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MID-CONTINENT BANKER
MAY, 1984
SOUTHERN EDITION
HUMAN
RESOURCES
ISSUE
Commercial-Lender Demand Remains High at Banks . . . Page 8
Deferred-Fee Plans Address Director Concerns . . Page 18
Management Training Boosts P roductivity........ Page 22
Personnel-Function Analysis Can Help a Bank Page 47
State
C o n ven tio n
Preview s
NEW M E X IC O .......... Page 29
M IS S O U R I............. . Page 38
I N D I A N A ___ . . . ____ Page 44
TEN N ESSEE ............... Page S/3
M ISSISSIPPI ............... Page S/6
IL L IN O IS ..................... Page 52
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Arthur O rtiz
New Mexico BA
Pres.
George R. Curry
Missouri BA Pres.
J. H. Shelton
Tennessee BA Pres
f
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Federal Reserve Bank of St. Louis
SAFEWAY
C H E q g g ä R D
Transfund
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Federal Savings and Loan
Association, ChecOKard and
TransFund will offer this new level
of banking convenience at over
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City and Tulsa. So now, with
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Soon, Safeway will be a part of
the largest shared network of
off-premise electronic banking
services in Oklahoma City, Tulsa
and later, statewide.
So why shop around? Call Liberty
...we have electronic banking
convenience in store for
your customers.
Middle America is moving
...Liberty is leading the way.
LIBERTY
THE BANK OF MID-AMERICA
Liberty National Bank and Trust Company
P.O. Box 25848 • Oklahoma City, Oklahoma 73125
405/231-6807 • Member FDIC
You c a n t co m p ete in today's tough financial
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bilities to meet your
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That means larger data storage, communication with
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And, the System 2000 gives you extra power, with
user memory that’s expandable up to 896KB. What’s
more, it’s based on the new 80186 microprocessor
from Intel, making it one of the fastest 16-bit systems
around.
Plus, it comes with the most popular operating
systems, MS-DOS and CP/M-86.® And application
packages which provide an entire library of software to
help you take on today’s tough competition.
Now, as great as this may sound, there’s more!
Monroe gives you service and support direct from over
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For more information, call 800-526-7843 ext. 444
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The Monroe System 2000. It’s nice to know
there’s a microcomputer that will cure your bank’s
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a MONROE SYSTEMS FOR BUSINESS
Forleaders,not followers.
MS is a tra d e m a rk of M icro so ft C o rp o ra tio n . CP/M -86 is a re g is te re d tradem ark of D ig ita l R esearch, Inc. Monroe System 2000 is a tradem ark of L itto n B usiness System s, Inc. © 1984 L itto n Business System s, Inc.
MID-CONTINENT BANKER for May, 1984
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
CONVENTION
CALENDAR
MID-CONTINENT RANKER
(Incorporating M ID-W ESTERN BANKER)
M ay 16-19: In d e p e n d e n t Bankers
Association of America, Sem inar/
W orkship on th e O ne Bank H o ld
ing Com pany, San Antonio, Tex.,
H otel St. A nthony.
May 16-19: A m erican Safe D eposit
A ssociation N ational E ducation
C onference, Dallas.
M ay 17-20: M ississip p i B ankers
Association A nnual C onvention,
Biloxi, B ro a d w a te r/H ilto n H o
tels.
M ay 20-23: T e n n e s s e e B an k ers
Association A nnual C onvention,
Knoxville, H yatt Regency.
M ay 22-24: M issouri Bankers Asso
ciation Annual C onvention, K an
sas City, H yatt Regency.
M ay 23-25: Bank A dm in istratio n
In stitu te Bank Tax C onference,
Boston, Sheraton H otel.
Ju n e 2-6: N ational AIB L e a d e rs’
C onference, A tlanta, H yatt R e
gency Atlanta.
Ju n e 3-15: Stonier G raduate School
o f B a n k in g , N ew B ru n sw ic k ,
N .J., R utgers U niversity.
Ju n e 4-7: ABA R isk/Insurance M an
a g e m e n t in B anking S em inar,
A rlington, Va., H y att R egency
C rystal City.
Ju n e 9-15: ABA T rust M anagem ent
School, E v an sto n , 111., N o rth
w estern U niversity.
Ju n e 10-13: Bank A dm inistration
In stitu te Strategic Planning C on
ference, Chicago, H yatt R egen
cy.
J u n e 11-12: M in n e so ta B ankers
Association Annual C onvention,
St. Paul, Radisson H otel.
J u n e 11-13: W isco n sin B an k ers
Association Annual C onvention,
M ilw aukee, H yatt Regency.
June 12-14: Indiana Bankers Asso
ciation Annual C onvention, In d i
anapolis, H yatt Regency.
Ju n e 13-15: Illinois Bankers Asso
c ia tio n A n n u a l C o n v e n tio n ,
Peoria, P ere M arq u ette H otel.
Ju n e 15-18: N ew Mexico Bankers
Association A nnual C onvention,
A lbuquerque, H ilton Inn.
J u n e 19-23: M ic h ig a n B a n k e rs
Association A nnual C onvention,
M ackinac Island, G rand H otel.
Ju n e 20-22: A ssociation o f Bank
H o ld in g C o m p a n ie s A n n u a l
M eeting, N ew port, R .I., S h er
aton Islander.
4
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Federal Reserve Bank of St. Louis
IN T H IS IS S U E
Volum e 80, No. 5
M ay, 1984
8 M O S T -W A N T E D B A N K E R S , ‘H O T S P O T S ’
Human-resources survey o f 1984
18 D I R E C T O R S ’ D E F E R R E D - F E E P L A N S
Address concerns about taxes, inflation
22 D I M E N S IO N A L M A N A G E M E N T T R A IN IN G
Deals with behavioral situations
24 U N D E R S T A N D IN G A D U L T L E A R N E R S
It’s first step in training employees
32 N E W S O F B A N K S , B A N K E R S
Promotions, reorganizations reported
47 S U R V IV A L P L A N F O R B A N K S
Should include personnel-function analysis
49 ‘F I G H T I N G S P IR IT ’ S T R E S S E D BY I N D E P E N D E N T S
A t their annual convention in New Orleans
66 T H E R A C E R ’S E D G E
Budgeting coupled with optimization
70 T H E B A N K IN G S C E N E
Innovations in banking education
M itF C o i^ ^
Ralph B. Cox
Publisher
Lawrence W. Colbert
Vice President, Advertising
Rosemary McKelvey
Editor
Jim Fabian
Senior Editor
John L. Cleveland
Assistant to the Publisher
M id-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.
POSTMASTER: Send address changes to MID
CONTINENT BANKER at 408 Olive St., St.
Louis, MO 63102.
Printed by The Ovid Bell Press, Inc., Fulton,
Mo. Second-class 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.
Commerce Publications: American Agent &
Broker, Club Management, Decor, Life Insur
ance Selling, Mid-Continent Banker and The
Bank Board Letter.
Officers: Donald H. Clark, chairman emeritus,
Wesley H. Clark, president and chief executive
officer; James T. Poor, executive vice president
and secretary; Ralph B. Cox, first vice president
and treasurer; Bernard A. Beggan, David A.
Baetz, Lawrence W. Colbert and William M.
Humberg, vice presidents.
MID-CONTINENT BANKER for May, 1 9 8 4
BANK SERVICE
We can help
your bond portfolio
work in concert
wim your
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IllSl -;'if
fiiftli
11
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a service of L. F. Rothschild,
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We assign a team of experts
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together. We review your rate sen
sitive assets and liabilities, your tax
situation, your overall rate struc
ture—everything that effects per
formance. We probe the ways all
these activities are contributing
(or failing to contribute) to your
bank's overall goals.
Then we come back to
you with an objective, thirdparty recommendation.
It demonstrates steps
that can strike a chord
$
between your banking o bjec
tives and bond portfolio.
For example, we might
show you how to reduce your
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to gain some tax advantages
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We also offer two other inno
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Our Portfolio Managers System
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BANK SERVICE'S®
total orchestration of
bond portfolios with banking
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that's why the substantial majority
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To learn how we can be instru
mental in improving your bank's
position call Stephen H. Kovacs,
Special Limited Partner, BANK
SERVICE® at (212) 425-3300, or
write to 55 Water Street, New York,
NY 10041. Because it's time your
bond portfolio worked in concert
with your banking activities.
IB
L. E ROTHSCHILD, UNTERBERG, TOWBIN
BANK SERVICE
We help orchestrate banking success.
MID-CONTINENT BANKER for May, 198 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
5
COMPETITION
Sears Subsidiary Seeks 'M ature M arket'
T
H E “M A TU RE” segm ent of th e
population long has b een im por
tan t to com m ercial banks. This can
seen in th e various “packages” banks
offer those over, say, 55 or 60 — pack
ag es th a t c o n ta in f r e e c h e c k in g
accounts, free in v estm en t advice, sp e
cial trip s and e n te rta in m e n t. Now,
nonbank com petitors also are realizing
th e value of this group of people. F or
instance, a m em b er of th e Sears “fami
ly of com panies” recently announced
creation of an organization called M a
tu re O utlook for those 55 and over.
M atu re O utlook is d esig n ed as a
m arket-segm entation strategy th at All
state E n terp rises H oldings, Inc., b e
lieves will b enefit four Sears business
groups, including Allstate Insurance,
D ean W itter Financial Services, Coldw ell B anker Real E sta te and Sears
M erchandise.
“Purpose of M ature O utlook is to
create a g re a te r affinity of this age
group to th e Sears family of com panies
For faster
service on
BANK
CREDIT
INSURANCE
CALL THESE SPECIALISTS
Harold E. Ball • Carl W. Buttenschon
John E. King • M ilto n G. Scarbrough
1 800 527-5511
-
-
Foster (Horsey) Latimer
Missouri General Agent
INDUSTRIAL
LIFE INSURANCE COMPANY
P.0. Box 220998, Dallas, Texas 75222
6
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Federal Reserve Bank of St. Louis
"Purpose of Mature Out
look is to create a greater
affinity of this age group (55
and over) to the Sears family of
com panies and to develop
marketing opportunities for all
of its business groups." — W il
liam R. Strauss, executive
director, Mature Outlook.
be
h e a lth in su ra n c e /M e d ic are guides.
O th er benefits include hom e evalua
tions from Coldwell Banker, low-cost
film developing and discounts from
H ertz U sed C ar Sales.
“ T h e 5 5 -a n d -o v e r m a r k e t,” M r.
Strauss p oints out, “is a large and
grow ing segm ent of th e population.
O ne-third of all consum er households
(28 million) in the U. S. are head ed by
a p e rs o n 55 o r o v e r. T h is g ro u p
accounts for $400 billion of annual p e r
sonal incom e in the U. S .” • •
Credit-U nion Membership
Pondered For Elderly
and to develop m arketing op p o rtu n i
ties for all of its business groups, ” says
W illiam R. Strauss, M ature O utlook
executive director.
A newly form ed firm, M ature O u t
look, In c., adm inisters and services
this new organization. M ature O u t
look, Inc., is a subsidiary of Allstate
E n terp rises H oldings, Inc., which, in
tu rn , is ow ned by Sears, Roebuck &
Co. and is serviced by Allstate In su r
an ce G ro u p .
Anyone 55 years old and older is
eligible to join. M ature O utlook offers
sev eral services and b en efits to its
m em bers for a $7.50 annual fee. Some
of those benefits include a quarterly
m agazine called Mature Outlook and
several issues of a n ew sletter of the
sam e nam e. Each of the publications
contains inform ative articles on how
M ature O utlook m em bers, including
those considering retirem en t, can get
m ore out of life.
O th e r m em bership benefits include
leisure/travel inform ation and tips on
w hich hotels, restaurants and o th er
services offer discounts to people 55
and older. M em bers also are offered
auto-safety checks at Sears A utom otive
centers and are eligible to join Allstate
M otor Club at discount rates.
M ature Outlook provides financial
tip s , in c lu d in g fre e in v e s tm e n tportfolio evaluations by D ean W itter,
in fo rm a tio n on A llsta te ’s lifetim eincom e IRA plans and o ther invest
m en t services.
In addition, m em bers receive in
form ation about special Allstate dis
counts on auto/hom e ow ners’ in su r
ance, travel-accident protection and
The National C red it U nion A dm in
istration (NCUA) is expected to decide
soon w h eth er it will allow the nation’s
retirees to join any nearby credit u n
ion.
U n d er p re se n t regulations, credit
unions are lim ited to offering th eir ser
vices to individuals linked by some
“com m on b o n d ” of em ploym ent, asso
ciation or location.
T he NCUA is expected to vote on
th e p ro p o sal follow ing a c o m m en t
period that en d ed April 30 and after
the agency has exam ined a study on
th e topic now being com piled.
T he proposal appears to coincide
w ith the N C U A ’s chartering and ex
pansion policies. Last year the agency
sought com m ents on a sim ilar proposal
that left unclear w h eth er credit union
service w ould be extended to all re
tired persons or only to those w ith
prior credit union m em bership. The
new proposal is ex p ected to clarify
w hich retirees should be eligible for
th e service.
The NCUA says a m ajority of com
m ents are in favor of extending credit
union services to retirees. Proponents
state that m any retirees cannot obtain
credit union service because they have
m oved from th e area w here they once
w ere em ployed, breaking th e ir com
m on bond status.
• D oyle L. A rnold, sen io r d e p u ty
com ptroller for policy and planning at
th e Office of the C om ptroller of the
C u rren cy , W ashington, D. C ., has
re sig n e d to b eco m e affiliated w ith
W ells Fargo Bank, San Francisco. H e
joined the O CC in 1982, following ser
vice as executive assistant to th e d e p u
ty secretary of the Treasury.
MID-CONTINENT BANKER for May, 19 8 4
J. Michael Collins, Asst, vice-president
Chippewa Bank, St. Louis, MO
"The Horizons 60 program has enabled
us to attract and retain an ever-growing
share of the senior citizens market."
"With the help of the HORIZONS 6 0 staff," adds Mr. Collins, "we're able
to successfully com pete with larger, m ore m anpower-intense senior citizens
programs of other banks, at a fraction of the cost. Our experience at
Chippewa Bank has definitely been positive."
Chippewa Bank is one of the many banks across the country that are
successfully using HORIZONS 6 0 to capture the fast-growing and
profitable 6 0 + market.
A com plete, ready-to-use, proven senior citizens program, HORIZONS 6 0
includes a well-organized travel tour system, quarterly newsletter, accidental
death insurance, optional m edicare insurance supplem ent, all necessary
advertising m aterials-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 consider the savings in expensive
bank m anagem ent time.
Write or phone us today for full details on HORIZONS 6 0 . Sooner or
later one bank in your com m unity is going to capture the major share of
the 6 0 + market. Shouldn't it be yours?
MID-CONTINENT BANKER for May, 198 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
7
Most-Wanted Bankers,
Banking's 'Hot Spots'
Revealed in Survey
N th e M ay, 1983, issue of M i d C o n t in e n t B a n k e r , an article on
results of a survey of executive-search
firms show ed that experienced com
m ercial lenders w ere th e m ost soughtafter category by com m ercial banks.
W e hate to sound like a broken record,
b u t th e 1984 su rv ey of ex e c u tiv e search — or “h e a d h u n te r” — firms
again shows com m ercial lenders to be
most in dem and.
T he annual hum an-resources survey
req u ested com m ents from these com
panies on several areas besides p erso n
nel categories, such as geographical
“hot sp o ts,’ salaries, fringe benefits
and hiring rate.
Commercial Lending. T h e re is a
c o n tin u in g n e e d fo r c o m m e r c ia l
lending officers th ro u g h o u t th e MidC o n tin e n t a re a , a c c o rd in g to Bill
D o h e r ty , b a n k staffin g sp e c ia lis t,
C a m e ro n & M e r r ill B an k S e a rc h
G roup, O lathe, Kan. R equests for his
firm ’s assistance are com ing from all
sizes of banks — small, m edium and
large.
“Personally,’ continues Mr. D o h er
ty, “I thought th e re w ould be a decline
in the need for com m ercial-loan offi
cers because of th e various acquisitions
a n d m e r g e r s b e in g c o m p le te d in
almost ‘Pac-M an’-like fashion by some
of the larger banks and H Cs. H ow ev
er, instead of a decline, I was p leasant
ly surprised to see an increase in e m
ploym ent opportunities. It appears the
tren d has b een for acquiring banks to
be aggressive in th e ir new trade areas
by actively seeking new depositors and
loan c o m m itm e n ts . B ased on th is
aggressiveness, they actually have c re
a te d a n e e d for additio n al officers,
mostly officers w ith five or m ore years
experience dealing m ainly w ith m id
dle-m arket accounts. The need is well
known by officers who fall into this
category and affords them th e oppor-
8
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Federal Reserve Bank of St. Louis
tu n ity to be som ew hat selective as to
th eir geographic preference and also as
to th eir salary/fringe-benefit re q u ire
m e n ts.”
This opinion is b orne out by Vernon
H. M cK inley, fin an cial-in stitu tio n s
c o n s u lta n t, P ro fessio n al P e rso n n e l
C onsultants, Inc., Southfield, M ich.:
“Now that th e econom y has im proved
and deregulation has becom e an im
p o r ta n t c o m p e titiv e facto r, b an k s
seem to have re-evaluated th eir longrange planning and req u ire strong, ex
perien ced m iddle-m arket com m ercial
lenders. T he heavy em phasis is being
placed not ju st on formal credit train-
Interesting Sideline
Regency Recruiters, Inc., Kansas
City, has an interesting sideline, as
reported by Carol Park, banking
specialist there. It is obtaining livein domestic help for trust clients,
hired via trust officers of the firm’s
client banks.
While domestic help never has
been an area her firm has worked,
says Ms. Park, it is aware of an everincreasing need for live-in servants/
com panions for w ealthy people
whose only alternative would be a
retirement or nursing home. Those
mentally and/or physically healthy
don’t consider these as alternatives,
continues Ms. Park, and they want
to stay in their own homes.
As an agency, she points out, Re
gency Recruiters does this as an
additional service to a bank and
works only through that bank in
locating the proper person or per
sons. W hile “ m aid -an d -b u tler”
placements were not an area of ex
pansion her firm anticipated, it has
been able to fill this role successfully
for its bank clients and wants to be
come aware of any additional areas
where it can be of service to its pri
mary client, the bank.
ing, b ut also on a strong personality
an d p o lish e d p a v e m e n t-p o u n d in g ’
capabilities.”
“ D uring the last six m onths of 1983
and the first q u arter of 1984, ” says L in
da Blue Sm ith, p resid en t, Tom Hagan
& Associates, N orth Kansas City, “the
m arketplace has shown an increased
in te r e s t in re a l-e s ta te -lo a n /s e n io ragricultural-loan personnel. C om m er
cial lenders in th e m iddle- to seniorm a n a g e m e n t le v e ls an d “ p r o v e d ”
a d m in istra tiv e officers c o n tin u e to
hold a lead in th e dem and category.”
Ms. Blue adds that consum er-loan
o ffie e r/ju n io r a g ri-lo a n and e n try level-m anagem ent positions still are
soft areas.
“T here still is a big dem and for com
m ercial le n d e r s ,” says C arol Park,
banking specialist, Regency R ecruit
ers, Inc., Kansas City, “b ut a category
even higher in dem and is the com m er
cial-construction len d er whose aver
age loan is approxim ately $3 million in
size.”
Ms. Park points out that ag lenders
for sm aller country banks also are in
dem and. She adds that w orkout ex
perience is im portant, and this is re
lated directly to econom ic problem s
farm ers are experiencing.
A third area Ms. Park sees a need for
is trust (prim arily personal-trust ad
m inistration).
In addition, she says, th ere always
will be a dem and for C E O s, and the
biggest activity she is seeing is in the
$15-m illion to $50-m illion privately
ow ned banks.
A lthough John S. D ean, banking/
financial recru itin g , S-H-S In te rn a
tional of W heaton, Inc., W heaton, 111.,
agrees that com m ercial lenders con
tinue to hold a lead in nu m b er of job
openings, he sees an increasing d e
m and for skilled real-estate lenders to
re-staff departm ents that had becom e
^CONTINENT BANKER for May, 19 8 4
short-handed the past few years.
“ S tro n g c o m p e titio n for e x p e ri
e n c e d re a l-e s ta te le n d e r s ,” h e ex
p lain s, “ is co m in g from re n a s c e n t
S&Ls and from syndicators p u ttin g
to g eth er tax-shelter packages. Sophis
ticated tru st-in v estm en t officers c u r
rently rep re se n t one of the highestpriced specialties, although a com par
atively small segm ent of th e m arket by
n u m b e rs.”
D em and-type positions m ost sought
after by clients of D unhill of Phoenix,
In c ., are, acco rd in g to D o n ald N.
H anak, C P C , p re sid e n t/c h ie f h e a d
hunter: 1. Loan w orkout/loan review /
credit officers — b ecause of th e F D IC
and F ed p u ttin g som e banks on th eir
“watch lists” regarding quality of those
b an k s’ loans. 2. C o n stru ctio n /m o rtgage lenders — because of th e increase
in bo th com m ercial and resid en tial
construction. 3. C om m ercial lenders
— because of th e positive econom y
and the fact th at businesses during the
past couple of years w ere in a survival
m ode, b u t now are looking at grow th,
and, finally, because S&Ls have re
cruited heavily in this area due to d e
regulation.
Ray E . M ak alo u s also says th e
strongest dem and continues to be for
experienced com m ercial lenders, p a r
ticularly those w ith form al cred it tra in
ing. H ow ever, Mr. Makalous, p artn er,
Accounting & Financial C areers, Inc.,
O verland Park, Kan., sees an increase
in dem an d for g eneral m anagers in
C E O and e x e c u tiv e -v ic e -p re s id e n t
positions. H e attrib u tes this to a com
b in a tio n o f th e m a n y o w n e r s h ip
changes in banks and large n u m b er of
problem banks. H e also sees an in
crease in m ortgage lending and th e b e
ginning of a strong in terest in businessd e v e lo p m e n t e x p e rtis e an d in th e
general m arketing area.
V ernon H. M cKinley of Professional
Personnel C onsultants says productd ev elo p m e n t and strategic-planning
professionals are being considered and
should be in dem and as new financial
interm ediaries e n te r the com petitive
m arketplace.
“Hot S p o t s T he Sun Belt area, as it
was last year, still is a top destination
for relocating bankers, m ost of th e re
sponding h e a d h u n ters say. H ow ever,
problem s w ith energy loans have no
ticeably slowed th e expansion rate of
Texas and O klahom a banks.
H ow ever, C arol Park of R egency
R ecruiters does not share th e opinion
th e Sun Belt still is “h o t.” “If th e re is a
geographical hot spot in today’s m arket
for b an k ers,” she says, “I am unaw are
of it. At th e decline of th e oil boom ,
O klahom a and Texas cooled off, b u t
Major Trends, Future Direction
Of Bank-Executive Compensation
By Donald K. Inderlied
IV EN the scenario of slow, b u t continued, econom ic growth over the
balance of th e 1980s, along w ith a changing profile of bank-business
structure, diversification of e n trep ren eu rial and conventional banking practices,
bank-executive com pensation will gravitate away from fixed-cash salaries to
variable pay tied to perform ance objectives and long-term incentives. As m ore
and m ore banks adopt tru e pay for perform ance philosophies, we can expect that
m ore com pensation-program -design experim entation will em erge. M ore indi
vidualization of com pensation program s will surface to m otivate and rew ard
separate business units and specific key individuals w ithin the group.
Based on our studies of bank-officer com pensation and on our research/
consulting activities, we see the following specific trends developing:
• Cash-Pay Trends. O ver th e next several years, we expect cash-salary in
creases for executive-level personnel to decline m oderately and average b e
tw een 7.5% -8.5% over the balance of the 1980s. It is possible, how ever, that in
banks th at have a substantial positive turnaround-earnings experience, execu
tive cash-pay increases could rise to the 11%-14% range in the short term . As
m ore banks experim ent w ith pay-increase formulas tied directly to corporate
objectives, we expect the n u m b er of executives receiving salary increases to
decrease. D irector-com pensation com m ittees will tie rew ards m ore selectively
to results attained by key executives in individual business-profit centers.
• Variable-Pay Trends. W e expect a gradual shift from traditional fixedcom pensation program s em ploying um brella-rew ard guidelines w ith matrix for
m atting to a m ore fluid design variable-rew ard structure. Y ear-end-bonus p ro
grams will be designed w ith tougher criteria, and pay-out potentials will be
contingent on m ore carefully defined objectives.
• Short-Term-Bonus-Plan Trends. Bonus plans for m iddle-m anagem ent and
key professional/technical personnel tied to short-term objectives will gain popu
larity as m ore banks introduce new products and capitalize on entrep ren eu rial
opportunities in th e retail m arket.
• Long-Term-Reward Trends. As m ore and m ore banks integrate pay p ro
grams w ith strategic corporate-perform ance objectives, use of long-term -rew ard
program s will increase sharply as the vehicle to m otivate executive m anagem ent.
The design of th ese instrum ents will be m ultifaceted, em ploying a com bination
of direct-cash-paym ent/stock-option features. Incentive stock options (ISOs) will
be adopted w idely in conjunction w ith non-qualified options.
• Individual N et-W orth Trends. Along w ith the shift from cash year-end
increases to long-term incentive awards, we expect m ore individualized d e
signed executive-com pensation program s. As banks begin experim enting with
m erchandising techniques, as done in th e retailing industry, the need for e n tre
pren eu rial skills and talent will rise. Along w ith this shift, banks will focus m ore
on individual net-w orth needs since program s and strategic objectives will be
designed to m aximize perform ance. W e expect this will bring about a gradual
shift away from the concept of career/retirem en t planning to personalized em
ploym ent contracts w ith individual com pensation packages.
• Employment-Contract Trends. Individual em ploym ent contracts will in
crease sharply as corporate dem ands get stiffer. Also, as the nu m b er of m ergers
and acquisitions increase, so will the n u m b er of security-blanket or “goldenp arach u te” program s.
• Compensation-Committee Trends. As rew ard systems increase in num ber,
com plexity and cost, participation of boards and com pensation com m ittees will
increase.
• Benefits/Perquisites Trends. Traditional health-care/dental/life, etc., b en
efits and cars/clubs/m em berships perq u isites will continue throughout the
1980s, contingent on changes in tax legislation. M ore experim entation will be
done in th e areas of providing financial-counseling services to key executives and
in offering special early -retirem en t opportunities.
G
Donald K. Inderlied is consultant, Personnel Consulting Services, Inc., Erie, Pa., with a
Southwest office in Dallas.
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"STEEL-STRONG"
mc
business in g eneral th ro u g h o u t th e
M idw est has rem ained stab le.”
D o n ald N. H an ak of D u n h ill of
Phoenix m aintains th e h o t spots of
activity still seem to be in Florida,
T exas, C o lo ra d o , O k lah o m a, N ew
Mexico, U tah and California.
In th e M idw est, says Linda Blue
Sm ith of Tom H agan &: Associates, ru
ral and com m unity banks are showing
g reater dem and than are m etropolitan
banks. O f course, she points out, o u t
lying areas don’t have th e luxury of a
large labor pool, and m any m etropoli
tan areas are located in m ulti-bank-H C
states that have had changes in laws
allow ing co n so lid atio n of affiliates,
w ith s u rv iv in g e n titie s b e c o m in g
branches. Thus, she adds, supply v e r
sus d e m a n d in som e m e tro p o lita n
areas is out of balance.
A ccording to Ray E. M akalous of
Accounting & Financial C areers, th ere
is strong activity in th e C entral Plains
areas, b u t no one city seem s unusually
active.
V ernon H. M cKinley of Professional
P ersonnel C onsultants cites th e east
e rn seab o ard and so u th ern and far
w estern states as hot spots.
Salaries/Fringe Benefits. According
to Carol Park of R egency R ecruiters,
banks in the Southw est and Southeast
still appear to offer th e b est salaries.
G enerally, she continues, small and
m edium -sized banks seem to pay high
e r salaries. She attrib u tes this som e
tim es to th e rem ote area, having p ri
vate ow nership or h igher perform ance
of such banks.
As to fringe benefits, Ms. Park says
they definitely are the key in seniorexecutive placem ents. She lists the
m ost sought-after benefits as stock op
tions, incentive com pensation, cars,
profit sharing and insurance.
F o r senior officers, says L inda Blue
Sm ith of Tom H agan & Associates, the
larger th e bank, th e larger th e salary,
b u t m any m id d le-m an ag em en t p e r
so n n el m ay re c e iv e eq u al or even
g re a te r co m p en satio n from sm aller
banks.
Ms. Sm ith believes th e im pact of
fringe-benefit packages fluctuates w ith
levels of responsibility. Stock options,
p ro fit-sh a rin g , re tire m e n t-p la n , in
cen tive-com pensation and deferredincom e plans will w eigh m ore heavily
w ith th e experienced executive officer
than w ith the young m iddle-m anager.
D u n h ill of P h o en ix ’s D o n ald N.
H anak sees higher salaries offered in
Texas and by larger banks. H e also says
th ere is opportunity for grow th and
a d v a n c e m e n t o ffe re d by sm all to
m ed iu m -sized banks, and in d e p e n
d e n t com m unity banks in Arizona and
MID-CONTINENT BANKER for May, 1 9 8 4
C a lifo rn ia a re o ffe rin g a ttr a c tiv e
opportunities, as well as stock options
and incentive bonuses.
According to S-H-S In tern atio n al’s
John S. D ean, New York and Chicago
continue to pay th e highest salaries
across the board, b u t banks in o th er
large cities have narrow ed th e gap con
sid erab ly . H e b e lie v e s b ank-salary
scales ten d to relate m ore to a b ank’s
size than to its geographic location. In
m e tr o p o lita n a re a s , m id d le - s iz e d
banks often try to m atch salaries of
th eir larger com petitors.
In the fringe-benefit area, Mr. D ean
says incentive com pensation seem s to
be increasingly attractive to banks. A
great m any studies have b een done to
devise program s th at not only rew ard
an executive for superior perform ance,
b u t keep h im /h er tied to an in stitu
tio n ’s future. Mr. D ean points out that
p e rfo rm a n c e b o n u se s a re p o p u la r,
w ith at least a portion of the payout
Skills! Skills! Skills!
Responses to M i d - C o n t i n e n t
1984 hum an-resources
survey from John S. Dean, banking/
financial recruiting, S-H-S Interna
tional of Wheaton, Wheaton, 111.,
are, he points out, influenced by
conditions in the extended metro
politan Chicago area, where his firm
has a majority of its assignments.
He cites two of these conditions as
worth specific mention since they
have a marked influence on person
nel requirem ents of banks in his
area.
First, in addition to managing
changes brought about by deregula
tion of financial institutions on a
national level, banks in the metro
politan Chicago area are dealing with
realignments brought about by an
increasing num ber of new multi
bank HCs.
Second, the overall economy of
Chicago (and the whole Great Lakes
region), with its mature smokestack
industries, was hard hit by the re
cent recession and is recovering
more slowly than most of the coun
try.
According to Mr. Dean, these fac
tors combined have led to narrowly
focused recruiting assignments with
tightly drawn specifications relating
to immediate needs of a hiring bank.
The mid-level generalist, continues
Mr. Dean, currently is in real trou
ble when trying to find a new bank
position. The maxim outlining the
three requirem ents for successful
real-estate investment — 1. Loca
tion. 2. Location, 3. Location — can
be paraphrased as an accurate de
scription of today’s requirements for
success in finding a good job in bank
in g — 1. Skills. 2. Skills. 3. Skills.
B a n k e r ’s
fre q u e n tly d eferred . Stock options,
w ith m any variations, also seem to be
regaining favor.
G enerally, says Ray E. Makalous of
A ccounting & Financial C areers, the
prevailing wage level in a com m unity
will apply to banks as well as o ther
em ployers. H e notes one exception:
Banks in rem ote small towns generally
have to pay prem ium s to recruit top
talen t to th eir locations.
S p eaking of fringe b en efits, M r.
M akalous b eliev es red u ctio n in in
com e-tax rates has caused senior ex
ecu tiv es to place less em phasis on
fringe benefits and m ore em phasis on
th e ir base salaries. H e points to cars,
stock options (especially for seniorlevel executives) and bonus com pensa
tion as the m ost popular fringe b e n
efits .
According to V ernon H. M cKinley
of Professional Personnel C onsultants,
salaries, fortunately, are beginning to
b e extrem ely com petitive and m ore
acceptable to the professional banker
co n sid erin g a m ove. As im p o rtan t,
how ever, says Mr. M cKinley, are costof-living factors from one area of the
country to another.
“ A lth o u g h s a la rie s m ay d iffe r
according to sizes of banks and geo
g rap h ical lo c a tio n s,’’ h e co n tin u es,
“career opportunity, cost-of-living and
‘quality-of-life’ factors are being con
s id e re d by to d a y ’s ‘m o b ile ex e c u
tiv e .” ’
Some innovative and exciting b e n
efit packages have been developed by
b a n k s , M r. M cK in ley p o in ts o u t,
adding th at although im portant in final
MID-CONTINENT BANKER for May, 198 4
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Federal Reserve Bank of St. Louis
n e g o tia tio n s, th e se packages d o n ’t
seem to be the initial factor inducing a
candidate to relocate.
“O pportunity for career grow th still
is the decisive factor for an individual
in considering a new em p loyer,’’ says
Corporate Personnel
Banking Division
Banking Personnel Specialists Sinee 1964
Nationwide Recruitment and Placement
Commi RE Lender (TN)
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Sr. Commi Lender (MO) (TX)
Jr. Commi Lender (FL)
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Marketing (IN) (TX) (OK)
Secondary Marketing (FL) (WY)
Trust Admin. (WY) (AR) (KY) (MO)
Trust Investor (IN) (Ml) (MO)
(OH) (Wl)
Auditor-EDP (FL) (TX)
Programer-MICR (AR)
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Other Opportunities, all levels, now open!
Send resume in confidence. All Fees
Paid.
Dixie Jenson, Manager
P.O. Box 4387 G.S.
Springfield, MO 65808
417-883-1212
Banking Career Specialists
Financial Placements is built on a history of strong relation
ships between bankers and Bank News' publications.
You can benefit from these relationships — plus the more
than 65 years of bank-related experience of these two men —
by using our specialized employment service.
Call us!
We can help find the
right person or the
right position.
M ike Wall
Manager
816 421-7941
-
Tom Cannon
Associate
FIN A N C IA L PLA C EM EN TS
912 Baltimore
a division of BANK NEWS
Kansas City, MO 64105
11
Rill D oherty of Cam eron & M errill
Rank Search G roup. “W ithout afford
ing an opportunity for upw ard m obil
ity, a bank has little, if any, chance to
hire a good officer, regardless of the
sa la ry in c re a s e , p e rk s o r sig n in g
bonus.
H E N banks search for ways to reduce staff turnover, not many
“ In c e n tiv e pro g ram s for le n d in g
think of helping em ployees in th e child-care area. H ow ever, a
officers
are eith er in place or are being
C leveland bank — A m eriT rust — has set up a child-care program it
te s te d by m any banks and, at this
credits w ith helping to decrease em ployee turnover.
point, are proving to be successful and
This program does not involve filling an area of the bank w ith sand
beneficial for the bank as well as excit
boxes, swings and toys. Instead, A m eriT rust p u t to gether a program
ing for the officers because, based on
called C hildcare Advice and Referral for E m ployees (CARE), which
perform ance, they can increase th eir
helps its 4,000 em ployees find th e b est m ethods of having th eir children
earnings. Banks w ith in cen tiv e-p er
cared for w hile th e paren ts are at work.
form ance program s are going to attract
W hat exactly is A m eriT rust’s CARE? It is, basically, providing in
th e m ost ta le n te d and professional
form ation on and referral to child-care facilities. According to a bank
officers. Officers in terested in incen
brochure, CARE answ ers such questions for em ployees as: Is there
tive program s that provide a portion of
child care for ch ildren w ith special needs? Can I check out child-care
th eir incom e seem to be m ore aggres
options w ithout obligations? Are th e re learn-to-sw im program s or play
sive and work w ith a high level of confi
groups in m y area? W hat do I do w ith my school-agers during vacations?
dence
in th eir abilities. They like the
Is th e re any child care for night-shift em ployees?
challenge
of com pensation by excel
The program serves th e following age groups: infant, preschool,
ling.”
toddler, kin d erg arten and before- and after-school program s up to the
Hiring Rate. In th e opinion of Carol
th ird grade.
Park of R egency R ecruiters, th e hiring
An early-childhood specialist is at th e bank’s main office each T ues
rate for b ankers is up, and she at
day, and em ployees m ay arrange telep h o n e or personal interview s for
trib u tes this to th e general econom ic
that day. Follow -ups are m ade w ith each em ployee to ensure that he or
recovery and to the m any acquisitions
she has located appro p riate child care.
being m ade and new charters being
Lois G oodm an, em ploym ent specialist at A m eriTrust, points out that
granted.
it’s not only w om en em ployees who avail them selves of CARE. A
divorced father told a supervisor he was unable to accept a prom otion
According to L inda Blue Sm ith of
because it w ould m ean w orking Saturdays, a difficult tim e to find day
Tom Hagan & Associates, the hiring
care. The supervisor called th e CARE office; a sitter was located, and
outlook for “top p e rfo rm e rs” at all
the m an took th e prom otion.
levels is bright. T he problem is m ore
In an o th er case, tardiness was reduced. A wom an em ployee had been
one of attracting th e “top p erfo rm er,”
getting up at 5:30 a.m . each day, b u t still was late getting to work. The
she says and adds that m any seniorreason: She took two buses to get h e r child to day care and th en th ree
level officers w ho survived th e u p
buses to get back to work. A ccording to Ms. Goodm an, CARE helped
heaval of th e last two years seem chal
h e r find a m ore convenient cen ter, and now she gets to work on tim e.
lenged and satisfied in th eir p resen t
To help th e day-care consultant, L ynda Staycer, make placem ents,
positions, and th e n u m b er of quality
she has a com puterized list of m ore than 800 day-care centers and
applicants is not m atching past n u m
hom es, baby sitters, before- and after-school program s, sum m er camps
bers.
and n u rsery schools.
