far have failed, he says. One
who failed was an applicant for a custo
dial job. Mr. Wright says he was hired
despite the low test score because he
wouldn’t have access to money, but it
wasn’t long before the bank’s pens
were disappearing! The custodian was
dismissed after only a week on the job.
Mr. Wright says the test is valuable
because it determines an applicant’s
attitudes before employment com
mences. It’s not a cureall, he says, but
it eliminates potential problems. He
says the bank has experienced no prob
lems with any of the applicants who
passed the test.
“Unlike an interview,” Mr. Elster
says, “which is unsystematic and often
subjective, the bank personnel selec
tion inventory is a benefit to the honest
candidate. It is fair because it submits
all candidates to the same measure
ment. To the degree that fairness, con
sistency and equal treatment describe
ethical hiring practices, this selection
procedure is a step in the right direc
tion.”— Jim Fabian, senior editor. ••
Personnel Administration
Is Subject of New Book
“Banker’s Guide to Personnel Admin
istration,” by C. Eugene Looper.
Publisher: Bankers Publishing Co.,
210 South St., Boston, MA 02111.
Hardcover, 360 pages. $39.
This book is described as a complete
program for managing personnel, writ
ten to be used by CEOs, senior offic
ers, d epartm en t supervisors and
branch managers. It provides practical
guidance on topics such as interview-
Job Openings Described by Bank
Via Telephone 'Hot Line'
OB OPENINGS at First Tennessee Bank, Memphis, are described
via a telephone “hot line, ” which is open seven days a week, 24 hours
a day.
This program, which went into operation in April, 1982, is termed a
“proved success” by Norma Billings, employment specialist in the
bank’s employment services department. She says calls average 75 and
sometimes more a day.
Not only does the hot line give vacancies and brief descriptions of the
jobs, but also instructions as to when and where applications may be
placed.
The bank advertises the hot line in the local newspaper, perhaps once
a month, by noting it as a referral on its other ads. Advertising also is
done in-house, at college-placement offices and other recruiting sources
and by word of mouth by bank employees and/or applicants.
“We place a few job positions from each category, i.e., managerial,
professional, technicians, clerical, etc., on the hot line,” says Ms. Bill
ings. “Our high-level positions have not been included.
“The hot line is convenient for the job seeker. We reach a much
broader segment of the work force (public) with this means and feel our
advertising expense has been well utilized.”
In addition, she points out, “The amount of time saved by our
assistants in answering inquiries about jobs has been tremendous.
Therefore, they can be more productive in assisting us.”
Other advantages of the program are pointed out by Ms. Billings:
“The hot line is so much more convenient for the job seeker. He or she
can call anytime and hear the recording. Our department also has
reduced our advertising costs, and we really have reduced the time our
receptionists spend on the phone answering questions concerning
jobs.”
According to Ms. Billings, the bank is in the process of fine tuning its
hot line, perhaps by changing the recording and voices on it more often
than it does now (weekly) as job vacancies increase and/or for a special
announcement.
As many as 75% of all job hunters who go to First Tennessee for
interviews, says Ms. Billings, have heard about the jobs from the hot
line.
“Everytime we advertise a position,” she continues, “we add the
number of the hot line in case the job seeker would like information
concerning other available positions. As a result, the word is spreading. ”
J
ing prospective employees, conduct
ing performance appraisals, structur
ing training programs and increasing
personnel productivity. The book also
explains benefit programs, federalreporting requirem ents, a job-clas
sification system and a career-pro
gression format.
Also included are su p erv isors’
guides on how to use authority, analy
ze organization effectiveness and what
to do if contacted by a union organizer.
Sixteen sample policy statements cov
er almost every area, including educa
tion, probation, reimbursable expense
accounts and personal work habits.
In addition, there are practical sug
gestions that can be used in any size
institution on timing and size of merit
increases, developing management
talent from within, job-posting pro-
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
grams and how to audit personnel policies/procedures.
This comprehensive reference con
tains sample policies and forms, plus
70 job descriptions, all custom tailored
for the financial industry.
The author is a former senior per
sonnel officer at both Wachovia Bank,
Winston-Salem, N. C., and Southeast
Banking Corp., Miami; past director,
Bank Administration Institute, Rolling
Meadows, 111., and chairman of the
BAI’s human resources committee and
former chairman, ABA bank holding
company personnel conference.
He holds an M.A. from Louisiana
State U niversity, Baton Rouge, a
Ph.D. from Georgetown University,
Washington, D. C., and currently is a
lecturer in management/finance at the
University of Miami (Fla.).
25
R e d u c tio n o f F e a r Is C r it ic a l
T o P ro d u c tiv ity -S tu d y S u c c e s s
EDUCTION of employee fear is
critical to the overall success of
any productivity study.
Since close observation of personnel
is an important part of a productivity
study, even the most secure employee
could feel somewhat intimidated when
under close observation. Employees
will be internally — if not audibly —
asking these questions: “What exactly
is expected of me? Am I meeting those
expectations? Are those conducting
the study qualified to observe me
accurately? Will my contribution be
justly measured?”
If management doesn’t adequately
address these questions and their
attendant fears, results of the study
will be less than optimal. A pervading
atmosphere of fear will substantially
restrict those conducting the study.
Although fear sometimes is an effec
tive motivator, it more often is a se
rious drag on performance. With ex
cessive fear, clarity of thought and
spontaneity of action generally are in
hibited. Those being observed are
more likely to work faster than normal
and provide only information they per
ceive will put them in better stead with
their supervisors. Their activity and
response to inquiry may be less than
honest. In view of this, a concentrated
effort to red u ce fear b efore and
throughout the study is essential.
An analogy may be drawn between a
successful productivity study and a
R
By W illia m P. Sawyer Jr.
Vice President
Penquite & Associates
Dallas
successful speech. A professional
speaker introduces his subject matter
with an overview, elaborates on the
overview in the body of the speech and
summarizes what was covered in con
clusion.
Every productivity study should be
gin with an employee meeting where
the objectives, methods and expected
results (including benefits to em
ployees) are explained in detail. At that
time, as many questions as possible
should be answered.
During the study, periodic meet
ings should be held to keep employees
posted on what progress has been
made and to reinforce introductory in
formation.
When the study is complete, a final
meeting should be held to answer any
remaining questions, to explain the
conclusions of the study, the benefits
to the bank and employees.
Why do most banks need productiv
ity studies?
The most important reason is to
achieve increased stability within an
unstable banking environment. A pro
ductivity study should bring every de
partment into line as functioning por
tions of a well-oiled machine. When
each major department is functioning
at optimal levels of efficiency, the en
tire bank can withstand much more
environmental pressure.
Most experts predict that pressures
of rapid change within the banking in
dustry in this decade will result in a
substantial reduction in the number of
banks. Some have predicted the num
ber to drop from today’s 14,000+ to
about 3,000. Banks with too much rust
and corrosion — banks that haven’t
adequately prepared for the pressures
of the 80s — will not survive. The
future is much brighter for all parts of a
well-oiled machine, for all employees
of an optimally efficient bank.
Doesn’t a productivity study gener
ally result in more work demands on
employees?
Not all employees. Some will do
more work and some will do less. In
most banks, a number of people are
overworked and some are underwork
ed. Those in the latter category often
are nearly as exhausted at the end of
the day as those in the former cate
gory. Boredom creates a tremendous
amount of stress, promotes negative
thinking and complaints about work
ing conditions. To constantly look at a
clock, wondering when the day is
going to end, is stressful. To have to
look busy when one is not is stressful.
To feel that one’s potential contribu
tion isn’t adequately being utilized is
(C ontinued on page 30)
Productivity Study Results in Salary Savings for Bank
HE BOTTOM LIN E of a produc
tivity study is the savings in sala
ries it can bring to a bank, says E.
Heymans J r ., p resid en t, Bank of
Menomonie, Wis. The bank employed
Penquite & Associates to perform such
a study in 1980.
Each department in the then-$30million-asset bank was studied, and
overworked and underworked em
ployees identified. One employee was
found to be putting in only four hours
worth of work each day, although she
was taking eight hours to do it. It
wasn’t the employee’s fault, Mr. Hey
mans says, her job description was in
error — it indicated the job was a full
time one when it wasn’t.
T
26
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
The study revealed that some func
tions were being performed by depart
J.ments least prepared to do the work.
For instance, secretaries were per
forming some functions better suited
to tellers. Without the study, such in
efficient work situations would not
have been detected. The Penquite
representative suggested ways to per
form the work more expeditiously and
economically.
When the survey was about to be
gin, Mr. Heymans informed all bank
officers. On the day the survey began,’
all employees were introduced to the
Penquite representative. They were
told no one would be fired because of
study results.
The study revealed that the bank’s
bookkeeper was quadruplicating effort
in her work by maintaining four com
plete systems for looking up accounts.
Although there were reasons for such a
system, the study revealed a way to
eliminate two of the systems — and the
time it took to perform them.
A year after the study was com
p leted and recom m endations im
plemented, the bank had an additional
branch (making five) and had experi
enced a jump in assets of $5 million.
But it had five fewer employees doing
the work.
Today the bank has $50 million in
assets, with only one additional em
ployee on the staff. • •
MID-CONTINENT BANKER for May, 1 9 8 3
Union Planters National Bank
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changing GAP between
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“ liabilities and rate
— sensitive assets, __—
showing you why
today’s solution
may compound
— tomorrow’s ------ ?— M
„problem s. J___ ___M
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And more. All in a very short time. All for very
little money. | j • j j j
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Ü.LLLLLLL_____
N a i i n n a l R a n i/
Imagine getting only bare w alls
when, for the sam e price,
you could have had a
beautifully built, elegantly
furnished bank.
“ It just about happened to us,”
says Henry Kinberger, president of
Security 1st National Bank, in
Alexandria, Louisiana.
“ We listened to not one, but a
number of proposals for an important
building project for our bank. One
from an architect, another from a
leading plan-design-build firm. Both
would have offered us far less than
the solution we got from HBE.”
“A lot more value for
the dollar.”
“ Instead of remodeling our old
building, HBE showed us how we
could build a brand-new building
that would be much more functional,
for about the same cost, on the same
site, without any interruption of
business. And the HBE price included
a spectacularly beautiful, finished
interior, not just bare walls.”
“Other bankers couldn’t
believe how much we got
for the price.”
“ When many of our banker
friends visited us, they were amazed.
One of them said, ‘I came here
expecting to be disappointed. I can’t
believe my eyes.’”
“ What they saw were things like
floor-to-ceiling solid-oak doors,
marble floors, really nice furniture
and the like. All included at the
square-foot price they thought would
have been bare walls only.”
“They didn’t try to
boss us around.”
“We enjoyed an excellent working
relationship throughout the project.
HBE listened to our thoughts and
responded to what we wanted to do.
There was never any attempt to
impose formulas or rigid sets of ideas
on us. And we liked that.”
“Everything about it works
better for us.”
“ We have such nice touches as
an exceptionally fine heating and air
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
conditioning system with a lot of
zone controls and real energy savings.
Better departmental and work flow
arrangements. And an employees’
patio on our drive-in roof. All the site
work was included, too. So was
demolition of our old building. Even
vault and security equipment. Plus
new sidewalks, fountains, and so on.
And throughout, HBE stayed with us,
directing all phases and weeding out
anything that proved inefficient.”
Practically no work
change orders.
Security 1st was so satisfied that
work change orders amounted to only
a tiny fraction of the industry average.
Better planning, closer personal
attention, and a more careful, more
concerned, more thoroughly pro
fessional approach throughout made
the difference. A difference we feel
you can see in every HBE project,
whether bank, savings and loan or
credit union.
Stories like this are not just
once-in-a-while happenings at HBE.
We make them happen all the time.
It’s our specialty, our point of difference,
our pride. We’d like to start making
things happen for you. Find out more.
Call or write me, Sally Eaton, right now
at 314- 567- 9000. HBE Bank Facilities,
11330 Olive Street Road, St. Louis,
Missouri 63141.
22 H B E
B a n k Facilities
You can’t afford
not to look at HBE
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Federal Reserve Bank of St. Louis
stressful.
One result of an effective productiv
ity study is better utilization of existing
talent. Another is the equitable dis
tribution of work. This is accomplished
by thoroughly analyzing everybody’s
workload and establishing a reasonable
level of productivity for each indi
vidual, taking into consideration the
following factors:
• What the individual feels is a
reasonable level of productivity for
each major function performed.
• What the individual’s immediate
supervisor deems to be reasonable.
• Specific requirements of senior
management.
• What the industry norm is for
each major function performed.
Because “all work and no play makes
Jack a dull boy’’ or Jane a dull girl —
and certainly makes them less than
optimally productive — the following
factors also are considered:
• Sick time.
• Vacation time.
• Social time (coffee breaks, etc.)
Once the reasonable level of pro
ductivity is established, benefits to
employees are numerous. The comfort
of knowing exactly what is expected,
the comfort of always knowing where
one stands with regard to those ex
pectations, the comfort of knowing
that management is fully aware of each
individual’s contribution are all tangi
ble benefits. The comfort of knowing
that management has a fair, objective,
and measurable means of performance
evaluation is paramount.
D on’t productivity studies some
times result in people getting fired?
Sometimes, but not always. If, after
equitable distribution of the work load
is accomplished, it is determined that
existing work can be handled by fewer
employees, management may elect to
remedy overstaffing through attrition.
When someone leaves of his/her own
accord, there is no replacement and
work loads are appropriately redistrib
uted.
In some cases, productivity analysts
conclude that a bank is understaffed.
Chronically overworked employees
never are optimally productive. The
fatigue and stress of an excessive work
load can be the cause of numerous
counterproductive errors.
Isn’t the possibility of being fired a
good reason to fear a productivity
study?
The possibility of being fired always
exists. When a productivity study re
minds us of that possibility, it can be
somewhat disconcerting. However,
the possibility of being fired unjustifi
ably should be more disconcerting.
30
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Program Aids Retirement Planning
O M M ERCE Union Bank, Nashville, offers its pre-retirement-age
employees a two-day program designed to make the transition
from life as a working person to life as a retired person go smoothly.
Pre-retirement seminars were initiated by the bank in 1979 to pro
vide employees with an in-depth analysis of the impact of retirement on
their lives.
The program was developed to stimulate employee’s thinking on
issues concerning retirement at a time when they can do some careful
planning, says Dennis C. Bottorff, bank president.
Employees are given a look at their future retirement life and are
provided with advice on planning for that period. Participants discuss a
variety of retirement concerns, including financial planning, health,
legal arrangements, social security and its impact, housing, use of time
and other issues. They also talk with retired persons who share impres
sions of retired life.
The seminars are held once a year and are open to employees 55 and
older.
C
When conducted in the way previous
ly described, a productivity study will
enhance justice.
Employees should be justly pro
vided that which they deserve. Some
deserve promotions and more money;
some deserve to be fired. No one
knows this better than those deserving
promotions or firings.
Those who have been knowingly
“goofing off” have good reason to fear a
productivity study. Those who have
b een sacrificin g th e ir fellow em
ployees, those who have not been con
scientious about their responsibilities
to their co-workers and to the bank will
be justifiably exposed and dealt with.
Those who have b een honestly
doing their best, whatever they per
ceive their best to be, should have lit
tle reason to fear.
Before reasonable levels of produc
tivity are established, substantial dif
ferences will exist in what is perceived
as “reasonable. ” In many cases, people
perform at substandard levels of pro
ductivity because they never were told
what was reasonable. The person per
forming unknowingly at substandard
levels is dealt with differently than the
knowing “goof off. ” In only the worst
cases are conscientious employees let
go. Some banks are found to be so
overstaffed that this is the unpleasant
decision of management.
It’s unrealistic to assume that any
productivity study can be conducted
with a total absence of fear. However,
whatever amount can be reduced by
supplying appropriate information
certainly is worth the effort. Excessive
employee fear restricts the accurate
measurement of productivity. It prom
otes exaggeration and repression of in
formation sought by analysts. It always
results in employee morale problems.
How m anagem ent answers em
ployee questions and fears will vary
with management style, goals and
objectives. The value of reducing fear
by answering questions remains con
stant. • •
ABA Regional Directors
Elected for 1982-83
ABA regional directors have been
elected for 1982-83. Those in the 17state Mid-Continent area are:
Region II (Illinois, In dian a, Ken
tucky, Michigan an d O h io )— Donald
R. Lovett, president/chairman, Dixon
(111.) National. He is president, Illinois
Bankers Association.
R egion III (A labam a, M ississippi
an d Tennessee) — Donald T. Senterfitt, vice chairman, Sun Banks of Flor
ida, Inc., Orlando.
R eg io n IV (A r k a n s a s , K a n sa s,
Louisiana, M issouri, O klahom a and
Texas) — Joe S. Hiatt, president/chair
man, American State, Charleston,
Ark. He is a past president, Arkansas
Bankers Association.
Region V (M innesota an d W iscon
sin) — James T. Gowan, president,
First National, Chaska, Minn. He is a
past president, Minnesota Bankers
Association.
Region VI (New Mexico) — Norman
M. Dean, president/chairman, United
Bank, Greeley, and chairman, United
Bank, LaSalle, and U nited Bank,
Brighton, all in Colorado. He is vice
president, Colorado Bankers Associa
tion.
All directors will serve one-year
terms and, in their new posts, are on
both the ABA council and board. They
are elected by banking colleagues in
their regions who are ABA council
members.
MID-CONTINENT BANKER for May, 1 9 8 3
w
W
m
\
About Banks Sc Bankers
services. David S. Williams has been
appointed assistant vice president/
trust.
Irwin Union, Colum bus, has pro
moted H. Margaret Volland and Mar
garet S. Winchester to assistant vice
presidents. Both are loan officers.
Mrs. Volland joined the bank in 1956;
Mrs, Winchester has been with the
bank since 1978.
The Fed has approved the merger of
First National, Mishawaka, and 1st
Source Bank, South Bend, creating
the fifth-largest bank in the state.
Combined assets totaled $691 million
at year-end 1982.
MICHIGAN
An agreement in principle has been
reached whereby Comerica In c., D e
troit, would acquire all outstanding
shares of Pontiac State. The agreement
is subject to the necessary approvals.
Pontiac State, with year-end assets of
$555 million, operates 19 branches,
predominantly in northern Oakland
County.
John W. Ennest has been appointed
executive vice president/chief finan
cial officer, Citizens Com m ercial,
Flint. Mr. Ennest, formerly vice president/director of corporate planning,
NBD Bancorp and its principal sub
sidiary, National Bank of Detroit, will
be responsible for the bank’s financial
planning, control and investment divi
sion as well as asset/liability manage
ment and long-range strategic plan
ning. Mr. E nnest joined National
Bank of Detroit in 1965 and served in a
number of executive positions. In 1979
he took a year’s leave of absence to
serve as deputy administrator of the
Farmers Home Administration.
