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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
’’W hen I call their
Correspondent Division, it’s
kind of like calling home.”
“ Liberty’s been our principal correspondent
for longer than any of us can remember.
Their financial services have always been
superior, and through the years w e’ve used
the whole bank.
“ But what really sets them apart for us is the
attitude of the entire department—officers,
secretaries, everybody. They’re friendly,
anxious to help, professional down to the
last detail.
“ It’s a super group, and they come from a
long, long line of good folks. After all these
years, calling the Correspondent Division is
kind of like calling home.”
Merrill Burruss, Jr.
President
The Peoples National Bank
Kingfisher, Oklahoma
There is a relaxed atmosphere in Liberty’s Correspondent Division. It’s the
kind of feeling projected by people who know what they are doing, who are
thoroughly experienced, and who are closely involved with their customers.
This attitude doesn’t begin or end with your correspondent; it is evident
throughout the entire division.
No matter what size customer you are —no matter how large or small your
specific need might be—when you talk we listen. And we respond.
And if calling our Correspondent Division is “kind of like calling home,” it’s
only because we think of you as a member of the family.
OUR CORRESPONDENTS CALL IT SUPERIOR
SERVICE. W E CALL IT BUSINESS AS USUAL
BECAUSE... W E CARE ABOUT YOU.
LIBERTY
THE BANK OF MID-AMERICA
The Liberty National Bank and Trust Company/P.O. Box 25848/Oklahoma City, Oklahoma 73125/231-6164/M em ber FDIC
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
CORRESPONDENT QUIZ
1. Who has the fastest-growing Correspondent Bank Department in the South?
2. Who was the first to offer seminars on new Banking regulations and
laws featuring leading national advisors and government officials?
3. Who continues to offer those seminars and regular updates on how to
maximize profits at no cost to correspondents?
4. Who offers correspondents special insurance programs at low group rates?
5. Who is hig enough to handle every correspondent need, yet small enough
to handle each one of them, one at a time, with expert personal attention?
6. Who gives you senior experience and expertise on everything.. .from transit,
data processing, Visa and MasterCard, draft collection, investments, federal
funds, safekeeping, credit assistance, loan participation, trust services, wire
transfers and Business referrals...to seasoned advice on advertising,
marketing, personnel training
and even the design and
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
3
Convention Calendar
n H
S p S tó
The Financial Magazine o f the Mississippi Valley & Southwest
Volume 77, No. 11
October, 1981
FEATURES
18 NEW WEAPON AGAINST MMFs
Offered to banks by MasterCard International
20 CHECKING ACCOUNTS LINKED TO MMFs
Through program offered by Dreyfus
29 NEW TAX ACT ENCOURAGES REHABILITATION
Of old buildings, historic structures
36 WHAT BANKERS WANT FROM BUILDERS
Survey reveals buildings of future
44 CHOOSING LOCATION FOR NEW QUARTERS
Bank finds help from outside firm
50 BANK TAKES ADVANTAGE OF SPECIAL 'BREAKS'
To construct ‘bargain’ structure
55 APPAREL SUPPLIERS OFFER VARIED FARE
For bank customers
DEPARTMENTS
6 BANKING SCENE
10 INSURANCE
12 WASHINGTON WIRE
8 BANKING WORLD
10 CORPORATE NEWS
14 REGULATORY NEWS
16 INSTALLMENT LENDING
STATE NEWS
84 ALABAMA
85 INDIANA
86 LOUISIANA
88 NEW MEXICO
84 ARKANSAS
85 KANSAS
87 MISSISSIPPI
88 OKLAHOMA
84 ILLINOIS
86 KENTUCKY
87 MISSOURI
90 TENNESSEE
90 TEXAS
CONVENTION REPORTS
24 BANK MARKETING ASSN.
32 KENTUCKY
EDITORS
Ralph B. Cox ........ Publisher
Rosemary McKelvey .. Editor
Lawrence W. Colbert
Jim Fabian . . . . Senior Editor
Assistant to the Publisher
Eleanor Wainwright
Pamela Walsch
Assistant Editor
Editorial Assistant
MID-CONTINENT BANKER Editorial/Advertising Offices
St. Louis, Mo., 408 Olive, 63102. Tel. 314/4215445; Ralph B. Cox, Publisher; Marge Bottiaux,
Advertising Production Mgr.
Subscription rates: Three years $2 7 ; two years
$20; one year $12. Single copies, $ 2 .5 0 each.
Foreign subscriptions, 50% additional.
Milwaukee, W is., 152 W. W isconsin Ave.,
53203, Tel. 414/276-3432.