“E m p lo y e rs,” Ms. Sm ith em p h a
Ms. G oodm an says CARE also is a valuable recru itm en t tool. For
sizes, “continue to dem and quality and
instance, th e bank was trying to attract an executive from out of state
refuse to low er th eir standards for the
who also had received offers from several o th er places. H e and his wife
sake o f ‘filling a d esk .’ M arginal candi
had young c h ildren and w ere concerned about the effect of the move on
d ates will find 1984 to b e an o th e r
them . The CARE w orker pho n ed th e couple and let them know w hat
tough y ear.”
kinds of n u rsery school and en rich m en t program s w ere available in
John S. D ean of S-H-S International
C leveland, and be eventually accepted th e A m eriTrust offer.
says he finds the hiring rate in his area
to be up slightly com pared to a year
( ------------------------------------------------------------------------------------------------------------->
ago and up noticeably from two years
ago. The rate of hires probably would
be higher, he believes, if th ere w ere
m ore “to p -n o tc h ” can d id ates avail
able. D uring th e recession, he con
tin u e s , m any ban k s re d u c e d th e ir
w ork forces, e ith e r in selected d ep art
“A specialized Professional Service
m ents or bank wide. A pickup in busi
ness and the need to m eet com petition
for Executive Banker Personnel
in new areas of activity have forced a
throughout Oklahoma and the Southwest
highly selective re-staffing, he points
out.
Ray M ak alo u s of A c c o u n tin g &
Mrs. Lou Bentley
2211 W estpark Drive
Financial C areers says th e hiring rate
(405) 364-4 322
N orm an, O klah om a 73069
was extrem ely active a year ago, and it
V_______________________________________________________________________ ^ continues to be active. H e attributes
Child-Care-Referral Program
Helps Employees of Bank
W
banker personnel service
12
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MID-CONTINENT BANKER for May, 19 8 4
WithFirstTèamwork,your relationship
with FirstChicago
is to
bank Itspartner topartner’
“When you are a correspondent of First
Chicago, it means having access to the vast
resources of a money-center bank. It means
having teams of specialists working together
to deliver the kind of products your bank
needs. And it means a partnership that
supports instead of supplants.
“You won’t find a bank in the Midwest
that’s organized to deliver its resources
more effectively than First Chicago. You’ll
w ork with a relationship manager from our
highly trained specialty team s—the Com
munity Banking Team, the Illinois Team and
the Midwest Team— according
to your specific needs.
“When you’re a correspondent with
First Chicago, we won’tju st be working with
you— we’ll be working for you.
“See how First Teamwork can w ork
for you. Call me, Neal Trogdon, at
( 312)
732-7780.“
First Chicago
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/
*
—r-o
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Community Banking
e
Ç7
PhüipIL i t Britt, f Illinois Banking
FIRST TEAMWORK WORKS
©1984 The First National Bank of Chicago. Member F.D.I.C.
MID-CONTINENT BANKER for May, 19 8 4
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Federal Reserve Bank of St. Louis
13
this unusual activity to the large n u m
b e r of problem banks, large n u m b er of
ow nership changes and new o p p o rtu
nities for banks b ro u g h t about by d e
regulation.
Relocation. C arol P ark (R egency
Recruiters) says all h e r firm ’s clients
are willing to pay m oving expenses of
bankers th ey im port. O f course, these
banks like to draw candidates from as
close to th e ir areas as possible. The
reason for this, according to Ms. Park,
seem s u n related to m oving costs, b u t
is directly related to bankers having a
familiarity w ith th e m arketplace. F or
top-m anagem ent posts, m any of the
firm ’s client banks help in som e way
w ith th e new em p lo y ee’s housing.
ARE YOU SO BUSY
DOING YOUR JOB
THAT YOU’RE
FORGETTING YOUR
CAREER?
Call us today for a no-obligation dis
cussion of your career ambitions. Be
low is a PARTIAL listing of fee paid
career opportunities: Call or submit re
sume with salary history stated.
Head Shipper .......................... $35,000
Comm’l. Loan Ofc......................$40,000
Chief A p p ra is e r...................... $40,000
Comm’l. Real Estate Lend.
. $30,000
Region. Trust Mgr......................$40,000
Personal Trust Ofc.................... $30,000
/ -------------- --------------------------\
M ANAGEM ENT
V__________________ J
Personnel Service
3400 Peachtree Road,
Suite 525,
Atlanta, Ga. 30326
(404) 261-3850
In 1984, Ms. Park sees less resist
ance on the part of bankers moving
from th eir p resen t areas.
“ T h e re s is ta n c e w e ’ve e x p e r i
e n c e d ,” she continues, “is w ith our ap
plicants’ wives. The irony of the whole
thing is that the applicant will have as
m any as two interview s out of town
w ith a bank, accept the offer, and then
the wife will refuse to go. It appears, in
some cases, that she n ever has been
inform ed by h er husband that he was
interview ing, or if she was inform ed,
rem ained silent, and he in te rp re te d
h er silence as approval.
W e encourage our clients to te le
phone interview the wives early in the
in te rv ie w in g p ro c e ss. T w o -c a re e r
families are an ever-increasing p ro b
lem we have to deal w ith and a p ro b
lem th at’s not going to go away. As an
agency that specializes in o th er areas
besides banking, we offer to assist the
wives as well. In some cases, we have
placed both. Banks som etim es will be
helpful w ith this through th eir con
tacts.”
Linda Blue Sm ith of Tom Hagan &
Associates says em ployers are quite
willing to pay relocation expenses for
th e ir senior-m anagem ent personnel.
As th e le v e l of re s p o n s ib ility d e
creases, she points out, this item b e
comes m ore negotiable.
Ms. Sm ith believes the u p tu rn in
th e housing m arket has lessened p res
sure on the new em ployer to make a
com m itm ent to buy a new h ire ’s p re
vious residence, and few er applicants
seem to face the fear th eir hom es will
not sell w ithin a reasonable length of
tim e.
She also sees tw o-career families as
becom ing m uch m ore of an influence
on relocation than in the past. This
trend, she points out, is m ore evident
in th e younger m iddle-m anagem ent
ranks, and it could prove a m ajor p ro b
lem for sm aller com m unity banks in
th e future.
Bill D oherty of C am eron & M errill
has this to say about relocations: “N ew
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Just as our advertising says, Texas American Banks are managed by a special kind
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Jim Atkinson, Human Resources
TEXAS AMERICAN BANCSHARES, INC.
P.O. Box 2050 • Fort Worth, Texas 76113 • (817)338-8167
Principals Only •
Digitized for14
FRASER
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
An Equal Opportunity Employer
em ployers, as a rule, seem to be most
willing to pay reasonable relocation ex
penses for all levels of officers. H om e
buying-assistance program s seem to
be reserved for senior and executive
m an ag em en t. H ow ever, this is not
n e c e s s a rily c o m m o n p la c e , b u t a
negotiable b en efit.”
T he high cost of m oving d o esn ’t
seem to be a major problem to the
bank willing to im port a quality profes
sional, says V ernon H. M cKinley of
Professional P ersonnel C onsultants.
N aturally, he adds, the recru it’s p res
e n t hom e and fu tu re residence are
concerns. M any banks are willing to
p ro v id e m any form s of re lo c a tio n
assistance for th eir new executives.
Mr. M cKinley doesn’t find bankers
pu ttin g up m uch resistance to moving
away from th eir p resen t areas. Wives
and families do play an im portant part
in the relocation process, he points
out, and his firm assists both the bank
and banker in solving m any unfore
seen problem s. In the case of a twocareer family, he says his firm has the
staff expertise to help the nonbanker
professional.
In his answ er to the MCB survey,
John S. D ean of S-H-S International
says relocation/housing bonuses usual
ly are paid on jobs only in the $75,000$ 1 0 0 ,000-salary ran g e and up. H e
notes th ere are exceptions based on
acute specific needs of banks.
Mr. D ean says candidates continue
to have som e resistan ce to m oving
from one region to another w ithout
above-average salary increases. The
roadblock posed by real-estate/m ortgage m arkets is not the restraining fac
tor it was for the past two years, he
says. Life-style considerations are an
im portant factor for m any candidates,
w ith clim ate, cultural and recreational
o p p o rtu n itie s w e ig h in g h eav ily in
so m e c a n d id a te s ’ d e c isio n s. Tw ocareer families (particularly am ong the
under-40-age group) can be difficult to
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North Kansas City, MO 64116
816/ 474-6874
SERVING THE BANKING INDUSTRY
SINCE 1970
MID-CONTINENT BANKER for May, 1984
W h il e y o u ’r e
AT THE CONVENTION
PUT US ON YOUR
MEETING USX
Jonathan Kemper
John Messina
Ernie Yake
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
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May 22-24.
MID-CONTINENT BANKER for May, 1984
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
John Shrader
Steve Fletcher
Jerry O’Dell
Commerce
Bank
1 "»
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Member FDIC
of Kansas City"
(816) 234-2000
10th & W alnut
K ansas City, Mo. 64199
15
move, although for a few key jobs, the and reasonable.
em ployer will help a spouse of a relo
“Effective com m unications of busi
cated candidate try to find a job.
ness objectives, strategy and pay sys
D o n a ld N. H anak of D u n h ill of tem s will be a continuing source of
Nationwide VP and AVP opportunities offer
Phoenix sees a reluctance on the part co n cern . T rad itio n al m eans of su r
ing excellent career growth, based on per
formance (not longevity) for financial profes
of banks to bring people from one part veying and job-evaluation processes
sionals with experience in:
of the country to another. H ow ever, will be u p g rad ed technologically to
he adds, he has seen no resistance or take advantage of com puter capabili
• Commercial Loans
• Construction Loans
reluctance on th e p art of bankers to ties both in the m arketplace job pric
• Real Estate Loans
relocate.
ing and in m o d elin g co m pensation
• Secondary Marketing
“
T
h
e
y
a
re
in
te
r
e
s
te
d
in
c
a
r
e
e
r
program
s.
• Loan Review
ad v an cem en t,” says Mr. Hanak, “and
• Loan Workout
“C reating a clim ate of innovation
• Branch Management
if it m eans relocation — th ey ’ll move!” while, at the same tim e, practicing tra
• Accounting
Ray E. M akalous of Accounting & ditional sound business ju d g m en t will
• Auditing
F inancial C areers finds that, almost be difficult. D esigning com pensation
• Credit
w ithout exception, m oving expenses program s that will provide th e neces
$27,000-$51,000 plus outstanding benefits
are paid by an im porting bank w hen sary in c e n tiv e s to achieve to u g h e r
and freedom for self expression.
recruiting a new officer. The higher co rp o rate-perform ance objectives in
Our progressive clients pay all our fees. Nev
th e level, the m ore moving benefits an era of low ering expectations will be
er a cost to you. Let a successful professional
provided. At th e C E O and executive- a herculean task for m ost banks.
headhunter find you the position you want,
v ice-president level, he says, it is com
“Lastly, as shareholder sensitivities
where you want it, and in the strictest confi
dence.
m on to offer to buy th e house, pay for about executive pay increase, boards
interim financing, provide tem porary of directors and com pensation com
Act Now! If you’re ready to “ get your career
living q u a rte rs, etc. At th e low er- m ittees will find it difficult to com
on the move,” rush your resume including
current salary to Don Hanak, CPC, President/
level-officer positions, it is com m on to m unicate and justify new program s
Chief Headhunter, or call him person-topay actual out-of-pocket moving ex that are tied to long-term objectives
person collect at (602) 264-1166.
penses and provide tem porary living w ith o u t jeo p ard izin g strategic com
expenses.
DUNHILL OF PHOENIX, IN C .,
petitive plans of the corporation.
2712 N. 7TH ST ., STE. 3,
“Tw o-career families p resen t a sig
“As the profile of the financial indus
PHOENIX, AZ 85006
nificant recruiting problem for banks try changes due to com petitive and dein to d a y ’s e n v iro n m e n t,” continues regulatory issues, so will the mix of
Recruiting Hard-to-Find Profes
Mr. Makalous. “The im porting bank com pensation and benefits program s
sionals fo r Hard-to-Fill Positions
m ust be p rep ared to assist th e spouse w ithin th e industry. The job of top
since 1967.
in finding com parable em ploym ent in m anagem ent and board-com pensation
the new location. Successful recruiting com m ittees will be tougher. Key to
requires a m ore open m ind about the th e ir success will be w h eth er they can
role of the w orking spouse than ever p u t into place th e right mix of rew ard
before. Banks that are successful in re systems that will provide the necessary
RECRUITERS, INC.
cruiting a tw o-career-fam ily em ployee incentive to stim ulate, attract and re
are extrem ely active in assisting the tain key personnel who can attain the
spouse in finding em ploym ent by con difficult perform ance objectives over
tacting bank cutom ers in the hope of the balance of the 1980s.” — Rose
finding em ploym ent or even offering mary M cKelvey, editor.
to pay the spouse’s new em ployer’s
em ploym ent agency fee as an en tice
m en t to the new em ployer to hire the
sp o u se.”
A nother form of relocation seem s to
ABA Divison Renamed
be cropping up as shown in a statem ent
The ABA’s bank personnel divi
by Carol Park of R egency Recruiters:
sion has been renamed human re
“W
e
are
seeing
a
large
am
ount
of
activ
fro m M g t. T ra in e e to P re s id e n t
sources division.
ity in th e savings-and-loan industry re
call on th e b a n k in g sp e cia lists
The change represents a broader
questing bank personnel. C ontrary to
role for the division, which serves
banks in developing personnel poli
C arol P ark
J u d y K lin t tim es past, bankers have an in terest in
m aking these moves and no longer feel
cies and managing employment and
D ia n e Evans
it’s com m itting treaso n .”
human-resources issues.
The division continues as part of
W h a t Lies A head? H e re is how
the administration group. Shirley E.
D onald K. In derlied, consultant, P er
Broder, new to the ABA, is associate
s o n n e l C o n s u ltin g S e rv ic e s, In c .,
director of the division and has pri
We ch a n g e d o u r nam e E rie, Pa., sees the future: “Clearly, we
mary responsibility for its activities
b e lie v e th a t b a n k c o rp o ra te -c o m
S E R V IC E is th e same
and programs.
p ensation philosophies, policies and
The division provides professional
A L L F E E P A ID
program s will undergo substantial re
banker education and train in g
N A T IO N W ID E A f f ilia t io n s
visions over the balance of the 1980s,
through three national schools and
and, in the m ore conservative banks,
two national conferences annually. A
wide range of human-resources pub
ch an g e w ill b e ex trem ely difficult.
lications also is produced by the divi
P erhaps the single m ost difficult issue
sion.
1102 G R A N D AVE.
will be on deciding on perform ance
KA NSAS CITY, MISSOURI 64106-2387
m e a su re m e n ts th a t are ap p ro p riate
16
MID-CONTINENT BANKER for May, 1984
CONFIDENTIALITY
COUNTS!!
REGENCY
For
Banking Personnel
or a
New Banking
Position
816/ 842-3860
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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17
Tax, Inflation Concerns
O f Directors Addressed
By Deferred-Fee Plans
T
W O of th e p rim ary concerns of
successful business people today
are taxes and inflation, says D onald
Couch, financial p lan n er w ith D. F.
Nash & Associates, L ittle Rock.
And bank directors are no excep
tion. T h ey g en e ra lly have high in
com es and high tax brackets.
Board fees paid to directors can be
deferred in exchange for a contract to
pay larger am ounts after retirem en t,
he says. In addition, such contracts
provide for paym ents of benefits to a
directo r’s beneficiary in th e ev en t of
death prior to retirem en t.
H e cites th e following exam ple: A
directo r w hose bank defers a fee of
$100 p er m onth, starting at age 35,
w ould be en titled to $95,332 p e r year
for 10 years following re tire m e n t at age
70. The d irecto r’s beneficiaries w ould
b e e n title d to a d e a th b e n e f it o f
$19,619 p er year for th e sam e tim e
period.
The older a d irecto r is at th e tim e
he/she begins to d efer fees, th e sm aller
th e benefit am ount. B ut a directo r who
starts deferring $100 p e r m onth in fees
at age 45 can expect a payout of m ore
than $34,000 p e r y ear for 10 years after
re tire m en t at age 70, according to Mr.
Couch.
P. B anks p a rtic ip a tin g in plans d e
signed by the Nash firm purchase lifein su ra n c e policies for p articip atin g
directors, using d eferred fees to pay
prem ium s. The face value of the policy
at death or retirem en t d eterm in es pay
out benefits.
Mr. C ouch says benefits are a func
tion of several factors, including face
value of the insurance policy, future
dividends of th e policy, the tax bracket
of the firm, in terest rates at death or
re tire m en t of a director and m ortality
tables.
“W e don’t feel it’s fair to the bank or
th e d irecto r to estim ate w hat these
variables will be 10, 20 or even 30
years in the fu tu re ,” Mr. C ouch says.
“T herefore, our plan incorporates a
form ula w hich determ in es th e benefit
at re tirem en t or death. This form ula
allows us flexibility to custom ize a plan
for each of our clients. ”
T he form ula is designed in such a
way that th ere always is com plete cost
recovery for the bank, he adds. And
th e re is no cost to stockholders. D u r
ing the life of a plan, cash values of the
Four-in-10 Top Banks Defer Fees
A
LM O ST 40% of th e nation’s top 200 banks provide deferredcom pensation program s to th e ir outside directors, according to an
extrapolation of results of a recen t survey covering this topic m ade by
W illiam M. M ercer-M eidinger, Inc., Louisville.
Survey tabulation reveals th at deferred-com pensation plans are m ore
p revalent in th e largest 100 banks than in th e second-largest 100 banks.
Fifty p e rc e n t of th e top 100 banks re p o rte d having deferred-paym ent
plans and less th an o n e-th ird of th e second 100 provide the benefit.
W ith th e re c e n t liberalization of K eogh-plan-contribution regula
tions, “m any outside directors are, no doubt, taking advantage of this tax
sh elter on th e ir o w n ,” says Frank Peabody, m anaging director, M ercerM eidinger. “As ‘in d e p e n d e n t contractors’ they can make th eir own
decisions based on th e ir specific personal financial-planning needs, thus
some banks may not feel th e n eed to provide additional deferral arrange
m e n ts.”
A separate section of the survey indicates that th e vast m ajority of
larger banks m aintain m andatory retirem en t-age policies, w ith age 70
being by far th e m ost popular re tire m e n t age.
18
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
life insurance will reflect an increase in
surplus for the bank as com pared to
paying director fees at the tim e they
are earned.
Mr. C ouch says com m only asked
questions about d eferred com pensa
tion plans include the following:
• How can a bank pay a director so
m uch m ore later than it can pay now in
board fees?
Because of the tax-free nature of in
s u ra n c e p ro c e e d s , th e in c re a s in g
death benefit due to dividends and the
fact that benefit paym ents are tax d e
ductible.
• How long m ust a director defer his
fees?
T h is is n e g o tia b le b e tw e e n th e
d irecto r and the bank. N orm ally, a
director would defer his fee until re
tire m e n t; how ever, sh o rte r periods
can be arranged. Benefits are in direct
proportion to the total am ount of con
tributions a director makes.
• Does a plan req u ire governm ent
agency approval?
No. H o w e v e r, i t ’s n e c e ssa ry to
notify the D ep artm en t of Labor that
such a plan is available to a certain
distinct group of executives or direc
tors.
• Do all directors have to partici
pate?
No. Each contract is an individual
one betw een a director and the bank
and th ere is no interrelationship b e
tw een them .
• Is th ere any vesting?
No. If th ere w ere vesting or guaran
tees u n d er the contract th at certain
sum s w ere set aside for th e d ire c
tor, the IRS w ould consider the d efer
ral of fees to be constructive receipt in
the year they w ere deferred.
• W hat happens if a director leaves
th e board before reaching retirem en t
age?
U n d e r th e c o n tract, leav in g th e
board for any reason o ther than norm al
retirem en t or death is considered te r
m ination. U n d er term ination provi
sions, the director w ould be given the
cash value as stated in the policy at that
tim e.
• W hy should a bank w ant to make a
deferred-com pensation plan available
to its directors?
First, it’s a way for the bank to pay
m uch larger am ounts than the annual
directors’ fees and pay them at a tim e
w hen they are most needed. The exist
ence of such a plan will attract and
keep qualified individuals as directors.
Second, the bank can sponsor a plan
w ith no additional cost over regular
director fees. Third, fees accum ulate
in the form of cash values that increase
th e bank’s book value.
• Does a director have any tax liabil-
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Because most board members already have another source of substantial income, it’s
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DigitizedMID-CONTINENT
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Federal Reserve Bank of St. Louis
313 E. 16th, Kansas City. MO 64108 • (816) 842-8842
19
ity prior to d eath or retirem en t?
No. The way the plan is stru ctu red ,
th e d irector will not have any taxable
incom e from deferred fees until such
tim e as he/she begins to draw th e b e n
efits u n d er the agreem ent.
• Can a director defer a portion of
his/her fees?
Yes. If th e bank agrees to set up the
plan to allow for partial deferral.
• If the bank is sold or m erges w ith
an o th e r bank, w ould th e plan con
tinue?
Yes. The obligations u n d e r the con
tract w ould be assum ed by th e new
entity and w ould continue as long as
the director rem ains on the board. If
benefits are being paid u n d e r eith e r
th e d e a th or re tire m e n t provisions
w hen a change in ow nership occurs,
paym ents w ould continue.
• Does a d irector have to provide
evidence of insurability?
Yes. The am ount and age will d e te r
m ine the extent of m edical inform ation
to be subm itted. — Jim Fabian, senior
editor.
Officer/Director Deferred-Comp Plans
Replace Traditional Taxable Benefits
By Robert S. Mattel,* Vice President
Executive Planning Group, Inc., Monroe, La.
I
N T H E com petitive env iro n m en t non-taxable d u rin g th e officer’s in
facing banks today, the dem and for com e-earning years.
th e talent of quality bank officers is Similarly, top-quality directors find
trem endous. They are difficult to find, that board and com m ittee fees don’t
expensive to train and, if lost to com nearly com pensate them for the tim e
petitors, difficult to replace.
and fiduciary req u irem en ts of board
T ra d itio n ally , p e rio d ic salary in service.'Tax-favored fringe benefits for
creases and bonuses have w orked to d ire c to rs v irtu ally are n o n ex isten t,
retain officers. H ow ever, the bracket- since directors a re n ’t bank em ployees.
creep associated w ith our tax system, Additionally, m any who are no longer
com bined w ith inflation, have dim in active in a business are com pletely at a
ished th e effectiveness of these poli loss for a way to gain th e advantages of
cies to a point that it’s nearly futile to corporate-tax-favored fringe benefits.
im p lem ent them .
T he q u estio n ab le fu tu re of social
If an officer’s com pensation is suffi security and bulging federal deficits
cient to support his standard of living, m ake it p ru d e n t for banks to provide
som e m eans should be devised to p ro for th eir own. C ongress is encouraging
vide lifetim e security w hile avoiding retirem ent-capital form ation by p ro
c u rre n t taxes. T he obvious alternative viding for IRAs, 401(k) trusts and sim
is th e use of fringe benefits that are p lifie d e m p lo y e e p e n s io n p la n s
(SEPs).
This is the good news, b u t th ere also
is bad news.
T E F R A legislation placed severe
restrictions on these plans in term s of
e lig ib ility , v e stin g , c o n trib u tio n s ,
benefit restrictions and limits. The n et
result is that these plans are req u ired
D E F E R R E D -co m p en satio n plan for bank directors provides a
to be nondiscrim inatory: They m ust be
bank w ith a way to “lock in ’’ a relationship w ith an individual the
ap plied eq u itably to alm ost all em
bank w ishes to retain on its board, says Richard S. Pryor, president, ployees. This makes any m eaningful
Bank of Jacomo, Blue Springs, Mo.
rew ard to key officers cost-prohibitive
Such a plan also can be considered as a selling tool to convince a
in term s of th e expense req u ired to
high-incom e individual to accept an invitation to join a bank’s board, he
include all personnel. In fact, these
adds.
plans will provide larger benefits as a
Bank of Jacom o adop ted its deferred-com pensation plan for directors
percentage of salary to low er-paid em
in 1980. T he idea for th e plan cam e to Mr. Pryor from a m em ber of his
ployees than to officers.
staff who had b een an insurance agent at one tim e. This em ployee was
A nonqualified retirem en t plan is a
familiar w ith th e deferred-com pensation plan offered through IAC
benefit that Congress has supported
G roup of Kansas C ity and reco m m en d ed th at Mr. Pryor and his board
for years. I t’s nothing new. The only
consider it.
major restriction it carries is that it
“T h ere was no resistance from m y d irecto rs,” Mr. Pryor says. H e likes
cover only a select group of m anage
th e fact that th e plan is funded thro u g h a life-insurance program that is
m e n t or h ig h ly c o m p e n s a te d e m
ow ned and controlled by th e bank. T h e re ’s no direct tie to the insurance
ployees!
policy (supplied by Phoenix M utual) in th e plan, he says.
The tax code sections that govern
Bank of Jacom o’s directors see th e plan as a way to take a relatively
m ost of these plans is classified as d e
small fee and let it accum ulate through the years until it becom es a
ferred com pensation; how ever, b e n
relatively significant am ount w hen th e directo r reaches retirem en t age
efits may be provided w ithout a re
and is likely to b e in a low er tax b racket than was the case w hen the fees
direction in a participant’s income.
w ere earned.
A plan’s benefits and participation
“The program is a real w in n er for directors u n d er age 50,” Mr. Pryor
are selective according to the desires of
says. All of th e bank’s directors u n d e r th at age are participants.
th e bank, not the IRS or the D ep art
H e cites a suggested scenario for a typical participant: A director gives
m ent of Labor (Revenue Ruling 71-419
up — or defers — about $250 in fees p e r m onth. W hen th e director
extends these benefits to directors). A
reaches age 65, th e accum ulated fees can provide benefits of about
properly structured plan can provide
$2,500 p e r m onth for 10 years.
officers and directors w ith benefits that
Bank of Jacom o’s plan runs in five-year increm ents. At th e end of each
(Continued on page 26)
period, each d irecto r has an o p p o rtu n ity to stay w ith the plan or drop
out.
* Mr. Mattel also is preside7it, R. S . Mattel
ir Co., Inc., Monroe, La.
Deferred Compensation 'Locks in'
Director-Bank Relationships
A
Digitized for20
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MID-CONTINENT BANKER for May, 19 8 4
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MCB584R1
21
Dimensional Management Training
Used by Centerre
To Deal W ith Behavioral Situations
M P L O Y E E b eh av io r has a vital
effect on how a bank perform s. It
in flu e n c e s e ffic ie n c y le v e ls , r e la
tionships, attitu d es, tu rn o v er rates —
in short, it affects every function of a
bank, including its bottom line!
This realization was a factor th at
p ro m p te d m an ag em en t at C e n te rre
B a n c o rp ., St. L o u is, to p ro v id e
D im en sio n al M an ag em en t T raining
(DMT) for m anagem ent- and sup erv i
sory-level p ersonnel of both th e hold
ing com pany and its affiliates, includ
ing C e n te rre Bank.
This year C e n te rre is observing the
10th anniversary of th e D M T program ,
which, according to W ayne D. Muskopf, H C vice p resid en t/sen io r hum an
resou rces officer, is “a very usable
program th at w orks.”
D M T was d e v e lo p e d by P sycho
logical Associates, Clayton, M o., as a
form of p ersonnel training th at teaches
individuals how to m anage and su p e r
vise effectively by dealing w ith th e b e
havioral characteristics of them selves
and th eir subordinates. Mr. M uskopf
says th e training teaches supervisory
personnel how to assess a n o th er’s b e
havior and deal effectively w ith others
to accom plish th e business objective.
G roups of 20-25 p ersonnel are se
q u este re d daily at a hotel for a w eek of
intensive interactive training. D uring
that period they are fam iliarized w ith
four “qu ad ran ts” of behavior created
by two continuum s: vertically (dom i
nance through subm ission) and h ori
zontally (hostility through w arm th).
M em bers of each class are divided
into working groups of five individuals
fo r ro le p la y in g th a t ta k e s th e m
through th e four quadrants so they can
experience and deal w ith th e types of
behav io r associated w ith each. Ses
sions are videotaped and critiqued.
“C om m itm ent to achieving th e m ost
effective m ode of behavior is th e object
of the p ro g ram ,” Mr. M uskopf says.
Participants ten d to take p art w ith e n
thusiasm because th ey are assured that
everything that takes place in the class
room is confidential. Participants are
m ade aware of th e benefits th at can be
Digitized for22
FRASER
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Federal Reserve Bank of St. Louis
derived from m aking efforts to u n d e r
stand behavioral characteristics th o r
oughly so they can adapt th eir own
behavior tow ard subordinates in such a
way as to elicit cooperation and p ro
ductivity from them .
It is natural that, once an individual
u nderstands the four quadrants of b e
havior, he/she also understands his/
h e r own traits and those of subordi
nates, peers and supervisors and can
deal w ith them in a way that harm o
nizes the experience of everyone, thus
m aking th eir work perform ance m ore
effective.
A pproxim ately 500 C e n te rre p e r
sonnel have participated in the p ro
g ram , in clu d in g th e ch airm an and
president. Each w eek-long class ses
sion is p reced ed by 30-40 hours of
“p rew ork” study from a program text
book.
According to H elen M. Fick, assis
ta n t vice p re sid e n t/e m p lo y e e re la
tions, C e n terre Bank, the program is
designed for one-on-one interaction in
th e w orkplace rath er than for group
Must a bank be the size of Cen
terre to offer dimensional manage
m ent training (DMT) to its em
ployees?
No, says Bob Lefton at Psycho
logical Associates (PA), Clayton,
Mo., originator of DMT.
As few as four bank personnel can
take a private seminar from PA, he
says, with PA coming to the bank to
conduct the program. Or banks can
send personnel to one of the public
seminars PA holds in St. Louis. Five
individuals from one bank can be
accommodated at a public seminar
for the cost of four (tuition is $685 per
person).
Banks can join forces with each
other or with nonbank firms to put
on a seminar or their personnel can
be included in a “package” group
made up of representatives from var
ious firms in a community.
The cost of sending a PA instructor
to a seminar is $3,500, with an addi
tional $200-per-student charge for
materials, Mr. Lefton says.
action. Ms. Fick is one of two bank
personnel certified to teach the p ro
gram at C en terre. The o ther is Bob
O ’Leary.
Ms. Fick says the first day of the
program consists of a discussion of the
prew ork assignm ent and lectures that
encourage group participation and a
review of the program ’s concepts. “I t’s
a clarification d ay,” she says, during
w hich questions, concerns and doubts
on the part of participants are dealt
with.
Role-playing begins on the second
day in breakout sessions. D uring roleplaying critiques, videotapes of p ar
ticipants in action are com pared w ith
m o d e l in te r a c tio n s p r o v id e d by
Psychological Associates.
O n th e th ird day, th ro u g h rolep lay in g , c o m m u n ic a tio n skills are
practiced and observation skills are
sharpened.
O n day four th e em phasis shifts from
generic cases to real-life situations that
exist at the H C or bank. S tudents prac
tice resolving these situations w ith the
in ten t that th e experience gained will
enable them to deal m ore effectively
w ith th e actual situation w hen they are
back on the job.
An evening session is held on day
four to allow tim e for team assessm ent
of each in d iv id u al’s behavior. “C ri
tiquing takes lots of tim e ,” Ms. Fick
says; “and for m any is the highlight of
th e pro g ram .”
T he final day is devoted prim arily to
developing the assets and liabilities of
participants. Ideas are shared for b e
havior-handling im provem ent in the
m anagem ent of subordinates and p ar
ticipants are asked to com m it th e m
selves to the im provem ent of th eir own
m anagerial effectiveness. Individual
goal setting and planning for the onthe-job objective are review ed and re
fined by each team .
“ P articip an ts are grateful for th e
program , and they often express th eir
th an k s,” Ms. Fick says.
“Some classes even hold informal
reu n io n s,” Mr. M uskopf adds.
(Continued on page 69)
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nk
Understanding Adult Learners
Must Be First Step
In Employee-Training Program
T
H E C H A N G IN G com petitive e n
By Jeanne Czarnecki Baird
vironm ent in th e financial-services
industry has increased th e n eed for
training program s as em ployees take experiences, w hich may be positive or
refresh er courses to bring th em up to neg ativ e. R egardless of th e ex p eri
d a te in a fa st-p a c e d e n v iro n m e n t. ence, th e adult learn er will bring these
M ore supervisors and m anagers are feelings into the training sessions. It is
being called on to handle classroom im portant for the train er to be aware of
and on-the-job train in g functions as these attitudes and to realize they do
p art of th e ir responsibilities.
not reflect on the tra in e r’s ability.
In p r e p a r in g e m p lo y e e -tra in in g
• A d u lts have ingrained habits.
p ro g ram s, it is im p o rta n t th a t th e W hile this may be found typically in
train er u nderstands th e characteristics em p lo y ees w ith m ore w ork ex p eri
of adult learners in o rd er to design a ence, som etim es even new em ployees
successful learning experience. A dult- have e stab lish ed b eh av io r p a tte rn s
education teach ers or trainers often th at run contrary to w hat is taught in
sta rt th e tra in in g p ro cess w ith th e th e training session. This is not a draw
second step of education — th e actual back, b u t it does show that adult learn
teaching. They te n d to overlook the ers may be less flexible and m ore resis
m ost im p o rtan t first step — u n d e r tan t to change.
standing th e learning needs of th eir
Participants may feel th reaten ed if
adult audience.
th ey are told that a certain behavior or
E m ployees p articip ate in training procedures are incorrect. H ow ever, if
sessions for m any reasons. W h e th e r th e train er understands th eir feelings
em ployees receive training to learn a and is w illing to help them discover the
new skill, p rep are for job advancem ent advantages of change, th e training ex
or to im prove th e ir job perform ance, perien ce is likely to be m uch m ore
they all have one characteristic in com successful.
mon: All th e learners are adult. R e
• Adults tend to relate w hat they are
search show s th a t a d u lts ap p ro ach learning to what they already know.
learning differently from younger-age Adults have learned to relate new in
groups, and recognizing th e needs of form ation and ex p eriences to p rio r
this audience is a first step to a success situations. To a certain extent, every
ful training experience. In school, stu one does this, b u t adults have m any
dents study to do w ell in the course
work. H ow ever, w ithin a professional
environm ent, th e goal of learners is to J e a n n e C z a rn e c k i
do well in th e job.
B a ird is 2 n d v .p .,
Trainers should be aw are of some U. S. b an king /ad visbasic characteristics of adult learners: o ry serv ic e s , C o n
Illin o is
• Adults must have a desire to learn, t i n e n t a l
and they tend to be more goal-oriented
than other students. Adults n eed to be
shown th at the skills to be acquired
will enhance th e ir job perform ance.
T hey w ant to be able to apply im
m ediately w hat th ey have learn ed to
th eir jobs and careers.
• Adults have past learning experi
ences. D uring th e m aturation process,
everyone acquires different learning
24
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Federal Reserve Bank of St. Louis
N a t 'l ,
C h ic a g o ,
which she joined in
1 9 7 3 . M rs . B a ird
s ta rte d as product
m g r., e d u c a tio n a l
services division, be
came b anking offic
er in 19 7 9 and 2nd
v .p . in 1 9 8 3 . She
holds a B.S. d eg ree in edu catio n from
M ichigan State University.
m ore experiences to com pare and are
likely to continue to incorporate new
inform ation in this m anner.
T herefore, it is helpful for th e train
e r to relate new inform ation to familiar
situations or procedures. T he train er
m ight say to the participants, “Now
you all know how to perform pro ce
d ure A. W hat I am going to show you is
som ething like that, b u t ju st a bit dif
fe re n t. M aking th e se co n n ectio n s
gives em ployees a basis for learning
and also makes the training process
m ore com fortable, relevant and less
threatening.
• A d u lts need to be actively in
volved in the learning process. Most
adults w ant to do m ore than ju st sit and
passively receive inform ation. They
like to participate in the learning p ro
cess and have some im pact on th e ses
sion.
T herefore, the train er should lim it
lectures to essential inform ation. At
th e conclusion, the train er should ask
participants for opinions and to relate
this inform ation to th eir jobs and ex
periences. In this way, participants are
actively involved in learning, and they
have a stake in making the training
session successful. This also greatly in
creases the adult learn er’s reten tio n of
th e information.
• A dults w ant guidance and not
grades. W hile em ployees should know
how they are doing in a session, they
ten d to feel th reaten ed by a grading
system. It is im portant for the trainer
to rem em b er that m ost adults will set
standards for them selves.
In a d d itio n to re c o g n iz in g th a t
adults have separate learning needs
and backgrounds, trainers should be
aware of possible barriers to learning.
Learner A n xiety. Anxiety is one of
th e m ost com m on feelings participants
b rin g to th e tra in in g session. E m
p loyees are anxious ab o u t changes
they may be asked to make, th e ir p e r
form ance in the training session, how
th e class will be evaluated and how the
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experience may affect th e ir careers.