John H. Turpish has been promoted to
vice president-comptroller’s division,
National Bank of D etroit. He had
served as second vice president in the
division. Paul B. Visnaw has been
named vice president/financial ser
vices. Mr. Visnaw was second vice
president/information and operations
At Manufacturers National, Detroit,
Michael D. Boutell and Michael B.
Main have been promoted to vice
presidents/legal department. James C.
H am m ersm ith has been named
second vice president/account officerMichigan banking. Mr. Boutell joined
the bank in 1972 and was named
second vice president in 1979. Mr.
Main, who joined Manufacturers in
1972, has been a second vice president
since 1979. Mr. Hammersmith joined
as an account officer in 1982. Former
ly, he was affiliated with City National
and Community Bank, Washtenaw.
William P. Wilde has joined Comeri
ca, Detroit, as first vice president/product management. Before going to
Comerica, Mr. Wilde was group prod
uct m anager with C h esebrou ghPonds, Inc., Greenwich, Conn., Bar
bara H. Cole has been promoted to
vice president/personal trust, Comeri
ca Bank-Kalamazoo. Christopher J.
Dembek has been named vice presi
dent-personal trust, Comerica BankDetroit, and Gilbert B. Rodger has
been appointed vice president/person
al banking, Comerica Woodward-14
Mile Road office. Jocelyn E. Bennett
has been named assistant vice presi
dent/information systems; David O.
Taylor has been appointed assistant
vice president/corporate communica
tions, and Denise S. Dziuba has been
promoted to assistant vice president/
information systems, Comerica Inc.
Judith L. Bedford has been elected
assistant vice president/controller,
Peoples National, Bay City. She joined
the bank after six years as audit super
visor, Ernst & Whinney.
As a result of the merger between Old
Kent Financial Corp., Grand Rapids,
and Pacesetter Financial Corp., also of
Grand Rapids, B. P. Sherwood has
joined the Old Kent organization as
senior vice president, Old Kent Finan
cial Corp. and Old Kent Bank. He will
have responsibility for PacesetterWest of Grand Haven, Gaylord State,
MID-CONTINENT BANKER for May, 1 9 8 3
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Federal Reserve Bank of St. Louis
State Bank-Petoskey, First of Cadillac,
Central Michigan-Big Rapids, F re
mont, Peoples-Holland, PacesetterSouthwest of Niles and PacesetterCassopolis. In addition, he will be
chairman, Pacesetter-Grand Haven.
He has been president/CEO, Paceset
ter Financial Corp. since 1980. Thom
as D. Wisnom is rejoining the orga
nization as senior vice president, Old
Kent Financial Corp. and Old Kent
Bank. He comes from Peoples Bank,
Trenton. Mr. Wisnom will have re
sp on sibility for P eop les-T ren to n ,
Almont Savings, Pacesetter-Southeast
of Grand Blanc, Pacesetter-Owosso,
Hillsdale State, Brighton State, Pacesetter-Lansing and Pacesetter-Grand
Traverse. He will remain as chairman,
Peoples-Trenton.
Martha R. Seger, former Michigan
commissioner of financial institutions,
has been elected to the board of Cornerica, In c ., and C om ercia BankDetroit. A financial economist with ex
perience in business and banking in
both public and private sectors, she
currently is self-employed as an eco
nomic and financial counselor and is on
leave from her position as associate
professor of economics and finance at
Oakland University.
MINNESOTA
Ronald M. Bosrock, group vice presi
dent, American National, St. Paul, has
been named president of the Minneso
ta Consular Corp. for 1983-84. The
Minnesota Consular Corp. is an asso
ciation of foreign consuls — some full
time diplomats and some honorary
consuls — who represent 22 countries
throughout the state. Mr. Bosrock is
honorary consul for Austria.
Northwest Bancorp, M inneapolis,
offered $50 million of 11% five-year
notes through Salomon Brothers, Inc.
The notes were offered for sale under a
$250-million shelf registration that be
came effective in September, 1982.
Proceeds of the offerings will be used
as required for general corporate pur
poses, including investments in or
31
advances to existing or future sub
sidiaries.
m ercial/industrial relation s. Mr.
Payant has worked at the bank since
1979.
Minnesota School of Banking
Announces New Curriculum
Darin P. Naryana has been appointed
to the newly established position of
senior vice president/m anagerfinancial institutions banking group at
Northwest Bancorp, Minneapolis. The
group is one of four created as part of a
corporate-wide reorganization. The
other three are consumer banking,
agriculture and commercial banking.
Mr. Naryana has been senior vice
president/international banking at
Northwestern National Bank, the cor
poration’s lead bank, since 1980.
Curriculum for the 1983 Minnesota
School of Banking, to be held June
26-July 1 at St. Olaf College, Northfield, has been updated to reflect sub
stantial industry changes occurring
over the past year. Increased emphasis
in three key areas — marketing, opera
tions and banking law — reflects the
rapid changes in the profession, says
Truman Jeffers, school director and ex
ecutive vice president, Minnesota
Bankers Association.
While the school has been expanded
in these key areas, most of its core
curriculum has been retained. High
lights include a series of management
case-study exercises and a computersimulation game where students are
asked to assume the role of president of
a $ 13-million bank they are to run for
two years.
Classes for the 1983 school will be
reduced from 90 to 60 minutes, and
the first- and second-year students will
be encouraged to have more one-onone contact with the faculty.
At N orthw estern N ational, M in
neapolis, David M. Nash and Todd L.
Parchman have been named senior
vice presidents/domestic banking.
Daniel G. Brian and John C. Sandvig
have been appointed senior vice presidents/international banking. Mr. Nash
was vice presid en t/ h ead -retail,
wholesale/transportation division. Mr.
Parchman was vice president/headenergy/natural-resources division.
Mr. Brian, who has been vice president/manager, L atin A m ericandivision since 1979, will be responsible
for the Latin American-division and
the U. S./Canada divisions. Mr. Sand
vig, who was vice president/regional
manager of the U. S./Canada division,
will be responsible for Asian, Middle
Eastern, African and European terri
tories, the New York Edge Act office
and international customer services.
Northwest Bancorp has appointed
Jen n ifer Freem an vice presidentasset/liability management. She was
vice president/manager-asset/liability
division, Northwestern National, Min
neapolis. Transferring with her from
the bank are William Breesman and
D avid W heaton, asset/liabilitym anagem ent analysts. Joining the
group from the treasu ry staff is
Step h en R. Kaufman, financial
analyst.
The Minneapolis Fed has approved
the application of Fergus Falls Bancshares, Inc., to become a bank HC
through acquisition of Security State,
Fergus Falls.
OHIO
Construction Started
On Huntington Plaza
C OLU M BUS — Huntington Na
tional has begun construction on a new
plaza area that will link the existing
bank building with the planned Hunt
ington Center. The center, a 37-story
complex scheduled for completion in
mid-1984, will serve as headquarters
for the bank. It will feature four
atriums and an exterior of rose-colored
granite with floor-to-ceiling windows
of bronze-tinted glass. Incorporated in
William K. Stern has been named
manager of First Bank Minneapolis
St. Anthony Falls office. Mr. Stern has
been assistant vice president/commercial banking for the past three years.
At National City Bank, Minneapolis,
John F. Crinklaw has been elected
senior vice president/credit and de
posit management. He has been with
National City since 1971. W. Bandall
Payant, assistant vice president, has
been named head, group B-com 32
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
E n try w a y s to Huntington P laza featu re
arched-glass canopies.
its design are energy-saving features
and safety systems.
The plaza is designed to comple
ment the center and will include a onestory structure with street and con
course levels. Retail shops and res
taurants will be located in the plaza.
Open lattice work, trees and shrubs
will adorn the arched-plaza entryways.
When the plaza and center are com
pleted, the Huntington complex will
occupy most of the north portion of the
block bounded by Broad, High and
Front streets. Access to the plaza will
be from Broad and High streets.
“There will be a connecting entry
way, lined with additional retail space,
from the plaza into an expanded lobby
in the bank building,” explains Hunt
ington Chairman/CEO Frank Wobst.
“From this expanded lobby, escalators
will lead to the second-story walkway
into the new Huntington C enter.”
Provision also has been made for
eventual incorporation into proposed
connecting walkways throughout the
downtown area.
All entrances to the retail plaza will
have a uniform look, using archedglass canopies. “This will put a new
face’ on the entire corner,” says Mr.
Wobst, “one we believe will be aes
thetically pleasing.”
Materials used will include lime
stone as well as black and red granite.
The present north side of the bank will
be resurfaced to closely resemble the
front of the building’s exterior. The
main banking hall, designed by Tiffany
Studios, will be preserved.
Huntington National has been lo
cated across from the State Capitol
since its founding in 1866 and has occu
pied its present headquarters since
1924.
The planned changes will have a
positive impact on downtown develop
ment, according to Mr. Wobst. “Broad
and High historically has been the hub
of downtown Columbus,” he notes.
“We propose to return it to that place
of prominence by creating a beautiful
new and inviting look, plus retail shops
at the heart of downtown Columbus
activity.”
The plaza is expected to be com
pleted by the end of the year.
Worth W. Wilson has been elected
senior vice president/employee rela
tions, Toledo Trust. Mr. Wilson has
served as vice president/employee re
lations since joining the bank in 1978.
Gary P. Arntz has been named vice
president/marketing. He joined Tole
do Trust in January, coming from First
National Charter, Kansas City, where
he was assistant vice president/
MID-CONTINENT BANKER for May, 1 9 8 3
E X T E N D E D
R
E
A
C
H
fl
Whatever the size or location of your bank, CIRRUS
gives you and your customers national reach.
As an aggressive, forward-thinking banker,
you know that nationwide electronic banking is
a force to contend with in the future. And to stay
competitive you must offer customers the
convenience of ATM banking wherever they
travel. Now, you can meet this challenge and
outpace the competition by joining the CIRRUS
Network today.
CIRRUS is the leading nationwide network
that links you and your customers with ATMs in
major markets throughout the U.S. Created by a
group of the country’s strongest and most
progressive banks, the CIRRUS Network will
include over 5,000 ATMs and over 16,000,000
cardholders when fully operational at the end of
1983. Our ATMs will be located in key travel
locations such as the Orlando, Las Vegas,
New York-LaGuardia and Boston airports. And,
by 1986, we project over 8,500 CIRRUS ATMs
will be in place.
Enhance your image as an innovator by becom
ing a part of a powerful, national network, while
offering your customers the widest scope of ATM
convenience. CIRRUS. It’s
the future of banking,
within your reach today.
Position for the future.
For further information call: Mr. Bruce A. Burchfield, President, CIRRUS System Inc.
at (312)-850-7080, or contact one of the following members:
M em ber
H eadquarters
AmeriTrust
BayBanks
The Central Trust
First interstate
Manufacturers Hanover
Cleveland
Boston
Cincinnati
Los Angeles
New York
MID-CONTINENT BANKER for May, 1 9 8 3
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Federal Reserve Bank of St. Louis
M em ber
H eadquarters
Mercantile Texas
Dallas
Merchants National
Indianapolis
Bank and Trust
Mellon
Pittsburgh
National Bank of Detroit Detroit
CIRRUS
M em ber
Headquarters
Northwest Bancorp
Sun Banks of Florida
Trust Company of Georgia
United Virginia Bank
Wachovia
Minneapolis
Orlando
Atlanta
Richmond
Winston-Salem
33
marketing director. JohnC. Moore has
been promoted to vice president/training and development. Mr. Moore be
gan his career at Toledo Trust in 1964
and has been assistant vice president/
director of training since 1979.
mmm
Bank Cosponsors Seminar
On Business Development
With Local Group
More than 70 directors and staff
members of Cleveland development
corporations attended a free businessdevelopment seminar cosponsored by
AmeriTrust and Local Initiatives Sup
port Corp. (LISC). The two-day event
was held at AmeriTrust headquarters.
LISC, a private, New York-based,
nonprofit organization, has generated
more than $35.6 million in donor com
mitments and other contributions for
low-cost loans and grants to local de
velopment corporations since its in
ception in 1980.
AmeriTrust is one of the Clevelandbased corporations and foundations to
raise nearly $1 million matched by
LISC national funds to carry out proj
ects of local development corpora
tions.
Discussing business-developm ent sem in ar
are (I. to r.): Dell L. Duncan, Am eriTrust
e.v .p ., branch ad m in istratio n ; Tony Proscio, sec./program director, Local In itiatives
Support Corp., and C h arles W . Z a w a d zk i,
v .p ., com m unity relations, Am eriTrust.
The seminar was coordinated by
Charles W. Zawadzki, AmeriTrust
vice president-community relations,
and Tony Proscio, secretary/program
director, LISC.
Attorney Paul Feinberg conducted a
workshop on legal and tax considera
tions in economic development; Pro
fessors Robert Mier and Wim Wiewel,
Center for Urban Economic Develop
ment, Chicago, discussed effective
strategy for economic planning; Henry
Doll, associate director, Guild Found
ation, Cleveland, described considera
tions of private foundations in award
ing grants to local development cor
porations; A m eriTru st branch administration personnel John Ringenbach, Robert D ’Andrea and Bill
Robinson gave a detailed outline of
necessary ingredients for a sound
financial proposal; and Professor Jef
frey Susbauer, Cleveland State Uni
versity, discussed b u sin ess-d e
velopment planning. Mr. Proscio’s
wrap-up talk centered on the proper
writing of a grant proposal.
Participants were able to ask ques
tions and meet with speakers on an
individual basis during breakfast and
luncheon sessions and at an evening
reception.
Kevin J. Rieke has been promoted to
controller-finance, and Kshitij V. Bendre has been named assistant vice
president-U. S./Ohio at Huntington
Bank of Northeast Ohio (formerly Un
ion C om m erce), C lev eland . Mr.
Rieke, who joined the bank in 1978,
continues as vice president/finance.
Mr. B en d re was named assistant
cashier in 1980 and joined the U. S./
Ohio division in 1982.
D is c o u n t h r
34
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Federal Reserve Bank of St. Louis
MID-CONTINENT BANKER for May, 1 9 8 3
National City Executives
Take Part in Program
Of Junior Achievement
C L E V E L A N D — F o r the past
three years, executives of National
City Bank have participated in Cleve
land’s Junior A chievem ent Project
Business Program. The bank execu
tives and other local business people
bring the resources of the business
world to the classroom and teach stu
dents about the workings of the busi
ness community.
This year, National C ity ’s Paul
Clark, consumer credit officer, is one
of 54 business executives taking part in
the program. He has volunteered once
a week for 13 weeks to talk to eighthgrade students at St. Luke’s School,
Lakewood. Mr. Clark uses a combina
tion of lectures and examples to help
students understand the nature of the
economy, supply and demand and
business cycles.
Richard P. Reed has been elected
senior vice president, Central Nation
al, Cleveland. Mr. Reed had been vice
president/manager, personnel, since
1981.
Peoples N ational, D elp h os, and
Maumee Valley National, Defiance,
will seek approval to consolidate their
operations under the name Maumee
Valley National Bank. Both banks are
subsidiaries of Toledo Trustcorp.
Robert L. Critchfield, currently presi
dent of both banks, will continue in
that position. Peoples National has two
offices in Delphos. Maumee Valley has
nine offices, located in D efiance,
Napoleon, M ontpelier, Hicksville,
Liberty Center and Paulding.
Union Savings, Warren, has agreed in
principle to merge with Bank One of
Eastern Ohio, Youngstown, an affiliate
of Columbus-based Banc One Corp.
Union operates 10 offices in four coun
ties and had year-end assets of $282
million. Bank One of Eastern Ohio has
assets of $720 million and 39 offices.
At BancOhio, Columbus, Emmitt W.
Brown, Anthony N. McEwen, David
W. VanDam, Daniel E. Crane, Reed
R. Sell and Eugene J. Topolski have
been elected vice presidents. Joel C.
Cornette has been promoted to assis
tant vice president.
Roger L. Hudkins has been named
senior international banking officer,
a
Toledo Trust. He joined the bank in
February, having served as assistant
vice president/international division,
First National, Toledo.
Eric W. Wise, president/treasurer,
Duplex Mill & Manufacturing, Springfield, has been elected a director of the
Springfield City office of Huntington
National. Paul C. Jacobs, president,
Geauga Community Hospital, has
been named a director of Huntington
National, Burton.
W ISCONSIN
Wisconsin Commissioner
Issues Advisory to Aid
Home-Mortgage Borrowers
Wisconsin Banking Commissioner
William P. Dixon has issued an advi
sory to state bank examiners directing
them to “place increased emphasis on
a bank’s collateral margin and the longrun probability of home- and farmmortgage pay-outs, and less than nor
mal emphasis on delinquencies in re
payments.’’
The practical effect of the advisory is
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47th & Ashland Avenue, Chicago, IL 60609 • 1-312-927-7000.
MEMBER FEDERAL RESERVE SYSTEM AND FDIC
35
to allow persons experiencing tempo Economic Optimism
rary economic hardship to work with Expressed in Panel
their local banks to avoid losing their
Sponsored by Bank
homes.
By directing the examiners to put
Optim istic about Madison’s eco
more emphasis- on a bank’s collateral nomic future, Lake City Bank has
and less on delinquency, the commis opened two new neighborhood offices
sioner is sending “a signal to Wisconsin on the city’s east side. Planning for
state banks that this office supports expansion began when research
their reasonable and prudent efforts to showed that people in the area were
avoid home-mortgage foreclosures.”
being shortchanged in terms of availa
The advisory was sent at the urging bility of financial services.
of State Senate Majority Leader Tim
“W e found there were twice as
Cullen, who requested the commis many people per bank in this area than
sioner’s office to “indicate some sort of in any other part of the city,” says bank
leniency for those lenders that hold President Robert W eber. The new
increasing mortgage delinquencies on offices have created seven jobs.
their books in order to aid borrowers
in meeting their financial commit
ments.”
“ Senator C u llen ’s proposal is a
sound one,” says Mr. Dixon, “and it is
in the best interest of W isconsin’s
citizens.
“In particular, this policy is to be
applied to those situations where the
delinquency is due to temporary eco
nomic circumstances and where the
home-owner is trying to work out an Madison business leaders p articipated in
acceptable plan with the bank to avoid panel discussion at one of Lake C ity Bank's
new east side neighborhood offices. P an e l
foreclosure.”
ists w ere (from I, seated ): M arian M aenner,
The policy, says the commissioner,
Jo e l S k o r n ic k a , R o b e rt O 'M a lle y an d
“is intended to ensure that this office (standing) C lark V arn er, M. W illiam Statz
does not penalize bank management and M ax Cobb.
for taking action to work out serious
residential-mortgage problems with
In conjunction with the opening,
borrowers who are in temporary eco
Lake City Bank sponsored a panel dis
nomic difficulties.”
The policy is not intended to be ap cussion by Madison business leaders.
plied when a borrower “abandons or Panelists expressed the belief that the
fails to maintain the home, moves out city’s business future looks bright and
of the area, refuses to communicate that there has been an economic turn
around in the area.
with the lender or in similar cases.”
Participants were Max Cobb, presi
The advisory applies only to a bor
dent, Midwest W holesdale; Floyd
rower’s principal residence.