Commerce Publications: American Agent & Bro
ker, Club Management, Decor, Life Insurance
Selling, Mid-Continent Banker, Mid-Western
Banker and The Bank Board Letter.
MID-CONTINENT BANKER is published monthly ex
cept semimonthly in May by Commerce Publishing
Co., 408 Olive St., St. Louis, Mo. 63102.
Officers: Donald H. Clark, chairman emeritus,
Wesley H. Clark, president; James T. Poor, execu
tive vice president and secretary; Ralph B. Cox,
first vice president and treasurer; Bernard A. Beggan, Lawrence W. Colbert, William M. Humberg
and Don J. Robertson, vice presidents: David
Baetz, assistant vice president.
Printed by The Ovid Bell Press, Inc., Fulton, Mo.
Controlled circulation postage paid at St. Louis,
Mo., and at additional mailing offices.
4
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Federal Reserve Bank of St. Louis
Oct. 22-23: Robert Morris Associates Loan Group Man
agement Workshop, Chicago, Hyatt Regency Woodfield.
Oct. 25-31: ABA National Compliance School, Nor
man, Okla., University of Oklahoma.
O ct. 25-27: Bank Marketing Association Product Dev e lo p m e n t/P ro d u ct M anagem ent C o n fe re n ce ,
Phoenix, Hyatt Regency Phoenix.
Oct. 28-30: Bank Marketing Association Marketing in a
Community Bank Workshop, Dallas, Regent Hotel.
Nov. 1-3: Bank Marketing Workshop “The ATM Puzzle
— New Opportunities,” Orlando, F la., Hyatt Re
gency Orlando.
Nov. 8-11: ABA National Agricultural Bankers Confer
ence, Washington, D. C ., Sheraton Washington.
Nov. 8-11: Bank Administration Institute National
Convention, Honolulu, Sheraton Waikiki.
Nov. 8-19: ABA National Commercial Lending School,
Norman, Okla., University of Oklahoma.
Nov. 11-13: Association of Bank Holding Companies
Fall Meeting, New Orleans, New Orleans Hilton.
Nov. 15-18: ABA National Correspondent Banking
Conference, Kansas City, Hyatt Regency Kansas
City.
Nov. 15-18: Robert Morris Associates Annual Fall Con
ference, New Orleans.
D ec. 1-5: Bank Marketing Association Essentials of
Bank Marketing Course — Southwest Extension,
Houston, University of Houston.
D ec. 6-9: Bank Administration Institute Money Trans
fer D evelopments C onference, New York City,
Grand Hyatt Hotel.
Jan. 24-27: Bank Administration Institute Bank Pro
ductivity Conference (PATH), Atlanta.
Jan. 25-28: ABA Insurance and Protection Conference
of Financial Institutions, New Orleans, Hyatt Regen
cy.
Jan. 31-Feb. 3: ABA Conference for Branch Adminis
trators, Atlanta, Omni International.
F e b . 7 -1 0 : ABA Bank T elecom m u nications, Los
Angeles, Century Plaza.
F eb . 7-10: ABA National Trust C onference, New
Orleans, Hyatt Regency.
Feb. 7-19: ABA National Installment Credit School,
Norman, Okla., University of Oklahoma.
Feb. 10-12: ABA Bank Investments Conference, San
Francisco, St. Francis Hotel.
Feb. 23-26: ABA National Compliance Conference,
Phoenix, Hyatt Regency.
Feb. 28-M arch 3: ABA Community Banks Executive
Conference, Dallas, Fairmont Hotel.
M arch 2-5: Bank Administration Institute Check Pro
cessing Conference, New Orleans, Marriott.
M arch 7-10: ABA National Credit Conference, Los
Angeles, Century Plaza.
M arch 10-12: ABA Corporate/Commercial Marketing
Conference, San Francisco, Hyatt Regency.
M arch 10-12: ABA Bank Planning Workshop, Denver,
Denver Marriott City Center.
M arch 14-17: Bank Administration Institute Confer
ence on Bank Security, Kansas City, Crown Center
Hotel.
M arch 14-18: Independent Bankers Association of
America Convention, Honolulu, Sheraton Waikiki.
M arch 21-24: ABA National Installment Credit Confer
ence, Dallas, Loew’s Anatole.
M arch 21-24: ABA Trust operations/Automation W ork
shop, Atlanta, Hyatt Regency.
M arch 21-25: Bank Administration Institute Bank Au
ditors Conference, Hollywood, F la., Diplomat.
M arch 28-31: ABA Southern Regional Bank Card Con
ference, Atlanta, Omni International.
April 2-6: Louisiana Bankers Association Annual Con
vention, New Orleans, New Orleans Hilton.