These feelings can influence partici
p ants’ attitudes.
Som e p eo p le m ay feel they w ere
singled out unjustly because they w ere
assigned to special train in g or th ey
may perceive th e assignm ent as an in
dication of low perform ance. T hey also
m ay th in k th e in stru c to r has b e e n
asked to m onitor th e ir perform ance
and discuss th e ir progress w ith th eir
supervisor.
O th e r p articipants are uncom fort
able talking in front of a group even
though it may be small. T hey are selfconscious about th e way they look and
sound in front of th e ir p eers and will
com pare them selves to th e ir p e rc e p
tio n o f o th e r s a ro u n d th e m . E m
ployees w ith this insecurity also are
afraid of m aking m istakes and find it
difficult to answ er questions in front of
th eir associates.
F o r th ese reasons, anxiety blocks
learning. T rainers n eed to be aware of
these feelings and learn to deal w ith
them . It may be difficult to ascertain
w hich em ployees are feeling anxious.
The anxiety may be expressed in th e ir
voice tone or choice of words. It may
be presen t in th e individual who sits
back in his chair pulling h im self away
A L U M IN U M
lig h tw e ig h t h eavy d u ty
from th e train er or th e person who
constantly looks around th e room or at
a clock to avoid eye contact.
T h e sk illfu l tr a i n e r s h o u ld b e
attu n ed to these signals, b u t not take
th e em p lo y ee’s behavior personally.
T he em ployee is reacting to a situation
th at is uncom fortable, not to the train
er. By rem aining calm and com fortably
draw ing the individual into the train
ing session, th e train er can help indi
viduals overcom e anxiety.
If th e train er does nothing to dissi
pate this anxiety, it can grow into re
sistan ce or h o stility . T he effective
tra in e r can d isp e l this reactio n by
draw ing the p articipant’s experiences
into th e training session through opene n d e d q u estio n s. A n o th er effective
way to overcom e resistance is con
stantly to reinforce th e tra in e r’s role as
a facilitator ra th e r than an expert or
teacher. In this way, participants will
recognize th e tra in e r’s role as a h elp er
and not a threat.
Conclusion. T raining program s are
becom ing m ore im portant as changes
continue in th e financial-services in
d u stry . U n d e rsta n d in g th e com po
nen ts of adult learning will help to e n
sure m ore effective em ployee training.
At th e same tim e, recognizing possible
blocks to th e adult-learning process
will help th e train er keep th e course on
track while dissipating individual anxi
ety.
To m eet the increased n eed for inhouse training, C ontinental Bank has
developed a com prehensive “Train the
T rain er’ course to help its own trainers
as well as others. Subjects, including
learning needs, learn er anxiety, m an
a g e m e n t in v o lv e m e n t, e v a lu a tin g
objectives, lecturing and o th er su b
jects, are outlined in a w orkbook and
o th er accom panying educational m ate
rials.
In th e en d , an effective train in g
program will benefit all involved —
th e em ployee, th e financial institution
and the trainer. • •
CHECK TRAY CASES
#3230 ALUMINUM CHECK TRAY CASE of
high strength aluminum with 3 compartments
to carry one #8201 CHECK TRAY ( I 8V2”
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One, two or three trays may be transported at
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#3232 ALUMINUM CHECK TRAY CASE as
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SEE YOUR VENDOR OR CALL/WRITE
mJ050«DOW[MggSE
D IV IS IO N O F B Y l O
3333 W 48TH PL
26
M FG
IN C
C H IC A G O 60632
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Federal Reserve Bank of St. Louis
312/247-4611
4 N ' 1------------------■
’
•
D ire c to rs & O ffic e rs
Deferred Comp
(Continued fro m page 20)
are tax deferred until retirem en t. It
also can provide greater benefits than
could be achieved w ithout such a plan.
F ro m th e b a n k e r’s v iew p o in t, a
properly designed plan has the follow
ing advantages:
• D iscrim inatory as to participants,
benefits, vesting, etc.
• Plan contributions rem ain an asset
of the bank.
• Positive cash flow can be g en er
ated.
• B ank e a rn in g s can b e taxs h e lte re d by im p le m e n tin g such a
plan.
Among bankers who have high
opinions of officer deferred compensation plans is Ward J. Ram
say, president, Peoples Bank, Rus
sellville, Ark. The bank uses a plan
put to g eth er by D. F. Nash &
Associates, Little Rock.
Five bank officers participate in
the plan, which has been in place for
four years.
Mr. Ramsay says he shopped
around for a plan that was best suited
for the bank. “The bank comes out
way ahead in the long run,” he says,
“and that’s good for the bank!”
*
*
*
Bank of Cookeville, Tenn., initi
ated a deferred-fee compensation
program for its directors last year.
“We were looking for a good tool to
retain our directors because they
were not eligible to participate in the
bank’s pension plan,” says Charles
R. Miller Jr., chairman.
Deferral of fees isn’t a big issue
with his directors, he says; however,
deferred income is “the only tax ben
efit left for them. And it’s a good
benefit.”
The plan, administered through
Executive Planning Group, Mon
roe, La., covers the bank’s directors,
two of whom also are bank officers.
Mr. Cooke said he looked at about
a dozen plans and the one offered by
Executive Planning Group offered
the most benefits.
“We re thrilled with the plan,”
Mr. Cooke says. “It’s a super ben
efit!”
D e fe rre d C o m p e n s a tio n
I
•
E x e c u tiv e &
E m p lo y e e B e n e fits
jy
F. Nash &
I Associates, Inc.
1
L ittle R o c k
5 0 1 /2 2 7 -8 4 0 0
The success of newly form ed banks
due to the efforts of aggressive officers
and directors is well known. Through
th e concept of nonqualified deferredcom pensation plans, individuals who
are key to the institution’s success can
be rew arded in a m anner that is good
for both the bank and its officers and
directors. • •
MID-CONTINENT BANKER for May, 19 8 4
Paper w eig h t
;
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,
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gold and silver.
You can rely on Centerre to provide your
customers with the most prestigous of precious
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And remember, non-Missouri residents are exempt
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The reassuring feeling of working with a bank such
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CENTERRE RANK
O u r cu st omers know.
Member FDIC
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Centerre Bank
One Centerre Plaza
St. Louis, MO 63101
Every Bankers Byword
R obert
Pi/kulioh and
fì/zooiatcv. Ino.
De/ign/Build
Con/truction management
10762 Indian Head Indu/. Blvd.
ft Loui/. mo. 63132
314-427-6633
Kuhlmann
Design
Group
Architects and Engineers
66 Progress Parkway
Maryland Heights, Missouri 63043
(314) 434-8898
A successful new or remodeled bank does not "just happen”. It is a result of the banker, the architect,
the construction manager sharing specialized information and formulating solutions to problems.
RPA has over 20 years of estimating, construction and building management experience
supporting guaranteed project cost which is applied to the building design package at the
conclusion of preliminary drawings.
Kuhlmann Design Group, working in conjunction with RPA, has experienced architects, interior
designers, and engineers providing you with their personal service. They apply professional
expertise and "state of the art” design input to your specific banking requirements.
With RPA serving as the manager and guarantor of the entire process, you receive a well
designed, cost effective building at a predetermined budget under a single source of responsibility.
For further information, please call Steve Wood at 314-427-6633.
“Return on Investment” is a phrase never
forgotten throughout our Design/Build Program.
28
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Federal Reserve Bank of St. Louis
MID-CONTINENT BANKER for May, 19 8 4
N ew Mexico BA Sets Convention
For June 13-16 in Albuquerque
H e a d in g th e NM BA this y ear is e le c te d p re s id e n t, C e n tin e l Bank,
REASURY Secretary D onald R e
Taos. H e m oved to his p resen t institu
A
rth
u r O rtiz , p r e s id e n t, W e s te rn
gan has b een invited to b e keynote
Bank, Santa Fe. Serving as p re sid e n t tion in June, 1981, and has served as
speaker at this y ear’s annual conven
tion of th e N ew M exico Bankers Asso elect is Jack Daniels, chairm an, F irst p resident/C E O since that tim e.
M r. D aniels becam e a b anker in
ciation. The m eetin g will be h eld June N ational of Lea C ounty, H obbs, and
F ebruary, 1965, w hen he was elected
tre a su re r is J. W. Craig, president,
15-18 at th e H ilton Inn, A lbuquerque.
c h a irm a n of F irs t N ational of L ea
Secretary Regan had not confirm ed F irst In terstate, A lbuquerque.
County. H e also serves on the boards
M
r.
O
rtiz
e
n
te
re
d
the
banking
p
ro
his appearance at press tim e.
(Continued on page S/15)
O th e r speakers will include N ew fession in January, 1973, w hen he was
Mexico G overnor Tony Anaya, who
will deliver th e w elcom e m essage on
Friday, June 15, durin g th e first g e n e r
al session; Jack Jackson, form erly w ith
A m erican A irlines, w ho will discuss
Wednesday, June 13
deregulation at th e sam e session; U. S.
2:30 p .m .— R egistration D esk O pen, A lbuquerque Hilton.
S en ato r P e te D o m en ici (R .,N .M .),
6:30 p .m .— Past P resid en ts’ D inner.
w ho will appear at th e second general
session on S atu rd ay , Ju n e 16; and
Thursday, June 14
Jam es C airns, ABA p re sid e n t-e le ct,
7:30 a .m .— M en’s G olf T ournam ent, A lbuquerque C ountry Club.
a n d p r e s i d e n t , P e o p le ’s B an k o f
7:45 a .m .— L adies’ G olf T ournam ent, Tanoan C ountry
W ashington, Seattle, w ho also will be
C lub.
on th e Saturday program .
8:00 a .m .— M en’s/W om en’s Tennis T ournam ent, Tanoan
C harlie Plum b, w ho spen t six years
C ountry Club.
in N orth V ietnam prisons durin g the
8:00 a .m .— Registration D esk O pen.
V ietnam W ar, will speak at th e p rayer
5:30 p .m .— W elcom ing Reception.
breakfast, w hich is scheduled for F ri
Friday, June 15
day, June 15. Closing luncheon speak
7:00 a .m .— Registration D esk O pen.
e r will b e D r. W . C. N ew berry, a
7:30 a .m .— P rayer Breakfast.
hum orist.
9:45 a .m .— G eneral Session.
D uring th e convention, th e tra d i
11:30
a .m .— W om en’s L uncheon/Style Show.
tional golf and tennis tou rn am en ts will
2:00 p .m .— W om en’s Bridge Party.
b e held for m en and w om en. Bridge
6:00 p .m .— R eception, A lbuquerque C onvention C enter.
also will be available for w om en.
7:30 p .m .— B anquet/Stage Show W ith D ella Reese.
This year m arks th e 73rd annual
T
Convention Calendar
convention of th e association.
Saturday, June 16
7:45
9:30
12:30
1:00
2:15
2:45
ORTIZ
DANIELS
a .m .—
a .m .—
p .m .—
p .m .—
p .m .—
p .m .—
Buffet Breakfast.
G eneral Session.
Reception.
L uncheon.
A djournm ent.
Board of D irectors’ M eeting.
The fifteen New Mexico state banks of the WEST
ERN BANK GROUP are pleased to congratulate
Arthur L. Ortiz, President of Western Bank, Santa
Fe, on a successful year as President of the New
Mexico Bankers Association.
We appreciate the cooperation and assistance
given Mr. Ortiz during his term of office and in his
efforts on behalf of banking in New Mexico.
Arthur L. Ortiz
CRAIG
CAIRNS
MID-CONTINENT BANKER for May, 198 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
29
Problem:
Most banks handle correspondent banking
the same old way for everyone.
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;
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Solution:
Come to the First. A handpicked
team of consultants will
treat your bank like
its one of a kind.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
'sim
,l%
J
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Federal Reserve Bank of St. Louis
J tB K w
The First knows that doing business
with other banks takes more than a repre
sentative who supplies you with a set of stan
dard services and pat answers. It takes a consul
tant who understands the economy, the opportunities in banking, and the available resources— and how
j / f to apply them to your bank’s special circumstances.
JKw
The First has been doing correspondent banking in
¿ a m just that way since 1886. Today, we offer a wide variety of
special services, including Priority Clearing of cash letters,
microcomputer-based asset/liability management systems, and expert ag-lending
capabilities as part of our special industries
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Wr
In addition to services, we offer something
jf r much more important: Our commitment to you as
m S one of our correspondent banks.
^ ¡| 4
W
If this dedication to offering customized solutions
W u
" to fit your needs is the kind of treatment your bank
1
deserves, contact Tom Papa or your account officer in the Senior ({™cep^sidem
Correspondent Department of First National CharterBank.
and Manager
Where\our Business Thrives.
a
FIRST NATIONAL
CharterBank'
KANSAS C ITY
10TH AND BALTIMORE □ KANSAS CITY, MO 64183 □ (8 1 6 )2 2 1 -2 8 0 0 □ M EM BER FDIC
About Banks Sc Bankers
ALABAM A
SouthTrust Corp., B irm ingham , has
an n o u n c e d plans for a m ajor office
building in th e dow ntow n area. The
s tru c tu re , w h ich has an e stim a te d
price tag of $50 million, will be the
tallest in th e state (29-34 stories high)
and will contain a m inim um of 550,000
square feet of floor space. C onstruc
tion will begin later this year, and com
pletion is expected in late 1986 or early
1987.
SouthTrust Bank o f Alabam a, B ir
m ingham , has p rom oted Don J. Giardina to vice p re sid e n t and D avid C.
D arby, Patricia J. Cross, Violet Rag
land and Bill Brown to assistant vice
presidents. Mr. G iardina jo in ed the
bank in 1980, Mr. D arby in 1978, Mrs.
Cross in 1969, Mrs. Ragland in 1957
and Mr. Brown in 1982.
Involved in recent changes a t First Arkansas Bankstock Corp., Little Rock, are (I. to r.):
James P. Jett, D. Eugene Fortson, Edward M . Penick, C. Joseph G iroir Jr. and W illia m L.
Cravens.
G iroir Jr., vice chairm an; Jam es P.
Jett, p resid en t, W orthen Bank; and
M essrs. Penick, Fortson and Cravens.
M o ch tar R iady is ch airm an, L ippo
H olding Com pany, H ong Kong, and
M r. G iro ir is ch airm an , Rose Law
Firm , L ittle Rock. Jam es Riady is a
d irector of Lippo H olding Co. and ex
ecutive vice p resident, S tephens F i
n an ce, L td ., also lo cated in H ong
Kong. Mr. C ravens recently resigned
as president, F irst Com m ercial Bank,
and vice chairm an, F irst C om m ercial
C orp., both in L ittle Rock.
A m erican N a tio n a l, G a d sd e n , has
m erged into A m South Bank, B irm ing
ham , and now o p e ra te s u n d e r th e
Am South nam e. A m South has had an
office in G adsden since 1976, w hen it
acquired Bank of G adsden, located in
G adsden Mall. The A m South offices at
that mall and at P iedm ont C utoff have
been jo in ed w ith th e form er Am erican
National to provide th re e full-service
offices in G adsden. Boards of the two
b a n k s a re b e in g m e r g e d to fo rm
A m South’s board in G adsden.
Becky Upton has b een elected vice
p resid en t, F arm ers Bank, Clarksville,
w h ere she is responsible for m arketing/lobby services. M ost recently, Ms.
U pton, w ith the bank 15 years, was
assistant vice p resident, m arketing.
ARKANSAS
IN D IAN A
F irst A rkansas B an k stock C orp.
(FABCO), L ittle Rock, has created an
executive com m ittee of th e board and
elected two new officers and th re e new
d ire c to rs. D. E u g e n e F o rtso n was
nam ed FA B C O ’s vice chairm an, and
W illiam L. C ravens was elected p resi
d en t/d irecto r of th e holding com pany.
Also elected to its board w ere M ochtar
Riady and Jam es Riady. E dw ard M.
Penick continues as FA B C O ’s chairm an/C E O , and Mr. F ortson continues
as chairm an/C E O , W o rth en Bank, a
FABCO subsidiary. N am ed to FAB
C O s e x e c u tiv e c o m m itte e w e re
M ochtar Riady, chairm an; C. Joseph
32
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
LIPPERT
HUGHES
John D. Lippert has been prom oted to
presid en t, National City Bank, E vans
ville, succeeding E dgar P. H ughes,
who re tired after 43 years w ith the
bank. H e rem ains on the board and
ex ecu tiv e c o m m ittee. M r. L ip p e rt
joined National City in 1979 and has
been a banker 33 years. H e form erly
was executive vice president.
1st Source Bank, South B end, has
announced these prom otions: to assis
tan t vice president/assistant m anager,
p e rs o n a l/s m a ll b u s in e s s le n d in g ,
Jam es R. Seitz; to m anager, M aple
L a n e B an k in g C e n te r , Je ffe ry F.
R em ble; to assistant vice p resid en t/
m anager, M ishawaka consum er loan
d ep artm en t, Jam es M. G renert; and to
assistant vice president/loan counselor/interview er, South B end personal
loan/sm all business len d in g d e p a rt
m ent, A lbert C. Irish.
Judy Kirchner has b een elected vice
president, M idw est C om m erce Bank
ing Co., E lkhart, w hich she joined in
1981. Since 1982, Ms. K irchner had
b e e n b ran ch m an ag er, Oak M anor
Banking C en ter. She also has been
prom oted to regional m anager, branch
adm inistration.
Northern Indiana Bank, Valparaiso,
has bought the Portage Branch of Peo
ples F ederal S&L, H am m ond. The d e
pository relationship of branch cus
tom ers will rem ain th e same after sav
ings accounts are tra n sfe rre d from
Peoples to N o rth e rn Indiana Bank,
and accounts will be fully insured by
th e F D IC . Following th e purchase,
th e bank reassig n ed som e officers.
Vice P resid en t W illiam B. O ’Brien has
m oved to the new W illow creek Office,
w hich he not only m anages, b u t he also
MID-CONTINENT BANKER for May, 198 4
Help W anted?
You’llwant our kindof help.
We know who you’re looking for,
because we’re the only bank in
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of success in placing mid-level to
upper-level executives who stay where
BANKER for May, 198 4
DigitizedMID-CONTINENT
for FRASER
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Federal Reserve Bank of St. Louis
they’re placed is phenomenal, and
or Linda Reh at 501-378-4257 or
it should be. Who could know pro toll-free in Arkansas 1-800-482-8450.
spective banking executives better
Or write to Union National Bank Per
than working, experienced, informed sonnel Consulting Agency, P.O. Box
banking executives? Here’s how
1541, Little Rock, Arkansas 72203.
confident we are of success: We’ll
Union National Bank
refund your fee if the recruit we send
you doesn’t work out. Call Joe Zegler Personnel Consulting Agency
coordinates N o rth ern Indiana Bank’s
Financial M anagem ent C e n te r activi
ties. T hat division, u n d e r th e direction
of Senior Vice P re sid e n t L e ste r T.
Proctor, is expanding tru st/in v estm en t
services in n o rth e rn P o rte r C ounty
from the W illow creek Office. Jam es
M. Connors has assum ed Portage C en
tral Office m anagem ent duties in addi
tion to being loan officer at th e bank. In
o th e r action, S tev en R. Y oder has
joined N o rth ern Indiana Bank as vice
p r e s id e n t/m a r k e tin g d ir e c to r . H e
form erly was assistant vice p resid en t/
com pliance officer, Second National,
Richm ond.
LONG
KOEPSEL
R a n d a ll K o ep sel, c u sto m e r in v e st
m ent officer, F irst N ational, W ichita,
has been nam ed a vice p resid en t, in
v estm en t division. H e was assistant
vice p re sid e n t, in v estm en t division.
Assistant Vice P resid en t Bruce Long
has joined the b ank’s com m ercial loan
division after having served as a co rre
spondent bank division officer since
1979.
F o u rth N ational, W ichita, has form ed
an in te r n a tio n a l-s e rv ic e s area. Its
fu n ctio n in c lu d e s le tte rs of c re d it,
foreign collections, fo reign-currency
e x c h a n g e a n d b a n k e rs -a c c e p ta n c e
financing. The bank has offered these
services s e p a ra te ly for som e tim e.
M anager of international services, a
function of the com m ercial loan d e
partm en t, is A nna A nderson, recently
nam ed international services officer.
H u tc h in s o n N a tio n a l h as n a m e d
G eorge H upach p ersonnel officer. H e
joined the bank M arch 15 from FarM ar-Co, w h ere he was m anager, compensation/benefits.
K an sas S ta te , W ich ita, has a new
d ire c to r, L arry D. F lem ing. H e is
o w n er/p resid en t, LARCO D istrib u t
ing, Inc., a b e e r d istributorship, and
co-ow ner/president, IM P, Inc., w hich
operates 15 W en d y ’s O ld-F ashioned
H am burger restaurants in Kansas and
Texas.
34
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
M ission Bank and C entennial Bank,
both of Mission, w ere m erged April 2
u n d e r th e M issio n B a n k ’s n a m e .
Assets of the new ly m erged bank are
about $275 m illion. T he C entennial
Bank location in th e M arley Building
now is th e C entennial Facility of M is
sion Bank.
F ir s t N a tio n al, O lathe, has nam ed
Vice P resident Geoff B utler vice presid e n t/tr u s t officer; G arland M cC or
mick, vice president; and Larry C am p
bell assistant vice president.
M ott L. R andle has joined Arkansas
Valley State, Valley C en ter, as vice
president. H e replaces R obert M on
troy, who retired F ebruary 15. Mr.
Randle form erly was w ith Life In su r
ance Co. of Kansas, W ichita, for five
years. Barbara McVay has joined the
b ank as assistant cash ier/m ark etin g
re p re s e n ta tiv e , going from U n ite d
A m erican B ank, W ich ita. A n o th e r
new com er to Arkansas Valley State is
C oleen H eld, who was nam ed auditor.
Ron D arlington has b een placed in
charge of the com puter d ep artm ent,
and M ark D en n e tt heads the newly
form ed real estate m ortgage d ep art
m ent.
WILLIAMS
CORNETT
Julian C. C o rn e tt and Jam es K. Wil
liams have been prom oted to senior
vice p re s id e n ts , D e p o sit G u aran ty
National, Jackson. Mr. C o rn ett, w ith
th e bank since 1981, is in th e state
b an k d iv isio n . M r. W illiam s, w ho
joined the bank in 1983, is in the com
m ercial-loan area of D eposit G uaranty
in H attiesburg.
MISSOURI
D ied: M erl M arkley, vice p resid en t/
director, Peoples State, Luray.
CRAY
KENTUCKY
F. Jack O ’Reilly, head of consum er
banking, F irst N ational, Louisville,
has been prom oted to executive vice
p re s id e n t. H e b ecam e a b an k er in
1951 as a ru n n e r for th e old Lincoln
Bank, w hich was m erged w ith F irst
N ational in 1960.
L ib e r ty N a tio n a l, L o u isv ille , has
announced these prom otions: to assis
tan t cashier, cash m anagem ent d e p a rt
m ent, Nancy S. D eBell; to tru st offi
cer, Jan M. M adison; to assistant trust
officers, R honda Richardson and Mary
E. D ean; and to assistant tru st invest
m en t officer, Doris Skees.
D ouglas M. L e ste r has b een elected
c h a irm a n /p re s id e n t/C E O , C itiz e n s
National, Bowling G reen. H e form erly
was executive vice p resident, Boone
C ounty National, Colum bia, Mo. John
P. H ines, who was th e Bowling G reen
b a n k ’s p r e s id e n t/c h a ir m a n , a n
nounced last O ctober that he w anted
to take early re tire m e n t after 34 years
w ith th e bank. H e continues as a board
m em ber.
COX
BARRON
C om m erce B ancshares, Kansas City,
has elected th ree new directors: Ran
dall D. B arro n , L e s te r L .C ox and
C loud L. Cray Jr. Mr. Barron is p resi
dent, M issouri division, S outhw estern
Bell T elephone C o., St. Louis. Mr.
Cox is chairm an, M odern D istributing
C o., Springfield. Mr. Cray is chair
m an, M id w est S olvents C o ., In c .,
Atchison, Kan. In o th er action, C om
m erce Bancshares has sold C om m erce
Bank, Brunswick, to a group o fM oberly investors.
M itchell T. M o rg an has b e e n p ro
m oted to assistant vice p resid en t, F irst
N ational C harterB ank, Kansas City.
H e jo in e d th e b a n k in 1981 a n d
form erly was assistant cashier.
NEW MEXICO
J e r r y In g ra m , vice p resid en t/co m m ercial loan officer, and Bill Bynum ,
v ice p re s id e n t/c a s h ie r, h av e b e e n
p rom oted to senior vice presidents,
F irst C ity National, Roswell. Mr. In
gram continues as h ead of th e com m er
cial loan dep artm en t, and Mr. Bynum
rem ains cashier.
MID-CONTINENT BANKER for May, 19 8 4
Precision teamwork
pays off. Where?
Our customers know.
To the casual fan, baseball is a gam e of
random events, but to the men who play for
a living, it is o n e of strategy, planned well
and executed precisely.
Strategy is equally important in banking.
Centerre offers correspondent banks new
and innovative consulting services in
strategic planning, asset/l¡ability
management, estate planning, executive
com pensation, general business insurance
and a wide range of personnel-related
services. We’re working to help each
correspondent custom er successfully m eet
today’s challenges through effective planning
and management.
Precision teamwork is on e reason why
Centerre is among the nation’s most
respected correspondent banks. Our
custom ers know w e can serve their needs.
Work with u s—w e can serve yours, as well.
CENTERRE BANK
One Centerre Plaza
St. Louis, MO 63101
314-554-7737
9th & Walnut Streets
Kansas City, MO 64106
800-892-2472
Member FDIC
MID-CONTINENT
BANKER for May, 1 9 8 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
35
Gets Banking Post
SANTA FE — Mary Mclnerny
has been named financial institu
tions division director, replacing
Richard Bosson. She formerly was an
assistant attorney general in the state
attorney generafs office.
Mr. Bosson, a Santa Fe attorney,
was named interim director in De
cember to replace Andrew Swarthout.
H a rry J. B a rre n has b een nam ed vice
p re sid e n t/c a sh ie r, F irst N ational of
D ona Ana C ounty, Las C ruces. H e
held th e sam e posts at Bank of Ysleta,
El Paso, Tex.
U nited N ew M exico F inancial C o rp .,
A lbuquerque, is th e n ew nam e of Bank
Securities, Inc. The H C has 10 banks
statew ide, w ith 41 offices, and a tru st
com pany in A lbuquerque.
OKLAHOMA
eq u ip m en t to banks and o th er financial
institutions, including S&L and credit
u n io n s. T h e a g re e m e n t m akes th e
bank th e exclusive rep resentative in
O klahom a for th e H enry company.
Because L iberty N ational previous
ly offered batch/rem ote-data-capture
processing, th e addition of the new inhouse capability m akes the bank a onestop data shopping c en ter for th e finan
cial com m unity, says D arrell W ood,
senior vice p resid en t, data processing.
K. G ordon G re e r, p resid en t, L iberty
National, O klahom a City, and 1983-84
p resid en t, O klahom a Bankers Associa
tion, has b een inducted into the Hall of
Fam e of the Business A dm inistration
School, O klahom a State U niversity.
O nly two in d iv id u als are in d u c te d
each year. Mr. G reer was honored for
his achievem ents in th e business world
an d for his civic service. In b ein g
nam ed to the Hall of Fam e, he joins
an o th e r L iberty N ational executive.
W illis J. W heat, executive vice p resi
d e n t, m a rk e tin g , was in d u c te d in
1975.
Liberty N atl, O C, Named
Data-Processing Agent
O K L A H O M A C IT Y — L ib e r ty
N ational now offers full in-house datap ro c e s s in g s e rv ic e to th o se b an k s
w anting to keep th e ir data processing
on th eir own prem ises.
T hro u g h a licensing arran g em en t
w ith Jack H e n r y èt A s s o c ia te s ,
M o n ett, M o., a c o m p u ter-so ftw are
firm, O klahom a banks may have stateof-the-art software support for all th e ir
principal services.
U n d e r th e lic e n sin g a g re e m e n t,
L iberty N ational will offer com puter
softw are, service and IBM su p p o rt
36
Jack C. M cK ee has been elected to
A m erican N ational of C hattanooga’s
board. H e is executive vice p resid en t/
treasu rer, M cKee Baking Co. H ugh
O. Maclellan and Thom as O. Duff, Jr.
have re tire d as active directors and
w ere nam ed advisory directors.
T he F ed has approved the application
of C h ester C ounty Bancshares, H e n
derson, to becom e a bank HC through
acquisition of C h ester C ounty Bank,
H enderson.
TEXAS
GREER
HOSKINS
R onald R. Hoskins has b een nam ed
vice p resid ent, consum er loan d e p a rt
m ent, C entral National, E nid, w here
he has overall m anagem ent of consum
er-loan activities. M ost recently, he
was vice p resident, installm ent len d
ing, Bank of N orthw est, W oodward.
C h a rle s D . Sw inton and Jam es G.
W o lf have b e e n nam ed vice p re si
d e n ts, L ib erty N ational, O klahom a
C ity. B efore joining th e bank, Mr.
Swinton was vice president, O klaho
mans for M odern Banking. Mr. W olf
was em ployed by G endein, Vanhooser/In teg rated Financial.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
TENNESSEE
Brownsville B ancshares C orp. has re
ceived F ed approval to becom e a bank
H C through acquisition of Brownsville
Bank.
D e n n is H ill, vice p re s id e n t, F irst
National, Clinton, has been elected to
th e bank’s board. H e has b een with
F irst National six years.
Involved in agre e m e n t for Liberty N a t'l,
O klaho m a City, to be representative for
Jack Henry & Associates, M on ett, M o., in
O klaho m a are: Jack Henry (I., seated); Bill
Sm ith (top center, I.); Gordon G reer (top
center, r.), Liberty's pres.; and Darrell Wood
(r., front), s.v.p., d a ta processing.
P a tie n c e L a ttin g , O klahom a C ity ’s
first woman city councilm an and later
its th ree-term mayor, has been nam ed
to a two-year term on and chairm an of
th e b o a rd o f th e O k la h o m a C ity
Branch of the Kansas C ity Fed. John
Snodgrass of A rdm ore, president/trustee, Sam uel R obert N oble F o u n d a
tion, was nam ed a director of the same
branch to fill an unexpired term . Mr.
Snodgrass is a form er chairm an/C E O ,
Exchange National, Ardm ore.
F irs t N ational, O klahom a City, has
e le c te d M artha B urke and Douglas
F u lle r vice presid en ts, energy divi
sion, and M artin E. Titus vice p resi
dent, securities m arketing. Ms. Burke
jo in ed the bank in 1979 and Mr. F u ller
in 1980. Mr. Titus has joined the bank
from F irst C ity National, H ouston.
R en ee B. R issm an , c o rre sp o n d e n t
banking, Frost Bank, San Antonio, has
b een prom oted to assistant vice p resi
dent. W ith the bank since 1976, Ms.
Rissman is an operations officer in the
co rresp o n d en t banking d ep artm en t.
She was elected correspondent bank
ing officer in 1980. F rost Bank also
p ro m o ted th e following to assistant
RISSMAN
vice presidents: Karen J. Banks, in
vestm en t services; Kaye C arp en ter,
tru st investm ents; Jerry M. Garcia,
E D P audit; Jean ette L. Johnson, trust
oil/gas; James M. M ullin Jr., cost/planning; A rm ando F. Polanco, autom ated
custom er service; and Skip F itzp at
rick, cash-m anagem ent services.
MID-CONTINENT BANKER for May, 19 8 4
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Micro
Computer
Division,
where big
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DO come in
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In today’s demanding managei
nvironment, you
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One that provides the right information when and
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Micro Computer Division: We can implement such a
system and make you a better manager.
We start with our IBM Micro Computer. Easy to use
and maintain — quite simply the best in the
business. And we’ll make it even better with a
substantial savings over retail cost. But that’s not
where this “little” package ends. We’ll also
provide you with FDMC-designed software designed
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such as Asset/Liability Management Planning
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Micro Computer means bigger and better things
for you.
FOR MORE INFORMATION CALL OR WRITE OUR
MICRO COMPUTER DIVISION:
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A .J
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MID-CONTINENT BANKER for May, 198 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
y m P.O.Box 25189
^
Oklahoma City, Oklahoma 73125
405-272-4999
37
Bob Hope to Head Entertainment
At Missouri BA Convention in KC
B
OB H O P E will be playing Kansas
C ity n e x t m o n th as th e s ta r
attraction at th e 94th annual conven
tion of th e M issouri Bankers Associa
tion. W hen th e nation’s top e n te rta in
e r is on your program , do you need
anything else?
Yes! say m em bers of th e MBA’s con
v e n tio n c o m m itte e , c h a ir e d by
Richard S. Pryor, p resid en t, Bank of
Jacomo, Blue Springs. So th e com m it
tee lined up a few o th er big nam es,
specifically, W illiam F. Buckley Jr.,
Barry Asmus and A dele M. Scheele.
T he MBA’s annual m eeting will be
T h e second gen eral session, p re
held at the H yatt R egency H otel, K an
sas City, May 22-24. Last year’s con sided over by MBA P resid en t G eorge
vention also was in Kansas City; this R. C urry, will begin th at afternoon at 2
year’s rep eat perform ance in th at loca p .m . M r. C u rry is ch airm an /C E O ,
tion breaks th e age-old trad itio n of C e n tra l Bank, L eb an o n . K e y n o te r
alternating Kansas C ity and St. Louis W illiam F. Buckley Jr. will deliver the
as convention locations. MBA officials keynote address. H e will be followed
stated earlier that a suitable location by A dele M. Scheele. Mr. Buckley is a
was not available in St. Louis this year. n o te d p u b lis h e r a n d a u th o r; D r.
As usual, the MBA will begin its Scheele is a career-developm ent spe
convention schedule w ith golf and te n cialist.
T he th ird general session is set for 10
nis tournam ents, w hich will begin at 1
p.m . on Tuesday, May 22. R egistra a.m . on Thursday, May 24. It will fea
tion also will begin on Tuesday at the tu re Barry Asmus, a m em b er of the
H yatt Regency.
faculty at Boise (Idaho) State U niversi
Registration will reo p en and com ty, and a spokesm an for free-m arket,
m ercial exhibits will open at 8 a.m . on lim ite d - g o v e rn m e n t eco n o m ics. A
W ednesday, May 23. The first general panel will discuss issues in the M is
session will begin at 10 a. m. and will be souri financial m arketplace.
T he fourth general session will b e
presid ed over by Mr. Pryor.
A “state of th e association’ panel gin at 2 p.m . th at afternoon. Tentative
presen tatio n will be followed by a re plans include a gubernatorial forum
p ort from th e MBA nom inating com featuring all candidates running in the
m ittee and election of officers for the prim ary election.
T he convention will w rap up w ith
1984- 85 term . A m eeting of M issouri
m em bers of th e ABA will w rap up th e th e traditional p re sid e n t’s cocktail p ar
ty and b a n q u e t, d u rin g w hich Mr.
m orning’s activities.
H ope will entertain.
Assisting Mr. Pryor on the conven
New 50-Year Clubber
tion com m ittee is Frank Spinner, vice
c h a irm a n , w ho is c h a irm a n /C E O ,
Only one M issouri banker is
C ounty Bank, St. Louis.
scheduled to be inducted into the
O th ers on th e com m ittee (all from
MBA’s 50-Year Club at this year’s
convention.
Kansas City) include L. D ean H ow ard,
He is T. J. McCullough, retired
vice p resid en t, F irst N ational C harterpresident, First Stock Yards Bank,
Bank; C. G erald Jam es, p resid en t,
St. Joseph.
B o atm en ’s N o rth H ills Bank; M ary
The induction luncheon will be
N ep tu n e, vice p resid en t, B oatm en’s
held during the convention under
Bank; B arbara P en dleton, executive
the direction of R. Quinn Fox, vice
vice p resident, U nited M issouri; D e n
p re sid e n t, C e n te rre Bank, St.
nis Riffle, vice presid en t, M ercantile
Louis, club secretary.
B ank; R ussell L. R u th , p re s id e n t,
38
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Federal Reserve Bank of St. Louis
M ercantile N ational of Clay C ounty;
W illiam J. S prenger, vice p resid en t,
C om m erce Bank; Phillip Straight, ex
ecutive vice p resid en t, U nited M is
souri; and F ran k V ictor, chairm an/
president, N orth Kansas C ity State.
MBA President George Curry
W raps Up Year at Convention
MBA P resident G eorge R. C urry,
chairm an/C E O , C entral Bank, L eba
non, will wrap up his year as MBA
p resid en t at the association’s annual
convention May 22-24 in Kansas City.
H e will preside at several business
sessions during this year’s convention
program .
Mr. C urry began his banking career
in 1949 at his p re s e n t in s titu tio n ,
although it th en was called State Sav
ings Bank, L eb an o n . H e was p ro
m oted to assistant cashier in 1950 and
has been chairm an/C E O since 1965.
Serving as MBA vice p resid en t is
W illiam W. Quigg, president, C entral
T rust, Jefferson City. H e served as
general counsel/lobbyist for th e MBA
in the late 1960s and has served on the
CURRY
QUIGG
MID-CONTINENT BANKER for May, 19 8 4
A SPECIAL TRIBUTE
TO
HARRY S. TRUMAN
100 years ago a farm
boy was born to John and
Martha Truman in Lamar,
Missouri. This boy next door
was destined to become a
folk legend and a national
hero in the coming years.