Desch, president, American Family
Insurance; Marian Maenner, owner,
Douglass C hina G a lleries, L td .;
Robert O’Malley, president, United
Independents Name
Bank; Madison Mayor Joel Skornicka;
D ire cto r
M. William Statz, president, Badger
D onna C oughlin has b een
U tility, and Clark Varner, owner,
appointed administrative director of
Team Electronics.
the Independent Bankers Associa
The mayor qualified the optimism
tion of Wisconsin. She will provide
expressed by the other panelists.
com m unication and educational
“Local government is cautiously opti
coordination for the association and
mistic about the future of the econ
will coordinate the association’s ac
omy,” he said.
tivities with the Independent Bank
United Bank President O’Malley
ers Association of America and with
commented that the economy was
other banking and professional trade
turning the corner on recession. Lake
groups.
Ms. Coughlin has been adminis
C ity and U nited banks have
trative secretary, United Medical
announced m erger plans and are
Credentials Committee, Madison;
awaiting regulatory approval.
vice president/producer, Apple
Corps Theater, Inc., and executive
secretary , Madison Area Safety
Council.
36
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
The Minneapolis Fed has approved
the application of Bice Lake Bancorp,
Inc., to acquire Citizens State, Birchwood.
Good-Sportsmanship
Awards
M cFarland and M ayville high
schools were winners of the 1983
good-sportsmanship awards spon
sored by the W isconsin Bankers
Association.
The annual awards are presented
to the schools demonstrating the
greatest degree of fair play and good
behavior during the girls’ and boys’
basketball tournaments at the Wis
consin Interscholastic Athletic Asso
ciation championships. The schools
were selected on the basis of b e
havior exhibited not only by the
teams, but also by school officials,
faculty, coaches, student body and
parents in attendance at the Uni
versity of Wisconsin field house,
Madison.
The W BA ’s bankers area-wide
advertising com mittee cosponsors
the televised games. This is the asso
ciation’s 10th year of involvement in
the tournament.
Norman Jacobs has been elected ex
ecutive vice president, Marine Bank,
Milwaukee, senior vice president,
Marine Corp., and president, Marine
Trust. Otto Wirth has been named ex
ecutive vice president, Marine Bank,
and senior vice president, Marine
Corp. Paul Ewig has been appointed
vice president/assistant controller,
Marine Corp. Owen Bane Jr., Michael
Isermann, Michael Johnson, Gary Sarner and Jack Woods have been named
senior vice presidents, Marine Bank.
At G erm antow n M arine Ronald
Krause has been appointed assistant
vice president. Shirley LeRoy has
been named vice president/cashier,
and Dave Knutson has been elected
assistant vice president, Marine Bank
Dane County. Don Baker now is presi
d ent, M arine N ational, N eenah.
David Kundert was named senior vice
president/chief operating officer at
M arine Trust. Thomas Regan and
Marcia Wilson have been appointed
assistant vice p resid en ts, M arine
Trust. At West Bend Marine, James
Bowerman has been elected vice pres
ident/cashier, and Gary Clemens has
been appointed assistant vice presi
dent.
William R. M cllvaine has join ed
Heritage Bank, Milwaukee, as senior
vice president — downtown division.
Mr. Mcllvaine most recently served as
a registered representative for Equi
table Life Assurance Society.
MID-CONTINENT BANKER for May, 1 9 8 3
If a bank answers, hang up.
As a correspondent of The Boulevard Bank, you don’t deal with a bank, you
deal with a person — a professional correspondent banker. Each one is a
senior Boulevard officer and each one is capable of making some seventy
Boulevard banking services available to you and your customers.
This unique Boulevard combination of “big bank” service and personal
attention involves four basic areas - Loan participations, Assets-Liability
Management Services, Operational and Clearing Services and Management
and Marketing Services.
It also involves our day-to-day dedication to applying people and
state-of-the-art technology in helping our correspondent customers meet
the challenges and benefit from the opportunities of today’s and
tomorrow’s economy.
If you’d like to find out more about the Boulevard approach to correspondent
banking, call (312) 836-6868. And talk to a person, not a bank.
Earning your business every day.
N a tio n a l B o u le va rd B ank o f C h ica g o
Boulevard
Bank
410 N. M IC H IGAN AVE., C H IC A G O , IL 60611
ONE ILLINOIS CENTER (111 E. W acker), CHICAG O , IL 60601
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
(312) 836-6500
• MEMBER FDIC
37
T h e r e ’S o n l y o n e
INNOVATIVE ELECTRON!
FRANKLINTON FI
Franklinton Financial Services
offers a full range of innova
tive financial services that
can keep you ahead of the
competition in this new age of
electronic banking. Franklinton
has over ten years of experience
in electronic funds transfer
and bank card processing with
one of the nation’s largest
financial institutions. That
valuable experience can help
you develop a new system or
make your present system
more efficient and profitable.
Working with
each client
on a
personal,
one-to-one
basis,
Franklinton has'
the flexibility to design a
program to fit your specif
ic needs. Franklinton’s
dedicated facilities and
state-of-the-art technology
help our professional staff
set up our services to work
within your operation...
rather than forcing you to
conform to an inflexible
system as some other pro
cessors do. As a result, you
maintain control of your pro
gram and the direction it
will take.
At Franklinton, you’ll receive
individualized, personal ser
vice. Every Franklinton client is
assigned an account represen
tative who is always available.
38
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
So if there is ever a question,
or if other Franklinton services
are needed, it can be handled
quickly and simply.
In the face of today’s growing
consumer demands, rising
costs, increased competition
and uncertain economy,
Franklinton brings you the
technology and expertise to
help your institution thrive.
Credit Card Processing
Franklinton offers a full range of
flexible
services
to help
make your
Visa or
MasterCard
operation more
efficient, responsive
and profitable. These
services include:
plastic embossing
and encoding, pay
ment and statement
processing, merchant
data processing,
merchant authorization
services, compre
hensive reporting,
and security assistance.
attract new depositors. In addi
tion, it will generate a new
source of fee income from card
holders and merchants, and
reduce your processing costs by
receipt of items through
electronic interchange.
Agent Credit Card
Programs
A complete turnkey program
with flexible participation
options allows all institutions,
regardless of size, to offer
credit card services. Franklinton
can provide everything from
customer credit review, to
issuing plastics, to collections
and customer service. And
perhaps most importantly,
Franklinton has the systems
experience and personal ser
vice to help you
every step of the
Debit Card Processing
Franklinton offers all the pro
cessing services needed to
structure a sound debit card
program.This new automated
means of payment ex
change can help you
maintain existing
customers and
MID-CONTINENT BANKER for May, 1 9 8 3
PLACE TO GO FOR
IC BANKING SERVICES:
ANCIAL SERVICES.
way in
setting
up and
operating a
profitable card
program.
Plastic Preparation
From one-time projects to a
continuing business relation
ship, Franklinton has the
capacity, quality, rapid turn
around and competitive pricing
to handle all your plastic needs
for total card production.
Franklinton’s services in
clude design, embossing
and encoding, delivery,
PIN issuance, insert
stuffing, inventory, and
security.
customers 24hour banking convenience. As
the representative of BancOhio
National Bank, a charter mem
ber of the rapidly expanding
PLUS SYSTEM® network,
Franklinton can offer you access
to nationwide ATM sharing.
Shared ATM
Networks
Franklinton offers over 10
years of ATM experience.
The AnytimeBank® regional
shared ATM network gives your
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Home Banking
Interchange1
The largest,
most
compre
hensive
in-home banking
research and
development pro
ject ever undertaken,
HBI can offer you insight
and hands-on
experience in
the electronic
home bank
ing and in
formation
systems of
the future.
Through
HBI, you
can position your institution as
a leader and an innovator, and
ultimately, successfully intro
duce a tested home banking
and information product to
your customers.
For large institutions and
small - banks, savings and loans
and credit unions-Franklinton
is the one place to go for
innovation, experience and
flexibility in electronic banking
services. Let us help you stay
a step ahead of your com
petition. Call Del Tonguette at
(614) 863-8222.
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FRANKLINTON
FINANCIAL SERVICES
a d ivisio n of B ancO hio N a tion al Bank
4661 East Main Street Columbus, Ohio 43251
Your competitive edge
in the electronic age.
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PLUS SYSTEM® isa registered service mark of PlusSystemJnc.
39
Home-Banking Pilot Project
Includes First Wisconsin
W i s c o n s i n , Milwaukee,
has joined Home Banking Inter
change, a nationwide pilot program
that will provide a wide range of com
puter-based financial and information
services for the home. Approximately
20 U. S. banks will take part in the
cooperative venture originated by
Automated Data Processing, Clifton,
N. J. First Wisconsin is the only Wis
consin bank in the project.
Two hundred Milwaukee families,
scientifically selected to represent a
cross section of First Wisconsin cus
tomers, will participate in the pro
gram, scheduled to begin later this
year. The fam ilies will have con
tinuous, around-the-clock access to
their deposit accounts, as well as other
banking services, by means of compu
ter facilities in their homes. In addition
to paying bills, customers will be able
to transfer funds betw een th eir
accounts, find out which of their
checks have cleared, determine their
current balances, make cash advances
on their bank cards and obtain in
formation on current interest rates on
loans and deposits. The program also
will include nonbanking services such
as news, weather and sports, travel
schedules and reservation s, te le
shopping, games and electronic mail.
Testing and refining of the banking
services will last 18 months and cus
tomers will be interviewed periodical
ly. The bank will furnish computer
terminals and will impose no service
fees during the first few months of the
project. Fees may be added later, and
the kinds of services may vary in an
attempt to determine customer prefer
ences and their rating of the services.
Ultimately, customers will be able
to select personal-identification num
ber codes to gain access to the system
to ensure security. Security is partici
pants’ greatest concern, but experi
ence with earlier forms of electronic
banking has shown that this will not be
a problem.
Hal C. K uehl, F irst W isconsin
chairman, expects that the project will
“help us understand how to serve well
those customers who wish to use home
computers and terminals to better
manage their finances. By participat
ing in the program, says Mr. Kuehl,
the bank will improve our under
standing of how recent technological
breakthroughs in home computers and
video can be made to better serve our
F
ir s t
40
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
customers’ financial and information
needs. In addition, we want to prepare
the best possible system of services
before full-scale market introduction,
improving software for home banking
and related applications so that they
become as useful and easy to use as
possible.” • •
First Wisconsin Corp., Milwaukee,
has filed a registration statement with
the Securities and Exchange Commis
sion covering a proposed public offer
ing of400,000 shares of adjustable-rate
cumulative preferred stock. Goldman,
Sachs & Co. and Robert W. Baird &
Co. are managing the group of under
writers making the offering. Net pro
ceeds of the issue will be used primari
ly for investments in, or extensions of
credit to, First Wisconsin’s subsidiary
banks and possible acquisitions of
additional banks.
No New Banking Legislation Seen,
Says Senator Garn to Bankers
S ENATE banking committee Chair
man Jake Garn (R.,Utah) told a
group of bankers in Indianapolis re
cently that he expects no new banking
legislation, that legislators are over
whelmingly opposed to in terstate
banking and that the Glass-Steagall
and McFadden acts and the Douglas
amendment will be studied by his
committee this year.
Banking laws represent “an incred
ibly unfair situation,” the senator told
bankers attending a program spon
sored by Merchants National, Indian
apolis. He said bankers were reeling
from inflation, high interest rates and
technological advances, plus increased
competition from brokerage houses
and other unregulated financial in
stitutions.
“There are a lot of new boys on the
block in the banking business,” he
said, “but they’re not willing to admit
they’re banks.”
He said he is disturbed at how bank
ing laws make it difficult for banks to
compete and advocated that Congress
“take the shackles off.”
He referred to last year’s Garn-St
Germain banking legislation as a “first
step” in removing the shackles and
said his committee will begin a review
soon of all major laws pertaining to the
banking industry.
“We must correspond the laws in
this nation to what’s taking place in the
marketplace,’ he said. “We can’t be 20
to 30 years behind what the market
place is doing.”
He said review of Glass-Steagall,
McFadden and Douglas will give Con
gress direction on what the industry
needs and will help develop a consen
sus for updating banking laws. He said
he won’t push for new banking legisla-
Sen. Ja k e G arn (I.) chats w ith Otto N. Frenzel III, ch., M erchants N at'l, In d ian ap o lis,
after senator spoke to b ankers attending
m eeting sponsored by M erchants Nat'l.
tion in 1983 because he doesn’t “want
Congress to act precipitously.”
In explaining Congress’ opposition
to interstate banking, Senator Garn
said many legislators fear smaller
banks within their states would be
“swallowed up” by large institutions if
interstate banking were permitted. • •
Independence Bank Group, Wauke
sha, plans acqu isition of Brown
National, Kenosha, subject to the
necessary approvals. Brown National,
which recently has been the object of
two different unfriendly tender offers,
has recommended the acceptance of
Independent’s offer.
Kevin C. Schuller has been promoted
to vice president/assistant general
counsel/assistant secretary, First Wis
consin Trust, Milwaukee. Mr. Schul
ler joined First Wisconsin Trust in
1974 and was named assistant general
counsel in 1978. He also serves as
secretary to the board. Nicholas J.
Bertha III has been named assistant
vice president. He joined the company
in 1981 as a trust officer.
MID-CONTINENT BANKER for May, 1 9 8 3
Leave the snarls of MoneyOrder
processing to tlie Paper I iger
Your back office has enough to do processing
all your daily proof items without having
to get involved in the problems of your
Money Orders.
Money Orders are probably only a service item
with you, not the meat of your business.
They are our main business. Travelers Express
(the Paper Tiger) has been in the funds
transfer field for over 40 years.
We’ll take over that back office workload and
free your people for more cost-efficient work.
We supply drafts that are faster and simpler
to issue; and do all the reconciling, tracing,
storing, filing, payment stopping and handle
all the other problems that occur daily.
Find out more about how the Paper Tiger can
help you lower your costs and reduce problems
with Money Orders and Official Checks, too!
He’ll work expressly fo r you.
For more information call 1-800-328-5678 and
ask for Gene Lewis.
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MID-CONTINENT BANKER for May, 1 9 8 3
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Federal Reserve Bank of St. Louis
41
Sophisticated Security Measures
Now Available in Rural Areas
F OR SOME TIM E, because of the unsettled state of the world
combined with terrorist acts committed against what is termed “the
establishment, political, civic and financial leaders in large cities have
access to many kinds of sophisticated security measures. These could
take the form of personal bodyguards or firms that provide external and
internal security.
Now, there’s a company that offers this service in a rural area. Called
C. N. Arne & Associates, it’s headquartered in Warrensburg, Mo. Its
area at present primarily is Missouri, according to its founder, Chet
Arne, but it plans to expand to nearby states in the future.
What exactly does C. N. Arne & Associates do? Mr. Arne says its
overall purpose is to provide security consulting and external/internal
physical security for banks and all kinds of businesses and commercial
enterprises.
Among its services are:
• Employee-integrity investigations, particularly pre-employment
investigations.
• Psychological-stress evaluations. Mr. Arne explains that these are
similar to polygraph (lie-detector) tests. Results are based on voice
responses (the way a person’s voice sounds during the test). High and
low voice frequency changes in response to specific questions.
• Computer/document security, which goes hand in hand with
physical security. Mr. Arne says his firm will study an operation and
then make recommendations on how it can be made more secure.
• Document-integrity studies. Mr. Arne describes this service as
studying any document questioned by a bank — checks, securities,
notes — anything that could be suspected of being forged or altered.
The Arne firm can examine these documents scientifically and either
authenticate them or show why they are not authentic.
• General investigative work. Suppose, says Mr. Arne, a banker
suspects an employee of embezzling or doing something else wrong, but
has no proof. The Arne firm can work under cover, even to “planting” an
operator in the bank to watch the supsected employee without raising
his or her suspicions.
• Executive protection inside and outside the U. S. Mr. Arne admits
most rural bankers probably don’t need this service, but he offers it if
they do.
Mr. Arne says he started his company because market surveys indi
cate such a service is needed in the rural, as well as the large urban,
areas of the country. He and his employees all have or are working on
bachelor’s degrees in criminal-justice administration and industrial safety/security, as well as business management.
Further information on this new service can be obtained from: Chet
Arne, C. N. Arne & Associates, 107 E. Culton, Warrensburg, MO
64093. • •
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P roducts
Ready-to-Use Letters
On Credit Collection
Available in Book
“The Complete Guide for Credit and
Collection Letters,” by Sol Barzman.
Publisher: National Association of
Credit Management, 475 Park Ave.
South, New York, NY 10016. Hard
cover, 224 pages, $26.95.
More than 300 model credit letters
can be found in this book, and they
deal with every customer situation,
from the first cu stom er con tact
through final correspondence. The
National Association of Credit Man
agement (NACM), the book’s pub
lisher, says each letter may be used as
is or easily adapted to fit special needs.
The book contains both credit and
collection letters, each of which, the
NACM points out, is to the point, easy
to understand and free of unnecessary
verbiage.
The credit letters, according to the
NACM, will help a banker write with
tact and assurance in these situations:
• Requesting financial statements,
rejecting orders, asking for references,
requesting credit applications.
• Asking for cash in advance, ex
plaining credit terms, establishing
credit limits, letting customers know
they are taking too long to pay.
• Discussing unearned discounts,
limiting credit, holding up shipments,
revising credit status.
• Pointing out delinquencies, re
opening old accounts, adding service
charges for late payments, granting ex
tensions to old customers.
The collection letters are those that:
• Remind a customer he is past due.
The approach is friendly and conversa
tional, and the letters vary in intensity.
• Take a more formal stance. They
are insistent letters that appeal to a
customer’s sense of fair play, his fear of
jeopardizing his credit status and
goodwill. These letters also are of
varying intensity.
• Demand that a customer face up
to his responsibility or suffer serious
action on the creditor’s part. These are
described as “tough” letters by the
NACM.
Mr. Barzman has written extensive
ly on business credit for various pub
lications. He also is the author of the
NACM s Everyday C redit C hecking.
FAST DELIVERY!!!
Laacke
& Joys
QualitySince 1844
Bank Products Division
P-O. Box 92912, Milwaukee, Wl 53202
PHONE (414) 271-7885
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42
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Federal Reserve Bank of St. Louis
MID-CONTINENT BANKER for May, 1 9 8 3
Four Fact-Filled Manuals for The Bank Director
Every Director Should Have a Copy of Each One
BOARD REPORTS . . . for The Bank Director
$24.00
More effective board meetings begin w ith effective reports. This 2 0 0-page manual
will help you determine the "quantity and q ua lity" of monthly reports needed by
directors so they (and management) can make proper decisions. Included are ex
amples of reports most needed by directors who want to create policies that lead to
prudent management. Contains information on many topics such as effective re
porting. . . reports to shareholders. . . report of examination. . . bank liquidity and
capital analysis. Manual illustrates various formats board reports can take. . . from
oral to detailed graphic presentation. Author: Dr. Lewis E. Davids.