April 3-6: Association of Reserve City Bankers Annual
Meeting, Phoenix, Arizona Biltmore.
April 13-16: Bank Administration Institute Accounting/
Finance Conference, Orlando, F la., Hyatt Regency
Orlando.
April 18-20: Conference of State Bank Supervisors
Annual Convention, New Orleans, Fairmont Hotel.
April 18 -2 3 : ABA N ational C om m ercial Lending
Graduate School, Norman, O kla., University of
Oklahoma.
May 2-6: Alabama Bankers Association Annual Con
vention, Lake Buena Vista, F la., Disney World,
Contemporary Hotel.
MID-CONTINENT BANKER for October, 1981
Does your correspondent banker
handle each loan request
personally?
Ours do —
start to finish.
How many times have you heard this?
“ Sorry, I’ll have to refer you to our
loan committee. Nothing personal,
mind you.”
Mercantile decided long ago our cor
respondent banks shouldn’t have to
put up with that. So we gave our
account officers the authority to
approve loans.
We found it saves a lot of running
around and wasted time. Especially
for you.
Not just on commercial loans, either.
Each officer also takes care of per
sonal and agricultural loans, plus
loans for bank stock and mergers and
acquisitions. He’ll even help you form
a syndicate, if needed.
As you might expect, this places a big
responsibility on the shoulders of our
account officers. So we try to make
sure they stay at top form. Each
officer attends seminars on credit and
finance to keep him up-to-date on the
latest trends.
Furthermore, each officer has 1600
Mercantile people backing him up all
the way. But he knows the full respon
sibility for your satisfaction falls
squarely on his shoulders.
So why not call a Mercantile Banker
today? He’s one guy who won’t pass
you on to some committee.
W e’re with you.
Correspondent Banking Division
M ercantile Trust Com pany N.A.
St. Louis, MO (314) 425-2404
MID-CONTINENT BANKER for October. 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
MERCRflTILE
BRfK
The Banking Scene
By Dr. LEWIS E. DAVIDS
Illinois Bankers Professor of Bank Management
Southern Illinois University, Carbondale
Can Federal Regulators Be Believed?
DIC CHAIRMAN William M.
Isaac recently noted to the Con
ference of State Bank Supervisors that
the problem list of all types of financial
institutions was down to 204 hanks
compared with 217 in D ecem ber,
1980, and 287 in December, 1979. The
number of problem banks peaked at
385 in 1976.
Mr. Isaac further mentioned that
the FD IC had handled only three bank
failures thus far this year, and they
involved total deposits of only $75 mil
lion. He is quoted as saying, “Pro
jected over the entire year, this is
about the same failure rate as in recent
years.”
One must wonder, with a high
prime rate of most mutual sav
ings banks locked into long
term mortgage rates predomi
nately below 1 0 % , whether
the mutual savings industry has
any true capital.
With due deference to the FD IC
and its delicate position, one should
note that more than 300 of the almost
500 mutual savings banks in the U. S.
are FDIC-insured. One must wonder,
with a high prim e rate and most
mutual savings banks locked into long
term mortgage rates predominately
below 10%, whether the mutual sav
ings industry has any true capital,
though it published book-value figures
showing capital structure. This prac
tice is based on the accounting conven
tion that mortgages are carried at their
acquisition costs, not at current market
value, which would be substantially
below costs.
Mr. Isaac further stated, “The na
tion’s savings banks lost . 17% of aver
age assets last year, and New York City
savings banks lost .62% of average
assets during 1980.” From a legal and
6
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Federal Reserve Bank of St. Louis
conventional bank accounting point of
view, those figures probably are accu
rate, but from a de facto point of view,
they are quite misleading. For exam
ple, one of the largest savings banks
posted a slightly better than break
even performance last year. But this
was accomplished only by the one
time sale of equity securities it had
acquired at substantially lower prices.
In liquidating these securities, the
bank was able to take the income into
its financial statements.
The accounting convention of banks
is predicated on a going-concern
value. It further assumes that the orga
nizations will continue to grow. Many
mutual savings banks are not growing
and, in fact, are experiencing disinter
mediation — to a large extent to
money-market funds. As disinterme
diation occurs, mutual savings banks,
in turn, are forced to sell or borrow on
some of their assets. As noted before,
there is a tendency to sell those assets
in which one already has a built-in
profit. This means that the institutions
don’t have to take bookkeeping losses
on their financial statements. It also
means the quality of assets is con
tinuing to deteriorate.