Of his father, Mr. Harry
Truman would frequently say,
“My father was not a failure.
After all, he was the father
of a president of the United
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
States of America.”
He was not so kind,
however, when he referred
to the unknown ancestry of
a New York music critic’s
review of his daughter’s pi
ano playing abilities.
Perhaps the most re
vealing insight into his char
acter is the now famous sign
that once stood on his desk
in the Oval Office. It sim
ply read, “The Buck Stops
Here.”
This year, the entire na
tion is commemorating the
Truman Centennial. Central
Bank of Jefferson City joins
in that celebration.
Central Bank
Member FDIC
The new Trum an B uilding
in Jefferson City. D edicated
A p ril 4, 1984.
MOSER
Your source for
financing resources.
Stern Brothers & Co. is a logical source for finding the
best in cost-effective capital financing.
Throughout our 67 years service, we’ve consistently
proven our ability to arrange for substantial capital loans and
equities. Often, it’s accomplished because of our close work
ing relationships with key sources for private placements.
Sometimes, the answer is found in “going public”.
Working with you to explore such alternatives is another
reason we are known as ‘the banker’s banker.’
Stern Brothers & Co. also is a reliable source for
evaluating bank portfolios or customer’s securities when of
fered as collateral. Current stock and bond information is
readily available, and it is supported by the resources of an
in-house research department. That facility, plus insight
gained from being an active dealer since 1917, is helpful when
making changes or bids on portfolio liquidations.
Call on Stern Brothers & Co. when you need investment
banking services. We back your capacity with our own.
CRAWFORD
MBA governm ent-relations and taxa
tion com m ittees. H e joined C entral
T rust in 1969 following service to the
M issouri G eneral Assembly as revisor
of statutes. H e recently was appointed
chairm an of the M issouri State Bank
ing Board.
Serving as MBA treasu rer is Jam es
C. M oser, who is p resid en t, Bank of
Poplar Bluff. H e joined his bank in
1974, going th ere from Citizens Bank,
Jonesboro, Ark., w here he was legal
counsel and com m ercial-loan officer.
H e had been an attorney for a nu m b er
of years prior to entering banking.
R obert W. Crawford has served the
MBA as its executive vice presid en t
since 1977. H e is a form er p resid en t of
th e Association of G eneral M erchan
dise Chains, and prior to that, was a
M issouri state representative. H e also
is a form er M issouri secretary of state.
David Lewis Is Nominated
For MBA Treasurer Post
D avid W. Lewis, chairm an/C E O ,
U nited M issouri, St. Joseph, has been
nom inated for MBA treasu rer for the
1984- 85 term .
Mr. Lewis began his banking career
in 1954 at F irst National, St. Joseph.
H e m oved to U nited M issouri (then
known as Park Bank) in 1966 as president/C E O . H e received his p resen t
title in 1983.
LEWIS
“The Banker’s Banker”
Stern
Brothers & Co.
^
Suite 2200 City Center Square South Kansas City Office:
P.O. Box 13486
United Missouri Bank Building/Suite 303
Kansas City, 1*10 64199
1-435 and State Line
816 471 6460
816 942-7150
40FRASER
Digitized for
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
H e is p resid en t of the U niversity of
M issouri Board of C urators and holds a
BS degree in business adm inistration
from UM C.
His election will take place during
th e MBA convention in Kansas City.
H e is expected to succeed Jam es C.
M o ser, p re s id e n t, B ank of P o p la r
Bluff, who has been nom inated to be
MID-CONTINENT BANKER for May, 19 8 4
O ur Correspondent
Commitment Knows
No Boundaries.
o us, the best thing about state
bankers association conventions is
that they give us the opportunity to continue
our commitment to regular personal
contact. The more we participate, the more
we can discover about your bank’s needs
and concerns.
Crosby Kemper
Chairman of the Board
Dick King
President
Naturally, it takes a heavy commitment
of personnel and man hours. But, you’re
worth it. That’s why even members of
United Missouri’s top management will
be attending various conventions.
S ee you there!
Byron Thompson
Vice Chairman of the Board
Investment Banking Division
Phil Straight
Executive Vice President
Correspondent Bank Division
■
Missouri
Kansas
Jack Beets
Dave Van Aken
George Crews
Maxine Hahs
Hal Hollister
Kirk Vaughan
Larry Russell
Bob Cnamberlain
Randy Klein
Ralph Lampton
George Morris
Steve Panknin
Phil Youngs
Dan Spencer
Joe Smith
George Crews
Noel Shull
Bob Hardin
Matt Grzybinski
Bob Heinsohn
Maxine Hahs
Hal Hollister
Kirk Vaughan
Nebraska
D ick Muir
Steve Panknin
Jeff Goble
Pat Baldwin
Dave Dickens
Colorado
Dick Muir
Steve Panknin
Oklahoma
Joe James
Larry Russell
Steve Panknin
Pat Baldwin
Greg Bernard
U N ITED MISSOURI BANK
of Kansas C ity n.a.
Member FDIC
10th and Grand o P.O. Box 226 o Kansas City, Missouri 64141
(816)556-7000
MID-CONTINENT
BANKER for May, 19 8 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Bob Chamberlain
Randy Klein
Ralph Lampton
George Morris
Steve Panknin
Phil Youngs
Dan Spencer
Joe Smith
MBA vice p resid en t, th e post being
vacated by W illiam W. Quigg, p resi
d en t, C en tral T rust, Jefferson City,
who has b een n om inated as MBA p re s
id en t for th e new term .
C ounty B ank o f T o w er G ro v e, St.
Louis, has elected W illiam A. Sullins
Jr. c h a ir m a n /C E O a n d J o h n J.
T h ie b a u th p r e s id e n t. M r. S u llin s
form erly was p resid en t and continues
as ch airm an , C o m m erce Bank, St.
Louis. Mr. T h iebauth jo in ed th e C om
m erce organization in 1981 and has
served as p resid en t, C om m erce Bank,
St. Louis, and executive vice p resid en t
of the m erged C om m erce and C om
m erce-M anchester banks, St. Louis.
F irs t N ational, St. Joseph, has nam ed
Steve T yrrell a vice p resid en t, Richard
G arvey a com m ercial loan officer and
Jeff H arrison a vice p resid en t in the
a g r ic u ltu r e /c o r r e s p o n d e n t d e p a r t
m ent. Mr. Tyrrell form erly was with
A m erican N ational, B axter Springs;
Mr. G arvey was w ith D rovers M ercan
tile Bank, South St. Joseph; and Mr.
H arrison was w ith F irst National, Sali
na, Kan.
W illiam W. Jam es has b een prom oted
from vice p resid en t to senior vice p re s
ident, B oatm en’s National, St. Louis,
w here he is in charge of th e tru st divi-
HARRISON
JAMES
s io n ’s e s ta te -p la n n in g sectio n . H e
joined th e bank in 1972. B oatm en’s
also e le c te d F re d e ric k C arl S chu
m acher Jr. tru st officer, investm ent
d e p a rtm e n t, tru s t division. Before
joining B oatm en’s, Mr. Schum acher
was president, H ickey-M itchell Co.
Municipal Bonds
c lx c iu iiv e iu
R. K enneth Bass Jr. has jo in ed Gravois Bank, St. Louis, as senior vice
p resid en t responsible for com m ercial
lending. H e form erly was w ith Cente rre Bank, St. Louis, as m anager,
M issouri/Arkansas section, correspon
d e n t banking division.
Specializing in
T h e F e d h as a p p ro v e d L an d m ark
Bancshares Corp. of St. Louis’ offer to
purchase for cash all th e 389,538 o u t
standing shares of F irst National, St.
C harles, at a p rice of $53 a share.
L andm ark anticipated th e closing of its
acquisition to becom e effective May 1.
GENERAL MARKET BONDS
Revenue and General Obligation
Your " Correspondent” for Municipal Bonds
Investment Bankers • Municipal Bonds
O N E TW ENTY SEVEN WEST TENTH
KANSAS CITY, MISSOURI 64105
(81 6) 221-4311
42
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
C ounty Bank of St. Louis, Clayton,
has elected Jac E. G riswold and P am e
la T ezon H ill vice p re sid e n ts. Mr.
G riswold joined th e bank in 1967, and
Mrs. Hill transferred to C ounty Bank
in F ebruary from C om m erce Bank, St.
Louis. C ounty Bank is an affiliate of
C om m erce Bancshares, Kansas City.
T he F D IC has approved the m erger of
two of the subsidiary banks of Boat
m en ’s Bancshares, St. Louis — Boat
m en ’s Bank of St. Louis C ounty and
B oatm en’s W est Port Bank. The su r
viving bank is B oatm en’s Bank of St.
L ouis C o u n ty , w ith to tal assets of
about $220 million. Richard C. Jensen
is president/C E O .
C e n t e r r e B a n k , St. L o u is, has
aw ard ed K uhlm ann D esign G roup,
Inc., St. Louis, a contract to design its
new C en terre St. P eters facility. The
one-story structure will include 3,800
MID-CONTINENT BANKER for May, 19 8 4
square feet of space and will have four
teller stations, two personal bankers, a
safe deposit vault, conference room
and m anager’s office, as well as an e n
closed w alk-up autom atic teller m a
chine. F o u r drive-up lanes will be in
cluded, w ith expansion capability to
eight lanes.
M e r c a n tile T r u s t , St. L o u is, has
appointed D avid W. C arter, Pat R.
M o b ley , J e ro m e P. Shaw Sr. and
D onald J. W ilson vice presid en ts and
C harles F. C lem en t, H. Jill Fivecoat
and David M. D en n eh y assistant vice
presidents. Mr. C arter w en t to M er
cantile in 1969, Mr. M obley in 1966,
Mr. Shaw in 1956, Mr. W ilson in 1973,
Mr. C lem en t in 1982, Ms. Fivecoat in
1980, and Mr. D en n eh y ju st recently.
D ic k H . W o o d s J r . h as r e jo in e d
th e Kansas City F e d as vice p resid en t/
general counsel. M r. W oods left the
bank in F ebruary, 1983, to join a Kan
sas City law firm. In o th er action at the
K ansas C ity F e d , Jo h n E . Y orke
m oved up from assistant vice p resid en t
to vice p resid en t, w ith responsibility
for bank-H C supervision in th e 10th
F ederal R eserve D istrict. C harles L.
Racon Jr. was p ro m o ted from assistant
general counsel/assistant secretary to
associate general counsel/secretary.
Interactive Market Data
The F in a n c ia l-M a r k e t-In fo r m a tio n S ys tem
(F M IS ) a t St. Louis' C e n te rre B a n k a llo w s
users on IB M 8 7 7 5 te r m in a ls to access a ll
in fo r m a tio n fr o m th e b a n k 's IB M 8 1 4 0
c o m p u te r, says Jo hn W . R o w e , s .v .p . a n d
h e a d o f th e in v e s tm e n t b a n k in g d e p a r t
m e n t. B a n k -s a le s e m p lo y e e s n o w can p ro
v id e a c c u ra te , tim e ly a n s w e rs to c u s to m
ers' in v e s tm e n t q u e s tio n s , fro m C D ra te s to
g o ld p ric es, s im p ly b y r e fe r r in g to th e
a p p r o p r ia te c a te g o ry in th e sy ste m . FM IS
" c re a te s a n a tm o s p h e re m u c h m o re c o n d u
cive to tr a d in g a n d s e llin g ," e x p la in s M r.
R o w e , w h o also is c h a ir m a n o f C e n te rre 's
fu n d s m a n a g e m e n t c o m m itte e . FM IS in
v o lv e s a n e tw o r k o f IB M v id e o -d is p la y
te m in a ls lin k e d to a c e n tra l IB M c o m p u te r.
T y p ic a lly , tra d e rs p u t in to th e system d a ta
t h a t sales p e o p le use to im p ro v e co ntacts
w ith cu stom ers.
MID-CONTINENT BANKER for May, 198 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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c u sto m e rs b ig b a n k services— like esta te p la n n in g .
N o w , F irst N atio n al B ank can b rin g it to y o u .
T h a t's rig h t. A t F irst N a tio n a l, o u r tru s t d e p a rt
m e n t is full o f estate p la n n in g ex p erts. O u r c o rre s p o n
d e n t b a n k officers— Bill M a n rin g , Jeff H a rriso n , Bob
H o lt o r M ark T h o m p so n — w ill b e glad to se t u p a
g ro u p se m in a r or an in d iv id u a l co n su lta tio n w ith y o u .
So give u s a call. W ith th e h e lp of F irst N atio n al,
y o u can offer b ig b a n k e sta te p la n n in g , too. N o m a tte r
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First National Bank
St. Joseph, MO 64502 • Call: (816) 279-2721
Affiliate of First Midwest Bancorp., Inc.
43
'Pursuit of Excellence' Is Theme
O f Indiana Bankers Convention
4 é ^ J U R S U I T of E xcellence’ is the
I th em e of this y e a r’s Indiana
B a n k e rs A s s o c ia tio n c o n v e n tio n ,
w hich will be held in Indianapolis June
12-14. E very th ird year, th e conven
tion moves to the capital city, m aking
use of th e C onvention C en ter/H o o sier
Dom e.
C onvention planners say th e p ursu it
of excellence has proved to be an e lu
sive goal th ro u g h o u t th e ages. I t ’s
sought by many, b u t obtained by few
— and it’s nev er won easily. I t’s the
result of m uch hard w ork — of “going
the extra m ile .”
T he 87th annual IBA convention has
been planned to explore th e m any def
initions of p u rsu it of excellence. T hese
definitions now are shifting and ex
panding and new forces are defining
th e role banking will play in to m o r
row ’s m arketplace.
In v itatio n -o n ly ev en ts are sc h e d
uled for th e day p rior to th e opening of
th e convention — M onday, June 11.
T he IBA board will m eet at 3 p .m .; a
jo in t re c e p tio n h o n o rin g IBA p ast
presid en ts and m em b ers of th e 50Year C lub (and separate dinners for
the two groups) will begin at 7:30 p.m .
Bankers will have opportunities to
display th e ir a th le tic excellence on
opening day — Tuesday, June 12 —
w hen they participate in golf and te n
nis to u r n a m e n ts at th e S y cam o re
Springs Golf C ourse and th e In d ian
apolis R acquet C lub, starting at 8:30
a.m.
A w om en’s to u r of th e Indianapolis
M useum of Art will d ep art from the
H yatt R egency H otel at 1:30 p.m .
O ne h u n d re d exhibitors will show
th eir wares to delegates w hen the IBA
trade show opens at 3 p.m . R egistra
tion (which also begins at 3 p.m .) will
be in the exhibit area. Bankers are
advised to bring 100 business cards to
fa c ilita te r e g is te r in g at e x h ib ito r
booths for prizes to be aw arded during
the convention.
T he evening will be reserv ed for
corresp o n d en t bank activities.
Serious business will be on tap for
delegates on W ednesday, June 13.
T he first business session will start at
9:30 a.m . Bob Richards, w in n er of two
O lym pic gold m edals, will be key
noter. H e will reveal “The Secrets of a
44
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
KING
ALEXANDER
at 8 a.m . Spouses will be invited to
bru n ch from 8:30-10:30 a.m . at the
Ayres D ep artm en t Store.
T he business session will feature
Barry Asmus, Willis A lexander and
Lezlie H eath. Dr. Asmus is a freem arket econom ist on th e faculty of
Boise (Idaho) S tate U niversity. His
topic: “T he Econom ics of R eality .”
Mr. A lexander is ABA executive vice
presid en t and Ms. H eath hosts a daily
fitness program on TV in Indianapolis.
H er topic: “Excellence Through E xer
cise and D ie t.” • •
W inner, ” p resenting his philosophy of
achievem ent.
W illiam King to Address
A panel discussion on “Im proving
Indiana
Convention in June
Bank P erform ance,” will take up the
balance of the m orning program . It
Indiana Bankers Association P resi
will feature representatives of th ree d e n t W illiam H . K ing, c h a irm a n /
consulting firms: Profit Technologies C E O , Second N ational, R ichm ond,
C orp., Sick & Co. and Larry H eine will address delegates during the IBA’s
Associates.
annual convention June 12-14 in In d i
A session for w om en will begin at anapolis.
9:30 a .m . an d w ill fe a tu re F ra n k
Mr. King e n te re d the banking p ro
Basile, a m otivator, who will speak on fession in 1958 at T erre H aute First
“ Signs of a H ealth y , P ositive Self- National. H e jo in ed Second National,
C o n c e p t.” C o n current sessions on in Richm ond, in 1965 as assistant trust
te rio r design, flow er arranging and officer. H e has served as chairm an/
creative cooking will be offered from
C E O since 1982.
10:45 a.m . to noon.
S erving as IBA vice p re s id e n t is
T he p re sid e n t’s luncheon will in R obert W. Hill, p resid en t, National
clude installation of new IBA officers Bank, G reenw ood. Mr. Hill becam e a
and an address by C harlie Plum b, who banker in 1948 w hen he joined Rock
e n d u re d six years in a C om m unist pris ville National. H e m oved to his p res
on cam p in N orth Vietnam.
e n t bank 10 years later, was elected
A d essert extravaganza will be held cashier in 1959, vice p resid en t in 1964,
in th e exhibit area at 1:45 p .m ., and a executive vice p resid en t in 1966 and
shopping tour will start at 2:15 p.m .
presid en t in 1977.
C o n cu rrent workshops will start at
IBA treasu rer is C harles E. Stanley,
3:30 p.m . and continue until 5 p.m .
president, Farm ers National, Rem ing
D avid T hurm an, vice president, F irst ton. H e joined his bank in 1963, fol
N ational, Richm ond, will tell about lowing service at Albion National. H e
the use of m icro-com puters in banks; was elected executive vice p resid en t in
Jerom e Frankowiac, Financial T ech 1967 and p resid en t in 1977.
nology, Chicago, will discuss asset/
liability; Jam es M ontague will presen t
relatio n sh ip banking; and th e th ree
consultants from the m orning panel
will continue th eir discussion of im
proving bank perform ance.
T h e e v e n in g activ ity w ill b e an
“E vening at the Pops” that will include
a reception, din n er and concert by the
Indianapolis Sym phony O rchestra.
Final convention day — Thursday,
June 14 — will begin with the annual
Indiana BankPac convention breakfast
HILL
STANLEY
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Federal Reserve Bank of St. Louis
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Mergers, acquisitions, regional
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tem increased dramatically. The
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Federal Reserve Bank of St. Louis
“ I congratulate HBE,” says Drew Karandjeff, Jr., executive
vice president of Granite City Trust Company, Granite City,
Illinois, in the metro St. Louis area. “ It’s quite an accom
plishm ent to be picked by a board of experts. And the
building trades experts on our board agreed unanimously
th a t the HBE choice would be clearly advantageous to us.”
“We’ve absorbed 50% of main-bank volume
with only seven people.”
“ We saw in HBE an intim ate knowledge of the banking
industry th a t could lead us to all the efficiencies. The
building design, layout and work flow of this full-service
branch facility are a direct result, and we are achieving
strong growth now very quickly.”
“What a refreshing surprise to find a
cooperative spirit. HBE has jt.”
“ Nothing burns me more than a high-hat attitude. I’ve
been through th a t before in other projects. When we dis
covered HBE, we were d e lig h te d -a ll of u s - w ith th e ir
totally open and candid attitude, th e ir honest dedication
and determ ination to deliver a real value. Planning was
logical and we enjoyed full participation. Our top manage
ment was not burdened w ith d e ta ils -w e could tru s t HBE.
Their on-site project manager took the job to heart, and we
finished ahead of schedule. There was good cooperation
between HBE and local labor. Being an outsider was no
p ro b le m -th e y worked well together. G etting the job done
right produced real economies for us.”
You should get in touch with HBE.
It’s easy to confirm what Mr. Karandjeff is saying when
you talk to us, here at HBE. Before your next project, be
sure to evaluate us yourself. Call or w rite Sally Eaton at
314-567-9000. HBE Bank Facilities, 11330 Olive Street
Road, St. Louis, Missouri 63141.
S S HBE
B ank Facilities
You can’t afford not to
look at HBE.
Bush Task Group Recommendations
O n Tennessee Convention Program
T
H E P R O G R A M for th is y e a r’s
annual convention of th e T en n es
see Rankers Association will cover a
W illia m H. Kennedy
variety of topics, including th e Rush
Jr., w ill discuss the
W a s h in g to n scene
Task G ro u p ’s recom m endations for the
d u r in g
th e
firs t
banking in d u stry , th e quality-circle
g e n e r a l b u s in e s s
concept of m anagem ent, an analysis of
session of the TBA
finance and econom ics and a re p o rt on
convention.
th e W ash in g to n , D. C ., legislative
scene.
T he convention will be h ead q u ar
te re d at th e H yatt R egency, Knoxville, an d w ill co n tin u e u n til th e second
and will run from May 20-23.
general business session begins at 9:30
T he calendar for Sunday, May 20, a.m . Exhibits will open at 8:30 a.m .
includes opening of registration and and th e registration desk will operate
exhibits in th e H yatt lobby at 1 p.m . from 9 a .m .-3 p.m .
An insurance-com m ittee m eetin g will
T he business session will feature
b e held at 3 p.m .
Richard C. B reeden, deputy counsel
Activities for M onday, May 21, will to Vice P resident G eorge Bush. His
begin w ith opening of registration and topic will be “The Bush Task G roup:
exhibits at 8:30 a.m . T he w om en’s hos R eco m m en dations for th e F u tu r e .”
pitality room will open at 9 a.m .
Mr. B reeden is sponsored by the U ni
T he first general business session is versity of T ennessee distinguished lec
set to start at 9 a.m . It will feature ARA tu re r program . M arvin T. Runyon,
C h airm an W illiam H. K en n ed y Jr. p resid en t/C E O , Nissan M otor M anu
w ith a r e p o r t on th e W a s h in g to n facturing Corp. USA, will speak on the
sc e n e . M r. K e n n e d y is c h a irm a n , quality-circle concept of m anagem ent.
N atio n al Bank of C o m m erce, P ine H e is a v eteran of 37 years of service
Bluff, Ark., im m ediate past p resid en t w ith F ord M otor Co., w here he was
of the ABA, past chairm an of th e ABA vice p resident/body and assem bly op
g o v ern m e n t-re latio n s council and a erations.
past p resid en t of th e Arkansas Bankers
N ew officers will be e lected and
Association.
proposed changes in th e TBA bylaws
Also on th e program is th e p resi will be discussed during the balance of
d e n t ’s a d d re s s , d e liv e re d by TBA th e session.
P re sid e n t Jam es H. Shelton, p re si
A spouses luncheon will begin at
d en t, Som erville Bank; and a talk by noon.
F ran k C appiello, finance/econom ics
E vening activities will include a re
an aly st, le c tu r e r at Joh n s H opkins ception at 6:30 p.m . followed by the
U niv ersity , vice p re s id e n t of M on annual b an q u et and induction of offi
um ental C orp., and a regular panelist cers at 7:30 p.m . E n tertain m en t will
on “Wall S treet W eek ” on th e Public be by singer Louise M andrell.
Broadcasting System .
The closing convention activity will
Two events for w om en will be held b e th e traditional fellowship breakfast,
d u rin g th e m o rn in g h ours: a color
analysis session at 9:30 a.m ., and a
spouses’ shopping to u r at 10:45 a.m .
A luncheon for th e TBA board will
begin at 12:15 p .m . D eleg ates will
have th e option of participating in golf/
tennis tou rn am en ts at th e Fox D en
C ountry C lub during th e afternoon.
The evening activity will be a recep
tion, starting at 6:30 p.m .
A co n v en tio n -w id e breakfast will
rouse delegates early on T uesday, May
22. The ev en t will begin at 7:30 a.m .
TANNER
SWAIN
MID-CONTINENT BANKER for May, 1 9 8 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
starting at 7:30 a.m ., on W ednesday,
May 23. Frank H. Bulle, m inister of
B a rtle tt U n ited M eth o d ist C hurch,
will be the featured speaker. • •
J. H. Shelton Will Preside
At Tennessee Convention
Presiding over th e general business
sessions of th e 94th annual T ennessee
Bankers Association convention this
year will be J. H. Shelton, TBA p resi
d e n t an d p r e s id e n t, S o m m e rv ille
Bank.
Serving w ith Mr. Shelton during the
1983-’84 term are Virgil H. M oore Jr.,
TBA p resid en t elect, w ho is chairm an,
F irst F arm ers & M erchants, C olum
bia; J. W. H udson, TBA first vice p re s
ident, who is p resid en t, Bank of Madisonville; Ray U. T anner, association
second vice p resident, w ho is p resi
dent, Jackson National; and R obert M.
Gilliam, TBA treasu rer, who is TBA
executive vice president.
W . H . S w ain , c h a irm a n , F ir s t
National, O neida, is TBA chairm an.
Mr. Shelton has b een w ith Som er
ville bank for 17 years and has served
as the institution’s p resid en t for the
past 15 of those years. Prior to that, he
was a tru ste e of F ay ette C ounty, a
position he held for 14 years. His bank
SHELTON
MOORE
GILLIAM
HUDSON
S /3
has been cited by the Bank A dm inis
tration In stitu te as one of th e nation’s
top institutions in term s of financial
perform ance.
Mr. M oore has b een w ith F irst F a r
m e rs & M e rc h a n ts N a tio n a l sin ce
1954. H e is an advisory directo r of the
ABA’s co m m u n ity -b an k ers division,
m em b er of the executive com m ittee of
th e ABA’s b ank-investm ent division,
s ta te d ire c to r o f th e I n d e p e n d e n t
Bankers Association of A m erica and a
past d irector of th e A tlanta F ed (Nash
ville B ranch) and th e in d e p e n d e n t
bankers and national bank divisions of
th e TBA.
Mr. H udson has been in banking
since 1965. H e was w ith the State D e
p artm en t of Banking for six years, ex
am ining banks in east T ennessee. H e
jo in ed Bank of M adisonville in 1970 as
presid en t, is a director of the S w eet
w ater H ospital Association, M onroe
C o u n ty I n d u s tr ia l D e v e lo p m e n t
Council and a past p resid en t of the
M adisonville Kiwanis Club.
M r. T a n n e r b e g a n h is b a n k in g
career in 1960 w ith N ational Bank of
C om m erce, M em phis. H e rose to the
position of vice presid en t before leav
ing NBC to join Jackson National in
1970 as its president. H e has atten d ed
th e Stonier G raduate School of bank
ing at Rutgers U niversity and has com
pleted both the com m unity bank ex
ecutive-officer program thro ugh the
ABA and a study course for m anage
m ent-data processing at P urdue U ni
versity. H e is a m em ber of the ad
m in is tr a tiv e c o m m itte e an d th e
g o v ernm ent-relations council of the
ABA and has participated in the ABA’s
banker-adviser program .
Mr. Swain has been w ith F irst of
O neida since 1959, the year he was
nam ed presid en t of th e institution. H e
added the title of chairm an in 1981.
People
People. They are the center of every organization,
regardless of its size or the nature of its business.
And they have very real needs that must be met by
the organizations for which they work.
A t the same time, you as an employer, must find
more effective ways of managing your human re
sources in to d a /s constantly changing environment.
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CORNERSTONE. Call today for more information on
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SM
A Division of Union Planters National Bank
P.O. Box 387 • Memphis, TN 38147
S/4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
STARTUP
WHISMAN
W illiam T. S ta rtu p and L. W ayne
W hism an, assistant vice presid en ts,
c o r r e s p o n d e n t b a n k d e p a r tm e n t,
T hird National, Nashville, have been
p ro m o te d to vice p re s id e n ts . M r.
Startup joined T hird N ational in 1970
and Mr. W hism an in 1980.
U nion P lan ters N ational, M em phis,
has prom oted D avid W. Autry, audit
division; Thom as R. Law rence, invest
m ent banking group; and M arion Don
W in b u sh , T e n n e sse e b an king divi
sion, to vice p residents and H om er L.
Brown and K athey E. Leggett, loan
adm inistration division, and Jam es M.
Mogan, investm ent banking group, to
assistant vice presidents. Joining the
bank as vice p residents are: Irw in M.
B e rg e r, U n io n P la n te r s F u tu r e s
C orp.; D onald W. C onrad, InnoVision, Inc., and Russell F. Allen Jr.,
P ro p h et C ounsel, Inc. Newly hired
assistant vice p residents are: John W.
Lewis, loan adm inistration division,
and Steven W. Reynolds, investm ent
banking group.
J e rry H . Sw etland has joined F irst
State, Brownsville, as executive vice
president. H e form erly was vice presi
d en t, com m ercial loans/investm ents,
F idelity Bank, O klahom a City. Also at
F irs t S ta te , R o b e rt Y. M oses was
p ro m o ted to sen io r vice p re sid e n t/
tru st officer, H elen F ish er to cashier
and head of the bookkeeping d e p a rt
m ent and Betsy English to assistant
cashier. Mr. M oses joined the bank in
1974, Ms. F ish er in 1970 and Ms. E n
glish in 1981.
MID-CONTINENT BANKER for May, 19 8 4
'four bank’s b u sin ess is our principal concern.
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Federal Reserve Bank of St. Louis
ABA, State Officials on Program
For Mississippi BA Convention
T
H E ABA’s G erald M. Lowrie, ex
ecutive directo r/g o v ern m en t rela
tions, and M ississippi L ieu ten an t G ov
ern o r Brad D ye will b e featu red speak G e r a ld M . L o w r ie ,
ers at this year’s annual convention of A B A e x e c u tiv e d ire c
to r /g o v e r n m e n t re
th e M ississippi Bankers Association,
la tio n s , w ill a p p e a r
w hich will ru n from May 17-20 in Bi o n t h e M B A p r o
loxi.
g ra m .
T he convention’s general business
session will beg in at 8:30 a .m ., on
S atu rd ay , M ay 19, in th e C o ro n e t
Room of th e B roadw ater Beach H otel,
w hich, along w ith the Biloxi H ilton ident, M erchants & F arm ers, M erid
H o te l, a re th e official c o n v e n tio n ian.
hotels.
• Young B ankers’ Section rep o rt by
T he business session will be p re YBS P r e s id e n t W illiam D. Sones,
sided over by MBA P resid en t R obert P resident, State Bank, Brookhaven.
E. K ennington II, chairm an, G renada
Recognition will be given to the fol
Bank.
lowing:
T he following agenda has b een set
• D o n a ld L. M oak, h e a d of th e
for the session:
MBA chair of banking at th e U niversi
• T reasu rer’s re p o rt by MBA T rea ty of M ississippi.
surer M. F. Kahlm us, chairm an/pres• O liver M cLean, presid en t, Bank
C onvention C alendar
Thursday, May 17
8:30 a.m .— Tennis T ournam ent, H ilton and B roadw ater Tennis
C ourts.
9:00 a .m .— R egistration opens, H ilton Lobby.
11:00 a.m .— L uncheon, H ilton G rand Ballroom.
N oon— G olf T ournam ent, B roadw ater Sun Course.
4:00 p .m .— O yster Bar, H ilton G rand Casino.
5:00 p .m .— Party, H ilton Tropicana Ballroom.
Friday, May 18
8:00 a.m .— Breakfast for School of Banking of the South graduates,
B roadw ater Vogue Room
9:00 a .m .— Registration, H ilton Lobby.
9:30 a.m .— Tennis Finals, B roadw ater Tennis Courts.
3:30 p .m .— Party, H ilton C ondom inium Pool Area.
7:00 p .m .— P resid en ts’ D in n er, B roadw ater Vogue Room.
10:00 p .m .— N ightcap R eception, B roadw ater Crown Room.
Saturday, May 19
8:00
8:30
9:30
11:30
4:00
6:30
a.m .—
a.m .—
a.m .—
a.m .—
p .m .—
p .m .—
R egistration, H ilton Lobby.
G eneral Business Session, B roadw ater C oronet Room.
W om en’s Breakfast, B roadw ater Crow n Room.
Party, H ilton G rand Ballroom.
O yster Bar, B roadw ater C row n Room.
Social H our, M ississippi Coast C onvention C en ter
A rcade/Foyer.
7:30 p .m .— B ankers B arnstorm , M ississippi Coast C onvention
C e n te r B anquet Hall.
10:00 p .m .— Party, H ilton H otel.
Digitized forS/6
FRASER
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
of Simpson C ounty, M agee, chairm an,
MBA agricultural com m ittee.
• L u th er R. Boyd, general counsel,
F irst M ississippi N ational, H a ttie s
burg, MBA bank attorneys com m ittee
chairm an.
• Clyde B. E dw ards Jr., executive
vice p resid en t, F irst N ational, Jackson, MBA b ank le n d in g /c re d it ad
m inistration com m ittee chairm an.
• V. E. B erbette, chairm an, F irst
Citizens National, Tupelo, MBA funds
m anagem ent com m ittee chairm an.
• L ag ro n e M o rtim e r, p re s id e n t,
Bank of Kilmichael, MBA group insur
ance com m ittee chairm an.
• Rebecca N. Vaughn, vice presid e n t/m a rk e tin g , B rookhaven Bank,
MBA m arketing com m ittee chairm an.
• M artha Taylor, senior vice president/cashier, N ational Bank of C om
m erce of M ississippi, Starkville, MBA
M ississippi School of Banking board
chairm an.
• Frank G arner, Tupelo, MBA operations/autom ation com m ittee chair
man.
• Joseph D. G arrick III, G renada,
MBA personnel com m ittee chairm an.
• W illiam H. M ounger Jr., senior
v ice p r e s id e n t/tr u s t o fficer, F ir s t
National, Jackson, MBA tru st com m it
tee chairm an.
The following reports will be called
for:
• MissBankPAC, by Bobby P. M ar
tin , c h a ir m a n /p r e s id e n t, P e o p le s
Bank, Ripley.
• MBA state legislative com m ittee,
by C. Willis Connell Jr., chairm an/
p re s id e n t, U n ite d S o u th e rn Bank,
Clarksdale.
• MBA federal legislative com m it
tee, by H oward L. M cM illan Jr., ex
e c u tiv e v ice p r e s id e n t, D e p o s it
G uaranty National, Jackson.
• MBA C E O sem inar com m ittee,
by R aym ond L. D avis, p re s id e n t,
Brookhaven Bank.
• P resid en t’s address and executive
com m ittee report, by R obert E. K en
nington II, MBA president.
M r. K ennington also will p resen t
c e rtific a te s to M ississip p i b a n k e rs
qualifying for m em bership in th e 40year and 50-year clubs.
Mr. Lowrie will speak to bankers on
MID-CONTINENT BANKER for May, 1 9 8 4
H A N C O C K BANK
STATEMENT O F C O N D IT IO N
M A R C H 31, 1984
Condensed Statement Showing the Condition of Hancock Bank
as of March 31, 1984
RESOURCES
Loans and Discounts
..............................................................
$195,962,061
United States Bonds and Securities ....................................
210,489,159
O ther Bonds and S e c u ritie s ...................................................
62,935,698
Federal Funds Sold ..................................................................
14,730,000
Banking Houses, Furniture & Fixtures ................................
20,848,021
O ther Real Estate
O ther Assets
.....................................................................
1,248,727
.............................................................................
12,690,141
Cash and Sight Exchange
.....................................................
36,046,810
TOTAL ASSETS ....................................................................
$554,950,617
Donald E. S utter
Chairman of the Board
Leo W. Seal, Jr.
President and C .E.O .
W alter C. Hinkle, Jr.
Executive Vice President
George A. Schloegel
Executive Vice President
Charles A. Webb, Jr.
Executive Vice President
C. E. Hutchins, Jr., CCL
Senior Vice President
0 . K. Lion
Vice President & Cashier
LIABILITIES
Jam es C. Nicholson
Senior Vice President
Capital S to c k ................................................... $ 4 ,20 1,83 0
Capital Notes .................................................
S u rp lu s ..............................................................
30,600,000
U ndivided Profits ...........................................
2 ,997,934
Reserve for C o n tin g e n c ie s ............................
1,681,259
480,000
John M. Tatum
Vice President
OFFICES:
Total Capital A c c o u n ts ........................................................
O ther Liabilities .......................................................................
$ 39,961,023
16,249,715
Federal Funds P u rc h a s e d ........................................................
D e p o s its ......................................................................................
7,586,000
491,1 53,879
TOTAL LIABILITIES..............................................................
$554,950,617
Call Hancock Bank at 601-868-4000 to see how we can serve any
correspondent banking need in South Mississippi.
HANCOCK
f t BANK
One Hancock Plaza, Gulfport, Mississippi 39501, Member FD1C
MID-CONTINENT BANKER for May, 198 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
EXCUTIVE MANAGEMENT
OF HANCOCK BANK
Bay St. Louis
Bay-Waveland
(Hwy. 90, Bay St. Louis)
Gulfport
Pass Christian
Long Beach
N ortheast
(Pass Road, Gulfport)
Mississippi City— Handsboro
Edgew ater
Norwood Village
NSTL Branch
U.S. Navy CB C enter
Diamondhead
Pineville Road
(North Long Beach)
Poplarville
(Bank of Commerce)
Picayune
(Downtown,
Northside,
W est Canal,
Southside)
S/7
a topic to be announced at th e session
and a m eeting of th e M ississippi m em
bers of th e ABA will follow, u n d e r th e
direction of R. D. Gage III, ABA state
vice p re sid e n t, and p resid en t, Port
Gibson Bank.
T he annual necrology rep o rt will be
given by MBA P resident K ennington,
followed by a rep o rt from the resolu
tions com m ittee, chaired by R obert
W. Baskin, p resid en t, M erchants &
Farm ers, W inona.