PLANNING THE BOARD MEETING
$8.00
This 6 4 -page booklet provides some workable agenda, suggestions for advance plan
ning and also lists types of reports a board should receive monthly and periodically.
It emphasizes the need for informing the board as qu ickly and concisely as possible.
Contains a chapter outlining a "w orkable" board meeting, another on visual aids for
the board meeting. Also contains a model for minutes of the board, plus sample
forms to communicate status of bank to the board. An excellent "com panion" to
BOARD REPORTS. Author: Dr. Lewis E. Davids.
EFFECTIVE SHAREHOLDER MEETINGS
$14.00
Before your next shareholder meeting, get ready for gadflies, activists and others
who may be planning to disrupt your program. Here's h o w to anticipate damaging
incidents, prepare tested countermeasures, turn potential disasters into a plus for
your bank. Details include handling of unusual actions (such as replacing a CEO) —
political contributions, laws and regulations directors may unw ittingly break, stock
purchases, sales and disclosures, proxy provisions, etc. A checklist of meeting de
tails. Promoting attendance. Stockholder proposals. Materials to mail. Agenda and
procedural rules.This book is a tested"how -to"of Annual Meetings from inception
to final reports, including personnel responsible for each step. 96 pages of "m ust”
reading fo r chairmen, directors and officers involved.
RESPONSIBILITIES OF BANK DIRECTORS
$9.00
This book is "rig h t" for today's banking problems. Due to the economic influence
banks have on their communities, the rapid growth of HCs and the ever-growing
"consumer" movement, directors must know what is expected of them and their
bank in terms of responsibilities to depositors, shareholders and the public. This
manual examines recent court decisions, investment return, continuity of manage
ment, long-range planning, effects of structural changes on competition, and more.
Author: Raymond Van Houtte, president, Tompkins County Trust Co., Ithica, NY.
P— — —
|
■
QUANTITY PRICES
Board Reports
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— *
——
The BANK BOARD Letter
408 Olive St., St. Louis, MO 63102
Please send:
Planning The Board Meeting
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— — — —
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$_
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copies. R espo nsibilities o f D ire cto rs
------- T o ta l Enclosed
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Name & T i t l e __________________________________
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B a n k __________________________________________
Responsibilities of Directors
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
S tre e t__________________________________________
C ity , S tate, Z i p ________________________________
I
(Please send check w ith o rd e r. In M issou ri, add 4.6% ta x.)
43
Wisconsin Bank Offers Public-Service Seminars
OMMERCIAL & Savings Bank,
M onroe, W is., is offering a
series of public-service seminars to
help people manage their money. Part
of the bank’s com m unity-relations
program, the seminars are designed to
be interesting as well as convenient for
consumers. New approaches include
holding programs in the bank lobby
and dramatization of a planning session
between customers and their banker.
“Our customers tell us they want
C
and need more reliable information on
coping with economic changes, and
they certainly can’t afford to spend a lot
of money to find out how to save or
make their money stretch to cover
necessities,” says J. F. Kundert, presi
dent of the bank, which serves a pri
m arily agricultural com m unity of
30,000. “Our seminars are offered as a
public-service to the community — to
customers and non-customers alike.
And, we maximize our audience by
N E W
CONSUM ER
L E N D IN G
P O L IC Y
A Manual for Directors,
Management and
Lending Officers
By Dr. Lewis E. Davids
Bank directors don’t get in day’s changing environment.
volved in consumer lending, per
This 208-page manual includes
se, but they do get involved in for an array of consumer loan policies
mulating consumer-lending policy. in force at various-sized banks,
In order to formulate such policy provides checklists of topics on in
intelligently, they MUST be familiar stallment-credit policy and proce
with the broad scope of consumer dures and policy components;
lending as well as the pitfalls such model application forms; an over
view of the Federal Reserve’s con
lending can hold for a bank.
Dramatic increases in personal sumer regulations; the Federal
bankruptcies call for new policies Reserve Functional Cost Analysis
in the consumer-lending area. of the installment-loan function; in
State usury laws are being revised stallment-loan department plans;
or preempted by federal statutes. consumer-credit terminology, and
Existing “ rule of thumb” lending bibliography of reference mate
practices aren’t always valid in to- rials on installment loans.
maintaining a good relationship with
area newspapers and radio and televi
sion stations. Reporters are invited to
attend our meetings and help us reach
thousands of people who are looking
for reliable financial advice.”
At a seminar entitled “Economic
Survival Through Planning,” the bank
featured 1973 Miss America Terry
Meeuwsen as keynote speaker. Miss
Meeuwsen formerly co-hosted a Mil
waukee television program, “New
D a y ,’’ which included a w eekly
“Money Help Line segment pre
sented by the station and the Wiscon
sin Bankers Association.
The seminar was held on a Saturday
in the bank’s lobby. There were two
two-hour sessions, one at 9 a.m. and
another at 1 p.m. Midway through the
program, personal bankers gave halfhour presentations — “Banking Has
News for You,” where they explained
new products and services. Mr. Kun
dert, Miss Meeuwsen and her hus
band, Andy Friedrich, then staged a
mock interview with a banker. Playing
the part of a “typical young couple,”
the Friedrichs asked their banker,
played by Mr. Kundert, questions on
financial planning.
“This interview with a banker’ for
mat makes financial planning and
budgeting, which can be a tedious sub
ject, interesting,” says Mr. Kundert.
“Terry and Andy gave the audience a
look at money management from the
consumer’s point of view and helped
make the point that helping people to
learn to handle money is part of a bank
er’s jo b .”
Audience response was good, and
after the program most people took
home copies of the bank’s financial-
Save! Send check with order.
THE BANK BOARD LETTER
408 Olive St., St. Louis, MO 63102
1 Copy @ $25.00_________ 5 or more @ $20.00 e a :______
Consumer Lending Policy
N am e..................................... „.............................................. Title
Bank ...............................................................................................
S tre e t...............................................................................................
|
City, State, Zip ..............................................................................
I
44
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
D ram atization of fin an cial-p la n n in g ses
sion b etw een b anker and customers m ade
su b je ct in te re stin g an d in fo rm a tiv e at
com m unity-service sem in ar at Com m ercial
& Savin g s Bank, Monroe, W is. Bank pres.,
J. F. Kundert, (r.) talked w ith "custom ers"
A n d y Friedrich and Terry M eeuw sen.
MID-CONTINENT BANKER for May, 1 9 8 3
FOR YOUR DIRECTORS — TO HELP THEM HELP YOU
No. 51 BUDGETING, FORECASTING
and PLANNING
No. 220 — AN INVESTMENT GUIDE
For the Bank Director
E v e r y b a n k m u s t k n o w W H E R E it is
g o in g a n d H O W to g e t th e re ! M a n a g e
m e n t s h o u ld “ m a p the c o u rs e ,” but
d i r e c t o r s s h o u l d p l a y a r o l e in e s t a b
lis h in g g o a ls .
T h is m a n u a l s u p p lie s d ire c to r s
w ith to o ls th e y need to s te e r b ank
p o l i c y in t h e b e s t d i r e c t i o n . C h a p t e r s
h e lp d ir e c to r s e s ta b lis h “ m is s io n s ”
s ta te m e n ts , tra c e s ta g e s o f a p la n
n in g p ro c e s s .
D e ta ils H O W to per
fo rm fin a n c ia l p la n n in g . . . h o w to
p la n fo r n e w s e rv ic e s . . . h o w to
“ fo re ca st.”
T e c h n iq u e s used by s u c c e s s fu l
b a n k s are in c lu d e d , a lo n g w it h s o u r
ce s o f in fo rm a tio n an d a b ib lio g r a p h y
of refe re n ces.
In t h i s 1 9 2 - p a g e m a n u a l , t h e a u t h o r
d is c u s s e s th e m e rits of d ire c to rs
p a y in g c lo s e r a t t e n t io n to b a n k in
v e s t m e n t p o lic ie s .
P o o rly th o u g h t- o u t- a n d -e x e c u te d
in v e s tm e n t p o lic ie s c a n p la c e a
b a n k ’ s c a p i t a l in j e o p a r d y , p a r
t i c u l a r l y w h e n a b a n k is f o r c e d t o
liq u id a te in v e s tm e n ts d u rin g a p e rio d
o f r is in g in te re s t rates.
S h o u ld the bo a rd “ in tru d e ” up o n
m a n a g e m e n t p re ro g a tiv e s o f th e C E O
in t h e a d m i n i s t r a t i o n o f t h e i n v e s t
m e n t p o r t f o l i o ? N o t a t a ll, s a y s t h e
a u th o r. H o w e ve r, a w r it te n p o lic y ,
c a re fu lly s tru c tu re d
a ro u n d
th e
b a n k ’ s d e p o s i t a n d lo a n “ m ix , ” c a n
be c o m f o r t in g d u rin g r is in g o r fa llin g
in te re s t rates.
A s an a id to m a n a g e m e n t a n d th e
board, th e a u th o r p re s e n ts n u m e ro u s
in v e s tm e n t
and
p o rtfo lio
m anagem ent
p o lic y
s ta te m e n ts
p r e s e n t l y in u s e b y r e c o g n i z e d w e l l run b anks.
Price — $29.50
2-5 c o p ie s $2 6.50 ea. 6-10 c o p ie s $2 5.00 ea.
No. 101 DIRECTORS . . . Selection
Qualifications, Evaluation
and Retirement.
T h i s 42- p a g e m a n u a l a n s w e r s k e y
q u e s tio n s c o n c e rn in g d ire c to r s e le c
tion, re te n tio n a n d re tire m e n t. S p e c ia l
s e c tio n : th e p ro s p e c tiv e d ire c to r and
h o w he s h o u ld be e x p e c te d to c o n t r i
b u te to th e b a n k ’s s u c c e s s . In c lu d e s
a ra tin g chart.
M a n u a l a ls o c o n ta in s a s e c tio n
p o s in g q u e s tio n s th a t a p ro s p e c tiv e
d i r e c t o r s h o u l d a s k h i m s e l f b e f o r e he
a c c e p ts a b a n k b o a rd p o st.
A n o th e r s e c tio n d e a ls w ith th e s e n
s itiv e n a tu re of d ire c to r re tire m e n t.
A g e c a n be a g u id e b u t not an o ver
r i d i n g f a c t o r in t h i s d e c i s i o n .
Price — $24.00
2-5 c o p ie s $2 2.00 ea. 6-10 c o p ie s $21.00 ea.
No. 230 — CONTRACTS WITH BANK
EXECUTIVES
In m a n y b a n k s , s a l a r i e s , b o n u s e s
a n d frin g e b e n e fits of to p m a n a g e
m e n t are c o v e re d by c o n tra c ts . S in c e
m a n y c o n tr a c ts e x te n d fo r p e rio d s of
fiv e y e a rs th e y c a ll fo r c a re fu l c o n
s id e ra tio n ,
s tru c tio n .
T h is 4 8 -p a g e m a n u a l d is c u s s e s th e
role o f th e b o a r d ’s C o m p e n s a t io n
C o m m i t t e e in d e t e r m i n i n g t h e n a t u r e
of
such
c o n tra c ts .
The
a u th o r
s u g g e s ts th a t “ p e rfo rm a n c e ” can
a n d s h o u l d b e t h e k e y in r e w a r d i n g
th e e x e c u tiv e . C h a rts a n d w o r k s h e e ts
a re in c lu d e d to h e lp th e c o m m it t e e
a rriv e a t “ fa ir a n d e q u ita b le ” pre
re q u is ite s as m o tiv a tin g fa c to rs fo r
th e b a n k e x e c u tiv e .
A n a id to w r it in g a N E W c o n t r a c t or
in R E V I E W I N G e x i s t i n g c o n t r a c t s .
Price — $8.00
2-5 c o p ie s $ 7 .0 0 ea. 6-10 c o p ie s $ 6 .5 0 ea.
No. 210 MAXIMIZING
CORRESPONDENT BANK
RELATIONSHIPS
D ire c to rs a re n ’t “ born c o rre s p o n
d e n t e x p e rts , b u t y o u c a n h e lp th e m
c a t c h u p in a h u r r y , a n d i t ’ s p r o f i t a b l e
f o r y o u t o d o so. T h i s 1 0 0 - p a g e m a n u a l
c o v e r s all f a c e t s o f c o r r e s p o n d e n t
b a n k in g . C le a rin g s and flo a t a n a ly s is
. . . loan p a r tic ip a tio n s . . . lin e s of
c r e d i t . . . fo re ig n e x c h a n g e , etc. T h is
m a n u a l a ls o h e lp s d ire c to r s A P P R A IS E
c o rr e s p o n d e n t s e rv ic e s —
to m ake
c e rta in y o u re c e iv e m a x im u m s e rv ic e
a t a c o m p e t i t i v e price .
T h e m a n u a l a ls o d is c u s s e s se veral
fe d e ra l re g u la tio n s , in c lu d in g th e c o n
s tr a in ts im p o s e d on “ in s id e r” b a n k
l e n d i n g b y F IR A . A M U S T f o r e v e r y
b a n k d ire c to r.
Price — $14.00
Price — $10.00
2-5 c o p ie s $ 8 .0 0 ea. 6-10 c o p ie s $ 7 .5 0 ea.
Please Send These Management Aids:
5 1 _________ c o p i e s $ ______________
1 0 1 _________ c o p i e s $ ______________
2 1 0 _________ c o p i e s $ ______________
2 2 0 _________ c o p i e s $ ______________
2 3 0 _________ c o p i e s
Name
_____________________
Bank
_____________________
$ _____________
A ddress
___________________
(In M i s s o u r i a d d 4 . 6 % ta x )
2-5 c o p ie s $ 1 2 .0 0 ea. 6-10 c o p ie s $ 1 1.00 ea.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
The BANK BOARD LETTER
408 Olive Street
St. Louis, MO 63102
T a x $ _____________
T O T A L S _____________
C ity
________________________
S t a t e __________________ Z i p _
statement forms.
Other programs in the series have
included sessions on individual retire
ment accounts and on tax changes.
The bank encourages people attend
ing the seminars to bring brown-bag
lunches. Beverages are served, and
people are invited to “come when you
can, leave when you must.”
The seminars are held to encourage
people to come to their commercial
banks for advice. “In a time when ev
erybody seems to be getting into the
money-managing act,” says Mr. Kundert, “commercial banks need to make
sure people know that now, more than
ever, we are in the ‘business’ of offer
ing financial information and advice.”
Safe-Deposit Association
Sets Conference for June
The 59th national educational con
ference of the American Safe Deposit
Association will be held June 15-18 at
the Downtowner Best-Western Hotel,
Green Bay, Wis.
Speakers and their topics will in
clude “Success in Deregulation: The
Critical Few” by Walter J. Fiorentini,
first vice president, First Wisconsin
National-Milwaukee; “If It Moves,
Price It by Jack Whittle, chairman,
Whittle, Baddon, Motley & Hanks,
Chicago; and “The Importance of Con
tinual Education” by Lee Gunderson,
past ABA president, and director of
the Prochnow Graduate School of
Banking.
Com ptroller Sets Moratorium
O n Brokers' Moves Into Banking
HE Comptroller of the Currency has imposed a moratorium on new
charters for banks created or acquired by brokerage and securities
firms that want to enter the consumer-loan business.
The moratorium will remain in effect during the time Congress
considers eliminating or broadening the loophole that has permitted
Wall Street firms to invade the consumer-loan business by purchasing
banks and divesting them of their commercial-loan portfolios in order to
get around the definition of a commercial bank maintained by the Fed.
The moratorium doesn’t apply to any charter applications accepted as
of April 6 or to most charter applications for national trust banks and
national banks whose acquisition by a bank HC across state lines is
authorized by state law. But it does include applications for trust banks
by organizers who serve as investment advisers to mutual funds.
Securities firms recently have been permitted to operate banks that
would not make business loans, although they could offer consumer
loans and take deposits.
The Comptroller’s office will continue to accept applications, despite
the moratorium, because it wants to avoid a legal challenge to the
moratorium. However, it may extend the ban on new charters if Con
gress doesn’t resolve the issue before the moratorium is scheduled to be
lifted by year end.
Comptroller C. T. Conover said Congress appears prepared to debate
the full range of policy issues regarding bank deregulation that is being
raised by the increasingly rapid pace of marketplace innovation.
Congress expects to hold hearings on the Glass-Steagall Act, which
restricts bank products, and the McFadden Act and Douglas Amend
ment to the Bank HC Act, which limit geographic expansion by banks.
Comptroller Conover said he believes a moratorium on nonbank
banks at this time will help foster free and open debate on these
important policy issues. It would reduce the pressure created by esca
lating marketplace innovations at the national level that could outpace
congressional deliberations.
“I look forward to working with Congress during this moratorium to
examine the full range of issues presented by changes in the financialservices industry,” Mr. Conover said. “Those issues include changes in
the S&L industry, emerging changes in state law that affect geographic
and product restrictions for state-chartered banks and technological
developments that make new financial products and delivery systems
possible.”
T
46
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Electronic Monitoring
Of Money-Mkt. Accounts
Available to Banks
A new on-line service, M oneyMarket Monitor (MMM), enables a
bank to compare its rates on dereg
ulated-deposit accounts to regional
and national averages. It was de
veloped by Whittle Raddon Motley &
Hanks, In c. (W R M & H ), Chicago
financial-marketing firm. It’s deliv
ered to bankers nationwide over InnerLine, the banking industry’s com
puter-based information/management
service.
Based on a sampling of 200 financial
institutions selected at random, MMM
reports averages compiled nationally,
regionally and by size of institution. In
addition, the service provides trend
analysis and a weekly commentary by
L. Biff Motley, WRM&H executive
vice president.
According to Wayne B. Lewin, Inn e rL in e ’s ch ie f operating officer,
MMM monitors “super NOWs” and
money-market-investment accounts;
one-month, 2 V2- and SV^-year certifi
cates; a 1 Vk-year fixed-rate IRA and
lVk-year variable IRA. As new retail
products are developed and marketed,
MMM will revise and expand its week
ly report to include any new instru
ments.
InnerLine, developed jointly by the
Bank Administration Institute, Rolling
Meadows, 111., and A m erican B anker,
provides financial news, analysis,
financial reports and electronic mail.
InnerLine offers 28 services, including
a Fed-pricing schedule, prime-rate
reporting service and Index of Bank
Performance.
International Monetary Market
Sponsors Futures Seminar
A seminar on corporate applications
of financial futures is planned for June
15-17 at the Hyatt on Hilton Head Is
land Hotel, Hilton Head, S, C. Spon
sor is the International Monetary Mar
ket of the Chicago M ercantile Ex
change.
The seminar will highlight futures
application to management of liquid
assets, foreign exchange, commercialpaper issues, bank borrowing and
equity issues. Treatm ent of hedgemanagement tactics, accounting/legal
considerations and broker/bank rela
tionships also will be featured.
Fu rth er information is available
from the International Monetary Mar
ket.