In reading the trade press, I notice
increasingly that mutual savings banks
are merging. The trade press, in turn,
generally describes these mergers as
designed to achieve a better marketing
position, economies of size and other
euphemistic goals. One must respect
the reasons for the statements issued
to the p u blic, but so p h isticated
analysts are likely to conclude that
these are not marriages of strong vigor
ous institutions, but rather of troubled
ones.
In previous years, it was regulators’
practice to take a troubled institution
and merge it into a stronger one. As
one looks at the mutual-savings bank
industry, it’s difficult to find more than
a handful of institutions that could be
described as vigorous and healthy.
Incidentally, the fact that the merg
ers did take place in the past points up
one other area where government sta
tistics are suspect. Specifically, if one
looks at the description of insured bank
failures as illustrated in the annual re
ports of the FD IC , it should be noted
that the failures involve only situations
where institutions required disburse
ments by the agency. They don’t in
clude situations where mergers have
been engineered by bank regulators.
It also should be noted that some of the
mergers were precipitated by boards
of mutual savings banks, possibly in
anticipation of their growing prob
lems. We thus have a semantic prob-
Will failures of an increasing
number of financial institutions
result from in a p p ro p ria te
federal monetary and fiscal
policies rather than from in
competent management of in
stitutions?
lem. Is a merger under such circum
stances a failure even if it hasn’t in
volved formal bankruptcy procedures?
To a large extent, the same logic can
be attributed to many of the S&Ls in
the nation, though probably to a some
what more modest degree. For years,
students of problem banks have noted
that the problem-bank list continues to
be fluid; that is, most banks don’t re
main on the list for a long time, but
rather they come and go. For example,
during 1979, 198 banks were removed
from problem status, while 143 others
were added to the list. However, the
question em erges; Is the present
plight of the mutual savings banks one
that can be corrected rapidly?
If prevailing interest rates were to
drop back to the level of the 1950s or
1960s, the problem would be wiped off
(C ontinued on page 91)
MID-CONTINENT BANKER for October, 1981
Surefire wire.
M oney m anagem ent. It’s a m atter of transferring
the right am ount to the right account at the right tim e. It’s one
of the things we do best
at C om m erce Bank.
T he m oney m anagem ent
specialists at C om m erce deal
_____________in a large volume of transfers
averaging about one bMon dollars a day. We have handled as
..sisssHiiiipii m any as one thousand
...... ì d transfers in a single day.
11
In a business w here mil"“ llsl
iPlf lions of dollars change hands
____________________jBffliiaiJia each hour, you can’t afford a
bank that m akes m istakes. In som e cases w e’ll follow a
a ¡si»««!
•■■
• ■»■mhubm wire transfer up with a phone
call to make sure that funds
have been deposited to the
proper account. And, if there
is a problem, it is resolved
quickly, usually within the sam e business day.
F a st, accu rate service from friendly professionals.
wethinkit’sthe
surefire w ay to keep our
correspondents happy.
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ft Commerce Bank
r
w r
of Kansas City
NA
MEMBER FDIC
(816) 234-2000 • 10th & Walnut • Kansas City, MO 64141
BANKING WORLD
Walter Hoadley retired as chief econ
omist of Bank of America recently. He
jo in ed the San F ran cisco -h ead quartered bank in f 966 and was named
chief economist in 1968. He was a
member of the bank’s managing com
mittee and directed economics-policy
research and related activities. Prior to
joining BofA, Mr. Hoadley was chair
man, Philadelphia Fed. He currently
is an advisor to the U. S. Congression
al Budget Office, vice chairman of the
Commission on International Monet
ary Belations of the International
Chamber of Commerce in Paris and a
member of the executive committee of
the International Management and
Development Institute in Washing
ton, D. C. He has served on the White
House review committee on U. S. bal
ance of payments, presidential task
fo rce on U nited States econom ic
growth, task force for land utilization
and urban growth and P resid en t
Gerald Ford’s conference on inflation.
In retirement, he serves as a senior
research fellow at the Hoover Institu
tion at Stanford University.
Republic New York Corp., HC of Re
public National Bank, and Salomon
Brothers HC have entered into an
agreem en t with M anufacturers
Hanover Trust (HMT) to purchase the
present headquarters of MHT at 350
Park Avenue in New York City for
$161 million. MHT expects to substan
tially complete its move to new head
quarters at 270 Park Avenue by the
end of 1982. Republic National is ex
pected to occupy a portion of the quar
ters vacated by MHT.
Tony Neel has been promoted to vice
president at W orthen Bank, Little
Rock. He is responsible for agricul
tural lending and correspondent rela
tionships in eastern Arkansas,
Louisiana and southeast Missouri.
Prior to joining Worthen in 1980, Mr.