L ie u te n ta n t G o v e rn o r D y e w ill
address th e delegates on a topic to be
announced at the session.
Final event on th e program will be
nom inations and election of officers for
the 1984- 85 term .
O th e r convention ev en ts will in
clude tennis and golf tournam ents on
T h u rsd a y , M ay 17; a b reak fast for
graduates of th e School of Banking of
th e South, tennis finals and the annual
p resid en ts’ d in n er on Friday, May 18;
a w om en’s breakfast, convention social
h o u r/b an q u et on Saturday, May 19;
and a breakfast for executive com m it
tee m em bers on Sunday, May 20.
Com edian Andy A ndrew s will e n
tertain at the w om en’s breakfast and
th e Spurrlow s will e n te rta in at th e
banqu et, w hich will be h eld at the M is
sissippi Coast C onvention C enter. • •
Kennington, Davis, Kahlmus
Head M BA for '83-'84 Term
P re s id in g o v e r th e M is s is s ip p i
Bankers Association adm inistration for
th e past year has b een R obert E. K en
nington, MBA p resid en t, and chair
man, G renada Bank. Serving w ith him
as top officers of th e association have
b een Raym ond L. Davis, MBA vice
presid en t, and p resid en t, Brookhaven
Bank, and M. F. Kahlm us, association
tre a s u re r, an d c h a irm a n /p re s id e n t,
M erchants & F arm ers, M eridian.
Mr. K ennington began his banking
career as a su m m er em ployee at D e
posit G uaranty N ational, Jackson, in
KAHLMUS
KENNINGTON
1951. H e m oved to G renada Bank in
1963 and was nam ed an officer th ere
th e following year. H e has held his
chairm anship since 1970.
Mr. Davis e n te re d banking in 1952
at Bank of N orwood, La. H e m oved to
Brookhaven Bank in 1965 as senior
DAVIS
vice p resid en t and was elected p resi
d en t in 1968.
M r. K ahlm us has b e e n a b an k er
since 1964 w hen he jo in ed his p resen t
bank as vice p resid en t/tru st officer. H e
has b e e n c h a irm a n /p re s id e n t since
1968.
Feldstein Discusses Budget Deficit
At Hancock Bank Symposium
P
R E S ID E N T R eag an ’s p ro p o sed facing Congress and th e nation. H e
deficit-reduction package is a first d e sc rib e d th re e possible long-term
s te p in d e a lin g w ith th e n a tio n ’s
effects of allowing b u d g et deficits to
budget-deficit problem , b u t the next stay above $200 billion a year for the
step is up to D em ocrats in C ongress, rem ainder of th e decade:
according to M artin F eldstein, chair
• National d e b t w ould grow from
m an of the P resid en t’s C ouncil of E co $1.5 trillion to $2.5 trillion by 1990,
nom ic Advisers.
creatin g an annual in te re st-ra te ex
D r. F e ld s te in m ad e th e s e com pense of $250 billion — or m ore than
m ents w hen he addressed M ississippi half of all cu rren t personal incom e-tax
G u lf C oast b u sin ess lead ers at th e rev enue — at cu rren t rates.
H ancock Bank, G ulfport, Annual E co
• C ap ital a ccu m u latio n in p lan t,
nom ic Sym posium M arch 26. In the eq u ip m en t and housing w ould be re
p a s t, D r. F e ld s te in s c ritic is m of duced, m eaning low er productivity,
Reagan A dm inistration handling of the grow th and incomes.
b u d g et deficit had earned him th e so
• Since past experience gives little
b riq u et, “D r. Gloom, ” b u t at the H an reason to expect that th e U nited States
cock Bank conference, he expressed is capable of m aintaining a m onetary
optim ism that D em ocrats w ould show policy appropriate for keeping infla
th e sam e flexibility that R epublicans tion in check, a p ro tracted bu d g et def
h a d so th e P r e s id e n t’s d e f ic it- r e icit likely w ould add to the inflationary
d u c tio n pro g ram could b e e n acted problem .
w ithout delay.
“In addition to these th ree, cum ula
D r. F eldstein did not m inim ize the tive longer-term effects, the prospect
seriousness of th e b u d g e t problem s
(Continued on page S/18)
Specializing in
MISSISSIPPI AND SOUTHERN MUNICIPAL BONDS
and
Industrial Revenue, Hospital Revenue, and
Leased Housing Revenue Bonds
Member
NASD and SIPC
lHORbMLVIS, H/ELCH, INC.
INVESTMENT SECURITIES
216 South State St.— P.O. Box 806— Jackson, Mississippi 39201
(601) 969-9200
JO H N THORN
S /8
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
JAMES H . ALVIS
L O N N IE W E L C H
MID-CONTINENT BANKER for May, 1 9 8 4
“It’s good for the bank.”
“It’s great for the directors.”
P. E. Lindsey, seated. Chairman o f the Board, First Stale Bank, Livingston, Texas
B. A . Glover, standing, Director, First State Bank, Livingston, Texas
Over the past decade, there has been a
profound shift tow ard m ore active boards of
directors for financial institutions. As a result
o f this broader oversight role, increased banking
regulations, pressures from stockholders, and
increasing legal and fiduciary responsibilities,
the time demands required to serve as a bank
director have substantially increased.
In recognition o f these added duties, Executive
Planning G roup has developed a unique, taxfavorable com pensation plan for directors: the
D irectors’ Benefit Plan. The plan recognizes
the im portant functions directors perform and
helps to reward them accordingly, and it provides
much greater benefits than the directors can
achieve by investing current Board Fees. For
m ore inform ation about the D irectors’ Benefit
Plan, call (318)388-0013.
Directors’
Benefit Plan
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EXECUTIVE PLANNING GROUP, INC.
Being marketed in the Southeast by First Financial — Mike Miller
MID-CONTINENT BANKER for May, 1 9 8 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
S/9
Louisiana Convention Report
Possible Multi-Bank HC Action
Leads Topics in New Orleans
W
IL L L o u isia n a a d o p t m u lti and gas severance taxes, w ere voted in
h o ld in g -c o m p a n y b a n k in g ? w ith alm ost no opposition, b u t it is said
This question was u p p erm o st inthe
thegovernor had “called in all of his
m inds of bankers as th ey m et in New political I.O . U .s” during th e process.
O rle a n s last m o n th for th e ir 8 4 th T herefore, say th e In d ep en d en ts, “we
annual convention.
have a good chance of beating any leg-
N e w LBA officers are, from I.: W illia m O. W atson, treas.; Henry
Kinberger, pres.; and James A. Comiskey, pres.-elect.
The answ er may not be long in com
ing as th e state’s legislature convened
only days after th e b an k ers’ convention
a d jo u rn e d . W h e n th is re a c h e s th e
re a d e r, h o ld in g -co m p an y bills m ay
have passed through com m ittee and
be ready for d eb ate on the floors of the
H ouse and Senate.
The situation, as it prevailed during
th e convention w eekend of April 6-9,
was this: It was a know n fact th a t
Louisiana’s G overnor E dw in Edw ards
is a su p p o rter of m ulti-H C banking and
has, in fact, “stacked” both H ouse and
Senate com m ittees w ith people who
will, undoubtedly, vote out a bill for
holding com panies. “W e can’t win in
th e s e c o m m itte e s ,” I n d e p e n d e n ts
said, “and so th e fight will com e on the
respective floors.”
It also is a known fact th at G overnor
Edw ards has an gered m any m em bers
o f b o th h o u s e s , a n d m a n y v o te rs
th ro u g h o u t th e state, b ecau se of a
huge tax-increase package “ram m ed
th ro u g h th e le g is la tu re ,” th e y say,
during a special session in early 1984.
These new taxes, actually m ade neces
sary because of a disastrous drop in oil
S /1 0
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
the man who will lead them in th eir
“b attle” — Paul H ardy. Mr. H ardy is a
form er secretary of state in Louisiana,
com m issioner of th e d e p a rtm e n t of
tra n sp o rta tio n an d an unsuccessful
gubernatorial candidate. H e also is a
Speaker Henry Kissinger (r.) w ith M r. and Mrs. Joseph M. Con
nolly. He's outgoing LBA pres, and ch., Century Bank, N e w
Orleans.
islation on the H ouse floor, pointing to
th e ir heavy rural rep resen tatio n in the
H ouse and am ong In d e p e n d e n t m em
bership.
In d ep en d en ts held a special “pep
rally” at th e close of the convention to
o u tlin e som e in itial plans for th e ir
opposition cam paign and also to m eet
New LBA Officers
The following w ere elected by
Louisiana bankers to serve the associa
tion during the year 1984-85:
P re sid e n t — A. Henry Kinberger,
president, Security First National,
Alexandria.
P re sid e n t-E le c t — James A. Com
iskey, president, Bank of Louisiana,
New Orleans.
T r e a s u r e r — William W. Watson,
president, Bank of St. Joseph.
D ire c to rs — T. Armstead Brown,
president, Riverlands National, LaPlace; Richard A. McNeese, presi
d en t, Hib ernia N ational, New
Orleans; and Robert J. Zeringue, ex
ecutive vice president, St. James
Bank, Lutcher.
director of St. M artin Bank, St. Martinville.
Mr. H ardy, in an inspiring talk to
m ore than 100 in d e p en d en t bankers,
rem inded them th at they o u tn u m b er
pro-m ulti-H C banks by m ore than two
to one. And th at strength will be re
flected in the rural rep resentation of
th e H ouse, w here, he m aintained, a
m ulti-H C bill can and will be defeated.
P ro p o n en ts of m ulti-H C banking
w ere to m e e t th e following day in
Baton Rouge, w here it is p resum ed
th at strategy m easures also w ere dis
cussed on how to offset th e known
strengths of the In d ep en d en ts in the
House. (This w riter did not atten d that
session.)
W hile everyone talked about a hold
ing-com pany bill, no one at th e con
vention actually had seen one. It was
rum ored that at least two bills would
be introduced — one that already has
been w ritten and another that w ould
be introduced with the backing of G ov
ernor Edw ards. And th ere w ere the
usual ru m o rs th e se bills w ould be
loaded w ith am endm ents that w ould
(Continued on page S/12)
MID-CONTINENT BANKER for May, 19 8 4
Pam Delamore, Jim O'Hare, D rew W hitley', Gus Tramonte, Rose Greco, Roger
A yers, and D oug Lore. Bankers w hose business is helping your bank grow.
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irst NBC shares your profes
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This First NBC Correspondent Bank
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B a n k in g Your W ayA t F irst N B C
First
NBC
First National Bank O f Commerce, 210 Baronne Street, P.O. Box 60279, New Orleans, Louisiana 70160, (504) 561-1371
BANKER for May, 198 4
DigitizedMID-CONTINENT
for FRASER
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Federal Reserve Bank of St. Louis
Member FDIC
S /ll
eith e r please or displease e ith e r side.
T hus, th e lines w e re d raw n and
opponents w aited for th e legislature to
convene and round one of th e battle to
begin.
C aught in th e m iddle w ith a known
policy of being neutral on m ulti-H C
banking is th e office of th e Louisiana
B ankers A ssociation and its elected
officials. But they w ere not caught u n
p rep ared w ith this year’s convention
p rogram , sch ed u lin g one afternoon
workshop headlined: “Planning for a
m ulti-bank holding-com pany environ
m e n t.” A n d it played to a packed
house!
T hree CPAs u rged bankers to d e
cide quickly w h eth er they w anted to
acquire, be acquired, rem ain in d e p e n
d en t or go out of business. W hatever
th e d e c is io n , d e te r m in e s tr a te g y
quickly so th at your bank will not be
surprised by a takeover — friendly or
hostile — IF m ulti-H C banking does
becom e Louisiana law.
These CPAs urged bankers to d e te r
m in e th e v a lu e o f th e ir b an k s —
w h eth er they plan to sell or not —
because, they said, it is im portant to
know your strengths and w eaknesses.
Evaluate your assets, operations, m an
a g e m e n t a n d tax p o s itio n , th e y
advised, and begin to maximize your
s tr e n g th s . T h e r e s u lts , th e y su g
g e ste d , w ould be useful no m a tte r
w hat changes m ight occur in Louisiana
banking laws.
B ankers a tte n d in g this w orkshop
also listened to a long list of actions that
could be tak en to th w a rt a hostile
takeover. Legal advice was suggested
on setting up the m any elem ents of
anti-takeover m easures.
Thoughts of interstate banking also
w ere on th e m inds of Louisiana bank
ers as they convened on that second
day of th e convention. A M onday
m orning headline in th e N ew O rleans
Picayune indicated that M ellon Bank
of P ittsburgh had asked th e C om ptrol
ler for perm ission to establish a con
sum er-banking office in N ew O rleans,
as well as in a n u m b er of cities in the
Southeast. And so an o th er possibility
of “change” was th ru st on Louisianans
as th ey continued th eir convention.
T h e s e r e q u e s ts fo r c o n s u m e r
banking offices are being m ade by a
n u m b er of m oney-center bank H C s —
C iticorp and C hase of N ew York City
and F irst In terstate of Los Angeles —
u n d e r a le g a l lo o p h o le r e c e n tly
“p io n e e red ” by U. S. T rust Corp. By
accepting only consum er deposits and
Want a Sales Program for Your Bank?
Are you planning to build a sales
program at your bank? It takes a strong
com m itm ent from m anagem ent,
according to Tricia Faulkender, who
conducted a sales workshop at the
Louisiana convention.
Mrs. Faulkender, representing
Financial Shares of Chicago, told
bankers that senior management must
take seriously any sales-driven pro
gram adopted by the bank. The chief
executive also must play a strong role
model and not give the program “lip
service.”
Employees also must know their
efforts affect the bottom line of the
bank and the program must have a
system that holds employees account
able for results. Most important, said
Mrs. Faulkender, who has conducted
numerous bank sales-training pro
grams, “if you do not have people in
positions where they are comfortable
in selling, then hire people who will
get the job done.”
Any sales program, to be successful,
said Mrs. Faulkender, must have a
strong “ feed-back” system . Em
ployees need to know, want to know,
she said, what they are doing right (or
wrong), and customer-contact tech
niques, therefore, need to be analyzed
quickly and efficiently. Correct or
praise these techniques, she said.
S/l 2
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Federal Reserve Bank of St. Louis
T ric ia F a u lk e n d e r w e lc o m e s tw o
Louisiana bankers to her afternoon
workshop on "B uilding a Sales Pro
g ra m ."
Also, let employees know their
efforts will be monitored. People do
better when they know what is ex
pected of them and that they will be
“inspected.” It is no accident, she
pointed out, that customer service is
tops in McDonald’s, American Airlines
and the Disney show places. Em
ployees there are trained, they are
told what to do and their activities are
“shopped.”
Similar results can be achieved in
banks, but such a program must be
continuous, rewards must be fair and
positive and, above all, someone must
be in charge — possibly someone with
a new sales manager title in the bank,
according to Mrs. Faulkender.
m aking only co nsum er loans (while
avoiding com m ercial loans), these in
stitutions say they avoid being labeled
“banks” u n d er th e federal Bank H old
ing C o m p an y A ct an d , th e re fo re ,
w ould not be subject to federal interstate-banking restrictions.
A nd so, one banker was h eard to say:
“The com petition only gets bigger, b ut
m aybe not b e tte r.”
T h e c o n v e n tio n ’s o p e n in g -d a y
speaker, ABA P resid en t-E lect James
G. Cairns Jr., also dealt w ith the sub
ject of com petition. “Nonbanks have
b een going after us for y ears,” he told
th e LBA m eeting, “and th e result can
be seen in our declining m arket share.
In 1949, com m ercial banks held 52.3%
of all financial assets. In 1979, th e fig
ure was 37.4% . . . and today, that
share may have declined to less than
36%. ”
Mr. Cairns, who is p resid en t, P eo
ples Bank of W ashington, Seattle, sug
gested that bankers should not w aste
tim e in bickering w ith one an o th er
(so m eth in g c o m p e tito rs w ould like
bankers to do), b u t should press C on
g re ss for a c tio n on “ c o m p e titiv e freedom legislation” during this ses
sion. Unless bankers participate, he
said, th ere is little hope for legislation
this year. H e suggested:
1. C o n ta c t c o n g re ssio n a l r e p r e
sentatives and “let them know how vi
tal it is that we b e allowed to com pete.
This is a consum er issue. Increased
com petition will m ean low er prices
and a w ider choice for the consum er. ”
2. A nother approach: “G et your cus
tom ers (and stockholders), who stand
to benefit from changes in the law, to
c o n ta c t th e i r r e p r e s e n ta ti v e s . In
W ashington, D. C ., quantity counts!
3. Also, he said, support BankPac.
In 1983, bankers collected $500,000
throughout th e country. “This y e a r,”
he said, “our goal is $750,000.”
The ABA’s incom ing p resid en t for
1984 n o te d th a t b an k ers “can talk
sen se” to th e ir representatives. For
exam ple, he said: As a result of p resen t
deregulation, banks have paid out $12
billion in m oney-m arket rates, at the
same tim e increasing service charges
by another $3 billion. “T hat has b e n e
fited consum ers by $9 billio n.” (The
inform ation, he said, cam e from the
C om ptroller’s office.)
W hat do banks n eed in o rd er to
com pete in the future?
1. A bility to offer secu rities and
m utual funds to bank custom ers.
2. Perm ission to un d erw rite and sell
insurance.
3. F reed o m to becom e m ore in
volved in the real-estate m arket.
(Continued on page S/16)
MID-CONTINENT BANKER for May, 19 8 4
We believe a service
is only as good
as the people behind it.
Jerald L. Fleschner
Owen D. Hendrixson
At Mercantile you’ll find one
of our greatest services is our
correspondent bankers. They
have the authority to help you
with any loan or investment. Start
to finish.
Loan Services. From simple
commercial loans to overline and
bank stock loans, your correspon
dent banker has the authority to
approve your loan. And knows
the full responsibility for your
satisfaction falls on him.
Investment Services. Fed
funds, bonds, securities, BAs,
CDs. It’s a big job keeping up
with all the domestic and interna
tional money markets. Your cor
respondent banker has access to
the latest communications and
computer equipment. And knows
how to use them to help you
make decisions wisely.
Check Clearing Services. Are
you paying too much for your
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better availability? If you have
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We’re w ith you
R c n r r r iiE
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M e m b e r F D IC
Correspondent Banking Division
Richard G. Ross
Mercantile Trust Company N.A.
St. Louis, MO 63101
Please feel free to call us
collect at (314) 425-2404.
Matthew A. Favazza
BANKER for May, 1 9 8 4
Digitized MID-CONTINENT
for FRASER
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Federal Reserve Bank of St. Louis
S/13
Uni-Banc Group
Develops DP Software
For In-Ftouse Small-Bank Use
AN a small bank — a very small
This was th e start of th e Uni-Banc
bank — autom ate successfully, Association — a small n u m b er of banks
in-house? T h e $ 5 -m illio n F a rm e rs
th at had similar accounting problem s,
State of Schell City, M o., has proved along w ith B&H, a program m er and
that it can. (It actually autom ated w hen also a vendor — that m ushroom ed into
it was $1 million sm aller.) But it has a full fledged association th ree years
on-going help from the U ni-Banc Asso later. This group, now incorporated
ciation of w hich it and 64 o th er banks u n d e r A rkansas law s, m e e ts on ce
scattered over eight states are m em annually, holds train in g schools for
bers.
m em b er em ployees, operates u n d er
T hese banks, ranging in size from com m ittee stru ctu re and elects officers
the $5-million M issouri bank to a $75- and directors who “hold” th e associa
million bank in M ississippi, o perate on tio n to g e th e r. U ni-B anc also has a
various size N C R c o m p u ters — all m odest dues structure, used prim arily
driven by a software program origi to finance travel of officers and com
nated by B&H Associates, Jonesboro, m ittee m em bers.
Ark., a program constantly enhanced
D uring the closing days of M arch,
through efforts of association m em bers this group, w ith over 50 banks re p re
them selves.
sented, m et at Lake of th e Ozarks,
T he 65-m em ber association did not M o., and in IV 2 days, saw dem onstra
h a p p e n o v ern ig h t. B& H Associates tions of new eq u ip m en t, listened to
had “p io n e e re d ” a software program d is c u s s io n s o f p o s s ib le p ro g ra m
for several small banks in Arkansas and changes and conducted the business of
Missouri. As th ese banks recognized electing new directors and officers.
the n eed for additional program s and
T he B&H “team ” from Jonesboro,
e n h an c e m en ts of th e original, th ey A rk., also was p resen t to answ er q u es
also re c o g n iz e d th e n e e d to b a n d tions and provide m em bers w ith in
together, discuss problem s and needs form ation on how to handle problem s
that w ere com m on to th e group and th at occur routinely during the opera
th en charge B&H w ith responsibility tion of any autom ated system . B&H,
for program m ing those needs into the for exam ple, can be reached by phone
system .
during all business hours to solve a
problem experienced by a bank in M is
so u ri, M ississip p i, A rk an sas, e tc.
O perators of the system s in th e very
sm all banks are n o t p ro g ra m m e d trained and, therefore, do n eed assist
ance that is quick to com e through
telephone contacts w ith B&H.
M ost of the problem s com e — after a
bank has been on th e system for sever
al m onths or a year — w hen enh an ce
m en ts to th e program are received
from B & H . T h e se e n h a n c e m e n ts ,
m any of them m ade necessary by reg
ulatory changes and others through
th e suggestion system of the associa
tion, are sent out m onthly or quarterly
from Jonesboro as the occasion w ar
rants. B&H, for exam ple, keeps track
of all regulatory changes program m ed
into the system and sent to m em bers.
Its biggest effort cam e last year w hen
interest-w ithholding regulations w ere
m erged into the system. M em bers still
need assistance in this area from tim e
to tim e.
B& H , incidentally, is h ead ed by
F re d Boling, a v eteran b anker and
v e n d o r of c o m p u te rs and softw are
program s. H e is assisted by Irm a H ick
man, who w orked in Arkansas banks
for m ore than 10 years, and Jim B ur
n ett, who heads a staff of five program -
U n i-B an c President W a y n e S ch w eig ert
( 1 9 8 2 -8 4 ) is a.v.p ./cash of $ 3 8 -m illio n
Bank of Ste. G enevieve, Mo.
Uni-Banc Program Director Norm a Thomas
comes fro m $ 5 -m illio n Farm ers S ta te ,
Schell City, M o., w here she is v.p./cash.
C
S /FRASER
14
Digitized for
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
W allace M artin , e.v.p. of $ 1 1 -m illio n First
State, Parkin, Ark., has headed Uni-Banc's
softw are com m ittee.
MID-CONTINENT BANKER for May, 198 4
m ers, c o n s ta n tly at w o rk to k e e p
abreast of th e needs of th e 65-m em ber
group.
Efforts of this group are safeguarded
th ro u g h a tr u s t e e r e la tio n s h ip in
Jonesboro, w h ere an attorney holds
the source code of the program sys
tem. This code is m onitored four tim es
annually by an association audit com
m ittee. This protects m em bers should
B&H change hands or go out of b u si
• Suggestion: Keep up w ith expira
tion dates on insurance.
Action: This is needed. Im portant
w ork prev ents priority date. Field 12
or field 14 can p resen tly be used to
store these expiration dates and then
extract th e expiration dates by use of
“cu sto m .”
• Suggestion: A udit control string,
m alfunction on line p rin ter, pow er in
terru p tio n . F our-line m essage is lost.
Uni-Banc group, currently w ith 6 5 mem bers scattered over eigh t m idw estern
states, w as represented a t Lake of the Ozarks sem inar by app ro x im a tely 5 0 of
those m em bers. Most banks sent tw o or three employees to "absorb" new
inform ation on the association's data-processing softw are program .
ness and, of course, it satisfies regula
tory exam ination req u irem en ts.
M em bers also provide one anoth er
with backup assistance in storing disks
that contain all of a bank’s c u rre n t re c
ords.
The association’s software-advisory
com m ittee is th e real w orkhorse of th e
6 5 -m e m b e r g ro u p . T h is w as e v i
denced at th e M arch m eeting as m em
bers w ere p re se n te d w ith a 12-page
prin to u t of “suggestions” th at w ere in
various stages of re so lu tio n by th e
com m ittee and B&H.
T he com m ittee, h ead ed by W allace
M artin, executive vice p resid en t, F irst
State, Parkin, Ark., m eets four tim es
a n n u a lly , c o n s id e rs A L L p ro g ra m
problem s subm itted by m em bers and
works closely w ith B&H to d eterm in e
if satisfactory solutions can be reached.
T he com m ittee, says Mr. M artin, con
siders EVEBY suggestion th at rem ains
on its agenda until it e ith e r is adopted
and developed or is dropped.
“N one of th e suggestions is dealt
w ith friv o lo u sly , d ro p p e d w ith o u t
notice or ig n o red ,” Mr. M artin points
out. In any case, all decisions are p u b
lished in a regular n ew sletter m ailed to
m em bers.
An exam ple of som e of th e sugges
tions received and th e co m m ittee’s ac
tions are listed in the following para
graphs.
T here is no recovery option. Could a
recovery option be included?
Action: C hange will be m ade. Plan
to store this notice h ead er in bank param file. Now scheduled for second
q u arter, 1984.
• Suggestion: Accrual loans — sug
gest a trancode allowing in terest to be
cred ited to accrual loan w ith no effect
on paym ent schedule. To w ork same as
trancode 15.
Action: B&H will have this in first
BANKER for May, 19 8 4
DigitizedMID-CONTINENT
for FRASER
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
quarter, 1984. This now has b een com
pleted.
• Suggestion: An IR A -p ay -b ack
program for the 701/2-year-old inves
tor.
Action: W ork on this is in progress,
e x te n d e d to second q u a rte r, 1984.
M ore com plex program than antici
pated.
A nd so it w ent, page after page of
reco m m en d atio n s, w ith ap p ro p riate
action recorded and rep o rted to m em
bers. The com m ittee, and B&H, agree
th at some “frills” that m ight be useful
to one or two banks are w eeded out
and “tab led ” as being too costly for all
banks to reprogram into th eir systems.
T he com m ittee, along w ith B&H, also
k eep s in m ind th a t som e program
changes m ight force a sm aller bank
into a larger, m ore expensive piece of
equipm ent. This type of change often
is delayed to p erm it th e sm aller bank
to continue to operate w ith the lowestcost system.
H ow do bank em ployees — those
who operate th e system — feel about
th e i r in -h o u s e o p e ra tio n s ? W h e n
asked this question at th e O zark m eet
ing, th e y re s p o n d e d unan im o u sly .
“W e w ere really afraid that we couldn’t
h a n d le a c o m p u te r sy stem . I was
scared to d e a th ,” said one young lady.
But all agreed that introductory train
ing, plus te le p h o n e com m unication
w ith B&H in Jonesboro, makes it re l
atively easy to operate th e system.
W hat’s in the future for the UniBanc group? The software com m ittee
and B&H indicate program s are being
developed for the safe deposit d ep art
m e n t, sto ck h o ld ers’ reco rd s, asset/
liability m anagem ent, a profile credit
h istory of a loan custom er, a loan
closing program , plus an accountsreceivable program for dealers in a
farm com m unity.
And w hen will the association m eet
again? Early in 1985, w hen it expects
to have a few new m em bers join it. —
R alph B. Cox, publisher.
New Mexico
(Continued fro m page 29)
of Daniels Insurance and Jack D aniels
Realty.
Mr. Craig has been in banking since
1950, th e year he joined Union P lant
ers N ational, M em phis, T enn. H e
m oved to F irst In terstate, A lbuquer
que, in 1970 as senior vice president.
H e has been presid en t of the bank
since August, 1977. • •
S/15
Louisiana Convention
(Continued fro m page S!12)
“A rep o rt by P e te r M errill Associ
a te s,” said Mr. C airns, “shows that
broader real-estate-equity-investm ent
powers w ould offer th e possibility of
g reater profits at no extra risk .”
A nother convention speaker — Alex
Sheshunoff, known to bankers for his
discussions of b ank p ro fitab ility —
concurred on th e subject of bank sales
of insurance. Mr. Sheshunoff d em o n
strated to bankers p otential incom e
from household insurance th at could
be sold to a portion of a bank’s custom
er base. This type of p ro p e rty and
casualty insurance (home ow ners, auto
and personal liability policies) can be
sold by banks, he said, at a cost lower
than any oth er type of sales m edia and
over a period of tim e could result in
substantial incom e for th e consum erorien ted bank. And, he said, capital
investm ent would be relatively minor.
Louisiana bankers, who “do things
rig h t” at th eir convention, w elcom ed
several “person alities” to th eir 84th
m eeting: Joan Fontaine, who starred
on the screen with such actors as Cary
G ran t, Paul N ew m an and Sir L au
rence Olivier, spoke to an afternoon
a u d ien ce on “T he G olden Years of
H ollyw ood.” D ale Evans, wife of the
cowboy star, Roy Rogers, was featured
at a S u n day m o rn in g in sp iratio n al
m eeting, and H enry A. Kissinger, for
m er Secretary of State, spoke to an
opening-day session on, you guessed
it, “W orld C onditions.”
Louisiana’s Senator J. B en n ett John
ston, a m em ber of the Senate B udget
C om m ittee, told his constituents that
“com m on sense and political courage”
w ere necessary to solve th e federalb u d g et crisis. R estraint is need ed , he
said, in four main areas of spending:
defense, en titlem en t program s, m edi
care and social security. T hese are the
only areas, he said, w here spending
cuts w ould m ean anything.
Art Buchwald, syndicated colum nist
and offerer of unsolicited advice to
U. S. Presidents, sent everyone hom e
w ith a laugh. O ne of his b est spoofs, he
said, was a colum n about high-flying
spy planes. O ne of his colum ns re
vealed a plane that w ould “fly so high
and so slowly” that no one could shoot
it down. W ould you b eliev e it, he
asked his audience, several days later
som eone from the Pentagon called and
asked “W ho leaked th e inform ation?”
— R alph B. Cox, publisher.
JANVIER
CARONNA
DUBRET
Roy C. C aro n n a, John C. D u b ret Jr.
an d G eo rg e Jan v ier III have b e e n
n a m e d v ic e p r e s id e n ts , W h itn e y
National, N ew O rleans. Mr. Caronna,
in te rn a tio n a l banking, has b e e n at
W h itn e y m o re th an 30 years. Mr.
D u b ret, th ere since 1963, works at the
Carrollton A venue Branch. Mr. Jan
vier, M ain Office, w ent to the bank in
1964. Prom oted to assistant vice p resi
d e n ts w e re : W a lte r E . E s tr a d e ,
M ichael L. Jones, Jam es M. Jones,
Cecilio J. M anero, E dgarda W ater
man, B ennierita S. Sm ith, M ichel A.
H a rd o u in S r., Jo sep h S. E xnicios,
L a w re n c e J. B e rg e r J r ., A. Ross
D ozier, G erard F. Lowe, D erek P.
D elaney and C arroll V. Despaux.
R oger C larke has b een nam ed execu
tiv e vice p re s id e n t, ad m in istratio n
group, F irst G uaranty Bank, H am
mond. Ralph Ross was m ade executive
vice p re sid e n t, banking group, and
D ave Bodi was e lected senior vice
p re s id e n t, o p e ra tio n s.
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FRASER
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MID-CONTINENT BANKER for May, 19 8 4
Brokerage service
from the bank
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You met us as Memphis Bank & Trust, and came to know us as the bank that
offered you more correspondent services from a more experienced staff.
Now we have a new name to reflect the whole area we serve,
Midland Bank & Trust, and a new service to help
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tYie p 'itC't' aSe
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Exchange, from the same correspondent
bank department you’ve always been able to take
stock in. Give Lynn Hobson, Gus Morris, Jim Newman,
Ron Ireland or Tom McKelroy a call, toll-free, at 1-800/238-7477.
In Tennessee, 1-800/582-6277.
fiHi
MID-CONTINENT BANKER for May, 198 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
S /l 7
Hancock Symposium
(Continued fro m page S/8)
of large deficits year after year affects
the character of th e econom ic recov
e ry ,” said D r. F eldstein. “Large d e
ficits crow d o u t p riv a te -in v e stm e n t
spending and, by raising th e value of
th e dollar, also crow d out n et exports.
T he resu lt is a recovery th at is less
balanced and th erefo re likely to be
m ore fragile and m ore inflationary.”
It is, th erefo re, of critical im p o r
tance th at legislation be enacted now
to provide a gradual, pred ictab le and
significant reduction in b u d g et deficits
in th e com ing years, D r. F eld stein
defense spending by $43 billion, cut
grow th in defense spending by $40 b il
lion and increase rev en u e by $48 bil
lion. T he resulting deficit reduction
cu ts d e b t service o ver th e se th re e
years by an additional $18 billion. The
total d e b t reduction is, therefore, $150
billion.”
U nder the R epublican-backed p ro
posal, deficit red u ctio n w ould start
w ith a m odest $25 billion in 1985, rise
to $53 billion in 1986 and to $71 billion
in 1987. “This p attern of grow th m eans
th at deficit reduction is even g reater
after 1987,” Dr. F eldstein said.
T he Republican package, as good as
it is, m ust be labeled only a down pay
m en t indicating that m ore substantial
action will be req u ired in 1985 to bring
th e deficit u n d er control, D r. Feld-
Leo Seal Jr. (I.), pres./CEO, Hancock Bank, G ulfpo rt, Miss., prepares to direct question from
audience to M a rtin Feldstein (r.), President Reagan's economic adviser, during M r.
Feldstein's app earance a t Hancock Bank's economic symposium.
added. T he R epublican-backed, def
icit-reduction package w ould do ju st
that, he said.
“It’s a balanced package and a su b
stan tial o n e ,” h e to ld th e H ancock
Bank audience. “O ver th e next th re e
fiscal y e a rs, it w o u ld re d u c e n o n
stein said. Yet w ith th e “dow npay
m e n t” package as a start, “th ere is no
reason why we shouldn’t be able to
elim inate the structural deficit by the
end of the decade. ”
A lthough the deficit looms as a long
te rm econom ic problem , D r. Feld-
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S/l 8
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
stein said that sh ort-term econom ic
prospects are bright.
“The econom y this year is expand
ing at a very strong pace,” he said.
“T here is good news about virtually
every facet of econom ic activity. ”
The reduction of the annual inflation
rate from 12.4% in 1980 to 3.8% last
year was one of the great achievem ents
of th e R eagan A d m in istratio n , D r.
Feldstein said. The painful cost of r e
ducing inflation should p rev en t future
a d m in is tr a tio n s fro m ta k in g any
chances w ith inflation. Inflation cu r
re n tly is u n d e r control although at
least a slight increase over last year’s
rate is to be expected this year, he said.
M onetary policy, he added, is cu r
rently right on target. The F ed eral R e
serve’s announced ranges for grow th in
th e basic m oney aggregates — M l and
M2 — are appropriate for th e year
ahead and consistent w ith th e goal of a
nom inal Gross N ational P roduct in
crease of about 10%, he said. A goal of
faster m oney grow th at p resen t likely
w o u ld m ean m ore in flation, w hile
slower m onetary grow th w ould slow
th e pace of real growth.
D r. F eld stein em phasized th at it
w ould be a terrib le m istake for the F ed
to p rev en t a rise in in terest rates by
pursuing an excessively expansionary
m onetary policy. “T he experience of
the 1960s and 1970s shows that the
m ost likely re su lt of such a policy
w ould be rising inflation followed by
rising in terest ra te s,” he said.
O th e rs a d d re s s in g th e H an co ck
B ank e c o n o m ic sy m p o siu m w e re
Adm iral K innaird R. M cKee, U. S.
Navy, a native of the G ulf Coast area; a
w ell-respected im port to th e region,
Roland W eeks Jr., president/general
m a n a g e r, B ilo x i-G u lfp o rt D aily
H erald and Sun; an d G eorge W il
liam s, M ississippi tourism director.
H ancock’s D onald E. S u tter, chair
man; and Leo W. Seal Jr., pesident/
C E O , presided at the half-day session
held at the M ississippi Coast Coliseum
C onvention C enter. — John L. C leve
land, assistant to the publisher.
• The ABA has announced the latest
issue of its Competitech series: “Bank
M utual Funds: A New P roduct L in e.”
T he publication explains th e en tire
process, from d eterm ining w hat type
of m utual-fund service to offer to best
m eet banks’ custom ers’ needs to allo
cating space for personnel to operate
the fund. Copies may be purchased by
o r d e r in g C o m p etitech — “ B ank
M utual Funds: A N ew P roduct L in e ,”
No. 022800, from O rd er Processing,
A m erican B ankers A ssociation, 44B
Industrial Park Circle, W aldorf, M D
20601.