MID-CONTINENT BANKER for May, 1 9 8 3
Compensation for Bank Executives:
Designing a Program to Fit the 1980s
LEARLY, the financial -services
industry is in a transitional
period, shifting from a relatively stable
environment characterized by distinct
business and product segm ents,
through a phase of broadening and
overlapping product lines with ex
panding distribution options, to an un
settling and uncertain future.
The need for strategic planning nev
er has been greater. It now is impera
tive that directors and top manage
ment provide strong leadership, cou
pled with a clear sense of direction
communicated throughout the orga
nization, so that everyone understands
where the organization is going, why
and how it will get there.
The task of deciding the future
direction of the organization, whether
to merge, acquire, form a holding com
pany; w hether to com pete in the
emerging retail market, and how, etc.,
presents, at best, tough challenges for
top management and boards. Compet
ing successfully will require a compre
hensive assessment of how to position
the organization in the industry. It will
req u ire en trep re n e u ria l thinking
about products and structure of the
organization’s different business units.
M aintaining sound business ju d g
ment, while at the same time restruc
turing product lines and staff units to
profitably capitalize on market oppor
tunities, will require a different philo
sophical approach to executive com
pensation during a period of lowering
expectations.
Given the fact the banking industry
is on the threshold of experiencing a
merchandising revolution, executive
compensation in banking is in a period
of fundamental change. Rather than
revising plans and programs on a short
term basis, we expect that more banks
will take positive steps to adjust their
By Jack B. Collage, AEP*
Executive Vice President
Human Resources
Marine Bank
Erie, Pa.
C
thinking to developing long-term per
formance-related plans or to reconcile
existing programs to long-term eco
nomic reality.
M ajor Trends. Given the scenario of
slow but continued economic growth
over the balance of the 1980s, along
with a changing profile of bankbusiness structure, a diversification of
en trep ren eu rial and conventional
banking practices, bank executive
compensation will gravitate away from
fixed cash salaries to variable pay tied
to performance objectives and long
term incentives. As more and more
banks adopt true pay for performance
philosophies, we can expect that more
compensation-program-design experi
mentation will emerge. More indi
vidualization of compensation pro
grams will surface to motivate and re
ward separate business units and spe
cific key individuals within the group.
Based on our studies of bank-officer
compensation and on our research and
consulting activities, we see the fol
lowing specific trends developing:
• Cash-Pay Trends: Over the next
several years, we expect cash-salary in
creases for executive-level personnel
to decline moderately and average be
tween 8.5% -9.5% over the balance of
the 1980s. It is possible, however, that
in banks that have a substantial posi
tive turnaround-earnings experience
* AEP stands for accredited executive in
personnel. Mr. Collage also is chairman,
Personnel Consulting Services, Inc., a hu
man-resource management-consulting
company luholly owned by Marine Bank.
in 1983, executive-cash-pay increases
could rise to the 11-14% range in the
short term. As more banks experiment
with pay-increase formulas tied direct
ly to corporate objectives, we expect
the number of executives receiving
salary increases to decrease. Directorcompensation committees will tie re
wards more selectiv ely to results
attained by key executives in indi
vidual business-profit centers.
• Variable-Pay Trends: We expect a
gradual shift from traditional fixedcompensation programs employing
umbrella reward guidelines with ma
trix formatting to a more fluid design
variable-reward structure. Year-end
bonus programs will be designed with
tougher criteria, and pay-out poten
tials will be contingent on more care
fully defined objectives. Additionally,
we anticipate a strong interest in de
veloping separate strategic business
unit group-incentive plans.
• Short-Term Bonus-Plan Trends:
Bonus plans for middle management
and key professional and technical per
sonnel tied to short-term objectives
will gain popularity as more banks in
troduce new products and capitalize
on entrepreneurial opportunities in
the retail market. As these plans are
integrated gradually with longer-term
strategic business objectives, payment
of an annual reward to a multi-yearreward potential will emerge.
• L on g -T erm -R eivard T ren ds: As
more and more banks integrate pay
programs with strategic corporateperformance objectives, use of long
term reward programs will increase
sharply as the vehicle to motivate ex
ecutive management. The design of
these in stru m en ts will be m ulti
faceted, employing a combination of
direct-cash-payment and stock-option
featu res. In ce n tiv e stock options
Long-Term-Reward Trends
Short-Term Bonus-Plan Trends
“As more and more banks integrate pay programs with
strategic corporate-performance objectives, use of long
term reward programs will increase sharply as the vehicle
to motivate executive management. The design of these
instruments will be multifaceted, employing a combina
tion of direct-cash-payment and stock-option features. In
centive stock options (ISOs) will be widely adopted in
conjunction with non-qualified options.”
“Bonus plans for middle management and key profes
sional and technical personnel tied to short-term objectives
will gain popularity as more banks introduce new products
and capitalize on entrepreneurial opportunities in the re
tail market. As these plans are integrated gradually with
longer-term strategic business objectives, payment of an
annual reward to a multi-year-reward potential will
em erge.”
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
47
(ISOs) will be widely adopted in con
junction with non-qualified options.
• In d iv id u a l N et-W orth T ren d s:
Along with the shift from cash yearend increases to long-term incentive
awards, we expect more individually
designed execu tive-com pen sation
programs. As banks begin exper
imenting with merchandising tech
niques, as done in the retailing indus
try, the need for entrepreneurial skills
and talent will rise. Along with this
shift, banks will focus more on indi
vidual net-worth needs since programs
and strategic objectives will be de
signed to maximize performance. We
expect this will bring about a gradual
shift away from the concept of career/
retirement planning to personalized
employment contracts with individual
compensation packages.
• E m p lo y m en t-C o n tra ct T ren d s:
Individual employment contracts will
increase sharply as corporate demands
get stiffer. Also, as the number oi
mergers and acquisitions increases, so
will the number of security-blanket or
“golden-parachute” programs.
• C ompensation-C ommittee
Trends: As reward systems increase in
number, complexity and cost, partic
ipation of boards and the compensa
tion committee will increase. Com-
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Federal Reserve Bank of St. Louis
pensatimi com m ittees will become
more directly involved in defining the
corporate-compensation philosophy as
well as more involved in actual plandesign activities.
• Benefits/Perquisites Trends: Tra
ditional health care, dental, life, etc.,
benefits and car, clubs and mem
bership perqu isites will continue
throughout the 1980s, contingent on
changes in tax legislation. More ex
perimentation will be done in the areas
of providing financial-counseling ser
vices to key executives and in offering
special early-retirem ent opportuni
ties. To share risk and cost of benefits
more equitably, banks will experiment
with flexible core-benefit programs,
allowing individuals to choose options
that best meet their personal and fami
ly needs.
C o n c lu s io n . Clearly, we believe
bank corporate-compensation philos
ophies, policies and programs will
undergo substantial revisions over the
balance of the 1980s, and, in the more
conservative banks, change will be ex
tremely difficult. Perhaps the single
most difficult issue will be on deciding
on performance measurements that
are appropriate and reasonable.
Effective communications of busi
ness objectives, strategy and pay sys
tems will be a continuing source of
concern. Traditional means of sur
veying and job-evaluation processes
will be upgraded technologically to
take advantage of computer capabili
ties, both in marketplace job pricing
and in modeling compensation pro
grams.
It will be difficult to create a climate
of innovation, while, at the same time,
practicing traditional sound business
judgment. Designing compensation
programs that will provide the neces
sary incentives to achieve tougher
corporate-performance objectives in
an era of lowering expectations will be
a herculean task for most banks.
Last, as shareholder sensitivities
about executive pay increase, boards
and compensation committees will
find it difficult to communicate and
justify new programs that are tied to
long-term objectives without jeopar
dizing strategic competitive plans of
the corporation.
As the profile of the financial indus
try changes because of competitive
and deregulatory issues, so will the
mix of compensation and benefits
programs within the industry. The job
of top m anagem ent and boardcom pensation com m ittees will be
tougher. Key to their success will be
whether they can put into place the
right mix of reward systems that will
provide the necessary incentive to
stimulate, attract and retain key per
sonnel who can attain difficult per
formance objectives over the balance
of the 1980s. • •
'Deferred-Fee Plan
(Continued fr o m page 19)
From the director’s standpoint, a
key advantage of a deferred-directorfee plan is the ability to realize greater
earnings through the plan by investing
with pretax dollars compared to the
earnings available with after-tax dol
lars. Also, provided a director’s de
ferred fees are not paid until after age
71 (age 70 in 1983), deferred fees will
not cause a reduction in the director’s
social security benefits due to excess
earnings.
It’s hoped that when the deferral
period is over and the full amount is
paid, the appropriate tax rate will be
lower than it is now. But even if it is
not, use of pretax dollars to accumulate
interest is a big benefit. Obviously,
this type of deferred-compensation
program can be a good supplement to a
normal retirement program, and we
think it makes sense for outside direc
tors.
Other new compensation concepts
are being developed for outside direc
tors, mostly outside the banking indus
try. Most are familiar compensation
elements for inside directors, but his
torically have not been available to
outside directors, such as:
• Group insurance.
• Separate pension plan.
• Income tax assistance.
• Financial counseling.
We already are seeing more and
more companies outside the banking
industry offering these tax-exempt
perquisites to their outside directors.
And we believe the banking industry
will follow suit.
Sum m ary. Responsibilities of out
side directors will continue to increase
throughout the next decade, and com
petition for top-management talent to
serve on boards will continue to be
intense. Increased cash fees are essen
tial, but they may not be enough for
your bank to attract and retain the
talented directors it needs for future
success.
Other industries already are offering
additional perquisites to directors, and
we think the banking industry will fol
low soon. Even though banks do not
directly compete with these other in
dustries in normal business activities,
they do compete in attracting and re
taining high-quality directors. • •
MID-CONTINENT BANKER for May, 1 9 8 3
Asset-Based Loan Firm
Set Up By St. Louis Bank
ST. LOUIS — Mercantile Trust has
set up a subsidiary to make asset-based
loans. Mercantile Business Credit will
provide companies with revolving
lines of cred it secu red by th eir
accounts receivable, inventory and
equipment.
The new subsidiary primarily will
serve middle-market firms, those with
annual sales of $5 million to $200 mil
lion.
HIRSTEIN
advantage of an opportunity for
growth.”
The subsidiary’s staff includes au
ditors who make quarterly field ex
aminations of the collateral pledged for
loans and monitor inventories and re
ceivables.
Payments the company receives
from its customers go directly to a des
ignated account and are applied to the
outstanding loan, thereby reducing,
the company’s borrowings and interest
expense. The procedure improves the
company’s cash flow because it has ac
cess to funds by borrowing against its
receivables or inventory rather than
waiting for payment from customers.
Services of M ercantile Business
Credit are available to customers of
any of the 33 M ercan tile banks
throughout Missouri. The unit also
will handle referrals from accountants,
attorneys, venture capitalists and
other lending professionals.
WUEST
/T\
Named president of the subsidiary is
Dennis B. Hirstein, who joined Mer
cantile Trust last year, following eight
years with a major commercial-finance
firm. Mr. Hirstein reports to John J.
Wuest, senior vice president/special lending area.
Typical business situations in which
a company might seek asset-based
financing include:
• A period of rapid growth or a prod
uct line with wide seasonal variations
in sales. A consumer-products distrib
utor, for example, might seek financ
ing to stock a new, fast-selling item.
Existing inventory could be pledged as
collateral for the loan needed to ac
quire inventory of the new product.
• A leveraged acquisition. When a
large firm divests a division or sells a
plant that no longer is compatible with
its overall operations, management of
the unit often is its buyer. The financ
ing package might include an assetbased loan using the unit’s equipment,
inventory and accounts receivable as
collateral.
• A company that has stabilized its
turnaround situation but needs an in
fusion of working capital to assure its
upturn.
“Loans made by Mercantile Busi
ness Credit are designed to support a
company’s interim financing needs,
which may not fit conventional finan
cial ratios used in evaluating requests
for long-term loans,’’ Mr. Wuest says.
“The unit also is sensitive to time
pressures that may require that a busi
ness make a decision quickly to take
MID-CONTINENT BANKER for May, 1 9 8 3
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49
P ro d u c tiv ity U p , C u s to m e r G r ip e s D o w n
A s R e su lt o f
N e w E q u ip m e n t in R e se rv e -C a sh A r e a
ETTING fewer people to handle
a larger workload and handle it
well — commonly known as improved
productivity — is a prime objective of
every banker, businessman and indus
trialist in the land, but one that’s often
difficult to achieve.
Among those that have addressed
the issue with striking results is Cleve
land-based AmeriTrust Corp., espe
cially its reserve-cash department and
total-vault operations whose manager,
Vice President Kenneth Otto, is deter
mined to create a profit vs. cost center.
He’s also tuned in to the $5.5 billion
bank’s commitment to build its com
mercial business for continued in
creased revenue by introducing new
and better services to customers.
In June, 1981, a sophisticated coin
wrapping system, consisting of four
high-speed packagers and automatic
takeaway equipm ent from Brandt,
In c., was put into service — to provide
customers an alternative to the in
creased price-per-wrap from Cleve
land’s Federal Reserve Bank. And in
the fall, manual handling of commer
cial deposits was substantially reduced
with the installation of 10 compu
terized cash-settlement systems from
the same manufacturer.
As a result of the reserve-cash de
partment’s new look, says Operations
Analyst Lisa Payne, “Our major objec
tive to increase productivity and de
crease personnel has been reached,
G
Kenneth Otto and Lisa Payne v.p . and op
erations an a ly st, respectively, at A m e ri
Trust, C le v e la n d , have seen increased pro
ductivity and decreased personnel req u ire
m ents in the reserve-cash d ep artm ent be
cause of autom ation.
as reported in a deposit proof-progress
summary to AmeriTrust management
12 months ago. W here it previously
took an average 234 hours per week to
process deposits of major commercial
customers, it now takes 91 hours — a
62% savings in employee time. And
the number of employees required for
all vault operations has dropped from
31.2 to 24.9, or a reduction of 6.3 full
time employees.
In s t a lla t io n of 10
cash-settlem ent sys
tems in the reservecash d epartm ent at
C le v e la n d 's A m e ri
Trust has resulted in
a 6 2 % s a v in g s in
e m p lo y e e
t im e .
Eq u ip m e n t
w as
p u rc h a s e d
fro m
Brandt, W atertow n,
W is.
50
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
“When we decided to go with the
cash-settlement systems,” says Ms.
Payne, “we expected a 17.9% return
with a payback of three to four years.
We re achieving this goal quickly, con
sidering the fewer employees to whom
we must pay salary and benefits.”
With the new equipment in service
“and employees totally comfortable
with it,” says Mr. Otto, “we can now
work hand-in-hand with AmeriTrust’s
marketing department to increase our
commercial business. We can process
our customers’ deposits faster and with
far greater accuracy. Most of them re
ceive an audit the same day. The in
creased speed means the bank gets the
funds to work a day earlier than be
fore.”
Each settlement system includes a
currency counter and a computerized
central control unit (CCU) that totals
checks and other media input and
prints out detailed data on tape for
permanent records — thus eliminating
manual preparation of spread sheets.
Seven of the systems also incorporate
coin sorter/counters for use in serving
customers such as the Ohio Turnpike,
which handles significant amounts of
coin. Three of the 10 CCUs have
optional foodstamp keys to accommo
date A m eriTrust’s several grocery
accounts.
Each system is located in an indi
vidual booth and operated by a single
individual from 8 a.m. to 4:30 p.m.
Deposits collected by an armored
courier the previous day arrive at the
receiving room early in the morning
and bag contents are brought to system
operators for processing.
P reviously, each booth was
equipped with a Shadowgraph scale
for counting strapped items. A single
currency counter was used by all staff
members to verify and strap currency.
Coin was hand-counted; strapped cur
rency was weighed and all loose cur
rency was hand-counted; and coin,
currency, checks and foodstamps were
keyed into adding m achines and
totaled to verify against deposit tick
ets. If totals didn’t verify, money had
to be recounted and totaled, and a deb
it or credit issued.
“The former procedure required a
large staff,” notes Ms. Payne, “and
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hand-counting of items was excep
tionally time-consuming, messy and
error-prone. Currency and coin were
being handled too many times and
balancing took far too many collective
hours.”
“We wanted to try and improve each
person’s job — make it easier, make it
more enjoyable — in order to motivate
our people to perform better,” Mr.
Otto says. “There isn’t much attention
paid to a department like ours that’s
down in the basement and ‘does what
ever it does,’ in the minds of other
bank staff. We wanted our people to be
recognized for their important con
tributions and wanted to show we
cared about them .”
Reserve-cash employees have re
sponded favorably, according to Ms.
Payne, “in both attitude and amount of
work they’re handling. They don’t
complain as they used to, now that
their jobs are so much easier, and
they’re taking pride in the speed and
accuracy of their performance. ”
Furthermore, says Mr. Otto, “Our
service to customers has improved to
the point that I no longer get calls from
customers complaining about this or
that. I haven’t had such a call for many
months now.
“And that,” he adds, “means a much
better, more solid relationship with
accounts that we want to keep and
build on. • •
Teller Performance Issue
Is Competitech's Best Seller
“Teller Performance Management
— the Key to Productivity” has turned
out to be the “best seller” of the first
seven issues of the ABA s Competitech, a monthly series on implem entable banking techniques and
technology.
Other popular issues have included
“Controlling Bankruptcy Losses” and
“One Bank Holding Companies. ” And
demand has been brisk for special
issues dealing with the Garn-St Ger
main Act and withholding regulations.
Annual subscription sales of Competitech have passed the 1,200 mark,
says Larry A. Johns, chairman of the
ABA’s community bankers council,
and president/CEO, Isabella Bank,
Mount Pleasant, Mich.
Forty state bankers associations are
cosponsoring the Competitech pro
gram.
Manny-Hanny Subsidiaries
Announce Name Changes
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52
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Manufacturers Hanover Financial
Services, Inc., is the new name of the
consumer-finance subsidiary of Manu
facturers Hanover Corp. The subsidi
ary had been known as Manufacturers
Hanover Consumer Services.
Several of the subsidiary’s operating
units also have been renamed to reflect
the different markets they serve.
The 40 multi-product offices will
operate under the name Manufactur
ers Hanover Financial Services. They
had been Finance One Financial Cen
ters.
Five industrial banks in Denver will
operate as Manufacturers Hanover In
dustrial Banks. They had been Con
tinental Industrial Banks.
The thrift in Los Angeles will oper
ate as Manufacturers Hanover Finan
cial Center. It had been Finance One
Thrift of California.
The 324 consumer-loan offices in 30
states will continue to operate as F i
nance One offices and the 28 consum
er-loan offices in Puerto Rico and the
Virgin Islands will continue as CommoLoCo.
Five University Professors
Receive Ayres Fellowships
W A SH IN G TO N , D. C. — The
ABA has recognized five university
professors for their educational con
tributions in finance and has awarded
them Ayres Fellowships for the 1983
session of the Stonier Graduate School
of Banking.
The fellowships will provide the col
lege faculty members with the oppor
tunity to acquire practical banking
knowledge that will be useful in de
veloping their teaching techniques.
The fellow ships include tu ition ,
accom m odations and personal ex
penses.
Fellowship recipients are Arlyn R.
Rubash, Bradley University, Peoria,
111.; Robert Schweitzer, University of
Delaware, Newark; James W. Kolari,
Texas A&M University, College Sta
tion; William C. Hunter, Emory Uni
versity, Atlanta; and Ronald W. Spahr,
University of Wyoming, Laramie.
Ayres Fellow ships have b een
awarded for 19 years. They were estab
lished to honor the late Leonard
A yres, vice president/econom ist,
Cleveland Trust, and a member of the
Stonier faculty. Recipients must be in
volved in teaching courses in money
and banking, bank management, cred
it marketing or related topics as ap
plied to financial institutions.
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53
Haig, Nadler and Vanocur Scheduled
To Appear at Illinois Convention
h a i g , form er
U. S. Secretary of State; Sander
Vanocur, chief diplomatic correspon
dent, ABC News, Washington, D. C.,
and Paul Nadler, professor of finance,
Rutgers University Graduate School of
Management, New Brunswick, N. ].,
will be among speakers at the Illinois
Bankers Association’s annual conven
tion June 9-11 at the Chicago Marriott
Hotel.
The convention will begin at 11 a. m.
June 9 with registration and opening of
exhibits. From 2:30-4:30 o’clock that
afternoon there will be four concurrent
workshops. The speaker at the first
workshop will be Royce Brown, prin
cipal, J. D. Carreker & Associates,
Dallas, and the topic will be “Trends in
Depository Services.’
A second workshop will be con
ducted by Robert M. Martindale,
president, Hughes, M artindale &
Associates, Arlington Heights. The
topic will be “Discount Brokerage Ser
vices.’’
On June 10, exhibits and registra
tion will be open from 8 a.m .-6 p.m.,
and opening ceremonies will be held at
8:30 a.m. Keynote speaker that morn
ing will be Roy E. Moor, senior vice
president/ehief econ om ist, F irst
National, Chicago.
Following Dr. Moor will be a report
on “Agriculture to the Year 2000,”
given by Donald Havendick, presi
dent, Federal Interm ediate Credit
Bank, Omaha. Final speaker on the
morning program will be the ABA s
Gerald M. Lowrie, executive director,
government relations group.
A noon reception will be followed by
the Proehnow School of Banking
luncheon. Speaker will be Donald
Bernstein, president, Financial Solu
tions Corp., Oak Brook, 111., whose
topic will be “Asset/Liability Manage
ment — the Concept, the Myth, the
Truth.’
The spouses’ luncheon at the same
time will feature Betsy Aaron, ABC
News “Nightline” correspondent.
Four concurrent workshops also are
planned from 2:30-4:30 p.m. that after
noon.
At 8:30 a.m. June 11, Barry Asmus,
A
54
precede the annual meeting of Illinois
members of the ABA. At 10:30 a.m.,
Mr. Vanocur will appear.
An 11:30 a.m. reception will be held
ahead of the noon luncheon, which will
feature Dr. Nadler as speaker. At 2:15
William J. Hocter, IBA executive vice
president, will give his annual associa
tion report. At 3 o’clock, General Haig
will make his appearance. His career
has included being Secretary of State
under President Ronald Reagan until
resigning last year; supreme allied
com m ander of NATO forces in
Europe, 1974-78; White House chief
of staff under President Richard Nix
on, 1973-74, and brigade commander
in the Vietnam War, 1966-67. A 1947
graduate of W est Point M ilitary
Academy, General Haig now is visiting
statesman/executive, Woodrow W il
son School of Public/International
Affairs, Princeton University, Prince
ton, N. J.
E n terta in m en t. The convention’s
opening reception will be held from
7-10 p.m. June 9 and will feature bigband dance music by Dick Judson and
the Sunshine Brass. A complimentary
reception will be held from 4:30-6
p.m. June 10 in the exhibit area. On
June 11, the 6 o’clock banquet recep
tion will precede the 7 o’clock ban
quet, with entertainment by Danny
Gans and Kathy Lee Johnson. • •
lexan der
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
C arl D . H olm quist has b een
appointed assistant vice president in
charge of development/implementation of an executive/professional divi
sion that will be started later this year
at Heritage County Bank, Blue Island.
He joined the bank in February after
spending 11 years with Chicago’s Con
tinental Bank.
economist, Boise State University in
Idaho, will talk on “The Reagan Rev
olution.” He will be followed by James
G. Cairns Jr., ABA president-elect
designate and presid en t, Peoples
National, Seattle. Mr. Cairns’ talk will
Palos Bank, Palos Heights, has pro
moted Gregory J. Paetow to assistant
vice president/investments. He joined
the bank full time in 1977 after having
worked there part-time while attend
ing high school and college. Mr.
Paetow was named assistant install
ment loan officer/collection manager
in 1981.
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Let’s face i t . . . most correspondent banks offer the same basic types of services:
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guys who make a difference.
Jim Montgomery, Senior Vice President
Nineteen Public Square • Belleville, Illinois 62220
( 618)624-9297
618/234-0020
Bob Heifer, Vice President
( 618)624-9269
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Financial A ffiliate o f ¡ U
MEMBER FDIC
FIRST BANCORP
55
IBA Elects Directors
To Serve During 1983
Lovett, Forster and M cDowell
Are I BA Officers This Year
LOVETT
McDowell
F F IC E R S of the Illinois Bankers
A ssociation are: p resid en t,
Donald R. Lovett, chairman/president, Dixon National; vice president,
James E. Forster, chairman, DeKalb
Bank, and secretary, T. R. McDowell,
president, First National, Westville.
When the IBA meets June 9-11 at
the Chicago Marriott Hotel, it will be
its first convention since the healing of
a split that occurred among the state’s
bankers early in the 1970s. At that
tim e, the Association for Modern
Banking in Illinois (AMBI) was formed
to work for multi-bank HCs in the
state, and many bankers left the IBA to
join AMBI. However, last year, fol
lowing passage of a multi-bank-HC bill
in Illinois, the rift was healed, and
AMBI was merged with the IBA Janu
ary 1.
Under terms of the merger agree
ment, Mr. Lovett serves as association
president the first year, and Charles C.
Wilson, who was AMBI chairman, will
be president the second year. Mr. W il
son is chairman/CEO, First National of
the Quad Cities, Rock Island.
Mr. Lovett worked in banking dur
ing summers, starting in 1950, and
went to work full time in 1955 at
Citizens National, Durham, N. C .,
where he was branch manager. In
1957, he joined Dixon National, be
came assistant cashier in 1960, presi
dent in 1967 and chairman/president
in 1971.
Mr. F orster was an executive with
DeKalb Ag Resources, Inc., in DeKalb 1939-67; owner/operator, Forster
Implement Co., 1967-71, and presi
dent, DeKalb Bank, 1971 to the pres
ent. He also is CEO there.
Mr. M cDowell entered banking in a
training program in 1962 at F irst
National, Danville. From 1964-80, he
was C EO , Sidell State, and, since
1980, has been chairman there. He
also has been with First of Westville
from 1977 to the present, became vice
WILSON
SKOPEC
LUND
FORSTER
O
56
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Federal Reserve Bank of St. Louis
president in 1978 and president/CEO
in 1979. In 1978, he also was named
president, Westbanco, Inc., a onebank HC.
Mr. Wilson joined his bank in 1960
after having been with Chicago’s Con
tinental Illinois National since 1958. At
First National of the Quad Cities, Rock
Island, he was president/CEO, 197582, and chairman, 1978 to the present.
All the above officers are on the
IBA ’s executive com m ittee, as are
Kenneth A. Skopec, who will serve as
association vice president in 1984, and
James Lund, who will be its secretary
then.
Mr. Skopec is president, Mid-City
National, Chicago, which he joined in
1952 as a teller trainee. He was prom
oted to assistant cashier in 1957, assis
tant vice president in 1960, vice presi
dent in 1962 and president/CEO in
1972.
Mr. Lund entered banking in 1963
at Chicago’s Beverly Bank and was
there until 1969, when he joined his
p resen t bank, M atteson -R ich ton
Bank, Matteson. He became president
in 1970 and chairman/CEO in 1980.
Jeffrey W. Taylor has been named
assistant vice president, Main Bank,
Chicago. He had been associate gener
al counsel/loan representative for both
Main Bank and Drovers Bank, Chica
go, members of Cole-Taylor Financial
Group.
Directors elected by the Illinois
Bankers Association for 1983 are;
Region I: David E. Albertson, presi
dent, State National, Evanston; Her
b ert Dolowy, p resid en t, Lincoln
National, Chicago; James Lund, chair
man/president, M atteson -R ichton
Bank, M atteson; Kenneth Scopec,
president, Mid-City National, Chica
go, and Charles Waterman, chairman,
South Holland Trust.
Region II: John Andersen, presi
dent, First National, Lake Forest;
Thomas Bolger, president, McHenry
State; William Gooch Jr., president,
York State, Elmhurst; LeRoy Mattison, executive vice president, Kane
County Bank, Elburn, and George
Metzger, First American Bank, Bensenville.
Region III: Neil Bach, president,
Bank of Pontiac; James Forster, chair
man, DeKalb Bank; Donald Lovett,
chairman/president, Dixon National;
T. R. M cDow ell, president, First
National, Westville, and Charles W il
son, chairman, First National of the
Quad Cities, Rock Island.
R egion IV: James Coultas, chair
man/president, Elliott State, Jackson
ville; John W. Luttrell, president,
First National, Decatur; Warren Mar
tin, president, Capitol Bank, Springfield; Sam Scott, chairman/president,
Scott State, Bethany, and James Winningham , p resid en t, State Bank,
Arthur.
Region V: Thomas Andes, presi
dent, F irst N ational, B e lle v ille ;
Gerald Feezor, president, Peoples
Bank, Alarion; Walter Moehle, presi
dent, Old Exchange National, Okaw-
lllinois E.V.P.
W illia m J. H octer,
e.v.p ., Illinois B an k
e rs
A s s o c ia t io n ,
jo in e d th e IB A in
1 9 7 7 a fte r h a v in g
served e ig h t y e a rs
a s v .p ./ e c o n o m is t
w ith the C le v e la n d
Fed and seven years
w it h th e C h ic a g o
F e d . He h o ld s a
bachelor of science
degree and MBA in
business economics from X a v ie r University,
C in cin n a ti, and a doctorate in business
ad m in istratio n from In d ia n a U niversity,
Bloom ington. He has ta u g h t courses in
"Money and C a p ita l M arkets," "Portfolio
M an ag em ent," "M an ag em ent of Financial
Institutions" and "M an ag e ria l Economics"
at Loyola U niversity G ra d u a te School of
Business and In d ian a's G ra d u a te School of
Business.
MID-CONTINENT BANKER for May, 1 9 8 3
ville; George Ryrie, president, First
National, Alton, and Harlan Yates,
president, Cisne State.
L arg e-ban k category: David Con
nor, president, Commercial National,
Peoria, and from Chicago — Jay Buck,
senior vice president, Northern Trust;
Martin Farmer, First National; W il
liam Plechaty. executive vice president/auditor, C on tin ental Illinois
National, and David W ebber, senior
vice president, Harris Trust.
Eleven Bankers Nominated
For IBA's 50-Year Club
Eleven bankers have been nomi
nated for membership in the Illinois
Bankers Association s 50-Year Club.
They are:
H. D. Ewing, president, Union
National, Macomb; Fred Sack, presi
dent, Manufacturers Bank, Chicago;
H. Earl Morton, chairman, Paloma
Exchange Bank; Lloyd H. Ericson,
chairman, Hancock County National,
Carthage; Haldon Ayars, president,
Ayars State, Moweaqua; Lam bert
Peterson, trust officer, Bank of Gales
burg;
R. W. Schnitzm eyer, president,
Farmers State, Hoffman; Ed Abegg,
vice chairman, and Mary A. Cornwall,
vice president, Illinois National, Rock
ford; Allen B. Stubs, honorary chair
man, American National, Chicago,
and Lloyd H. Johnson, chairman,
Boone State, Belvidere.
TV Star Officiates
joined Drovers Bank in 1941. Ms. Har
dy has held several positions with
Drovers Bank, including correspon
dent bank officer and assistant vice
president.
Bruce W. Taylor has joined Bank of
Yorktown as vice president, commer
cial lending. Most recently, he was
correspondent banking officer, Drov
ers Bank, Chicago. Both banks belong
to Cole-Taylor Financial Group.
O n ly one teller is needed to service both
w alk-u p and drive-up traffic at N ew W in d
sor facility of Farm ers State, A lp h a . Part of
drive-up w in d o w is show n at left in photo.
Ja c k ie C arlso n (r.), custom er, is show n
transacting business w ith teller K ay Sedw ick behind glass-enclosed w in d ow .
Farmers State, Alpha, has opened its
New Windsor facility, thus returning
banking services to New Windsor for
the first time since the 1930s. Sinclair
Services, Ltd., Rockford, provided a
turnkey design/building/equipment
package that features a drive-up facil
ity, vault and community room. The
teller line is fully protected, allowing
the bank to operate for extended hours
with only one teller.
C ontinental Bank, C hicago, has
named these vice presidents: Gerald
B. Moore, bond/treasury services;
Morris Gold, financial services; Fran
cis T. Smith, general banking services;
Thomas W. Cherry, special industries
services; Robert P. Gibbs, Paul R.
Frey, Carl W. Jordan, Mark C. Rohman, James D. Slesser and Susan E.
Spika, U. S. banking services; Mary
Ann King, real estate services; Edward
J. Calkins and Cornelius A. Twomey,
trust/investment services; Myrna K.
Hellerman, corporate personnel ser
vices, and Anthony W. Arredia, John
L. Brecht and Robert E. Kline, operations/management services.
Ina State Closed
Ina State was closed last month by
William C. Harris, commissioner of
banks/trust companies. Mr. Harris
determined the bank to be insolvent
due to excessive loan losses and in
ability to generate sufficient income
to provide adequate capital to assure
safety to depositors.
The FD IC is acting as the bank’s
receiver, and its deposits have been
purchased by First Bank, Mt. Ver
non.
F irst Galesburg National has an
nounced these promotions: to senior
vice president, Donald S. Robinson; to
assistant vice president/manager, in
stallment loan department, James C.
Dunsworth; to assistant vice president/marketing director, G. Shirleen
Hilgenberg; and to assistant vice presi
dents, commercial loan department,
Mark W. Johann and Sandra J. Treash.
$1-Million Mark Noted
Dennis R. Daniels has joined Chica
go’s Harris Bank as vice president,
municipal bond division. He had been
with Van Kampen Merritt, Inc.
Merchandise National, Chicago, has
promoted Roy H. Nelson to vice presi
dent, commercial loan department,
and Larry E. Starzek to vice president/
cashier, operations department.
Chicago TV n ew s anchorm an Fahey Flynn,
a customer of Chicago's Boulevard B ank for
more than 4 0 ye ars, cuts the ribbon at the
n ew ly renovated South B anking C en ter in
the W rigley Building. Pictured (I. to r.) are:
John H a ra h an , v .p .; Richard T. Schroeder,
e .v .p .; Mr. Flynn; C h a rle s Schroeder, ch.,
an d Bruce Bulm er, v.p . A ll teller an d per
sonal-banking transactions are conducted
in the n ew center.
Alfred R. Mueggenborg and Kathleen
T. Hardy have been named vice presi
dents, Drovers Bank, Chicago. In
addition, Mr. Mueggenborg also has
been named to that post at Main Bank
and Bank of Yorktown. All three banks
are m em bers of the C ole-T aylor
Financial Group. Mr. Mueggenborg
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Roger E. Anderson (I. at bottom of stairs),
ch./CEO , Con tin en tal Bank, Ch icag o, pre
sents a check for more than $1 m illion to
Franklin A. Cole, ch., W alter E. Heller Inter
n atio n al Corp., and cam p aig n ch., C ru sad e
of Mercy. The m oney represents total con
tributions to the cam p aig n by the bank's
em ployees, some of w hom line the stair
w a y in this photo. Money pledged in the
ca m p aig n is d istributed throughout the
y e a r to various ag encies. This w a s the first
tim e C o n t in e n t a l B a n k 's e m p lo y e e s
pledged more than $1 m illion.
57
'N e w D ire c tio n s ' Is C o n v e n tio n T h e m e
F o r In d ia n a B a n k e rs Ju n e 1 4 -1 6
EW D IRECTION S will be ex
plored by Indiana bankers at
their annual convention set for June
14-16 at the Fren ch Lick Springs
Hotel.
First event on the June 15 businesssession calendar will be an ABA pre
sentation by C. Robert Brenton, ABA
president-elect, and president, Bren
ton Banks, Des Moines, la. Following
will be the report of the IBA nominat
RANFTL
JONES
ing com m ittee, given by Mark H.
Caress, com m ittee chairm an, and en terta in m en t by the W right
president, First National, CrawfordsBrothers. • •
ville. Election of officers will take place
at that time.
Joseph Bibler to Address
The second half of the program will
Indiana
Convention in June
be in the hands of R. M. Ranftl, corpo
rate director, engineering design man
Joseph W. Bibler, chairman, North
agement, at Hughes Aircraft Co., Eos ern Indiana Bank, Valparaiso, will de
Angeles, whose topic will be “Produc liver the traditional president’s ad
tivity.”
dress during the second general busi
The second day’s general session ness session of the Indiana Bankers
will include a meeting of the Indiana Association convention on Thursday
members of the ABA; the president’s morning, June 16.
address by Joseph W. Bibler, chair
Mr. Bibler was elected IBA presi
man, Northern Indiana Bank, Valpa dent at last year’s convention. Serving
raiso; the annual BankPac information with him as top IBA officers are W il
session; and a talk by Courtney F.
liam H. King, chairm an, Second
Jon es, treasu rer, G eneral Motors
National, Richmond — IBA vice pres
Corp., Detroit.
ident; and James D. Strietelm eier,
After the business sessions, bankers president, Columbus Bank — IBA
will be searching for new directions on treasurer.
the golf links and tennis courts.
Mr. Bibler entered banking in 1951
Convention registration will begin with his present bank, although it was
at 3 p.m. on June 14. Other events set
for that day include a past presidents’
reception and dinner, both in the west
dining room of the hotel.
Activities will begin on June 15 with
an Indiana BankPac breakfast, fol
lowed by the opening of the registra
tion desk, a women’s coffee, the first
general business session, a “Color Me
Beautiful’’ program for spouses, a
women’s singles tennis tournament, a
men’s golf tournament, a women’s
BIBLER
KING
luncheon, a Christmas craft exhibit for
spouses, a tour of the House of Clocks
and the Wednesday evening banquet,
featuring Joe Griffith.