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MID-CONTINENT BANKER for May, 19 8 4
Survival Plan for Banks
Should Include Personnel-Function Analysis
By Theresa D. (Tracy) Janda, Assistant Vice President, Union Planters National Bank, Memphis
T ’S A STARTLING, disconcerting only by those banks th at can sim ul
prediction: O f th e 15,164 banks in taneously em ploy quality, productive
existence in 1980, only 9,600 will exist p e r s o n n e l a n d c o n ta in h u m a n in 1990!
resources expenses. T herefore, it’s in
Clearly, only w ell-m anaged finan cu m b en t on m anagem ent to p erio d i
cial institutions will survive th e 1980s.
cally analyze in -d ep th th e organiza
Survivors will have continually ana tio n ’s p e rso n n e l-m a n a g e m e n t p ra c
lyzed and m onitored th e ir operations
tices and program s for th eir effective
for inefficiencies and taken steps to ness and to rectify all inefficiencies.
rectify any th ey identify. This analysis
U nfortunately, m anagers unfam iliar
will have included a long, hard look at w ith th e personnel function can find it
th e perso n n el function.
difficult to initiate such an analysis. All
A bank’s hum an resources re p re se n t activ ities of th e p e rso n n e l function
its greatest asset. D uring th e eighties,
may seem w orthw hile. F u rth e r, it may
w hen innovation and change will be be feared th at elim ination or modifica
dom inant th em es in th e financial in tion of program s w ould adversely im
dustry, th e im portance to th e orga pact em ployee m orale and negate an
nization of quality perso n n el will in ticipated benefits.
c re a s e . C o rre s p o n d in g ly , th o u g h ,
To survive the tu rb u len t eighties,
costs associated w ith th e bank’s hum an
bankers m ust elim inate th e b lu r of dis
resources also are likely to increase.
tinction b etw een req u ired , desirable
T h e tr e n d s a lr e a d y a re w e ll- and tru ly effective personnel activi
I
Ms. Janda is product manager for Cornerstone
personnel-management services offered by Un
ion Planters National. Prior to joining the bank
in 1983, Ms. Janda was with a Houston S&L.
She is a graduate of Rice University with degrees
in legal studies and political science. She is a
member of the Memphis Personnel Association
and American Society for Personnel Administra
tion.
established:
• Benefits costs have skyrocketed in
r e c e n t y e a rs, a p p ro a c h in g 40% of
payroll in m any organizations.
• C om petition for em ployees w ith
certain skills and experience is increas
ing, resulting in h ig h er salaries and
recruiting costs.
• G ov ern m en t regulation of p erso n
nel practices increases alm ost daily,
c reatin g m o re re q u ire m e n ts of th e
personnel function.
• T here is a grow ing ten d en cy by
e m p lo y e e s to su e a co rp o ra tio n to
achieve satisfaction of a grievance, in
volving th e organization in m ore and
m ore litigation.
I t’s obvious th at bankers are facing a
dilem m a. Survival will be achieved
ties. An in-depth analysis will bring
th e various activities into perspective
and th en will enable m anagem ent to
d e c id e w h ich a c tiv itie s sh o u ld b e
m aintained.
To initiate this process, we suggest
th e analysis be co n d u cted in th re e
phases:
• The analysis and reduction of risk
in all personnel-function activities.
• The review of th e com patibility of
personnel-function activities w ith the
organization’s objectives.
• The review and, w here necessary,
im provem ent of the cost-effectiveness
of those activities that are supportive of
th ese objectives.
Reduction o f Risk. To begin, the
p e rs o n n e l-fu n c tio n analysis should
MID-CONTINENT BANKER for May, 19 8 4
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Federal Reserve Bank of St. Louis
focus on m inim izing and, w here possi
ble, elim inating all opportunities for
th e organization to be subject to litiga
tion or penalties associated w ith noncom pliance. The activity in this phase
of the analysis should concentrate on
req u ired personnel-function activities
and m easures to p re v e n t em ployee
grievances and litigation.
R egulatory com pliance is extrem ely
im portant. Com panies that fail to satis
fy rep o rtin g and record-keeping re
quirem ents face significant penalties.
F o r exam ple, banks that fail to estab
lish and com ply w ith affirmative-action
program s can face penalties up to and
in clu d in g loss of F D IC in su ran ce.
T h e re fo re , it ’s im p o rta n t th a t this
phase of the analysis audit all perso n
n e l p ra c tic e s for c o m p lia n c e w ith
federal, state and local regulations.
If situations of noncom pliance are
discovered, rem edial steps should be
p u rsu ed im m ediately. W here practi
cal, procedures should be established
to guarantee com pliance.
F in a lly , s u p e rv is o ry p e r s o n n e l
sh o u ld b e k n o w le d g e a b le about
appropriate laws and should be held
accountable for m anagem ent of per
sonnel in accordance w ith these laws.
T he second part of this phase calls
for developm ent or im provem ent of
m easures to p rev en t em ployee griev
ances and litigation. H ere, again, proc
edures for certain personnel practices
may need to be developed to insure
the consistent and fair treatm en t of all
e m p lo y e e s. All p e rs o n n e l policies
should be in w riting and clearly com
m unicated to all em ployees. Further,
it is essential for m anagem ent to sup
p ort policies and procedures — espe
cially through the accountability of su
pervisors — for perform ance within
these guidelines.
Compatibility o f Objectives . Once
th e basic concern of regulatory com
pliance has b een alleviated, th e per
sonnel-function analysis should pro
ceed to a review of the function’s ac
tiv itie s as th e y re la te to co rp o rate
objectives. O ften, this type of analysis
nev er occurs. T he resu lt is th e exist
ence of personnel program s perceived
to be desirable b u t actually in conflict
47
with th e b ank’s objectives.
This incom patibility can be seen in
th e following exam ple: Bank “A” has
developed a plan projecting m anpow
er needs for th e next five years. This
plan projects an acute n eed for dataprocessing p erso n n el w ith over five
years of experience in the financial in
dustry. P ersonnel-function activities,
how ever, are o rien ted tow ard re c ru it
m ent of college data-processing majors
as th e y g ra d u a te . T his p r o c e d u r e
c learly d o e s n ’t su p p o rt th e b a n k ’s
o b je c tiv e . T h e p e rs o n n e l fu n c tio n
should allocate m ore resources to re
cruiting activities th at w ould reach ex
p erien ced data-processing personnel
in th e fin a n c ia l in d u s tr y th ro u g h
advertisem ents in trad e journals and
professional publications.
O ften, personnel program s are in iti
a te d sim ply b ecau se th e y are p e r
ceived to be w orthw hile or o th er orga
nizations have used them successfully.
This phase of the personnel-function
analysis will identify p ersonnel activi
ties th a t are in co m p atib le w ith th e
b a n k ’s o b je c tiv e s . S uch a c tiv itie s
should be elim inated, unless m odifica
tion can rectify th e incom patibility.
F u rth e r , w h e n e v e r n ew p e rso n n e l
ac tiv itie s are u n d e r c o n sid e ra tio n ,
they should be analyzed carefully for
th e ir c o m p a tib ility w ith c o rp o ra te
objectives.
Program C o st-E ffectiveness. T he
final phase of th e personnel-function
analysis deals w ith review of th e coste ffe c tiv e n e s s o f th o s e p ro g ra m s
d eem ed to be supportive of th e com
pany’s objectives. F or exam ple, a p re
ventive m easure for em ployee litiga
tion is an internal em ployee-grievance
procedure. But, if no em ployees use
this procedure and still pursue ex ter
nal relief of th eir dissatisfaction, the
program obviously is not effective and
should be im proved.
A rev iew of effectiveness should
cover all the personnel function’s ac
tiv itie s . T h e fo llo w in g q u e s tio n s
should be asked: Does the bank’s sal
ary-adm inistration program prom ote
th e com pany’s desire to pay for p e r
form ance or is it rew arding em ployees
for seniority? Are the dollars the com
pany is spending on benefits effective
in th e attraction and reten tio n of quali
ty em ployees? Are recruiting m ethods
effective relative to th eir costs? Are
th e r e m o re c o st-e ffe c tiv e w ays of
achieving training goals?
T h e c o s t-e ffe c tiv e n e s s re v ie w
should b ecom e a norm al course of
business for bankers to insure that p e r
sonnel program s are m aking a con
tribution to the organization’s profita
bility. Records of activity w ithin p ro
grams should be m aintained and then
com pared to the experience of o ther
financial institutions so th eir effective
n ess can b e assessed . In fo rm atio n
a b o u t o th e r o rg a n iz a tio n s can b e
obtain ed through published surveys
and telephone com m unication. Case
h is to r ie s o f su c c e ssfu l p ro g ra m
ch an g es also are available th ro u g h
tra d e p u b licatio n s and professional
associations.
Analysis Conclusions. The analysis
Historic ATM W ithdraw al Made
H E D A U G H T E R of a Pine Bluff, A rk ., banker m ade history recen t
ly w hen she m ade th e w o rld ’s first intercontinental transaction via
an ATM.
M ary Stone, d au g h ter of M r. and Mrs. D onald W. Stone (he’s execu
tive vice p re sid e n t at Sim m ons F irst N ational, Pine Bluff) used h er Visa
charge card in a Sydney, A ustralia, ATM to get cash from h e r account at
Sim m ons F irst National.
T he A ustralian ATM, ow ned by th e N ew South W ales C red it Union,
is connected to Sim m ons F irst N ational by Visa’s global com m unication
netw ork. T he 31,000-m ile-round-trip req u est for cash traveled from
Sydney to Singapore via com m unications satellite, then by undersea
cable to California, th e n by cable to W ashington, A tlanta and, finally, to
Pine Bluff. The transaction took about six seconds.
“W hen we discovered th at th e cred it unions of New South W ales had
some m oney m achines on th e Visa system , ’’ Mr. Stone said, “we asked
M ary, on vacation in A ustralia, to go to th e credit union and insert h er
Visa card. She did and h e r re q u e st for $300 Australian dollars cam e by
satellite through th e system , was con v erted to U. S. dollars and she
w ithdrew $285 from h e r account at Sim m ons F irs t.’’
Visa’s global netw ork of ATMs was announced last sum m er. M em ber
institutions have com m itted nearly 6,500 ATMs to the netw ork, w ith
about half in th e U. S. and th e balance in E urope, Latin America, the
Asia-Pacific region and Canada.
T
48
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
outlined here will identify num erous
im provem ents that can be m ade in a
bank’s personnel function. If the con
clusions are to elim inate some activi
ties, the m anner in which they are sus
p en d ed should be w ell-planned and
c o m m u n ic a te d . R e sp o n sib ility for
e ffe c tiv e p e r s o n n e l m a n a g e m e n t
doesn’t reside solely w ithin the con
fines of the personnel d ep artm ent, b ut
is shared by every banker w ith su p er
visory responsibility. T herefore, su
pervisors should have a clear u n d e r
standing of the reasons b eh in d any
p e rso n n e l-p ro g ra m changes. T h en ,
these supervisors can be sensitive to
em ployee concerns and b e tte r able to
respond to them w hen they occur.
T h e co u rse financial in stitu tio n s
m ust follow to survive in this decade is
clear — th ere m ust be an em phasis on
e ffic ie n t in te rn a l o p e ra tio n s. T his
translates into an acute need for bank
ers to elim inate any b lur of distinction
betw een personnel-function activities
req u ired by law, those perceived to be
desirable b ut incom patible w ith the
bank’s goals and those ju d g ed com pati
b le w ith th e se goals b u t not costeffective.
A review of the banks still in exist
ence in 1990 will show that th eir su r
vival plans included this focus on effec
tive personnel m anagem ent. • •
Computer-Software Package
Offered for ATMs, POS
F irst D ata M anagem ent Co., Inc.,
O klahom a C ity, and A pplied C om
m unications, Inc. (ACI), O m aha, have
a n n o u n c e d an a g re e m e n t th ro u g h
w hich ACI will provide state-of-the-art
c o m p u te r softw are to F irs t D a ta ’s
financial-services netw ork.
The BASE24® software package will
s u p p o rt b o th a u to m a te d -te lle r-m a
chine and point-of-sale devices and
will handle in terch an g e and se ttle
m e n t tran sactio n s b e tw e e n in s titu
tions and shared netw orks.
T he software will operate on T an
dem third-generation “TX P” com put
ers and support the IBM 4701 control
ler.
A bout 1,500 term inals will be con
nected through 150 financial in stitu
tions plus term inals on autom ated fueldelivery gasoline pum ps and o ther re
ta il PO S a p p lic a tio n s, says R. K.
M otheral, executive vice p resid en t,
F irst D ata M anagem ent, and general
m anager of its Service C ard System
division.
F irst D ata M anagem ent is a publicly
h eld com pany th at sells electronictran sactio n services and trad itio n al
data processing to financial institutions
in Oklahom a, Kansas and Missouri.
MID-CONTINENT BANKER for May, 19 8 4
'Fighting Spirit' Stressed by Independents
At Annual Convention in New Orleans
U T G O IN G In d e p e n d e n t Bank
New IBAA Officers
e rs A s s o c ia tio n o f A m e ric a
(IBAA) P resid en t Jam es D. H e rrin g
ton, ch a irm a n /p resid en t, C oldw ater
(K an.) N a tio n a l, to ld in d e p e n d e n t
bankers atten d in g th e IBAA’s annual
co nventio n in N ew O rlean s in late
M arch th at he had new s for “our socalled friends who keep telling us that
dying w ould be a lot easier if we only
laid down for them .
“The vital signs for th e com m unity
bank have n ev er b een h e a lth ie r,” said
KING
BACKLUND
M r. H e rrin g to n in his k ey n o te ad
IBAA Pres.
1st v.p.
dress. “T he fighting spirit of in d e p e n
d e n t b an k ers has n ev er b e e n m ore
robust. A fter a b rie f dip during the
y e a r w h e n th e n e w d e r e g u la te d
accounts w ere first introduced, th e re
tu rn on assets for com m unity banks
rose last year w hile th e re tu rn on assets
for b an k s o v e r $1 b illio n a c tu a lly
d ro p p ed . A ccording to F e d e ra l R e
serve statistics, our ROA is hig h er now
than it was d uring th e so-called good
old days of th e 1970s. C o m m u n ity
DOYLE
VanARSDALE
banks’ ROA is still m ore than double
2nd v.p.
Treas.
th at of th e m oney -cen ter giants. ”
M r. H e rrin g to n h ad m o re good
m itting in terstate banking.
news for IBAA m em bers: T he n u m b er
News rep o rts m ight give the im
of new charters for com m unity banks p re ssio n th a t in te rs ta te b an k in g is
has been setting a record pace; IBAA sw eeping th e country, said Mr. H e r
m em bership, contrary to th e tre n d at rington, b u t “nothing could be fu rther
m any o th er associations, is increasing; from th e tru th.
and the IBAA had enjoyed a n u m b er of
“F or exam ple, proponents of in te r
“w onderful” political successes during
state banking talk about th e fam ed
th e previous year. In addition to w hat
N ew England regional banking com
Mr. H errin g to n te rm e d th e “rem ark pact as if it w ere a m atter of fact, ” Mr.
able” battle to rep eal w ithholding at H e rrin g to n ex p lain ed . “ In reality ,
source, in d e p e n d e n t bankers in Iowa,
com m unity bankers in two N ew E n g
N ew Mexico and o th er states had com land states (New H am pshire and V er
b in ed to d efeat or delay legislation per- mont) w ere able to slow down the big-
O
D is c u s sin g b a n k
d e r e g u la tio n at
IB A A con ven tio n
are (from I.) Ken
neth McLean, m i
n o rity s ta ff d ir.,
and D anny W all,
s t a f f d ir ., both
with the U. S. Sen
ate Banking Com
mittee; and Peter
W allison, general
counsel, U. S. Trea
sury.
MID-CONTINENT BANKER
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
fo r
May,
1984
bank steam roller so that th e ir state
legislators could have tim e for second
thoughts about the im plications that
interstate bank ow nership w ould have
on th e c o m m u n itie s w ith in th e ir
sta te s. T hose sta te s still have n ot
joined the regional p act.”
M r. H e rrin g to n ’s th o u g h ts about
th e b rig h t fu tu re for in d e p e n d e n t
bankers w ere shared by another IBAA
convention speaker, W illiam M. Isaac,
chairm an, Federal D eposit Insurance
C orp (FD IC ). “W hile som e in stitu
tions u n d o u b te d ly will d isa p p e a r,”
said Mr. Isaac, “th ere always will be a
place for the w ell-m anaged, in d ep en
d en t local institu tio n .”
Mr. Isaac also attem p ted to let some
air out of w hat he indicated is another
p o p u la r m isc o n c e p tio n . E x p a n d e d
banking pow ers represents an oppor
tu n ity for all banks, n ot ju s t large
banks, he said.
“You possess high capital levels, an
established custom er base and close
ties to your local com m unities,” Mr.
Isaac told IBAA m em bers. “W hile it
may not be feasible to offer on a de
novo basis all of the financial services
that may be authorized, this will not be
an insurm ountable obstacle. F or ex
am ple, of the m ore than 1,200 com
m ercial banks, including m any com
m unity banks, currently offering dis
c o u n t-b ro k e ra g e serv ices, th e vast
m ajority e n te re d through jo in t v en
tures w ith discount-brokerage firms.
Similar arrangem ents can be used by
com m unity banks in the future to offer
a wide array of financial services rang
ing from insurance und erw ritin g to
m utual fu nds.’
Panelists participating in a discus
sion a b o u t d e re g u la tio n g e n e ra lly
agreed that th ere is some possibility
th a t C ongress could pass som e farreaching legislation expanding bank
p o w ers th is year. P e te r W allison,
general counsel, U. S. T reasury D e
partm ent, W ashington, D. C ., based
his forecast on legislative activity on
banking pow ers at the state level. As
soon as opponents of expanded bank
ing powers realize that events at the
state level are moving beyond their
control and that th eir best interests are
served by a national bill som ew hat
lim iting the range of new pow ers banks
may assum e, com prom ise legislation
49
will em erge, according to Mr. W allison.
S en ate B anking C o m m itte e Staff
D irecto r D anny W all agreed th at state
legislatures may force C ongress to deal
w ith fu rth e r d ereg u latio n this year,
b u t said th at events w ithin th e finan
cial-services m arketplace are w hat is
driving regulatory activity at th e state
level. “The m arketplace is w h ere it’s
a t,” said M r. W all. H e ad d e d th at
some com prom ise legislation could be
passed by Congress this year, b u t that
th e clam or of in d e p e n d e n t bankers
and others w ith a stake in deregulation
will be n ee d e d for th e re to be reco n
ciliation.
K e n n e th M cL ean , m in o rity staff
director, Senate Banking C om m ittee,
said th at his boss, Sen. W illiam Proxm ire (D .-W is.), finds him self in “the
unusual position of serving as a voice of
m oderation” w ith resp ect to d ereg u la
tion. Sen. Proxm ire is not convinced
that all of th e changes in th e financialservices in dustry are “dem an d ed by
th e consum er or driven by technolo
gy,” Mr. M cLean said. Sen. Proxm ire
is p ro p o sin g his ow n solution th a t
w ould expand bank pow ers only m od
estly and force nonbanks to divest
th e m s e lv e s o f b a n k in g a c tiv itie s .
A . J. " Ja c k " K in g,
pres., V alley Bank,
K a lis p e ll, M ont.,
shown presiding at
IB A A c o n v e n tio n ,
w h e re
he
w as
elected IB A A pres,
over 1st V. P. Paul H.
B r in g g o ld , p re s.,
First Nat'l, Cannon
Falls, Minn.
W h e th e r C ongress chooses to pass a
bill expanding bank pow ers broadly,
narrow ly or not at all, Sen. Proxm ire
feels th at it is im portant that Congress
deal w ith the issue this year, according
to Mr. M cLean.
A g ricu ltu re S ecretary John Block
used th e IBAA convention as a forum
Independents' 1984 Election
Results in Controversy
L E C T IO N of A. J. “Jack” King, p resid en t, Valley Bank, Kalispell,
M ont., as p resid en t, In d e p e n d e n t Bankers Association of America
(IBAA), at th e g roup’s N ew O rleans convention in M arch came as quite a
surprise and stirred considerable controversy.
Paul H. Bringgold, p resid en t, F irst National, C annon Falls, M inn.,
was expected to succeed Jam es D. H errington, president, C oldw ater
(Kan.) N ational, as IBAA president. Only once before in its 54-year
history had th e organization failed to elect its first vice presid en t — the
post Mr. Bringgold held during 1983-84 — as p resid en t the following
year. But th e election of Mr. King, who had served as second vice
p resid en t u n d e r Mr. H errington, was m ore than ju st a break with
tradition, an article in American Banker suggested. Animosity betw een
Mr. Bringgold and o th er top IBAA officers and staffers may have been
beh in d his being passed over for Mr. King, the article indicated. O ther
reasons also w ere cited in th e article.
H ow ever, R obert M cCorm ick, C E O , Stillw ater (Okla.) National, and
chairm an of th e com m ittee th at nom inated Mr. King, characterizes the
American Banker rep o rt as “idle gossip.”
“ Mr. Bringgold ran for p resid en t, and he lo st,” says Mr. M cCormick
em phatically, as if to say th at fu rth er speculation was useless. H e
refused com m ent on rum ors cited in the article about Mr. B ringgold’s
differences w ith others in th e IBAA, b u t did say the cause of Mr.
B ringgold’s being passed over was “p erso n n el” rath er than “personal”
and th at com m enting on p ersonnel m atters would be inappropriate.
Mr. Bringgold told M i d - C o n t i n e n t B a n k e r he thought the article in
American Banker was well done and th at he still is b itte r about the way
th e election was handled. O th e r than a three-line letter from Mr.
M cCorm ick saying he was not the association’s choice for president, Mr.
Bringgold says he has yet to receive any explanation for his being found
unsuitable. H e says h e was not th e source of the rum ors about him cited
in the article and cannot com m ent on them . Mr. Bringgold declines to
say w h eth er he will rem ain active in th e IBAA or if he will take any
fu rth er steps to seek th e p residency or discover the tru e reason for his
being passed over.
E
50
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
to announce a new approved len d er
program to stream lin e th e D e p a rt
m e n t of A g r ic u ltu r e ’s fa rm -c re d it
p ro g ra m . T h e n e w p ro g ra m w ill
em phasize th e role of private lenders
in processing F arm ers H om e A dm inis
tration guaranteed farm loans.
A. J. “Jack” King, who was elected
IBAA p resid en t at the New Orleans
convention, p resid ed over th e final
general session d uring w hich m em
bers approved 44 resolutions stating
th e IBAA’s position on political/econom ic issues im p actin g com m unity
banks. Mr. King is p resid en t, Valley
Bank, Kalispell, M ont., and has spent
his entire 31-year career in banking in
M ontana. O th er IBAA national officers
elected at th e convention are: B. F.
“C h ip ” Backlund, p resid en t, Bartonville (111.) Bank, first vice president;
C harles T. Doyle, C E O , G ulf N ation
al, Texas City, second vice president;
and C harles L. “B u d ” V anA rsdale,
p re s id e n t, B ank of C astile, N. Y.,
treasurer.
Through th e resolutions passed at
th e convention, the IBAA reaffirm ed
its support for Douglas A m endm ent
prohibitions against interstate banking
and M cFadden Act restrictions on in
terstate branching, except for in te r
state use of electronic-fund-transfer
system s. T he IBAA gave w hat Mr.
King term ed “m ixed” review s to Vice
P resident B ush’s Task G roup on Reg
ulation of Financial Services’s final re
port. G enerally, th e IBAA applauded
th e rep o rt’s support for a continued
role for the F ed eral R eserve Board b ut
strongly opposed the recom m endation
for a new federal banking agency.
O th er speakers w ho addressed the
IBAA in N ew O rle a n s w ere: Sen.
E rn est F. “F ritz” Hollings (D .-S.C .),
who joked that his presen ce was at the
b eh est of the voters of N ew H am pshire
w here his q uest for th e presidency ran
aground; and NBC News C om m enta
tor Roger M udd, who recom m ended
that polls close earlier in the w estern
than in the eastern U nited States so
th a t telev isio n new s p ro jec tio n s of
electio n outcom es w ould n ot affect
actual outcom es. U n d er Mr. M udd’s
proposal, television news departm ents
w ould v olunteer not to project any o u t
comes until all polls had closed. —
John L. Cleveland, assistant to the
publisher.
• Harold D. Schuler has b een nam ed
director, international relations/financial evaluation division, office of the
C o m p tr o lle r o f th e C u rre n c y ,
W ash in g to n , D. C. H e jo in e d th e
office as an assistant national bank ex
am iner in 1969.
MID-CONTINENT BANKER for May, 1 9 8 4
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Federal Reserve Bank of St. Louis
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'Capture Spirit of Illinois' Is Theme
O f Convention Set for Peoria in June
Convention Speakers
FORD
/ / R
HARRIS
th e S pirit of n iinois” is th e th e m e of this
year’s annual convention of th e Illinois
B ankers A ssociation, w hich will be
held June 13-15 in Peoria. H ead q u ar
ters will b e th e P ere M arq u ette H otel.
H eadlining th e convention program
will be form er P resid en t G erald Ford;
R obert G. D ed erick , fo rm er u n d e r
secretary of com m erce for econom ic
affairs; W illiam C. H arris, state b ank
ing com m issioner; N orm an V incent
P eale; R o b e rt B re n to n , ABA p re s
ident; and Douglas Kiker, NBC news
correspondent. Mr. D ederick c u rre n t
ly is ex ecu tiv e vice p re sid e n t/c h ie f
econom ist, N o rth ern T rust, Chicago,
and Mr. B renton is p resid en t, B renton
Banks, D es M oines, la.
Set for th e convention program are a
trade show, a series of special-interest
workshops and th e traditional social
activities, including th e annual b an
quet, w hich will feature the W arren
C ovington O rch estra and e n te rta in
m ent by th e Pied Pipers, the F o u r
F resh m en and th e F o u r Aces singing
groups.
T he convention is expected to begin
aptu re
DEDERICK
KIKER
on the m orning of June 13 w ith o p en
ing of registration and exhibits. W ork
shops are expected to be held that
afternoon on topics to be announced,
E x h ib its and re g istra tio n will be
open all day on June 14 and the first
business session is expected to begin
w ith opening cerem onies at 8:30 a.m ,
A noon reception will be followed by
various luncheons, including one for
graduates of the G raduate School of
Banking at th e U niversity of W isconsin
and one for spouses of delegates.
A dditional w orkshops are expected
to be conducted that afternoon, w ith
topics to be announced.
T he final day’s program is expected
to begin at 8:30 a.m . on June 15, w ith
th e second general session, followed
by th e annual m eeting of Illinois m em
bers of the ABA.
A reception will preced e th e annual
convention luncheon, and W illiam J.
H octer, IBA executive vice president,
is expected to give his annual associa
tion rep o rt that afternoon.
T he closing reception and b an quet
are expected to be held that evening,
at 6 p.m . and 7 p .m ., respectively.
PEALE
Presiding at this year’s convention
will be C harles C. W ilson, IBA p resi
d e n t a n d c h a ir m a n /C E O , F ir s t
N ational of th e Q uad Cities, Rock Is
land, Mr, W ilson assum ed the IBA
presidency last January 1.
H e began his banking career at C on
tinental Illinois National, Chicago, and
has b een w ith his p resen t bank since
1960. H e is a graduate of the G raduate
School of Banking at th e U niversity of
W isconsin and is a co-founder of the
Q uad C ities C h ap ter of th e AIB.
Serving w ith Mr. W ilson this year as
IBA officers are K enneth Skopec, IBA
vice p re sid e n t and p re sid e n t, M idC ity N a tio n a l, C h icag o ; Jam es B.
Lund, association secretary and p resi
d en t, M atteson-R ichton Bank, Matteson; and D onald R. L o v ett, IBA
tr e a s u r e r and c h a irm a n /p re s id e n t,
Dixon N ational (and im m ediate past
p re sid e n t of th e association). T hese
officers will serve th roughout calendar
1984. Officers for 1985 will be elected
at the association’s annual m eeting in
N ovem ber. • •
Convention Officers
WILSON
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Tom Blom e
C o rre s p o n d e n t Bank O ffic e r
(618) 624-9277
FIRST
g J3 NATIONAL
BANK
19 Public Square • Belleville, IL 62220
618/234-0020
Member FDIC
MID-CONTINENT
BANKER for May, 198 4
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Federal Reserve Bank of St. Louis
© C o p yrig h t, FNB, 1983
A ffiliate o f
MAGNA GROUP INC.
53
Chemical Buys Continental's
Charge-Card Operation
C ontinental Illinois N ational, C h i
cago, has sold its credit-card and re
lated m erchant-processing business to
Chem ical Bank, N ew York City. The
purchase price of approxim ately $1 bil
lion includes a p rem iu m of $176 m il
lion for th e n e t receivables and assets
of C ontin en tal’s charge-card division.
T he sale gives C hem ical approx
im ately two m illion cardholders in all
50 states.
Chem ical stated th at it intends to
em ploy C o n tin e n ta l’s e n tire cred it-
card division staff and perhaps expand
th e operation, w hich will continue in
Chicago.
C ontinental has agreed to becom e a
co rresp o ndent bank of Chem ical for
th e purpose of accepting m erchant d e
posits.
Northern Trust and F irst National,
b oth of Chicago, last m onth signed a
definitive purchase agreem ent u n d er
w hich N orthern T rust will w ithdraw
from its bon d -in d en tu re trustee/m un ic ip a l- b o n d /c o u p o n -p a y in g b u s i
nesses and recom m end th at custom ers
u sin g th e se services tra n sfe r th e ir
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Member FDIC
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Digitized for 54
FRASER
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Federal Reserve Bank of St. Louis
business to F irst Chicago. Northern
T rust reports it is w ithdraw ing from
these particular tru st services because
th e y no lo n g e r c o m p le m e n t its
strategic direction. The bank plans to
continue to expand its o ther tru st ser
vices, m ost notably p erso n al tru st/
M aster T rust. The transfer to F irst
Chicago is expected to be com pleted in
th e first q u arter of 1985.
M ichael J. Altenburger, vice p resi
dent, C ontinental Bank, Chicago, has
b een nam ed m anager of the e q u ip
m ent leasing division of th e special in
dustries departm ent. M ost recently,
Mr. A ltenburger was assigned to the
b a n k ’s eastern cen tral division. H e
joined the bank in 1975.
Cole-Taylor Financial Group, Inc., a
C hicago-based m u lti-bank H C , has
elected six new directors: Irving F in
der, president, Rolisa C orp., N o rth
brook; M elvin E. Pearl, senior p a rt
ner, F atten , M uchin, Zavis, Pearl &
Galler, Chicago; Jerry M. Reinsdorf,
chairm an, Balcor/American Express,
Skokie, and chairm an, Chicago W hite
Sox; Bruce W. Taylor, vice president,
Bank of Yorktown, Lom bard; Jeffrey
W. Taylor, vice president, M ain Bank,
Chicago; and Scott W. Taylor, execu
tive vice president, Skokie Trust.
W illiam Troutman, chairm an, F irst
State, Pekin, recently observed his
5 0 th a n n iv e rs a ry in b a n k in g . H e
started as a ‘ru n n e r’’ for C entral Bank
in his hom e town of D enver. H e left
that family-owned bank after 27 years
as a vice presid en t to becom e p resi
d en t, R ushm ore State, R apid City,
S. D ., w here he spent five years b e
fore going to a bank in W aterloo, la .,
briefly before ending up at Pekin. H e
becam e p re sid e n t of F irst N ational
th ere in 1968, and chairm an in 1977. It
was th en that he and his son, John,
bo u g h t controlling in te re st in F irst
State, Pekin, w hich had b een char
tered in 1972.
Carolyn G. W oolsey has been elected
vice president, H arris Bank, Chicago,
w here she heads the banking d e p a rt
m e n t’s s tra te g ic -p la n n in g /a n a ly s is
activ ities. Ms. W oolsey jo in e d th e
bank in 1977.
M id w est F in a n c ia l G rou p , Inc.
(M FG), Peoria, has com pleted acquisi
tion of the $368-million-asset U nited
Bancorp, In c ., a seven-bank Rockfordarea bank HC. In o th er action, direc
tors of DeK alb Bancorp, Inc., a onebank H C that owns the $110-millionasset D eK alb Bank, have approved a
le tte r of in ten t to join M FG . T he tran s
action m ust be approved by DeK alb
B ancorp’s shareholders and th e Fed.
MID-CONTINENT BANKER for May, 19 8 4
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Federal Reserve Bank of St. Louis
deposit and all loans in
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Transactions can also be in
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'W hys' and 'H ow s' of Forming HCs
Explained by Consultant M cNerney
Tom McNerney is a St. Louis-based
consultant to banks. His firm , McNer
ney & Associates, specializes in assist
ing bankers with legal, regulatory, tax
and general business matters involved
in form ing one-bank HCs. The question-and-answer article that follows is
based on Mr. McNerney’s pamphlet,
“W hat Every Director Should Know
A bout Bank Holding Companies.”
* * *
HY DO BANKS form HCs?
In general, m ulti-bank HCs
are form ed to expand custom er and
dep o sit bases, p ro v id e for e n try to
new , attractive m arkets and for ac
quisition of sm aller banks. C om m unity
b a n k s — w h ic h h a v e fo rm e d th e
m ajority of one-bank H C s — are in
te re s te d in m ain ta in in g local ow n
ership and capital ratios and facilitating
o w n e rsh ip tra n s fe r to n ew c o n tro l
groups.
W hy should a bank form an HC?
T he reasons listed below are m ost
com m only cited:
• M aintain local ow nership.
• P rovide liq u id ity to sh areh o ld ers
through stock redem ption.
• Repurchase of out-of-state shares.
• Add equity capital w ith pretax dol
lars.
• Engage in activities not p e rm itte d a
bank.
• E n te r new m arkets.
• Provide for possible estate planning
by th e bank’s owners.
• A cquire additional banks.
• Facilitate the transfer of ow nership.
If a bank has no plans to expand its
market or services is a one-bank HC
still a good idea?
Yes. T he bank H C stru ctu re can
prov id e m ark etab ility — subject to
some lim itations — of th e H C ’s shares
through stock redem ptions. The H C
can, th erefo re, pro v id e liq u id ity to
shareholders who desire to sell th e ir
stock. This benefit is particularly im
portan t to com m unity banks w ishing to
m aintain local ow nership because the
H C can repurchase shares, including
out-of-state shares, hold them as treas
ury stock for resale to local individuals,
retire them com pletely or use th e re
purchased shares in funding or estab
56
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Federal Reserve Bank of St. Louis
lishing pension or stock-option plans.
T he H C stru ctu re also offers the
ability to provide additional equity to a
b a n k w ith its p re ta x d o llars. T his
occurs w hen a one-bank H C borrows
from an outside creditor and uses the
fun d s to p u rc h a se su b sid iary bank
stock or to contribute capital to the
subsidiary bank. The H C provides a
vehicle o ther than the directors, offi
cers, or sh areh o ld ers for supplying
capital that may be req u ired by regula
tory agencies, for increasing the bank’s
lend in g lim it or sim ply for p ru d en t
banking. M any com m unity banks use
th e H C structure as part of th eir capi
tal-m aintenance planning.
McNERNEY
H ow does a bank become an HC?
T he bank m ust apply to the F ed for
perm ission to acquire the bank’s stock
and m ust com ply w ith all applicable
S ecu rities & E xchange C om m isson
(SEC), Internal R evenue Service (IRS)
and o th er federal and state agency reg
ulations.
What are the basic ways to become
a bank HC?
First, the stock can be purchased
w ith cash or n o tes. S eco n d , b ank
shareholders can exchange th eir stock
for an equal value of bank H C stock.
T h ird , an “in te rim ” or “p h a n to m ”
bank can be chartered. This bank is
ow ned by the bank HC and eventually
is m e rg e d into th e real bank w ith
sh areh o ld ers exchanging th e ir bank
stock for HC stock.
W hen are each of these methods
used in forming a bank HC?
T he type of transaction used in form
ing an H C d epends on the objectives of
th e com pany’s incorporators and the
legal, tax and regulatory constraints in
m eeting these objectives. A “hy b rid ”
transaction occasionally is necessary
because of conflicting req u irem en ts of
federal and state securities laws and
IRS and fed eral-b an k in g laws. T he
purchase of stock w ith cash or notes
usually accom panies transfer of ow n
ership and involves funding th e HC
w ith a down paym ent and the borrow
ing of funds by th e H C. T he exchange
of shares and th e phantom bank g en er
ally are used to reorganize into the
bank H C structure.
Which method should a bank em
ploy?
It depends on m anagem ent’s objec
tives, b u t only the interim or phantom
bank m erger can b e certain to resu lt in
th e H C owning 100% of the bank after
form ation. W e recom m end — absent
any o th er m itigating circum stances —
th at bank H C s be form ed through in
terim or phantom m ergers.
W hy is it desirable for the bank HC
to own 100% of the bank stock rather
than just the 80% needed to file a con
solidated federal income-tax return?
M any bank H Cs are form ed w ith
less than 100% ow nership, b u t usually
only w hen financing or o th er consid
erations outw eigh th e lack of flexibility
c a u se d by th e re m a in in g m in o rity
shareholders. By not owning 100% of
th e bank stock, th e H C has to consider
th e im p a c t th e s e m in o rity s h a re
holders will have on its future activi
ties, such as special dividends or ac
quisitions.
How would a phantom bank m erger
be accomplished?
E v e n th o u g h th e p h a n to m b ank
effectively exists on p ap er only, it is a
corporate en tity th at m ust be char
te re d by th e ap p ro p riate regulatory
agency and legally m erged w ith the
existing bank. Each shareholder will
receive a d o cu m en t explaining this
transaction. A shareholders’ m eeting
th en will be called to vote on the m erg
er. If the req u ired m ajority votes for
th e m e rg e r, th e b an k H C can b e
form ed and shareholders can exchange
th eir shares for H C shares.
W hat happens to shareholders who
choose not to exchange their shares?
T hey will be able to exercise th eir
d issenters’ rights. They can be given a
fair value, in cash, for th eir bank stock
MID-CONTINENT BANKER for May, 19 8 4
and th e H C th e n will own 100% of the
bank’s stock.
W here will the m oney come from to
buy out dissenting shareholders?
In som e cases, it will com e from a
third-party creditor, such as th e bank’s
correspondent. Because th e bank and
th e H C will be able to file a consoli
dated tax re tu rn , a tax b enefit is c re
ated. This tax b enefit allows th e bank
H C to pay off its loan m ore rapidly
because U ncle Sam picks up 46% of
th e H C ’s in te re st expense.
Will shareholders have to pay any
additional tax because o f this transac
tion?
The H C can be stru ctu red so that
th e transaction qualifies as a tax-free
reorganization. T herefore, sharehold
ers who exchange th eir shares will not
be taxed until they sell th e ir H C stock.
S h a re h o ld e rs exercisin g d is s e n te rs ’
rights and receiving cash for th e ir stock
m ust recognize th e gain b u t probably
will pay th e low er capital-gains tax.
What are the drawbacks?
The initial cost of form ing th e H C is
th e prim ary drawback. In addition, the
non-deductibility of organizational ex
penses and g reater regulation by the
F ed may be factors. In som e cases, the
H C also will be subject to th e re p o rt
ing requirem en ts of th e SEC if exem p
tions are not available.
What does it cost to form a bank
HC?
E very form ation requires legal, tax,
regulatory and consulting expertise to
e n su re a tro u b le-free form ation. In
addition to fees for professional ser
vices, th ere usually are filing fees and
fees for reg istering th e H C ’s stock.
F ees for professional services consti
tu te th e largest portion of the initial
cost, and fees and com plications will
vary as a function of the n u m b er of
stockholders a bank has, not of a bank’s
asset size.
Are there any annual or recurring
costs?
Yes. As a corporation, the H C will
be subject to certain taxes ju st as any
corporation would be. If the H C will
be subject to the reporting re q u ire
m ents of th e SEC, financial statem ents
audited by a CPA will be necessary.
Will a bank HC be required to reg
ister with the SEC?
Possibly. H ow ever, federal secur
ities laws allow several exem ptions
from registration. Bank H C formations
often can qualify for these exem ptions.
Is the additional Fed regulation and
supervision overly burdensome?
T here will be an additional regula
to ry b u r d e n , b u t th e F e d has a t
te m p te d to keep it to a m inim um con
sistent w ith its responsibility for the
safety and soundness of the nation’s
financial system. As long as the H C
and the bank are adequately m anaged
and in satisfactory condition, the F ed
probably will not inspect the H C m ore
than once every 18 to 36 m onths. The
F ed requires periodic reports similar
to a bank’s call reports.
H ow can sh a reh o ld ers w ho ex
change their shares be certain they
will not have to pay taxes because of
the transaction?
W e recom m end that the bank re
q uest an IRS ruling on the transaction
to make sure it qualifies as a* tax-free
reorganization before proceeding. Be
cause the facts of each proposed H C
form ation are different from bank to
bank, we advise our clients not to rely
on previously issued IRS decisions.
W ill the HC stock be as valuable as
the bank stock?
If every shareholder exchanges his/
h e r stock, th e proportional ow nership
of stock will not change, and since the
H C will own the bank, each share of
bank H C stock will be w orth the same
as the bank stock. But since the H C is
p erm itted m ore leew ay in the range of
its activities, bank H C stock could
have greater value or offer m ore flex
ibility to shareholders. If some share
holders exercise dissenters rights and
receive cash for th eir shares, the re-
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Federal Reserve Bank of St. Louis
57
m aining shareholders will own a p ro
portionately larger share of th e H C
than they did th e bank.
I presently have a will and wish to
leave my bank stock to my children.
How will this transaction affect my
will and the value of my estate?
In an exchange or reorganization, a
bank shareholder is exchanging his/her
“b lu e ” stock certificates for “g re e n ”
stock certificates of equal value. B e
cause a ch ange in co rp o rate en tity
occurs, how ever, we recom m end that
a bank shareholder consult an attorney
on any am endm ents to wills th at m ight
be required.
W ho will serve as directors of the
bank HC?
Usually th e directors and executive
officers of th e bank serve as H C d irec
tors. N ote that directors and officers of
th e H C will have th e same authority as
u n d e r the bank’s stru ctu re unless, of
course, shareholders and directors, re
sp ectiv ely, a u th o rize ad d itional r e
sponsibilities.
W ho elects directors of the bank
and the HC?
The bank HC holds its annual share
h o ld e rs m e e tin g an d sh a re h o ld e rs
elect directors. Because the H C owns
100% of the bank’s stock, directors of
th e bank H C elect directors of the
bank.
How often does the board of the
bank HC meet?
As often as is req u ired in th e by
laws. Usually, th e board w ould m eet
quarterly or sem i-annually to conduct
its business and to declare dividends to
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Federal Reserve Bank of St. Louis
shareholders.
D o officers and directors of the HC
get paid for their services?
Because th e HC usually has lim ited
activities, officers and directors often
serve w ithout pay. H C officials can be
c o m p e n s a te d fo r th e ir s e rv ic e s ,
how ever.
Will HC dividends be the same as
for the bank?
Usually, the bank’s and the H C ’s
d iv id en d are th e sam e because the
same directors declare both dividends.
T h e re m ay b e occasions, how ever,
w hen the bank will pay m ore (or less)
dividends to the H C than the H C will
pay to its shareholders. F or example,
th e bank may wish to pay the H C ’s
o p eratin g expenses or to re tire the
H C ’s debt.
How does the HC earn money to
pay dividends?
The HC earns a re tu rn on its invest
m ent, nam ely the bank stock. Bank
directors declare dividends ju st as they
w ould have w ithout the H C and these
dividends are paid to th e HC. Because
this incom e flows to the HC tax-free,
directors can declare the same am ount
of dividends for H C shareholders.
D o bank minority shareholders re
ceive dividends from the bank and the
HC?
No. M inority shareholders of the
bank receive only th eir share of any
dividend declared by the bank. M inor
ity shareholders of the bank w ould re
ceive, how ever, th eir pro rata share of
any extra dividends declared by the
bank to fund the operations of th e HC.
This is one im portant reason for the
H C to own 100% of the bank’s stock.
Is Fed approval of the HC transac
tion pretty much of a formality?
No one can guarantee F ed approval,
b u t a well-conceived, w ell-structured
and w ell-prepared application nearly
always receives favorable considera
tion. The F ed is very cooperative w ith
applicants who have a transaction that
makes good business sense and who
p resen t th eir case in a logical, straight
forward m anner. Be sure to structure a
transaction w hich m eets objectives,
makes good business sense and maxi
mizes likelihood of approval.
Can a bank use its own personnel to
form an HC?
P o ssib ly . A b an k m ay have th e
securities and tax law expertise and
resources, e ith e r in-house or on its
board, to properly stru ctu re th e trans
action. C onsider the process as m uch
like building a hom e, w ith the atte n d
ant problem s of com plying w ith all re l
evant building codes and the n eed to
coordinate w orkers so th e house is
ready w hen it’s tim e to move in. • •
MID-CONTINENT BANKER for May, 19 8 4
Helping
Bankers Cope
Through Consultants
(Part II. First A rtic le A ppeared in A p ril 1984, Issue)
T R A T E G IC P L A N N IN G . T h a t
seem s to be th e rallying cry of
com m ercial bankers today in the face
of deregulation, grow ing com petition,
n o t only from n o n b an k s, b u t from
thrifts and even th e F ed , and th e possi
bility of being granted, thro u g h leg
islation, pow ers to offer m any m ore
services than now are allow ed banks.
H ow ever, effective strategic plan
ning is elusive b oth because it is u n
familiar and because it is in h eren tly
difficult, says JoAnn S. Barefoot, p re si
dent, J. S. Barefoot & Associates, Inc.,
C olum bus, O. Ms. Barefoot, by the
way, is a form er d ep u ty com ptroller of
th e currency in W ashington, D. C .,
and h e r responsibility was to enforce
c o n s u m e r law s a ffe c tin g n a tio n a l
banks. Today, h e r firm ’s staff gives
banks support services to m ake com
pliance easier and/or less costly.
“Financial institutions, in p articu
la r,” Ms. Barefoot points out, “know
they n eed b e tte r strategic positioning,
b u t are struggling to achieve it. M any
have been too busy w ith survival to
engage in system atic planning. O thers
have used standard planning guides,
m aterial from conferences or in-house
efforts th a t sim ply have b e e n over
w helm ed by th e ch allen g e.”
A n o th e r c o n su lta n t, M arshall D.
Sokol, p resid en t, M DS C onsultants,
Inc., W hite Plains, N. Y., points out
th at few er and few er banks, regardless
of th e ir sizes and m ark et positions,
m aintain all th e resources and ex p er
tise internally to m eet all th e decisiona n a ly sis r e q u i r e m e n t s o f a f a s t
changing environm ent.
D eregulation, according to A rnold
G. D a n ie ls o n , m an ag in g d ire c to r,
D anielson Associates, Colum bia, M d.,
has set in m otion changes th a t are
transform ing th e stru ctu re of th e finan
cial-services industry. T he changes are
so substantial, he adds, th at it is diffi-
"Fewer and fewer banks,
regardless of their sizes
and market positions,
maintain all the resources
and expertise internally
to meet all
the decision-analysis
requirements of a
fast-changing environment."
cu lt to u n d e rsta n d w h ere th ey will
end, and th e only thing m ost partici
pants seem to agree on is th at survival
will req u ire an adaptability and cost
consciousness that w ere not necessary
in the past.
Com plex and com petitive are words
used by Strategic Solutions C o., G old
en, Colo., to describe th e changing
enviro n m en t of th e financial industry.
According to th e firm, the m any issues
facing financial institutions today have
becom e national topics of great con
cern, and th e b u rd en , of course, is on
industry m anagem ent to anticipate the
problem s and act effectively to m ain
tain and stren g th en th eir profitability.
T he com m ents m ade above reflect
th e p h ilo so p h ie s of th e co n su ltin g
firms. H ow ever, exactly how can they
help banks plan strategically?
No W asted Time. J. S. Barefoot &
Associates works w ith senior m anage
m e n t to c re a te a p ro c e ss th ro u g h
w hich th e organization grows into a
clear vision of itself, its future environ
m e n t a n d ho w th e tw o sh o u ld fit
together. Ms. Barefoot m aintains h er
firm also prev ents one of th e greatest
problem s in strategic planning: w ast
in g s e n io r m a n a g e m e n t’s tim e .
S tra te g ic d ecisio n s, she co n tin u es,
m ust be m ade by top executives with
MID-CONTINENT
BANKER for May, 1984
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Federal Reserve Bank of St. Louis
no surplus tim e. She says h e r firm ’s
service avoids this problem by taking
on the tim e-consum ing aspects of the
process and producing tangible prog
ress betw een each m eeting of the ex
ecutive team . In so doing, she believes
it p revents th e frustrations, delays and
o th er pitfalls that b eset m ost strategic
planning.
Specifically,]. S. Barefoot & Associ
ates provides:
• E stab lish m en t of strategic-plan
ning objectives, w ith clarification of
w h a t th e p ro c e ss re a listic a lly can
achieve.
• Advice in organizing a strategicp la n n in g c o m m itte e and se ttin g a
schedule.
• Structuring of planning m eetings
th at sharply address the critical q u es
tions, w ithout wasting tim e.
• Participation in com m ittee m e e t
ings, acting as discussion leader, dev
il ’s a d v o c a te /in fo rm a tio n s o u rc e /
general pathfinder.
• D evelopm ent of a “SW OT” analy
sis of th e o rg a n iz a tio n ’s stre n g th s,
w e a k n e s s e s , o p p o r tu n itie s a n d
threats.
• D evelopm ent of an environm en
tal scan that analyzes trends in eco
nom ics, dem ographics, com petition,
custom er expectation, politics, etc.,
that will affect the institution five to 10
years in the future.
• Analysis of how the in stitution’s
history should affect its future plans.
• D istillatio n of th e c o m m itte e ’s
work into a concise w ritten mission
statem ent and strategic plan.
• H e lp w ith c o m m u n icatin g th e
mission and plan to em ployees, stock
holders and others w ith stakes in it.
• C reatio n of an im p lem en tatio n
schem e and help in taking initial steps
to bridge planning w ith im plem enta
tion.
• Renewal of the process as th e in59
stitution and th e w orld change.
As an illustration of how h e r firm
w orks, M s. B arefo o t c ite d a large
m id w e ste rn bank H C , w hich elim
in ated its in te rn a l-a u d it function in
1983 and replaced it w ith the audit
service provided by J. S. Barefoot &
Associates. O ver the year, th e firm au
dited 19 of the H C ’s affiliate banks
th ro u g h o u t its state, recom m ending
ways to stren g th en and im prove the
efficiency of com pliance operations.
Thus, th e H C was able to use its au
ditors’ tim e for o th er priorities and, as
Ms. Barefoot, puts it, “to rely on our
superior expertise in th e highly te c h
nical com pliance field.
Late in the year, th e firm analyzed
re su lts of its au d its and a d d re sse d
them in a training session for th e 23
com pliance officers of th e H C ’s affiliate
b an k s. T h e p ro g ra m co st th e H C
thousands of dollars less, Ms. Barefoot
m aintains, than it w ould have spen t to
atten d national or regional com pliance
conferences. It also, she adds, had th e
quality advantage of focusing on only
the specific com pliance needs of this
H C ’s banks.
As a result of J. S. Barefoot & Asso
ciates’ com pliance program , th e H C
simplified a com pliance exam ination
by its prim ary federal regulatory agen
cy last year. According to Ms. B are
foot, th e exam iners w ere satisfied w ith
the scope and quality of h e r firm ’s re
view and relied on its findings in lieu of
m aking on-site visits beyond the lead
bank. This, too, she points out, saved
th e H C significant tim e.
In co n trast to this tailored largebank service, says Ms. Barefoot, the
firm offers sm aller banks a m ore basic
com pliance-support package that costs
less than they w ould spend to m aintain
in-house expertise for th e same ser
vices. This package includes:
• An annual audit.
• Training for new personnel/new
regulations.
• A place to call for answ ers to qu es
tions.
• Full m onitoring and tailored in
fo rm a tio n on r e g u la to ry d e v e lo p
m ents.
• H elp w ith exam ination/litigation
problem s.
• If desired, developm ent or u p d at
ing of com pliance-m anagem ent sys
tem s.
Strategic Planning. Ms. Barefoot’s
firm h as d e v e lo p e d a s tr a te g ic planning process specifically for small
and m edium -sized institutions.
“ Unlike some of th e strategic plan
ning offered by larger firm s,” she ex
plains, “ours is a tailored, one-to-one
program in w hich we act as a guide or
‘path fin d er’ to help a client com e to
grips w ith its strategic goals. O ur firm
provides a planning fram ew ork, in
form ation and analyses on the com
p e titiv e e n v iro n m e n t and m aterials
th at stru cture planning discussions to
m inim ize planning tim e. W e also do
th e necessary w riting, capturing the
c lie n t’s p lan n in g pro g ress in clear,
b r ie f d o c u m e n ts th a t ad v an ce th e
Mortgage-Lending Expertise
O ffered by Virginia Firm
PEC IA LIZA TIO N in m ortgage finance and th e secondary-m ortgage
m arket is offered by th e consulting/educational firm, B arrentine
L ott & Associates (BL&A), M cLean, Va. The firm offers w hat it d e
scribes as strategic, operational and financial expertise in four major
areas:
• Asset/liability m anagem ent.
• M ergers/valuations.
• T raining/education.
• M ortgage lending/secondary-m ortgage m arket.
BL&A says its client engagem ents range from lim ited special-purpose
consultation to com prehensive business-operating-strategy design/form ulation/im plem entation. Its client engagem ents include:
• D esigning/im plem enting m ortgage-lending program s/secondarym arket operations to im prove profitability.
• D eveloping/im plem enting restru ctu rin g strategies and asset/liability-m anagem ent plans to im prove financial perform ance.
• Financial sim ulations/profit forecasts.
• In d e p e n d e n t transaction analysis/evaluation using BL&A’s com pu
te r models.
• M erger/acquisition planning/im plem entation.
• Business/portfolio valuations.
• D esigning/presenting educational/training program s.
S
Digitized for 60
FRASER
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Federal Reserve Bank of St. Louis
process. P erh ap s m ost im portantly,
we serve as im partial listeners w ith
broad perspective and ability to help
the client identify, com m unicate and
b u ild enthusiasm for its long-range
goals.”
C u sto m er-B a se A n a ly sis. M D S
C onsultants provides m arket strategy/
developm ent, product developm ent/
m anagem ent and operations design/
developm ent services. For exam ple,
w ith resp ect to m arket strategy/developm ent, M DS perform s custom erbase analysis of a bank’s com m ercial
m arkets, com pares the custom er base
to th e total co m m ercial p opulation
according to 15 m arket-segm entation
criteria and th en helps th e bank in d e
fining the m ost profitable target m ar
kets.
In some instances, at a bank’s re
quest, MDS C onsultants conducts a
m arket-research survey of the busi
ness population in the bank’s defined
m arket region(s) and uses these data to
d eterm ine w hat banking services cu r
r e n tly a re b e in g u s e d a n d th o s e
planned for future use. D ata from the
c u s to m e r-b a s e an aly sis, s ta te w id e
population and m arket research then
are com bined into a data base, w hich
s u p p o rts an e x is tin g c e n tr a l- in
form ation file (CIF) from w hich MDS
C o n su lta n ts b u ild s or a c q u ire s an
ap propriate C IF for th e bank. This
helps the bank not only in assessing its
c u rre n t m arket status and p o stu re,
says M arshall D. Sokol, p resid en t of
M DS C onsultants, b u t also in planning
and m onitoring m arket p e n e tra tio n
and perform ance over tim e.
W ith respect to product developm ent/m anagem ent, MDS Consultants
perform s p ro d u ct-req u irem en t analy
ses for new products or existing p ro d
uct en h ancem ents based on m arket
needs identified in its m arket-analysis
services. The firm th en provides p ro d
uct definitions and functional speci
fications, including operations and ser
vice-su p p o rt re q u ire m e n ts for each
relevant product and service.
As for operations design/developm ent services, MDS C onsultants eval
uates d em an d -deposit-account/item p ro c e s s in g /b ra n c h o p e ra tio n s and
specifies the enhancem ents, features
and capabilities req u ired to im prove
the cost, efficiency and profitability of
th e operations that support the com
m ercial products and services of the
bank.
T he firm ’s c lien ts in clu d e m ajor
m oney-center and regional banks, plus
several country and com m unity banks
that have set objectives for increasing
th eir com m ercial-custom er bases.
Three-Step O peration. D anielson
Associates, Colum bia, M d., says its
MID-CONTINENT BANKER for May, 1984
m anaging director, A rnold G. D aniel tim id, it adopted a rath er drastic step out. F rom an outsider, this can be
son, has as its basic function helping and decided to move its main office to crushing advice, b u t in each case, it
fin a n c ia l in s titu tio n s p u t in p la c e th e largest city in th e state as a way of generally has b een accepted although,
strategic plans for th e future. Typical getting alm ost instantaneous presence in some instances, only after things
ly, the firm works w ith sm aller banks — and th en fleshed this out w ith addi have gotten w orse.”
— those with u n d e r $500 million in tional offices. N ot only did this move
Strategic-Marketing Planning. The
deposits — that cannot afford a full p r o d u c e so m e n ic e m a r k e t- s h a r e prim ary area in w hich Strategic Solu
tim e planning staff and e ith e r are new gains, b u t w hen in terstate banking ar tions Co., G olden, Colo., assists banks
to planning or have b een stum bling a riv e d in th e sta te , M r. D an ielso n is strategic-m arketing planning, says
bit. In assisting these banks, D aniel points out, the bank was able to com D iane R. Sauter, one of th e firm ’s con
son Associates goes through a th ree- mand a price o f 1.5 times book despite sulting directors. This includes, b u t is
step operation:
being fairly large and in a state not not lim ited to:
First, it puts to g eth er a background normally considered highly desirable.
Strategic analysis!planning:
docum en t to m ake certain planning
U nfortunately, Mr. D anielson adds,
• E xpertise in internal/external re
will be done based on actual facts p e r all e x a m p le s a re n o t as p o s itiv e .
search aim ed at helping m anagem ent
taining to th e m ark etplace and th e “S om etim es,” he says, “we are hired
construct a thorough situation assess
clien t’s capability.
b y banks in trouble that are looking for m ent.
Second, Mr. D anielson m oderates a panacea. O ur background docum ent
• Focusing strategies on serving key
an o b je c tiv e -se ttin g m e e tin g , from
generally has b een disappointing to
w hich objectives for the next five years th ese banks as it invariably suggests custom er groups m ore effectively.
te n d to surface.
th at th e plan has to be two or th ree
• C o n sideration of acquisition/diFinally, th e firm helps th e bank’s years of austerity, and that may be only versification/divestiture or portfoliostaff p u t to g eth er a plan based on the to p u t them in a b e tte r position to sell
(Continued on page 64)
purpose and objectives.
W h ere D anielson Associates differs
from a lot of consulting firms th at help
w ith p la n n in g , a c c o rd in g to M r.
D anielson, is th at it does not ju st set up
the fram ew ork and have bank p erso n
nel do all th e actual work. The firm
does the evaluation and plays an in
E L P IN G p rev en t fraud is th e purpose of Associated C redit Ser
fluential role in d irection-setting and
vices, Inc., H ouston, which, although not called a consulting
plan-w riting. This is because its ex
firm, serves banks in an advisory capacity.
p erience has taught it th at m ost banks
The firm points out how it w orked w ith a bank-card-processing cen ter
have not done good planning because
to help p rev en t fraud of a certain type: attem pts to get cards issued
they don’t find tim e to do som e of the
through legitim ate channels, b u t on the basis of false information.
m undane background work, says Mr.
N orw est C ard Services (Des M oines, la.), says Associated C redit
D anielson, and they often tu rn to a
Services, estim ates it saved betw een $100,000 and $200,000 in 1982-83
consultant for direction as well as p ro
through a program set up in conjunction w ith the C redit Bureau of
cedure.
G reater D es M oines, a subsidiary of Associated C redit Services. N or
“In terestin g ly e n o u g h ,” continues
w est C ard Services is a subsidiary of N orw est Bank, M inneapolis.
Mr. D anielson, “I feel our m ajor con
H e re ’s how th e program works:
tribution to m ost of our clients has not
W hen N orw est receives an application w ith serious discrepancies
b een the plans th at resu lted , b u t th e
indicating probable fraud, it gives the credit bureau full information.
thought processes th at w ere p u t in m o
The bu reau sets up a com puterized file for the questionable applicant
tion by our background evaluations.
and flags it w ith a special code. If another credit granter accesses the file,
Plans get b u ried in desks, b u t once an
instead of a cred it report, he receives a message to contact the creditbureau supervisor.
id ea is in so m eo n e’s head , it stays
th ere, and if you get the right ideas in
T he bureau supervisor and credit m anager th en discuss the b u reau ’s
place, your assistance can be invalu
efforts to verify th e inform ation given by the applicant, and the bureau
ab le .”
gives the m anager nam es and phone num bers of any o th er credit
As an exam ple of how his firm can
granters w ho have asked to be contacted w hen inquiries are received on
h e lp a clie n t bank, M r. D an ielso n
th e individual in question — usually because they already have been
cited one of its first clients, located in a
defrauded by th e applicant.
small eastern state. A lthough th e bank
The alerted credit g ran ter th en can avoid falling into the same trap,
was one of th e largest in th e state, it
e ith e r by denying the application for credit or by inactivating the
had m inim al p resen ce in th at state’s
account quickly to lim it the loss.
m ajor m arket. In th e long run, this
A nother benefit of having th e credit bureau function as a centralsituation w ould m ake it hard to keep
inform ation/referral point, says Associated C redit Services, becom es
pace with its m ajor com petitors, and if
ap p aren t w hen several credit granters have been defrauded by the same
in te rs ta te b a n k in g cam e, th e bank
individual or ring. N orw est C ard Services’ credit d ep artm en t su p er
w ould be far less attractive than o th er
visor, Raym ond Jones, says the mail-fraud problem has becom e so
banks.
massive th at the U. S. Postal Service seldom prosecutes any case u nder
In D a n ie ls o n A s s o c ia te s ’ b a c k
$5,000. If no one credit g ran ter’s loss is that high, none of them w ould be
ground docum ent and ensuing m e e t
able to recover th e ir losses alone. H ow ever, Associated C red it Services
ing, this becam e extrem ely evident,
points out, by exchanging inform ation through the C red it Bureau of
and the m ajor objective becam e how
G reater D es M oines, several credit granters collectively can dem on
th e bank could becom e a m ajor factor
strate a prosecutable am ount of fraud.
in that m arket. Since th e bank was not
Credit-Card Fraud Lessened
W ith Help of One Firm
H
MID-CONTINENT BANKER for May, 198 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
61
Atlanta Consulting Firm
Performs Merger Studies
To Determine Viability
Retirement-Services Questions
Specialty of Minnesota Firm
T
H E R E T IR E M E N T AREA is the specialty of U niversal Pensions,
Inc. (UPI), B rainerd, M inn., w hich says it can provide financial
in s titu tio n s w ith im m e d ia te and accu rate answ ers to individualretirem en t-acco u n t/H R -1 0 /sim p lified -em p lo y ee-p en sio n (SEP) and
o th er retirem ent-serv ices questions. F o r nearly a decade, U PI has been
providing retirem en t-acco u n t adm inistrative/consulting services.
The firm ’s staff is com prised of certified p ublic accountants, attorneys
and retirem en t-acco u n t specialists, who work w ith financial institutions
full tim e, year round. It offers u n lim ited toll-free services and a Monthly
Retirement-Services Bulletin, w hich, according to the firm, contains
accurate, easily understo o d inform ation. T he bulletin ’s m onthly articles
describe law changes as w ell as in terp retatio n s and directions for dealing
w ith IRA /H R-10/SEP accounts.
U PI points out how it h elp ed in a recen t situation. R etirees of a large
financial institution w ere receiving lum p-sum distributions from their
re tire m e n t plan consisting of cash and stock. M any w anted to roll their
funds into an IRA. U P I clarified th e p rocedures and m ethods to accom
plish these rollovers. If this had b een done im properly, U PI m aintains,
it could have resu lted in adverse tax consequences for these individuals
and probable ill will for th e financial institution from which they w ere
retired.
The ABA and IBAA don’t argue about productivity!
Both 1984 association presidents appreciate the
im portance of productivity im provem ent. Bob Brenton
(ABA) and Jack King (IBAA) are both clients of
Penquite and A ssociates, Inc. This year IBAA has
chosen P enquite and A ssociates, Inc. to conduct its
senior management sem inar on productivity. Last year
ABA chose Bob P enquite to speak on productivity at
its Community Bankers Seminar.
Please call or write today for more inform ation on our
productivity consulting services. No client’s bottom
line has ever suffered as a result of our services. We
contractually guarantee a first year return of twice our
fee.
62
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
a n d A sso ciate s, In c . — M an a g e m e n t S e rv ic e s
4 1 0 0 S p rin g V alley, S u ite 9 0 1 , B o x 7 3
D allas, T e x a s 7 5 2 3 4 (2 1 4 ) 3 9 2 - 2 5 5 2
505/292-7009
M erger operations is one of the spe
cialty services consulting firm Ross,
D eL any & M cGarvey, M arietta, G a.,
is offering banks. The firm perform s
p r e - m e r g e r d ia g n o stic s a n d p o s t
m erg er im plem entation, says James
M cGarvey, executive vice president.
T he firm sends a task force into a
bank or H C and perform s a detailed
on-site analysis of productivity, work
flow, etc. D ollar values are assigned to
th e se activities so p ro d u ctiv ity im
p ro v e m e n ts can b e m easu red costwise.
O ne of the prim ary values of a task
force of nonbank consultants is its abil
ity to see w here im provem ents can be
m ade in productivity and w ork flow,
M r. M cG arv ey says. M an a g e m e n t
often d o e sn ’t recognize cost-saving
opportunities in this area.
T he firm recently studied the p ro
ductivity of 675 em ployees of a 2,000em ployee m ulti-bank H C in the south
east. O ne of th e task force’s jobs was to
d eterm in e w h eth er th e 12 banks in the
H C would benefit from being m erged
into an institution w ith one nam e. The
task -fo rce stu d y re v e a le d th a t th e
p rim ary savings w ould occur if th e
bank’s com bined th e ir operations.
O f the 675 positions studied, it was
d e te rm in e d th at 85 could be elim i
nated through b e tte r w ork flow, Mr.
M cG arvey says. In addition, 30 m ore
positions could b e elim inated through
operations consolidation.
A ll p o s itio n s w e re e lim in a te d
through norm al attrition, he says. The
H C placed a freeze on new hiring, ex
ce p t in selected instances, so that,
w hen an individual elected to te rm i
nate, som eone else on th e staff could
step in and assum e that individual’s
workload. I t’s im portant, Mr. M cG ar
vey says, that determ inations be m ade
of how long it takes individuals to p e r
form certain functions. This enables
supervisors to assign portions of a te r
m inating em ployee’s duties to others
on a piecem eal basis.
F or instance, if som eone at a branch
term inates, th at p erso n ’s duties (which
usually are varied) can be divided up
am ong the b ran ch ’s o th er em ployees.
But this can’t be done efficiently w ith
out inform ation about how long it takes
to perform each duty.
Ross, D eL an y & M cG arvey also
perform n o n -interest-expense-reductio n , f lo a t-m a n a g e m e n t, q u a lity control and dem ographic and fee stu d
ies for financial institutions.
MID-CONTINENT BANKER for May, 198 4
Operational Cost Reductions
Merger Operations
Float Management
Management Information Systems
Space Planning
Demographic Studies
Increased income and
reduced costs through
goal oriented planning,
in-depth analysis, and
detailed implementation
the R.D.M. Plan.
BP
THE BANK CONSULTANTS
Lawyers Title Building
191 Roswell Street
Marietta, Georgia 30060
404-428-8899
Be sure to visit us at the National Operations & Automation Conference, Washington, D.C., Booth 1328.
MID-CONTINENT BANKER for May, 1 9 8 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
63
Consultants
(Continued fro m page 61)
liquidation strategies.
• E m p h a s is on h ig h e r - y ie ld in g
assets to im prove profitability/capital
positions.
Product management/development:
• Assessing n eed and m aking rec
om m endations for approach and stru c
tu re of p roduct m anagem ent/developm en t functions.
• Im proving sales-force effective
ness.
• P ro d u c t-lin e ev a lu a tio n /re co m m endations on new and existing p ro d
ucts to im prove custom er satisfaction
and profit.
• Improving non-interest-expense
productivity to deliver services more
efficiently.
• Modifying pricing policies to re
flect tru e cost/profitability of various
custom er relationships/products.
Marketing planning/management:
• M arketing system audits and m ak
ing recom m endations on structure, re
sponsibility, policies and procedures.
• D eveloping planning system s and
a n n u a l/lo n g -te rm plans to im prove
organization perform ance.
• A dvertising/prom otion budgeting
and planning/evaluation techniques.
• A d v ertisin g -ag en cy e v alu atio n /
selection/m anagem ent processes.
• N a m e /id e n tity -c h an g e analysis/
planning/program -m anagem ent assist
ance.
James Brown Gets Post
With Bank Bldg. Corp.
ST. LO U IS — Jam es E. Brown,
who retired early this year as president/chief adm inistrative officer, M er
cantile Bancorp, h ead q u artered here,
has jo in e d Bank B uilding C orp. as
senior m arketing associate. The firm,
also head q u artered h ere, has regional
offices in Atlanta, Dallas, D enver, San
Francisco and H artford, Conn.
BROWN
Management information/control:
Names and addresses of the con
sulting firms featured in articles in
the April and May issues of M i d C o n t i n e n t B a n k e r are listed for
the convenience of readers.
Associated Credit Services, Inc.,
2505 Fannin St., Houston, TX
77002.
Bank Earnings International,
3420 Norman Berry Dr., Suite 623,
Atlanta, GA 30354.
Barefoot & Associates, J. S., Lin
coln LeVeque Tower, 50 West
Broad St., Columbus, OH 43215.
Barrentine Lott & Associates,
Inc., P. O. Box 3280, McLean, VA
22103.
Danielson Associates, 10451 Twin
Rivers Rd., Suite 400, Columbia,
MD 21044.
John M. Floyd & Associates, Inc.,
P. O. Box 742667, Houston, TX
77274.
Littlewood, Shain & Co., 175
Strafford Ave., Wayne, PA 19087.
MDS Consultants, Inc., P. O.
Box 1724, White Plains, NY 10601.
MMG Land Contract Service
Group, 1014 Main St., St. Joseph,
MI 49085.
National Decision Systems, 539
Encinitas Blvd., Encinitas, CA
92024.
Patten, McCarthy & Associates,
Inc., 1444 Wazee St., Suite 220,
Denver, CO 80202.
Professional Bank Services, Inc.,
1000 Lincoln Income Center, Suite
305, 6200 Dutchman’s Lane, Louis
ville, KY 40205.
Profit Technologies Corp., 1776
Woodstead Ct., Suite 117, The
Woodlands, TX 77380.
Strategic Solutions Co., P. O. Box
1267, Golden, CO 80401.
Swords Associates, Inc., 4900
Oak, Suite 301, Kansas City, MO
64112.
Universal Pensions, Inc., P. O.
Box 764, Brainerd, MN 56401.
64
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
• S tr e n g th e n in g b asic finan cialm anagem ent procedures.
• R evising c u rre n t approaches to
asset/liability m anagem ent.
• D efining and assem bling m anage
m en t-in form ation system s for m ore
effective and responsive decision m ak
ing.
T he firm ’s targets are financial in
stitu tio n s w ith $2 billion or less in
assets.
Ms. S auter cites two specific “suc
cess” stories at two com m unity-bank
su b sid ia ries of a billio n -d o llar-p lu s
C olorado bank H C. H er firm orga
n iz e d a n d m a n a g e d in te n s iv e
strategic-planning projects for these
two banks, projects that involved d e
tailed analyses of all cu rren t incom e/
ex pense areas, com petition, m arket
changes, custom ers, regulations and
o th er categories. These analyses re
s u lte d in n e w o rg a n iz a tio n a l a p
p ro a c h e s s tr u c tu r e d a ro u n d k ey
strategic leverage points, new and ex
p lic it a sse t-a llo c a tio n d ecisio n s by
strategic business units and specific
strategies and m arketing plans for all
c u s to m e r s e g m e n ts a n d b u s in e s s
units.
P erhaps the case for banks hiring
consultants can be sum m ed up b est by
this quote in a brochure published by
J. S. Barefoot & Associates: “Your in
stitution is planning for survival and
grow th in th e new financial w orld.
Your success will depend, in part, on
securing know ledge and experience
beyond w hat you currently have inhouse. Rosemary M cKelvey, editor.
• An analysis of soliciting com petitive
b id s fo r in s u ra n c e is p ro v id e d in
“ M a rk e tin g Y our B ank’s In su ran ce
Program — W hy, W hen and H ow ,” a
recen t issue of th e ABA’s Competitech
series. Call 202/467-4118 for inform a
tion.
In his new post, Mr. Brown serves
in an advisory capacity to Bank B uild
ing’s p resident/C E O , Carl H. W eis,
and its senior vice president, Rex H.
D unlap, and works closely w ith T hom
as W illiamson, national sales m anager.
Mr. Brown joined M ercantile Trust,
St. Louis, in 1945. Subsequently, he
headed the bank’s m arketing, sales,
m etropolitan and correspond ent bank
ing divisions b efo re b e in g e le c te d
president/adm inistrative officer/director of M ercantile T ru st’s paren t H C,
M ercantile Bancorp, in 1971.
D u rin g his b an k in g c a re e r, M r.
B row n r e p r e s e n te d M e rc a n tile in
fo rm atio n of C re d it S ystem s, Inc.
(CSI), w hich processes M asterC ard
and Visa credit-card transactions, and
was C S I’s first president.
M idw est F inancial G roup, P eoria,
111., has elected six new directors and
app o in ted th re e new corporate vice
presidents. New directors are Seth G.
A tw ood, A tw ood V acuum M achine
C o., Rockford; W illiam Barnes III,
p re s id e n t/c h a irm a n /C E O , C itiz e n s
National, D ecatur; R obert M. Ritchie,
chairm an, C orn Belt Bank, Bloom ing
ton; D onald E. N ordlund, A. E. Staley
M anufacuring Co., D ecatur; H arold
B. Steele, Princeton farm er; and H ar
ry M. P e trie , p re s id e n t C orn B elt
Bank. New vice p residents are D ale P.
A rnold, form erly senior vice p re si
d en t, C itizens N ational, D ecatur; W il
liam A. Richards, p resident/director,
F irst T rust & Savings, Kankakee; and
H arlan A. W hite, senior vice presi
dent/director, C itizens National, D e
catur.
MID-CONTINENT BANKER for May, 19 8 4
CORPORATE NEWS
ALICK
HUTCHISON
• SignMaster Corp. D avid H utchison
has b een p ro m o ted to n eo n /p a tte rn
specialist at this Jonesboro, Ark. -based
firm. Mr. H utchison previously w ork
ed for SignM aster in plastic form ing,
w elding and sh eet m etal.
• Sendero Corp. Clifford M yers has
m oved up from vice p re sid e n t to presid en t/C E O of this Phoenix-based firm.
T heodore K raver, one of th e founders
of Sendero, has b een elected as the
firm ’s chairm an.
KURTENBACH
THOMPSON
ing/public relations and Nancy Costantin o u assistant d ire c to r. M r. Kuhlm an n ’s responsibilities include newbusiness d evelopm ent, specialized in
d ustry prom otion and m edia relations/
corporate-m arketing strategy. In addi
tion to h e r duties as executive secre
ta ry , M s. C o sta n tin o u assists M r.