On tap for June 16 are a women’s
golf tournament, a session titled “How
to Be a Wonder Woman,” a putt-putt
tournament, the second general busi
ness session, a cooking demonstration,
a luncheon buffet, a tennis tourna
ment, a women’s bingo party and the
concluding reception and dinner with
N
58
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
then known as Farmers State, Valpa
raiso. He was named executive vice
president in 1966, president in 1970,
CEO in 1976 and chairman in 1981.
He has served the IBA as chairman
of the legislative committee and presi
dent, Region II. He has been a vice
president of the Independent Bankers
Association of Indiana.
Mr. King entered banking in 1958 at
Terre Haute First National. He joined
Second National, Richmond, in 1965
as assistant trust officer. He received
his present title of chairman in 1982.
Mr. Strietelmeier has been in bank
ing since 1959. His first bank was Irwin
Union, Columbus. He moved to his
present bank in 1974 as vice president/
cashier and was named president in
1976.
AFNB Reports Surplus
In Balance of Trade
Third Straight Year
IN D IA N A P O F IS — A m erican
F letch er National has recorded its
third consecutive annual balance-oftrade surplus under internationaltrade transactions supported through
its world banking division.
AFNB supported $226 million in ex
ports from the U. S. to foreign coun
tries in 1982 and supported $146 mil
lion in imports, resulting in an AFNBassisted balance-of-trade surplus of
$80 million for the year.
In 1982, AFNB provided financial
services for Indiana exports totaling
$163 million. Principal export prod
ucts supported were non-electrical
machinery, transportation equipment,
agricultural commodities and live
stock.
Indiana is the nation’s ninth largest
exporting state. More than 800 com
panies and 144,000 jobs depend on In
diana products and services sold over
seas.
Midwest C om m erce Banking C o.,
Elkhart, has elected Thomas M. Payne
senior vice president/corporate bank
ing and David F. White vice president/commercial loan officer. Mr.
Payne has been with the bank since
1973 and was vice president/commercial loans. Mr. White comes to the
bank from Excel Industries, Elkhart.
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59
dent bankers groups and seeking ways
to better our effectiveness,” he con
cluded.
R. T. McNamar, deputy secretary
of the Treasury, asked for better com
munication between the Treasury and
the IBAA. He defended the govern
m ent’s position on withholding by
reinterating that the issue involves the
efficacy and perceived fairness of our
tions in the future by setting thrifts in tax system. He claimed that some 15
N D E P E N D E N T bankers voiced
strong concern about the disorder head-to-head competition with banks. million Americans under-report or fail
He found fault with the Comptroller’s to report interest/dividends and that
ly pace of change being forced on them
by the Reagan Administration during office “that continues to add banks and “if we continue to see the growth of tax
allows nonbanks to become greater evasion, the underground economy
their annual convention late in March.
Members of the Independent Bankers bank competitors. Now life-insurance and phony tax sh elters, then the
Association of America say the Admin companies and securities firms are perception that our system is fair for
istration’s actions threaten the prof finding loopholes through which to those who pay their taxes is gone. And
establish uninsured interstate deposit with it goes our last hope of reasonable
itability and survival of their banks.
taking entities very similar to banks,’’ comprehensive tax reforms and our
Outgoing IBAA President Robert L.
McCormick Jr. recapped the associa he said. “The regulators seem to be system of self assessment. ”
tion’s work with the D ID C , its support saying, Let the market decide the
He asked banker support of in
for favorable bankers bank legislation number of financial supermarkets to creased funding of the International
and its objections to new call-report be established and, if a large number of Monetary Fund. “If there was too
req u irem en ts, n oon -p resen tm en t banks fail as a result, let them fail.’ ”
much international lending in the dec
On the question of loan-loss disclo ade of the ’70s that contributed to to
deadlines on check clearings and
accrual accounting — in addition to an sure, Mr. McCormick reasoned that day’s problems, too little lending in
banks would change their lending poli the ’80s would be disastrous,” he said.
attack on withholding-at-source.
Mr. McCormick, who is president/ cies rather than report loan losses the
He told bankers to expect some
public might not understand. “Banks further degree of deregulation this
C E O , Stillw ater (Okla.) National,
pointed to several accomplishments are supposed to take risks to help bor year or next and warned that members
designed to help IBAA members cope rowers. How come our competitors of the IBAA who simply oppose the
are exempt from such disclosure?”
with changes in bank administration.
Administration’s comprehensive game
Regarding the w ithholding-at- plan and who have no alternatives to
Among these were restructuring the
IBAA’s executive council, expansion of source legislation, he said “the Admin offer Congress when it begins to look
committees, constant review of asso istration is thoroughly confused on this for answers will be left out of the de
ciation bylaws and development of issue and the cost of such an unwise bate. He asked smaller banks to look
new services, including new master provision will be borne by the public. ” for advantages to be gained from bank
He urged his listeners to be thinking HC legislation the Treasury is de
pension and profit-sharing plans, an
expanded risk-management insurance of how each would operate in a com veloping.
program, growing participation in the pletely deregulated industry. “It looks
Senator David L. Boren (D.-Okla.)
IBAA Barclays/Visa travelers-check like the system is to be changed, and won his audience with a rapid-fire
program and the formation of a service the IBAA will be working to make account of the forces in place in
those changes as advantageous as Washington in his remarks about the
corporation.
He decried the Garn-St Germain possible for community banks. Mean national budget.
bill that portends greater concentra while, we ll be improving our rela
The Senate Finance Com m ittee
tion of banking powers in fewer institu tionships with various state indepen member assured the audience that the
fight over repeal of withholding was far
from over and questioned why the gov
ernment can’t match 1099 forms with
income reports.
He seemed to think that Congress
would not penalize bankers for insti
gating public reaction to withholding,
adding that Senator Russell Long (D La.) was adamant in stating that Con
gress would not allow the tax code to
be used against the banking industry.
“But efforts may be made to increase
taxes for the industry,” he allowed.
Richard E. Lyng, deputy secretary
of agriculture, described the paymentin-kind program as an excellent short
term solution to the surplus problem.
He applauded the efforts of every
IBAA officers for 198 3-84 are (from I.) Kenneth A. G uen ther, exec, dir.;
one involved in farm credit for meeting
Robert L. McCormick Jr., im m ed iate past pres.; Paul H. Bringgold, 1st v.p .;
Jam es D. Herrington, pres.; A. J. King, 2nd v .p .; and Ja m e s R. Taylor, treas.
the needs of farm borrowers, adding
that ag banks are to be particularly
Independents Voice Concern
Over Administration Changes
That Threaten Bank Survival
60
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Federal Reserve Bank of St. Louis
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An affiliate of
Bankers Trust Company, New York
commended for deferring interest pay
ments and extending contracts to help
borrowers. “Any farm-loan morator
iums could be devastating to the finan
cial industry,” he said, “but we should
be doing everything we can to help
those farmers we know are capable of
making it through this tim e.”
Moving up to the presidency of the
IBAA was James D. Herrington, ehairman/president, C oldw ater (K an.)
National. Paul H. Bringgold, presi
dent, First National, Cannon Falls,
Minn., became first vice president.
New second vice president is A. J.
King, president, Valley Bank, Kalispell, Mont. James B. Taylor, president/CEO, McKeesport (Pa.) Nation
al, was reelected treasurer.
Course Catalog Issued
A new course catalog of education
al programs has been released by the
Independent Bankers Association of
America (IBAA).
Seminars and workshops spon
sored by the IBAA include a bankexecutive developm ent sem inar,
three workshops on one-bank HCs,
five workshops on spread analysis
and asset/liability management and
10 micro-computer seminars.
T h re e com m od ity -m ark etin g
seminars are co-sponsored with the
Chicago Mercantile Exchange.
Course descriptions, dates, reg
istration fees and attendance limits
are detailed in the eight-page bro
chure.
Free copies are available from
David Jacobson, IBAA, Box 267,
Sauk Centre, MN 56378.
Pitfalls of Retail-Securities Business
Detailed by Management Consulting Firm
ORE THAN 75% of the nation’s And yet this kind of volatility is com
200 largest banks will be in the monplace for the retail-securities mar
retail-securities business by the endket.
of
“Moreover, selling or marketing the
1983, predicts J. Bud Feuchtwanger,
service requires special skills. The dis
p resid en t, Feu ch tw an ger Group,
Inc., a New York City-based manage count business is direct marketing of
ment consulting firm.
an intangible service. . . . Initially, be
Although the retail-securities busi cause of the bank’s name and reputa
ness offers new opportunities for the tion in its marketing area, as well as the
heavy market volume, the inflow of
banking industry to generate profits,
attract new customers and open up business should be good. This flow,
markets, Mr. Feuchtwanger believes however, may hide the weakness of
many bankers may be underestimating marketing efforts and other structural
shortcomings.”
the difficulties involved.
Other potential difficulties cited by
“The ease of entry is seductive, ” he
says. “Clearing and execution firms are Mr. Feuchtwanger include lack of
doing an excellent jo b convincing knowledge about commission rates,
bankers they can become brokers easi problems in integrating the service
ly and quickly. However, signing up into the bank’s mainstream, and the
with a clearing agent, putting an order- fact that few banks have made plans to
entry terminal in an office, hiring a hire and train the right kind of person
broker and running ads will not make a nel.
On the other hand, there are a num
bank a successful long-term discount
broker.
ber of attractions in the brokerage
“The business is more complex than business for banks that are successful
in avoiding the pitfalls. Among them
is usually appreciated,” he warns.
“Long-term success requires a greater are: profitability, new customer pros
in-depth understanding of the broker pects for traditional services, low-cost
age business and the changes that are soliciting of current banking and cred
it-card customers, utilization of the
occu rring than most b rokeragebusiness entrants have exhibited to branch system as an effective market
date.
ing instrument, introducing the bank’s
name into new m arketing areas,
“Very few bankers ever have been
“wholesaling” services to correspond
exposed to a business where revenue
can fluctuate 50% to 100% from day to ent banks and insurance companies at
no incremental cost, opportunities to
day, over several weeks or months.
acquire accounts through purchase of
existing securities firms’ assets and
preventing current customers from
going elsewhere to conduct business.
“In sum,” says Mr. Feuchtwanger,
“the successful bank entrants into the
retail-securities business will be those
that move expeditiously, and also
make sure they really understand the
business. • •
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Federal Reserve Bank of St. Louis
ABA Publishes Sourcebook
The ABA has p u b lish ed the
second and expanded edition of Sta
tistical In fo rm a tio n on th e F in a n cia l
S erv ices I n d u s t ry . Purpose of the
publication is to help bankers keep
abreast of the growth and changes in
the financial-services industry.
The publication focuses on indus
try developments between 1971 and
1981. It specifies data on the growth
of financial institutions and changes
in their products, services and mar
kets during the 10-year period.
MID-CONTINENT BANKER for May, 1 9 8 3
Information on Ratios
Contained in New Book
SH R EW D
B U Y ER S
AUTOM ATE
W ITH
A U TO M ATIC
COIN
W R A P P ER S
“Analyzing R atios: A P ercep tiv e
A pproach,” by Je rry A. Viscione.
Publisher: National Association for
Credit Management, 475 Park Ave.
South, New York, NY 10016. Hard
cover, 124 pages. $14.95.
This book, says the National Asso
ciation for C red it M anagem ent
(NACM), shows how to perform a ratio
analysis, how to construct, apply and
interpret the “right” ratios for any
problems. The result, according to the
NACM, is that bankers will be able to
spot trends and identify areas of
strength and weakness and detect
situations that appear out of line. In
short, says the association, bankers
will gain valuable perceptiveness into
the financial health and future prob
lems of firms they are analyzing.
Author Jerry A. Viscione has classi
fied ratios into four broad categories:
liquidity, financial leverage, efficiency
and profitability, devoting an entire
chapter to each category. Numerous
ratios are listed and described in each
category.
For reference purposes, a glossary
of ratios is included, along with a brief
description of each ratio and a page
reference indicating where it’s cov
ered in the text.
Mr. Viscione is professor of finance
and chairperson/finance department,
Boston College. He has written “Flow
of Funds and Other Financial Con
cepts” and “How to Construct Pro For
ma Statem ents,” both published by
the NACM, and “Financial Analysis:
Principles and Procedures.” He also
coauthored “Cases in Financial Man
agement.”
A U TO M A TIC
Incorporation of MABSCO Video
Services, a videotape rental program,
has been authorized by the MABSCO
administrative committee.
The program will be designed to
augment the present ABA purchase
program and will be patterned after
the successful Nebraska Bankers Asso
ciation videotape library in respect to
enrollment/rental fees and the type
and quality of material available.
The incorporation was completed
last month and the accumulation of a
library is set to begin shortly.
MABSCO Bankers Services, Inc.,
was formed by 13 midwestern state
bankers associations to research and
provide services banks need to com
pete in the marketplace.
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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D ram atic Su ccess of M oney-M arket A cco u n ts
Prom pts Q u e stio n s A bout T h e ir Im p licatio ns
RO W TH of m oney-m arketdeposit accounts (MMDAs) at
banks and thrifts following their intro
duction last December has been well
beyond earlier expectations, says the
economic research division at Con
tinental Bank, Chicago.
Institutions actively marketed the
accounts by offering above-market in
terest rates and success was immedi
ate. The premium offered on the
accounts has narrowed substantially,
but the rate of growth remains quite
strong.
As a result, the level of outstandings
in MMDAs was $267 billion as of
February 16, second-m onth anni
versary of the accounts. This figure is
substantially higher than the $191 bil
lion held by money-market mutual
funds, Continental Bank says.
The fact that the rate for an indi
vidual institution floats on the basis of
its assessment of the cost of other
sources of funds not only will cause a
significant change in the sources and
cost of funds for banks and thrifts, but
also raises the more interesting ques
tion of how it will affect lending and
investment decisions.
Sources o f MMDA Funds. Moneymarket mutual funds have not been
the major source of MMDA deposits,
Continental Bank says, even though
MMDAs were introduced to m eet
com petition from m oney-m arket
funds. Since last December 1 the level
of money-market funds has dropped
by about $40 billion, which accounts
for only about 15% of MMDAs, given
the fact that a portion of the $40 billion
undoubtedly was used for traditional
year-end expenses.
By far the largest amount — about
60% — represents funds shifted from
other deposit accounts, although not
necessarily from within the same in
stitution. The remainder has come
from new savings or from investments
in other financial instruments, such as
government securities, Continental
says.
Commercial banks have attracted
the bulk of MMDAs, amounting to
about $152 billion by early February.
In analyzing the impact of the de
posit shifts into MMDAs at commer
cial banks, several interesting de
velopments surface, Continental says.
One is that the flow of funds from zeroor low-yielding accounts into the new
G
64
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
accounts seem s small. D em anddeposit accounts appeared to be little
affected by the in trod u ction of
MMDAs, given the latter’s limits on
number of withdrawals. However, the
introduction of Super-NOW accounts
in January evidently attracted sus
tained shifts from regular demand de
posits.
Savings accounts (primarily pass
book) at commercial banks fell about
$19 billion between mid-December
and m id -Febru ary. I f the en tire
amount had shifted to MMDAs, it
would have amounted only to about
13% of the total at commercial banks.
It seems likely that such a small shift
from savings accounts reflects the fact
that these deposits have been reduced
consistently over the past few years in
favor of higher-yielding alternatives.
". . . it is likely that banks
and thrifts will attempt to keep
rates on loans to both business
and consumers higher relative
to their overall cost of funds
than they have been in the past
(to compensate for high rates
of money-market funds)/'
Most of the total gain in M M D As has
come from small-denomination time
deposits, which declined by $67 billion
by mid-February at commercial banks
alone. These include the “premium”
rate products such as six-m onth
money-market certificates and other
longer-maturity deposits. The attrac
tion of MMDAs over these deposits in
part reflected the higher rate. But
probably more important was the li
quidity offered, particularly because
investors may be reluctant to lock into
extended maturities at current rates.
Im plications o f the new accounts.
There seems to be little doubt that
MMDAs have eased funding problems
of banks and thrifts. The increase in
MMDAs at S&Ls more than offset
losses in other savings and time de
posits in both December and January,
with the result that net new deposits
received reversed outflows that had
been occurring for much of the past
two years.
The sharp increase in new funds has
allowed commercial banks to further
reduce outstanding CDs, which have
been declining since last August due to
a lower level of loans. However, many
banks feel MMDAs will be a perma
nent substitute for CDs to some ex
tent. Prior to the introduction of
MMDAs, funds drained from bank and
thrift deposits into m oney-market
funds were returned through pur
chases of new CDs.
Some analysts have questioned how
stable MMDAs will be as a source of
funds given their apparent interestsensitivity and the fact that the rate
premium on these accounts already
has been reduced substantially and is
likely to be reduced further, Con
tinental says.
However, there are other benefits
for depositors. Often cited is the fact
that deposits at banks and thrifts are
fully insured up to $100,000, while
money-market funds are not insured.
Probably even more important to con
sumers is the convenience of making
deposits at a local banking office in
stead of using mail or wire transfers.
Moreover, banks are tying their
MMDA accounts to other services.
The biggest advantage to banks and
thrifts is their ability to set a competi
tive rate while money-market funds
pay a rate based on the return offered
by short-term money-market instru
ments.
The more serious question is what
effect the accounts will have on profita
bility, Continental says. Thus far, the
impact has been only minimal at most
banks, in large part because the
growth of these accounts has come pri
marily from other high-yielding de
posits and particularly six-month
money-market instruments. Howev
er, it seems likely that banks’ and
thrifts’ share of total funds in these de
posits will continue to grow substan
tially and will raise their cost of funds
over time, particularly at small institu
tions that have held a substantial
amount of low-rate consumer deposits.
Moreover, given the need to remain
competitive with other money-market
rates, the cost of funds raised through
these accounts will fluctuate more
quickly than on other types of de
posits.
The problem is exacerbated cur
rently by the weakness of businessloan demand, which generally would
MID-CONTINENT BANKER for May, 1 9 8 3
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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65
be a profitable use of the funds. Many
banks that normally might have sold
their excess funds in the fed-funds
market or purchased short-term gov
ernment securities will find these are
not profitable alternatives. As a result,
Continental says, it seems likely that
banks will be forced to consider in
creased activity in the mortgage and
consumer-credit markets or invest in
longer-term securities in order to
obtain yields exceeding the rate paid
on MMDAs. These actions substan
tially increase the risk of a severe
squeeze on profits in a period of rising
interest rates.
Given these concerns, it is likely
that banks and thrifts will attempt to
keep rates on loans to both business
and consumers higher relative to their
overall cost of funds than they have
been in the past. The other alternative
would be to shift to floating rates for
mortgages and consumer loans. • •
SELLIN G M ARKETIN G
Familiar Song Is Theme
For Money-Market Campaign
First Wisconsin-Madison used the
familiar notes of “Bill Bailey’ to lead
into its money-market campaign last
December.
The campaign theme, “Won’t You
Please Come Home,” was introduced
on radio and in newspapers as a teaser.
On the radio the “Bill Bailey” music,
played honky-tonk style, ran with a
voice-over by an actress who special
izes in elderly characters. She read the
theme “please come home” without
identifying the bank.