K uhlm ann by publishing th e corporate
n e w s le tte r, co n tactin g new s m edia
and coordinating all m arketing/advertising projects w ithin th e d ep artm ent.
• D aktron ics, Inc. A elred K u rten b ach , p re s id e n t/c o -fo u n d e r o f th is
firm , h e a d q u a rte re d in Sioux Falls,
S. D ., has b een nam ed South D akota’s
“ small b u sin essp erso n of th e y e a r.’
T he aw ard is p re se n te d annually in
each state to a businessperson for p e r
sonal ach iev em en ts in h is/h er b u si
ness, state and nation. D r. K urtenbach
is being honored at th e national confer
ence of th e U. S. Small Business A d
m inistration in W ashington, D. C .,
May 8-10.
• Littlewood, Shain & Co. E dw ard L.
M addox has been prom oted to senior
vice p resid en t at LSC, h ead q u artered
in W ayne, Pa. In his new post, he
holds responsibility for m anagem ent of
one of th e firm ’s m ajor consultingservice lines and associated products
re la te d to funds m an ag em en t. Mr.
M addox joined LSC after a decade of
operations-m anagem ent in a $2-billion
regional com m ercial bank. H e is the
author of two Bank A dm inistration In
stitu te publications, Check Float in the
C om m ercial-Banking In d u stry and
• Christmas Club a Corporation. D on
H e is e r an d Ju d y A lick h av e b e e n
nam ed pro d u ct m anagers at this E as
ton, P a.-based firm. Joe M artin has
b e e n m ade account executive. M r.
H eiser was plant m anager at th e firm,
w here his responsibilities now include
sales/m arketing of coupon books and
passbooks. Ms. Alick was a m illiondollar salesperson for C en tu ry 21 Real
E state before joining C hristm as Club.
S he now is r e s p o n s ib le for sales/
m arketing of th e advertising/checks/
display division. M r. M artin had been
affiliated w ith C P I C orp., St. Louis. At
C h ristm as C lub, M r. M artin is r e
sponsible for m ark etin g its savingsaccount program s and o th er services
offered by th e firm to banks and o th er
financial institutions in M issouri and
southern Illinois.
Float: A Guide fo r the Community
Banker.
• Kuhlmann D esign Group, Inc. This
St. L ouis-based firm has ap p o in ted
W illiam K uhlm ann d irecto r of m ark et
• Brandt, Inc. Ronald L. C ooper has
b e e n nam ed vice president-finance/
tre a s u re r of this W aterto w n , W is.based firm. H e joined th e com pany in
1978 as d irector of financial planning
and, in 1979, was prom oted to treasurer/ch ief financial officer.
• InnerLine. This Arlington H eights,
111.-based “electronic-com m unications
u tility” for th e financial industry has
m ade th e following appointm ents: to
n atio n al sales m anager, H arvey A.
Kay; to ad v ertisin g /sales-p ro m o tio n
m anager, Susan Pfeifer; to p ro d u ct
m a n a g e r-fin a n c ia l
m a n a g e m e n t,
Joseph M. C rews, P h .D .; to product
m a n a g e r - e x e c u tiv e m a n a g e m e n t,
Je ro m e J. H aley; to re ta il-p ro d u c t
m anager, Lee P. Breitkopf; to product
m anager-funds m anagem ent, V incent
S. Malinowski; to product m anager-
MID-CONTINENT BANKER for May, 19 8 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
MARTIN
HEISER
com m unications, C harles J. O bie; and
to c lie n t- s u p p o r t re p re s e n ta tiv e s ,
M yra H ow erton, Joyce A. Konecny,
Ann Lark, F rederick M adeira, M ark
W. Egan, Carolyn Forem an, C ath er
ine Jarzom bek and D avid C. Reba.
• B lan k en A sso c ia te s. F ra n k M.
Thom pson has b een nam ed corporate
vice p re s id e n t of this L ittle Rockb ased m an ag em ent-consulting firm.
H e previously was p resid en t, SALFASCO, a secondary-m arketing orga
nization, w hich is a Blanken Associates
division. In o th er action, Blanken has
nam ed Bob L. Rocke an account ex
ecutive and J. Shannon Flem ing staff
consultant. Mr. Rocke m ost recently
was a special representative for an in
te rn a tio n a l m an a g e m e n t-co n su ltin g
firm. Mr. Flem ing is a recen t graduate
of Louisiana Tech U niversity, Ruston.
• Bank Earnings International. Eric
T. D uncan Jr. has been nam ed vice
presid en t of this A tlanta-based firm.
H e had been executive vice presid en t
of a G eorgia bank and a bank consul
tan t w ith P rophet Counsel, a consul
tan t group ow ned by M em phis’ U nion
Planters National. H e also had been a
senior bank exam iner, Office of the
C o m ptroller of the C urrency. M ary
M iller has joined B EI as assistant vice
president, tru st consulting group. She
form erly was a tru st officer at F irst
National, Atlanta. B EI is a subsidiary
of B EI H oldings, Ltd. A nother sub
sidiary, Electronic Banking, In c ., also
in Atlanta, has nam ed M ichael M arcus
senior research associate.
• Blanken Associates. C harles L. Tull
has joined this L ittle Rock-based firm
as vice president, consulting division.
H e form erly was senior vice president,
hum an resources, F irst C om m ercial
Bank, L ittle Rock. W hile at that bank,
Mr. Tull was instrum ental in creating
its planning/m arket research d ep art
m ent.
65
The Racer's Edge —
Budgeting Coupled W ith Optim ization
AVE YOU ever th o u g h t about
how you do budgeting, e sp e
cially balan ce-sh eet b u d g etin g ? The
objective is clear — w e w ant m ore n et
in terest incom e next year, and th ere
are only five ways to get it: (1) Im prove
th e contribution from a m ore profit
able mix of sources and uses; (2) in
crease th e volum e of earning assets
w ith positive spreads; (3) increase risk
exposure in o rd er to im prove margins;
(4) tin k er w ith bank policy by altering
liquidity levels, loan/capital and loan/
deposit ratios in o rd e r to im prove th e
p e r c e n t o f e a rn in g a sse ts to n o n
earning assets and; (5) recover past
taxes paid or use tax shelters to b e tte r
advantage.
As we all have discovered over the
p a st se v e ra l y e a rs, th e tra d itio n a l
b u d g et process does not lend itself to
th e task of analyzing w hich of th e five
ways or w hich com binations of th e five
ways hold th e m ost prom ise for achiev
ing our potential n e t in terest incom e
next year.
W h at’s w rong w ith th e b u d g et p ro
cess? It does in fact p roduce a financial
plan. But it’s not so m uch th e plan we
w orry about as th e quality of th e plan.
Going back to concepts, the b u d g et
process o riginally was d e sig n ed by
people w ith accounting responsibility
to keep track of m anagem ent com m it
m ents. Its features have b een refined
and tu n ed to th e p oint of providing
e x c e lle n t in fo rm a tio n to tra c k and
analyze variance against b u d g et and
varian ce against p rio r p erio d s, and
h ere it shines.
O u r financial records already tell
w hat we m ade in O ctober of this year
and in O ctober of last year and year-todate this y ear and year-to-date last
year. As is always th e case, th e ea rn
ings for each of th ese periods is dif
feren t and we really care to u n d erstan d
why! If we d o n ’t figure out why, nega
tive tren d s may well continue (leading
to a bank out of control) w hile positive
trend s will forever rem ain a delicious
m ystery, ebbing and flowing w ithout
any ap p aren t reason.
The budget-variance rep o rt always
has been and continues to be a superb
tool for u n d erstan d in g the underlying
econom ic characteristics that drive net
in terest incom e, also for developing
specific d ep artm en tal insight useful for
m ak in g m id -c o u rse c o rre c tio n s —
H
66
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
By David L. Wark
D a v id L. W a rk is
e .v .p .,
N a t io n a l
Bank of Commerce,
M em phis, and ch.,
Com m erce G eneral
C o rp ., d a ta p ro c
essing subsidiary of
N B C , w h ic h
he
joined in 1973 as
chief financial p la n
ning officer. He has
served as sec./treas.,
National Commerce
Bancorp, M em phis, N B C 's parent com
pany. Mr. W ark formerly w as with A m er
ican Express International Bank as a.v.p.,
planning/budgeting, and, before that, w as
director of corporate p lan n in g, Am erican
Express Co.
absolutely clarifying th e reasons for
u n d e r or o v er a c h ie v e m e n t of th e
budget.
Look at E xhibit A (see page 68) for a
few m inutes and you will notice that
assets and liabilities are listed in the
first colum n followed by period bal
ances and in terest incom e and expense
for each period; e .g ., in this exam ple,
N ovem ber and D ecem ber.
The next section (reading from left
to rig h t and titled “V A R IA N C ES”)
contains a clinical analysis of all the
possible reasons that could produce re
sults at variance w ith our budget. For
exam ple, for each source of funds th ere
always are only four reasons for dif
feren t incom e figures:
• V o lu m e V a ria n c e — e ith e r
v o lu m e was h ig h e r or lo w er th a n
b u d g et or higher or low er than prior
period.
• Rate Variance — e ith er th e rate
was h igher or low er than b u d g et or
hig h er or lower than prior period.
• Period Variance — th e c u rre n t
actual period may differ from budget
or from prior-period actual.
• Mix Variance — th e mix of funds
may differ from the bu d g eted mix or
from prior-period mix.
W ith regard to this list, the first two
are fairly easy to see: If rates are held
constant and volum e actually is higher,
th e n incom e will b e hig h er. A ddi
tionally, if volum es are held constant
and rates actually are lower, th en in
com e will be lower. To figure out these
variances we use a little “m ake b e
lieve. For exam ple, w hen calculating
volum e variance, we p re te n d th e rates
have not changed, and for calculating
rate variance, we p re te n d the volum e
has not changed. In this way we actual
ly can isolate the effect on n et in terest
incom e of th e actual upw ard or dow n
w a rd m o v e m e n ts in r a te s a n d
volumes.
F o r D e c e m b e r vs. N o v e m b e r,
volum e variance is up $706,000 and
incom e effect is up $7,648. F or the
sam e period, rate variance is down
.06% and incom e effect is down $580.
Period variance is 31 days vs. 30 days
and incom e effect is up $4,228.
N otice the mix-variance colum n has
no account detail b u t figures are shown
for total loans. Mix variance by defini
tio n m u s t in v o lv e tw o o r m o re
accounts or no mix change is possible.
C onsider th e following exam ple (not
related to the exhibit):
E a rn in g Assets
M o.
1
M o.
2
L o an R ates
M o.
1
M o. 2
Loans
60
50
1 1 .0
1 1 .0
S e c u ritie s
40
50
9 .0
9 .0
100
100
In this exam ple, th e total volum e of
earning assets in each m onth is $100
m illion and th e rates in each m onth
have rem ained th e same, b u t incom e
has fallen significantly because $10
million in loans earning 11% have b een
replaced by $10 m illion in securities
earning 9%. Two p ercen t on $10 m il
lion for one year rep resen ts a $200,000
drop in n et in terest incom e and all of it
is attributable to mix variance.
Similar exam ples are available for
each earning asset and funding source.
And to the extent that th e b u d g et fixes
dep artm en tal responsibility w ithin the
bank for volum e and rate goals, th en
responsibility via th e variance rep o rt
can be fixed by d e p artm en t for eith er
u n d er or over achievem ent against the
b u d g et com m itm ent.
Up to this point we have not proved
m uch except that th e budget, coupled
w ith variance analysis, is a w onderful
to o l fo r tra c k in g , e x p la in in g a n d
assigning responsibility for perform
ance against b u d g et goals.
All of this analysis assum es th a t
b u d g et goals are w orth achieving or
are relevant to bank potential and re p
resen t intuitively good targets; and, of
co u rse, th e s e a ssu m p tio n s m ay be
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Federal Reserve Bank of St. Louis
67
ALMS
TL S 1
■ACNS"“
The nice part about optim ization is
that it requires only a modest am ount
of data — the focus is on m anagem ent
options.
H ere are the six steps necessary to
identify your b est balance sheet plan
for next year:
• Establish a chart of accounts that
identifies those loans, securities and
funding sources over which you can
exercise some control or influence.
• D ecide how m uch control or influ
ence you can bring to bear in each
account. F or exam ple, if short-term
com m ercial loans currently are averag
ing $40 m illion, could you raise those
totals to $46 m illion and/or low er them
to $35 m illio n w ith in th e nex t 12
m onths? If th ese w ere th e choices,
th e n th e balance sh eet “optim izer’’
w ould be given the task of finding the
b est and m ost profitable position b e
tw een $35 million and $46 million. In a
sim ilar fashion, b ank m a n a g e m e n t
w ould define practical m anagem ent
ranges for each loan, secu rity and
funding source in the balance sheet.
• Identify th ree in terest rates: (a)
T h e c u rre n t av erag e ra te for each
account; (b) T he new rate for additions
to each account; (c) The rate for those
e n t h y p o th etical in te re st rates th at
could occur, and then, changes in loan/
deposit and/or loan/capital ratios will
have additional effect. E ventually tax
ra te s com e in to play and d e m a n d
attention.
W hat we desperately need is a p ro
cess that will take all of these possibili
ties into account, all of our realistic
m anagem ent options into account, and
th e n select from that infinite n um ber
of options the one b est com bination
th at will produce m ore n et in terest in
com e than any other. W ith the right
tools, the job is far easier than you
w ould think.
It w ould be useful at this point to
d ra w a n o th e r d is tin c tio n b e tw e e n
b u d g e tin g and b a la n c e -sh e e t p la n
n in g . b u d g e tin g and v aria tio n s of
budgeting tell us w hat we could do
w ithout regard to a thorough analysis
of all possibilities. O n the o th er hand,
balance-sheet planning — if done sys
tem atically — will tell us w hat we
should do, given our objectives and
a n a ly tic asse ssm e n t of th e incom e
potential of each m anagem ent option.
T he tool that m ust be used to accom
plish this analysis is nothing m ore nor
less than the process of “optim ization. ”
nonsense. In o th er w ords, th e process
of budgeting does not necessarily e n
sure getting a good budget. R em em
b e r th e five ways to im prove n e t in
te re st income:
• Im prove mix
• Increase or decrease volum e
• Enlarge m argins
• C hange policy
• Recover taxes, etc.
Som ehow in th e b alance-sheet plan
ning process each of these five o ppor
tunities m ust be addressed individual
ly, collectively and selectively in com
bination.
The bud g et is w hat you get after the
analysis is over. Planning is req u ired to
identify the b est possible and achiev
able budget, given your bank’s u nique
resources and opportunities. If we had
all th e tim e in th e world, it conceivably
w ould be possible to test, in som e
logical order, each of th e balance-sheet
accounts and th en observe the re su lt
ing effect on n et in terest incom e. The
difficulty is that if you change m ore
than one account at a tim e, you will
lose track of the specific contribution
each change m ade to n et in terest in
come. Rut th e job has only ju st begun,
because th e re also are dozens of differ
EXHIBIT A
LANK
SIMULATION
NODULE
I
N
C
O
M
E
DEC 1983
ACTUAL
v
a
. ip ;
i
r . N
C
C
A
I M
A
L V
i_ 3 X
NOV 1983
ACTUAL
S
VARIANCES
AVERRSE
BALANCE
RATE
1NC0HE/
EIPENSE
AVERAGE
ÈA.ANCE
RATE
INCOME/
EIPENSE
CALENDAR
VDLUNE
RATE
O .S . B c w e rn ie n ts
Agency S e c u r it ie s
H u n ic ip a ls
C th e r S e c u r it ie s
8 ,3 9 5
2 ,9 1 7
2 ,3 0 4
3 ,2 5 3
9 .2 2
9 .3 2
5 .4 9
8 .7 9
6 5 ,7 3 9
2 2 ,6 5 5
1 0,541
2 3 ,6 8 2
8 ,3 6 9
2 ,8 9 4
2 ,2 8 9
3 ,1 1 6
9 ,1 6
9 .3 8
5 .5 5
8 .6 7
6 3 ,0 0 8
2 2,621
1 0,587
2 2 ,5 1 3
2 ,1 2 1
-
196
180
69
845
414
-1 4 6
-1 1 5
323
t o t i l SECURITIES
16 ,8 4 9
6 .7 3
1 2 2 ,6 1 6
1 6 ,6 6 8
6 .5 5
1 1 8 ,7 2 9
2 ,1 2 1
1 ,2 6 9
476
1
3 ,8 8 7
ln s t a ls e n t C o m
C r e d it Card L oans
1 1 ,7 6 2
T U T
2 ,3 1 6
1 3 .1 2
U .3 3
2 1 .0 0
13 1 .0 6 4
1151305
4 1 ,3 0 7
1 1 .0 5 6
9 ,1 6 9
2 ,2 8 3
1 3 .1 8
1 4 .4 4
2 1 .0 0
10 b , B 2Î
3 9 ,4 0 5
4 .2 2 8
3 ,7 2 0
1 ,3 3 2
7 .6 4 8
3 ,6 2 0
570
-5B 0
-857
-
_
-
1 1 .2 9 6
6 ,4 8 3
1 ,9 0 2
T o ta l LOANS
2 3 ,5 5 2
1 4 .3 6
2 8 7 ,6 7 6
2 2 ,5 0 8
1 4 .4 9
2 6 7 ,9 9 6
9 ,2 8 0
12,431
-1 ,4 3 7
-5 9 3
19,6 8 1
2 ,2 1 2
221
9 .5 0
9 .6 3
1 7 ,8 4 3
1 ,8 0 8
2 ,2 8 4
195
9 .3 3
.9 .5 0
1 7 , 5 '3
1 ,5 2 3
576
58
-5 5 2
203
309
24
.
-
333
285
T o ta l FED FOLDS l REPO'S
2 ,4 3 3
9 .5 1
1 9 ,6 5 5
2 ,4 7 9
9 .3 4
1 9 ,0 3 7
634
-3 5 3
333
4
618
T o ta l Non E a rn in g A s s e ts
5 ,0 1 8
4 6 ,5 5 8
1 0 .6 0
4 0 5 ,7 6 3
1 2 ,0 3 5
1 1,277
-6 2 8
1 ,501
2 4 ,1 8 5
H1I
TOTAL
INCOHE
Fed Funds S o ld
R e v e rs e R e p o 's
T o ta l INTEREST INCOflE
4 7 ,8 5 2
>
\
I
.
*
2 ,7 3 0
34
-4 6
1 ,1 6 9
^
4 ,9 0 3
1 0 .5 8
4 2 9 ,9 4 8
EIPEN5E
Honey H a rk e t C h e c k in g
4 ,0 9 5
7 .2 0
2 5 ,0 4 1
3 ,9 2 3
7 .1 2
2 2 ,9 5 8
808
1 ,0 0 7
269
-
2 ,0 8 4
T o ta l DENAND DEPOSITS
4 ,0 9 5
7 .2 0
2 5 ,0 4 1
3 ,9 2 3
7 .1 2
2 2 ,9 5 8
808
1 ,0 0 7
269
-
2 ,0 8 4
S a v in g s D e p o s its
Honey H a rk e t S a v in g s
4 ,2 5 9
5 ,4 8 2
5 .5 0
8 .3 0
1 9 ,8 «
3 8 ,6 4 4
4 ,3 2 7
3 ,4 6 8
5 .5 0
8 .4 5
1 9 ,5 6 0
2 4 ,0 8 6
642
1 ,2 4 7
-3 0 7
1 3 ,9 8 8
.
-6 7 6
-
T o t a l SAVINSS ACCOUNTS
9 ,7 4 1
7 .0 8
5 8 ,5 3 9
7 ,7 9 5
6 .8 1
4 3 ,6 4 6
1 ,8 8 8
1 0 ,8 9 6
-6 7 6
2 ,7 8 4
1 4 ,8 9 3
Honey H a rk e t C D 's
CD 's
Under 1100000
O ver $100000
IRA A c c o u n ts
5 ,5 3 7
9 .1 5
4 3 ,0 2 9
6 ,8 3 6
8 .9 5
5 0 ,2 8 7
1 ,3 8 8
- 9 ,5 5 6
910
-
- 7 ,2 5 7
9 ,4 5 0
1 ,0 8 4
3 ,1 2 8
8 .7 5
9 .0 4
9 .6 3
7 0 ,2 2 8
8 ,3 2 3
2 5 ,5 6 4
9 ,1 6 8
1 ,0 0 4
2 ,8 4 7
8 .8 8
8 .9 6
9 .5 5
6 6 ,9 1 4
7 ,3 9 4
2 2 ,3 4 7
2 ,2 6 5
268
825
2 ,0 5 8
589
2 ,2 0 6
- 1 ,0 1 0
71
206
-
3 ,3 1 4
929
3 ,2 3 7
152
222
-
334
1 4 ,5 5 8
1 9 ,1 9 9
9 .0 3
1 4 7 ,1 6 3
1 9 ,8 5 5
9 .0 0
146,941
4 ,7 4 7
- 4 ,8 5 5
177
Fed Funds P u rc h a s e d
T U L N o te s
R e p o 's S o ld
1 ,2 6 4
825
1 ,4 1 9
9 .1 2
9 .2 7
9 .1 5
9 ,7 9 1
6 ,4 9 5
1 1 ,0 2 7
1 ,5 9 6
794
1 ,3 5 8
8 .8 8
9 .3 3
9 .2 2
1 1,649
6 ,0 8 9
10,291
316
210
356
- 2 ,4 2 3
238
462
249*
-41
-8 2
-
- 1 ,8 5 8
407
736
T o ta l SHORT TERH ECRRCN1NSS
3 ,5 0 8
9 .1 7
2 7 ,3 1 3
3 , 74a
9 .1 0
2 8 ,0 2 6
881
- 1 ,7 9 5
127
72
-7 1 5
T o ta l OTHER TIHE DEPOSITS
T o ta l Non C o s tin g L ia b .
1 1 ,3 0 9
T o ta l INTEREST EIPENSE
4 7 ,8 5 2
6 .3 5
2 5 8 ,0 5 7
4 6 ,5 5 8
6 .3 1
2 4 1 ,5 7 4
8 ,3 2 4
6 ,7 1 4
-1 0 2
1 ,5 4 7
1 6.4B 3
4 7 ,8 5 2
4 .2 3
1 7 1 ,8 9 1
4 6 ,5 5 8
4 .2 9
1 64,189
3 ,7 1 0
4 ,5 6 3
-5 2 5
-4 6
7 ,7 0 2
NET INTEREST INC0HE
68
_
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Federal Reserve Bank of St. Louis
1 1 ,2 3 7
MID-CONTINENT BANKER for May, 19 8 4
accounts w hose balances are m aturing
during the next 12 m onths.
• D ecide w h e th e r or not rates are
variable or fixed for each account, and,
if variable, th en decide if th ey vary
w ith prim e, fed funds, or T-bills, etc.
This linkage assum ption will allow for
th e autom atic ad ju stm en t of rates if
prim e is forecast to m ove up or down.
• In tro d u ce som e rate forecast to
your liking and e n te r it in th e optim iza
tion m odel.
• Id en tify loan/deposit, loan/capital, liq u id ity ratio s as w ell as taxrecovery opportunities.
Now you are ready to run the bal
ance-sheet optim ization analysis on an
IBM personal com puter. W ithin five
to 10 m inutes and run n in g at th e speed
o f 500,000 instructions p e r second, th e
m odel will look at 50 to 150 different
balance-sheet com binations until it ex
hausts all possibilities. It will re m e m
b e r and p rin t out the highest earning
balance sheet. T he one com bination
th a t, after having tak en ev e ry th in g
into account, will p roduce m ore n et
in terest incom e than any other.
This w illing balance sh e e t w ould
th e n form th e fo u n d a tio n for th e
bu d g eted in terest incom e and in terest
expense com m itm ents from each of
th e bank’s b alance-sheet-related o p er
ating departm ents.
O nce th e best b u d g et is locked into
p la c e , th e b u d g e t-c o n tro l p ro c e ss
takes over, and by use of variance
analysis each m onth, m anagem ent can
keep the institution on track tow ard
th e m ost attractive profit goal level. In
o rd e r to rem ain c o m p e titiv e , o p ti
mization and budget-variance analysis
are no longer optional for th e w ell-run
bank. Each tool has its legitim ate place
and each fits in w ith th e others to p re
sent a form idable m anagem ent proc
ess.
If you u n d e rsta n d and use th ese
tools and your com petition does not,
th en you will in d eed have a com peti
tive (racer’s) edge. • •
B an kin g Scene
(Continued fro m page 70)
n u m b er of state banking associations.
O ne of th e prim ary advantages of
th e V B ES is its a b ility to u p d a te
videotapes alm ost im m ediately as new
legislation or develo p m en ts w arrant
such action. The VBES also serves as a
backup for bankers unable to partici
pate in live satellite teleconferences.
T he banker who misses an im por
ta n t teleco n feren ce m ay be able to
view th e e n tire p ro ceed in g s in his
hom e at his leisure. The price of one
conference m ade available recently on
two VHS cassettes was approxim ately
$250. That m ight seem unreasonably
high for one banker or even one bank
to pay, b u t if the tape can be d istrib
u te d to a n u m b er of bankers for view
ing w hen th eir schedules perm it, the
price seem s a m ore reasonable invest
m ent.
In th e future, we probably will see
m ore sophisticated com puter software
to train bankers. In d eed , th ere is no
b e tte r way for bankers to learn how to
use a com puter than through hands-on
e x p e rie n c e . B ankers a tte n d in g th e
ABA com m unity-banker conference in
Phoenix earlier this year learned that.
M any banks u n derw rite the costs of
e m p lo y e e p a rtic ip a tio n in tra in in g
program s; how ever, som e feel th at
em ployees should pay for th eir train
ing. O ne fiesty C E O confided to me
th at his em ployees generally left his
bank after retraining to join a com peti
to r at a substantially higher wage.
T h ere is little doubt that training
makes em ployees m ore valuable. That
value is ju st as great or even g reater to
a com petitor than to the bank doing
th e training. After all, th e com petitor
has no in vestm ent in the em ployee’s
training.
A bank investing heavily in perso n
nel training runs risks. But the risks
associated w ith not making such an in
v estm en t are even greater. T he world
o f b a n k in g is far too com plex and
changing too rapidly to let em ployees
fall behind. In fact, a bank — indeed,
banking as an industry — can m ake no
b e tte r in vestm ent than educating its
own people. • •
C e n terre
(Continued fro m page 22)
T h ere is usually a w aiting list of p e r
sonnel desiring to take the program . It
is talked up by th e training d ep artm en t
a n d by w o rd of m o u th . N ew e m
ployees soon are exposed to lingo that
is strange to them . W hen they inquire
about it, they are told they are hearing
vocabulary used in the D M T program .
A typical rem ark is, “T hat was Q -l of
you!’’ which, translated, m eans, “You
d id n ’t handle th at very effectively!”
Mr. M uskopf likes th e program for
m any reasons, b u t especially because,
“A m anager who learns how to practice
th e skills of com m unication and b e n
efit statem ents can get others to b e
com e c o m m itte d to acco m p lish in g
corporate ob jectives.”
T h at’s th e bottom line of D M T —
and it’s w orking at C enterre! — Jim
Fabian, senior editor.
MID-CONTINENT BANKER for May, 1 9 8 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
• Thomas G. Mudge has joined the
staff of the G raduate School of Bank
ing’s H e rb e rt V. Prochnow E ducation
al F o u n d a tio n as d ire c to r/e x te rn a l
program s. The foundation is in M adi
son, Wis. Mr, M udge form erly was
w ith th e G rad u ate School of Bank
M anagem ent and Public Finance In
stitute at the U niversity of M ichigan’s
G raduate School of Business A dm inis
tration. His prim ary responsibility is to
facilitate and coordinate im plem enta
tion of state-level banking schools in
th e central states.
•
In d ex to Advertisers
Aluminum Case Co.................................................... 26
American Express Co............................... 41, 43, 45
Arrow Business Services, Inc................................S/20
B & H Associates, Inc............................................... 55
Bank Building Corp................................................... 71
Banker Personnel Service ..................................... 12
Boatmen’s National Bank, St.L o u is ....................... 72
Brandt, Inc.................................................... 45 or 35
Centerre Bank, St. Louis ............................. 27, 35
Central Trust Bank, Jefferson City,Mo.................... 39
Citizens National Bank, Decatur, III..........................54
Cole-Taylor Financial G ro up........................... 32-33
Commerce Bank, Kansas City
........................... 15
Continental Bank, Chicago ................................... 2
Continental Data Systems .......................................23
Cornerstone ........................................................ S/4
Dorsey Love & Associates ..................................... 11
Downey Co., C. L..................................................... 10
Dressier Consulting Engineers ......................... S / l l
Dunhill of Phoenix, Inc............................................. 16
Executive Planning Group, Inc...........................
S/9
Financial Placements............................................. 11
First Interstate Bancorp................. 4 6 -S /l or 36-37
First Lease & Equipment Consulting Corp.............. 25
First National Bank, Belleville, III........................... 53
First National Bank, Chicago ................................. 13
First National Bank, St. Joseph, Mo....................... 43
First National Bank of Commerce,
New Orleans .................................................. S / l l
First National CharterBank, Kansas City . . . . 30-31
First Oklahoma Bancorp, Oklahoma City ..............37
First Wisconsin National Bank, Milwaukee .. 28-29
HBE Bank Facilities Corp.......................... S/2 or 38
Hagan & Associates, Tom ..................................... 14
Hancock Bank, Gulfport, Miss...........................
S/7
Horizons 60 ............................................................ 7
IAC Group .............................................................. 19
Industrial Life Insurance Co................................... 6
Innovision, Inc..................................................... S/19
Kuhlmann Design Group ........................... 27 or 28
LaSalle National Bank, C hicago............................. 46
Liberty National Bank & Trust Co.,
Oklahoma C ity .................................................... 2
MMG, Inc....................................................................40
Management Search, Inc.......................................... 14
McNerney & Associates, Inc.....................................57
Mercantile Bancorp, St. Louis ......................... S/13
Microthought Publications ................................... 17
Midland Bank & Trust Co., Memphis .............. S/17
Missouri Encom, Inc............................................ S/15
Mohr Development, Inc.............................................67
Monroe Business System s..................................... 3
Nash & Associates, Inc., D. F.................................. 26
Penquite & Associates, Inc.......................................62
Personnel Consulting Services, Inc..........................58
Regency Recruiters, Inc............................................ 16
Ross, DeLany & McGarvey, Inc................................63
Rothschild, Unterberg, Towbin, L. F..................... 5
Sallie Mae ................................................................21
Schooler & Associates, Don ............................. S/18
Stern Brothers & Co.................................................. 40
Struven, Inc., G. Carlyle .........................................51
Texas American Bancshares, Inc., Fort Worth . . . 14
Third National Bank, Nashville .......................
S/5
Thorn, Alvis, Welch, Inc...................................... S/8
Travelers Express .................................................... 30
Union National Bank, Little Rock ......................... 33
United Missouri Bank, Kansas C it y ....................... 41
Western Bank Group ............................................ 29
Zahner & Co............................................................... 42
69
THE BANKING SCENE
By Dr. LEWIS E. DAVIDS
Professor of Finance
Southern Illinois University, Carbondale
Innovations In Banking Education
E
XAM IN E listings of various ed u ca drive to a six- or seven-hour confer
tional program s in banking p u b ence or sem inar and b e hom e in tim e
lications and you m ay get th e im p resfor supper. Costs w ere dram atically re
sion that bankers spend th e ir en tire duced because no overnight stays at
lives in classrooms.
hotels or m otels w ere involved.
T he n u m b er and b re a d th of educa
T he Bank M arketing Association d e
tional offerings available to bankers veloped a n u m b er of audiotapes that
tru ly is asto n ish in g . In ad d itio n to p e rm itte d even fu rth er reductions in
program s sponsored by th e A m erican educational costs. A slight modifica
Bankers Association, th e re are ed u ca tion of this tech n iq u e was developed
tional program s sponsored by banking by a n u m b er of m ajor banks th at sold
schools and state banking groups. Ex cassette tapes featuring th e voices and
p erts in a n u m b er of fields have found accum ulated wisdom of such em inent
th e ir talents in dem and and are spon
soring sem in ars for ban k ers. M any
banks have developed in-house p ro
gram s th a t th e y occasionally m ake
a v a ila b le to c o r r e s p o n d e n ts . T h e
A m erican In stitu te of Banking p ro b
ably has th e w orld’s largest industry
A conference featuring top
training program and m any u niversi
ties have d e v elo p ed w e ll-re sp e c ted banking-industry experts can
program s for bankers.
be beamed via satellite to
A decad e ago, costs of atte n d in g
such schools, including travel, w ere bankers around the globe at a
com paratively m odest. But as trav el fraction of the cost of flying
ing expenses to distant locations for
everyone to a central location.
additional learning grew in th e 1970s,
ban k s b e g a n to ex am in e th e costs
associated w ith delivering such educa
tional o p p o rtu n itie s. T h ey realized
th at traveling to an exotic locale m ight
be fun for sem inar participants, b u t
from a cost-benefit p erspective, such
program s w ere difficult to justify.
b a n k in g -in d u stry au th o rities as D r.
T he Bank A dm inistration In stitu te Paul N adler of R utgers U niversity. A
began to sponsor regional m eetings b anker caught in a traffic jam need not
th at did not req u ire bankers to travel w aste th e tim e idly tapping his fingers
g re a t d is ta n c e s . T h e s e p ro g ra m s on the steering w heel to the beat of the
proved highly popular. State banking m usic em anating from a tape player.
groups began to sponsor educational Instead, the banker need only pop an
program s th at drew bankers from a inspirational or educational cassette
five- or 10-county area ra th e r th an into th e player to learn about trading
from th roughout th e state.
com m odity futures or how to sell new
S p o n so rin g a n u m b e r o f sm aller services.
Satellite com m unications have been
m eetings at selected sites th roughout
th e state, ra th e r than a state-encom an o th er m ajor im provem ent in bank
passing conference held at a location ing education. A conference featuring
chosen for its proxim ity to th e largest top banking-industry experts can be
city or central to every point in the beam ed via satellite to bankers around
state, makes econom ic sense in an era th e nation at a fraction of the cost of
of resource shortages. Bankers could flying everyone to a central location.
70
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
W orkbooks on bank-related topics
have been developed that are especial
ly v alu ab le in e d u c a tin g n ew e m
ployees or retrain in g bankers being
transferred to new functions. The unit
cost of th e w orkbooks com pared to
re n tin g or purchasing videotapes is
low; b u t considerable self-m otivation
on the part of em ployees is req u ired
for such training m ethods to be effec
tive.
W hile m uch of banking is concerned
w ith finance, bankers also are called on
to pick up know ledge from outside
th e ir chosen profession. The A m erican
M a n a g e m e n t A sso c ia tio n has d e
veloped several books and training cas
se tte s capable of assistin g b an k ers
learning subjects norm ally not con
strued as being w ithin the narrow ly
defined realm of finance.
V id e o -tra in in g p ro g ram s for use
w ithin a bank are an even m ore recent
phenom enon. A library of such p ro
grams perm its a bank to take advan
tage of an ex trem ely cost-effective
m ethod of introducing em ployees to a
new specialization.
E m ployees w ith hom e com puters
can take e d u c atio n al m aterials th e
bank has developed for use on a com
p u te r hom e w ith them in th e evening.
E m ployees may even have th eir own
v id eo tap e e q u ip m e n t at hom e th at
they can use to study m aterials b o r
row ed from the bank’s videotape li
brary. In fact, the growing arm y of
part-tim e em ployees and those who
tele -c o m m u te m ay find th em selv es
g ettin g an increasing p ercen tag e of
th eir training and instructions over a
telev isio n or c o m p u te r te rm in a l in
th eir homes.
L arger banks usually find it advan
tageous to develop or buy train in g
program s. C om m unity banks are an
e x c e lle n t m a rk e t for th e re n ta l of
video-training m aterials. In fact, the
Video Bank Education Service (VBES)
makes its large library of training m ate
rials available to bankers through a
(Continued on page 69)
MID-CONTINENT BANKER for May, 1984
T
he
R
ig h t
I dea
When we decided to remodel anqj
expand our building, says Rowan C.
McAllister, President of First
National Bank of Barron, Wise., we
wanted it to be distinctive.. . not just
another pretty bank.’
We have always been closely tied to
our community and wanted our
facility to express our own unique
personality to our customers arid the
community we serve. It had to be
warm, friendly, inviting, convenient
...and different.
We talked to a lot of firms, but the
people at Bank Building really
listened. And understood. They
studied us, our needs, our people
and our community. And they came
up with the right ideas.
a»- .
Our new facility is exactly what we
wanted...efficient, productive,
unique... and successful. We
couldn’t ask for more.”
Let us put our ideas to work for
you. Call Tom Spalding,
1- 800- 325-9573
J
I
1
—
:
i
!
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Meeting the needs
of the community
you serve... by design.
<>
Bank Building
Corporation
1130 Hampton Avenue
St. Louis, MO 63139
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
B oatm en’s Ted Sm others.
O peration s A ssista n ce
O verline A ssistan ce.
Loan P articipation s.
In vestm en ts.
Boatmen’s Vice President Ted Smothers working
with Bob Menz, Chairman and President of The
First National Bank of Highland. Whatever your
correspondent needs, B oatm en’s has know l
edgeable people to assist you. Call Ted Smothers.
He can help.
C orrespondent Banking Division
THE BOATMEN'S
NATIONAL BANK
OF ST. LOUIS
314- 425-3600
Member FDIC
@FedFRASER