Print ads employed a group of car
toon characters, each holding suitcases
with out-of-town destination stickers,
and each with a sad face.
Copy for both radio and newspaper
ads was forgiving in nature. It was
understandable that people would
want to “leave town,” but it was “time
to come home.” There was no direct
mention of money-market accounts.
In January, when the reveal portion
of the campaign broke, the “ Bill
Bailey music and the cartoon charac
ters served as the transition elements.
In newspaper ads, the headline
changed to “Come Home to First Wis
consin’s Money-Market Fund and the
cartoon people all had smiles. On TV,
the bank’s spokesm an walked on
screen to the “Bill Bailey” theme,
announced changes in the law that per-
Actor works w ith cartoon character in TV ad
for m oney-m arket accounts for First W is
consin-M adison that utilized "come hom e"
them e.
66
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
mitted the bank to offer money-market
accounts and invited a life-size cartoon
character to “come home to First Wis
consin.”
Impact of the teaser campaign was
immediate and bank officials were
pleased enough to use the cartoon
characters later to help sell moneymarket checking accounts.
Personal Computers
Help Bank Customers
Learn About IRAs
Comerica Inc. has installed Apple
HE personal computers at 64 locations
in the Detroit area to help consumers
understand individual retirem en t
account (IRA) plans. The computers
are programmed to answer general
questions about IRAs, explain their
benefits and enable consumers to de
termine their IRA balances at retire
ment.
“IRAs are confusing to many cus
tomers, says Mark Woods, Comerica
assistant vice president. “Personal
computers make it easy to explain the
differences between various IRA op
tions and select the IRA plan that best
meets the individual’s investm ent
objectives.”
The computer terminals are located
in the lobby of selected Comerica
branch offices and are available for use
on a first-come first-serve basis. In
structions appear on the screen and
lead the user through a series of ques
tions such as:
What are IRAs and what kinds are
there?
What is the maximum I can deposit
in my IRA and how will it grow?
What are three common misconcep
tions about IRAs?
How do I choose the right IRA?
To select a question, the consumer
presses a button on the keyboard and
the answer appears on the screen. The
consumer can have a specific question
answered or can run through the
whole program. The entire process
takes about 10 minutes.
Com erica customer m akes use of IRA com
puter w ith assista n ce of Jo an Suckling,
assistant m anag er. Com puters are a v a il
ab le at 86 branches.
“These computers are so easy to use
most people will be able to sit right
down and use the program,” says Mr.
Woods. Branch-office personnel are
on hand to provide assistance when
needed.
Campaign to Promote
Bank's 'Upbeat' Image
Proves to Be Success
When First National, Ponca City,
Okla., conducted a research study last
fall, results indicated the bank needed
a more “upbeat” image than it had. So
the bank hired a Tulsa advertising
agency, Hinkle Brown Bloyed, In c., to
coordinate an identity/image cam
paign with the bank’s marketing de
partment.
The two-phased campaign began
January 16 and lasted through Febru
ary 11. It included newspaper, radio
and outdoor advertising, point-ofpurchase lobby displays, “Call Me by
My First Name” employee buttons
and employee participation in a teller
contest.
Phase o n e’s o b je ctiv e was to
familiarize community residents with
the bank’s new "advertising” name,
Ponca City First. Actually, its legal
name remains First National Bank &
MID-CONTINENT BANKER for May, 1 9 8 3
Capture the growing
60 + market for your
bank with
Besides being among your bank’s most profitable
accounts, senior citizens are one of its fastest-growing
markets. Fact is, their numbers are growing twice as fast
as the total U.S. population.
So it’s obvious that winning a growing share of this 60+ market is important
to your bank’s long-term success. And that’s precisely what HORIZONS 60™ is
designed to do.
HORIZONS 60 is a complete, ready-made senior citizens program with a
proven record of success in attracting new bank customers and deposits from the
60+ population, as well as strengthening bonds with existing customers in that
age group.
Included are a well-organized travel tour program, quarterly newsletter,
shop-by-mail service, accidental death insurance, car rental and motel discounts,
all necessary advertising materials— in fact, everything you need to make your bank
the market leader in your community. All at a fraction of the cost of developing
it on your own.
And these tangible dollar savings don’t even begin to take into account the
savings in expensive bank management time.
Write or phone us today for full details on HORIZONS 60.™ Sooner or later,
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P.O. Box 3 0 0 6 3 • St. Louis, MO 63119 • (314) 962-9310
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
67
Trust Co. However, as Rex Edger, the
bank’s president/CEO, points out,
. . . We felt a need for a shortened
name.”
He says the shortened name ties in
with Ponca City First’s new ad slogan
— “Serving You Right From the First”
— and reflects the bank’s long-standing
community support through service,
products and involvement in local
activities.
Phase two of the campaign focused
on Ponca City First’s personal-cus
tomer attention. The bank promised to
pay $1 to any customer not recognized
by name by a bank teller while making
a transaction.
“We always have tried to maintain a
first-name basis with our customers,”
explains F o retta Long, marketing
officer. “This phase of our identity/image campaign publicly illustrated how
successfully we have done just that.
“The results were outstanding! Out
of over 17,000 Ponca City First trans
actions in a two-week period, only $1
was paid to a customer not recognized
by name. The teller making that trans
action was a trainee.”
m onarch.
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Study Provides Details of
Middle-Market Demand
For Cash-Mgmt. Services
ATM at Transit Depot
A recent study indicates that more
than half of middle-market corpora
tions surveyed obtain cash-m an
agement services from banks. A signif
icant number of responding corpora
tions use more than one bank for ser
vices and obtain services from out-ofstate banks.
The study was made by Trans DataCorp., Cambridge, Md., to determine
where middle-market corporations are
obtaining cash-management services.
Credit relationships appear to be of
diminishing importance among mid
dle-market corporations in their selec
tion of banks for cash-management ser
vices, Trans Data says. More than 40%
of the corporations surveyed maintain
that cred it relation sh ip s are “ ir
relev ant” in evaluating cash-man
agement services and more than a
third indicate that the relationship is
merely a factor considered.
As credit relationships decrease in
importance, greater emphasis may be
expected to be placed on obtaining feebased services from banks, Trans Data
says. Factors supporting this trend in
clude the increased use of competitive
bidding and an increasing corporate
preference for paying for cash-man
agement services through fees rather
than compensating balances.
In addition to the pricing of cashmanagement services, the study found
that most corporations place a great
deal of emphasis on service quality,
reliability and information timeliness
in selectin g banks for cash-m an
agement services. A major focal point
of com petition among cash-m an
agement-service providers has been
the decreasing importance of the geo
graphic location of the service provid-
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A lam o N atio nal, San Antonio, Tex., has
installed an ATM at a m ass-transit depot.
The MPACT m achine is at a city-operated
park-and-ride facility used by thousands of
dow ntow n workers w ho park their cars at
the depot and ride the bus d ow ntow n.
Workers can use the ATM in the morning to
get cash for the d ay and use it a g a in in the
even in g to replenish their billfolds, the
bank says.
er, especially among larger middlemarket corporations.
Thus, banks can expect heightened
levels of competition from a variety of
players that operate on a national
level.
Competition from nonfinancial in
stitutions is strong. Currently, more
than 80% of the corporations surveyed
that are under $25 million in annual
sales, and almost two-thirds of the
sm aller corporation s, have been
approached by brokerage houses in
the past two years. More than half the
corporations have been approached by
management/consulting firms.
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68
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
MID-CONTINENT BANKER for May, 1 9 8 3
Senate Vote on Withholding Alters Banks' Plans
S THIS issue went to press, the
U. S. Senate had gone on record
favoring repeal of withholding by
overwhelming majority (91-5).
Actually, the chamber voted to de
lay implementation of withholding on
interest/dividends for four years. Even
then, it wouldn’t take effect unless
Congress agreed that taxpayer com
pliance hadn’t reached certain pre
scribed levels.
The Senate action prompted the Illi
nois Bankers Association to cancel a
seminar it had scheduled on the topic
of withholding. Enrollm ent for the
seminar was near 100, according to Jim
Civik, director of communications/
marketing for the IBA. The association
decided to cancel the program rather
than face an expected large number of
cancellations.
The Senate action prompted Secur
ity Bank, Mt. Vernon, 111., to put its
withholding-implementation plans on
indefinite hold, according to Gilbert
E. Coleman, chairman/president. The
bank has spent “a couple of thousands
of dollars” already in implementing
withholding, but it can avoid spending
three or four times that amount if re
peal makes it, Mr. Coleman said.
A
He says his bank is maintaining the
pressure for repeal, and he is advising
his customers to write directly to Pres
an
ident Beagan now, since members of
Congress have indicated they have re
ceived the message from the public
that withholding isn’t popular with
constituents.
In Alabama, Mary George Jordan
Waite, chairman/president, Farmers
& Merchants, Centre, says the bank is
still accepting exemption forms but has
yet to take action to implement with
holding. Mrs. Waite said she was so
confident withholding would be re
pealed that the bank has done little to
prepare for withholding.
She has figured that implementation
would require the services of two addi
tional staff people, but, even with the
increased assistance, the bank would
not have been ready by July 1. Her
bank depends on one of its correspond
ents to provide the service.
I ’ve always though repeal would
happen, so we’ve done nothing to im
plement withholding,” said Lindley
Smith, President, Bank of Tuckerman,
Ark. “If I’m wrong,” he added, “my
bank will have to file for a hardship
deferment of withholding. ”
He said there’s no way the bank’s
computer vendor could be geared up
by July 1.
Irwin Union Bank, Columbus, Ind.,
has pulled back on withholding imple
mentation, according to Karen Coldiron, vice president/operations. The
bank hasn ’t spent a great deal of money
yet on implementation, but it has
printed exemption forms and is using
them. A brochure explaining with
holding to custom ers hasn’t been
printed yet.
The bank’s implementation is pro
vided by Systematics, Inc., software
house in Little Rock. The implementa
tion had been scheduled to be com
plete by May 1, but things are on hold
for now.
Should withholding be deferred,
the bank’s primary savings will be in
freeing personnel now involved with
withholding implementation to do
other work, Ms. Coldiron said.
Implementation has been complete
for some time at Boatmen’s National,
St. Louis, according to Larry D. Bayliss, vice president. The system will be
on a “ready-to-use” basis at the time
withholding becomes a reality, which
is inevitable, Mr. Bayliss said. • •
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MID-CONTINENT BANKER for May, 1 9 8 3
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Federal Reserve Bank of St. Louis
Cummins Branch Offices in your area:
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Cummins Hotline for Factory Branch Office nearest you: 312/635-5499.
69
BANKING WORLD
• Robert E. Mannion has joined the
Washington, D. C., law firm, Caplin &
Drysdale. He formerly was deputy
general counsel, Fed Board of Gov
ernors.
• H. Joe Selby has moved up from
senior deputy comptroller for national
operations, Office of the Comptroller
of the Currency (OCC), Washington,
D. C., to senior deputy comptroller
for bank supervision. He went to the
OCC in 1958. Mr. Selby also has re
ceived the Treasury D epartm ent’s
1982
EEO
A w ard-of-the-Y ear.
According to departm ent officials,
“Mr. Selby’s outstanding contribu
tions to the C om p troller’s equalem ploym ent-opportunity program
and his personal commitment to equal
ity for all individuals’’ prompted his
selection. His former post of senior
deputy comptroller for national opera
tions has gone to Michael A. Mancusi,
Roger Lyon Dies
Roger A. Lyon, 55, died of cancer
April 16, following a two-year ill
n ess. He was ch ./ C E O , V alley
National Bank of Arizona and its par
ent HC, Valley National Corp., both
of Phoenix.
who had been deputy comptroller for
the OCC’s central district.
• William E, Martin has resigned as
deputy comptroller for multinational
banking, Office of the Comptroller of
the Currency, Washington, D. C., to
becom e executive vice president,
Nevada National, Reno. He had been
with the OCC since 1964.
• Suzanne Franklin has been pro
moted from associate national bank ex
aminer to national bank examiner,
Office of the Comptroller of the Cur
rency. She remains headquartered in
St. Louis.
• Bruce K. Nichols has been pro
moted to senior vice president in
charge of the newly formed midwestern group of Bankers Trust of New
York City’s world corporate depart
ment. Based in Chicago, Mr. Nichols
is responsible for the bank’s business
with major corporations and financial
institutions in 10 midwestern states.
He joined the bank in 1963 and estab
lished Bankers Trust’s Chicago repre
sentative office in 1974.
• Jack E, Edgington, deputy to the
chairm an, adm inistration, F D IC ,
Washington, D. C ., retired April 1
In d e x to A d v e r t is e r s
Mr. Lyon, who was ABA treasur
er, 1975-77, entered banking in 1950
at the former Chase National (now
Chase Manhattan), New York City,
as a member of the head-office train
ing force. Later, he was in the cor
respondent-bank portfolio-review
division and the investment/financial planning departments. In 1972,
he became e.v.p. in charge of the
institutional banking department,
which included responsibility for
correspond ent-banking relatio n
ships.
In 1976, Mr. Lyon w ent to
Phoenix as Valley National Bank’s
pres. In 1981, when Valley National
Corp. was formed, he also served as
its pres. Last September 1, he was
made ch./CEO of the bank and HC.
He was 1982-83 president, Arizo
na Bankers Association.
70
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Federal Reserve Bank of St. Louis
•
American Bank Directory ............................. S/35
American Fletcher National Bank,
Indianapolis ............................................... 59
Andersen & Co., Arthur .................................. 46
Arrow Business Services, Inc......................... S /ll
Associates Commercial Corp............................. 21
Bank Board Letter ...................... 43, 44, 45, S/5
Bank Building Corp.......................................... 71
Banker Personnel Service ............................... S/4
Bankers Trust Co.............................................. 61
Boatmen’s National Bank, St. Louis ............... 72
Bunce Corp................................................... S/14
Centerre Bank, St. Louis ................................ 45
Central Bank of the South, Birmingham .......... 41
Central Trust Bank, Jefferson City ............... S/12
Cirrus Systems, Inc.......................................... 33
Cole-Taylor Financial Group........................ 34-35
College for Financial Planning......................... 51
Commerce Bank, Kansas City ......................... 3
Commercial National Bank, Kansas City, Kan. S/23
Continental Bank, Chicago............................... 37
County Tower Bancshares, Clayton ............... S/17
Cummins-Allison Corp...................................... 69
Deposit Guaranty National Bank, Jackson ....... 43
Downey Co., C. L.............................................. 63
Dunhill of Phoenix, Inc..................................... 48
Financial Insurance Service, Inc....................... 53
Financial Placements ..................................... 12
First Alabama Bank, Montgomery................. S/33
First National Bank, Belleville, III ................... 55
First National Bank, Kansas City .................... 35
First National Bank, St. Charles, Mo.............. S/20
First National Bank, St. Joseph, Mo............... S/21
First National Bank & Trust Co., Joplin, Mo.
S/16
First National Bank of Commerce, New Orleans S/l
First Oklahoma Bancorp, Oklahoma City ....... S/31
Franklinton Financial Services ................... 38-39
Golston Co....................................................... 68
and has been succeeded by Margaret
L. Egginton. She was deputy to the
chairman, public affairs. Mr. Edgington joined the FD IC in 1954 and Ms.
Egginton in 1980. Atone time, she was
with First Kentucky National Corp.,
Louisville.
• Mercantile Trust, St. Louis, is phas
ing out its 18-month-old Edge Act
office in New York City. According to
President Neal J. Farrell, changes in
both federal-banking legislation and
the international economy that oc
curred since the branch’s opening
have greatly reduced advantages of the
office to the bank and its domestic cus
tomers. The latter will continue to be
served by Mercantile’s international
department in St. Louis.
• William M. Issac, FD IC chairman,
also has b een e lecte d chairm an,
Federal Financial Institutions E x
amination Council, created under the
Financial Institutions Regulatory and
Interest Rate Control Act of 1978. It is
composed of heads of the Federal
Home Loan Bank Board, National
Credit Union Administration, Office of
the Com ptroller of the C urrency,
FD IC and a member of the Federal
Reserve Board.
FI B E Bank Facilities Corp.......................... 28-29
Flagan & Associates, Tom .............................. 17
Hattier, Sanford & Reynoir ............................. S/4
Florizons 60 ................................................... 67
Flutchinson National Bank & Trust Co............ S/29
IAC Group ...................................................... 23
Industrial Life Insurance Co.............................. 52
Kansas State Bank & Trust Co., Wichita ....... S/25
Laacke & Joys ............................................... 42
Liberty National Bank & Trust Co.,
Oklahoma City ............................................ 2
Media Management & Magnetics Inc................. 62
Memphis Bank & Trust Co............................... S/7
Mercantile Bancorp, St. Louis......................... 39
Missouri Encom, Inc...................................... S/21
Monarch Graphics .......................................... 68
Monteleone, The ............................................ 33
National Boulevard Bank, Chicago ................... 37
North Central Life Insurance Co........................ 2
Penquite & Associates, Inc............................... 16
Rothschild, Unterberg, Towbin, L. F................. 15
St. Johns Bank & Trust Co............................. S /l9
Schooler & Associates, Don ......................... S/18
Security State Bank, Great Bend, Kan............ S/26
Signmaster Corp............................................ S/30
Son Corp.......................................................... 52
Southwest National Bank, Wichita ............... S/28
Springfield Marine Bank.................................. 7
Stern Brothers & Co....................................... S/16
Stifel, Nicholas & Co., Inc............................. S/27
Struven, Inc., G. Carlyle.................................. 65
Third National Bank, Nashville ...................... S/9
Thunderbird Education & Training Div............... 49
Travelers Express............................................ 41
Union National Bank, Little Rock.................... 10
Union Planters National Bank, Memphis ........ 27
USLife Corp.....................................................
5
Visual Control Systems, Inc.............................. 22
Whitney National Bank, New Orleans .............. S/3
Zahner & Co.................................................. S/18
MID-CONTINENT BANKER for May, 1 9 8 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Meeting T he Needs Of T he
C ommunity Y ou S erve ...
Historically. Banks have enjoyed a
special relationship with their
communities. Their function has
always been closely tied to the needs
of people. Those they serve... and
those who serve them.
It’s a relationship we understand and
respect. We share with our clients
the desire to match an image of
success and stability ... with a com
munity lifestyle.
Our mutual goal is to create a climate
of performance. A confident, con
venient, inviting environment for cus
tomers. A comfortable, productive
At Bank Building Corporation, you’ll
find a team of dedicated profes
sionals who are committed to help
you meet the needs of your organi
zation . . . your people ... and the
community you serve ...
B Y D ESIGN
For information call Tom Spalding.
80 0 -3 2 5 -9 5 7 3
Bank Building Corporation
1130 Hampton Avenue
St. Louis, MO 63139
M e e tin g th e n e e d s
o f t h e c o m m u n ity
y o u s e rv e . .. by d esign.
9.
Bank Building
Corporation
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
@FedFRASER