Neel was with First National, Paragould, Ark., and, before that, with Un
ion Planters National, Memphis. He is
a graduate of the School of Banking of
the South.
Thomas Butts, former first vice presi
dent at Third National Corp. and Third
National Bank, Nashville, and head of
the bank’s regional banking group, has
been named president of Williamson
8
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Federal Reserve Bank of St. Louis
Robert P. Mayo, former president,
Chicago Fed, has been named special
economic consultant for Fiduciary
M anagem ent Associates, Chicagobased portfolio management firm. He
also serves as director of the firm’s
businessman’s advisory board. Mr.
Mayo joined the Treasury Department
in 1941 and served as assistant to the
Secretary of the Treasury from 1959 to
1960. He was a vice president at Con
tinental Illinois National, Chicago,
from 1960 to 1968. He served as direc
tor of the U. S. Bureau of the Budget
under President Nixon before moving
to the Chicago Fed in 1970.
Continental Illinois National, Chica
go, has opened a representative office
in Atlanta and is expected to open
another in White Plains, N. Y., this
fall. The bank is increasing the number
of its representative offices by 50%.
E a rlie r this year, rep resen tativ e
offices were opened in Minneapolis
and Southfield, Mich., near Detroit.
The bank also has rep resentative
offices in Cleveland, Dallas, Denver,
Houston, Los Angeles, New York, San
Francisco and Seattle.
County Bank, Franklin, Tenn. He suc
ceeds George E. Bivins Jr., who has
b een named chairm an/CEO . Mr.
Butts had been in charge of Third
National’s correspondent bank divi
sion since 1972. He joined that bank in
1961. He is a former director of the
Independent Bankers Association of
America.
W, James Armstrong has been elected
presid en t/ch ief operating officer/
d irecto r, N orthw estern N ational,
Minneapolis, effective September 8.
He formerly was executive vice presi
dent/chief financial officer, Northern
Trust, Chicago, which he joined in
1957. At Northwestern National, he
succeeds E. Peter Gillette J r ., who has
b een named chairm an/CEO. Air.
Armstrong headed Northern Trust’s
banking department from 1974-78. In
the latter year, he became senior plan
ning officer and, the following year,
was named chief financial officer.
Jack W, Impey has been promoted to
vice president, correspondent banking
departm ent, at First National, St.
Louis. Mr. Impey joined the bank re
cently, moving from Financial Insur
ance Service, Schaumburg, 111., where
he was a senior vice president. Prior
service has been with Scarborough &
Co., Chicago, and Travelers Insurance
Co., Hartford, Conn. For First Na
tional, he serves the Illinois region.
Keehn Berry Dies
Keehn W. B erry , chairm an,
Whitney National, New Orleans,
died September 7 at the age of 86.
His banking career began about
1915 at St. Louis Union Trust, which
he served until the outbreak of
World War I. After the war, he was
associated with National City Bank,
New York City, and later moved to
First National, Birmingham, Ala.
He joined Whitney National in 1937
as a vice president and was named
president the following year. He had
been chairman since 1969.
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Winning begins
with teamwork
No race has ever been won without the
unique combination of all-out spirit and
human control. And no correspondent
relationship has achieved its goal without
the spirited and experienced participation of
both banks. Our commitment to teamwork
places us at the ready to supplement your
own expertise in solving problems or
capitalizing on opportunities. United
Kentucky Bank correspondent services
begin with you.
United
Kentucky
Bank
begins with you.
Member FDIC
1 Riverfront Plaza, Louisville,
Kentucky, 40202
Insurance
Insurance Available for Discrimination Suits
NSURANCE now is available to Truth-in-Lending (TIL), Fair Credit
Rilling, Equal Credit Opportunity and
financial in stitu tion s w orried
about the threat of law suits charging Electronic Funds Transfer acts.
them with discrimination in their lend
The insurance is available now in all
ing practices.
states except Alabama, Connecticut
A new program, called Consumer and New York. They are excluded,
Credit Class Action Insurance, will according to a spokesman for the plan,
pay up to $1 million in judgments, de because of an “inordinate number” of
fense costs and plaintiffs attorney’s class-action suits in those states.
fees that arise from class-action suits
According to Mr. Butler, a consult
against commercial banks, S&Ls and ant to the program, the new insurance
mutual savings banks.
was inspired, in part, by the complex
The program, which was started
ity and volume of compliance rules
September 1, was developed by Victor connected with the four consumerO. Schinnerer & Co., a Washington,
oriented acts. He also points out that
D. C.-based insurance firm, and for the industry “is so dynamic right now;
mer Federal Reserve attorney Natha the rules keep shifting. ”
niel Rutler, now in private practice in
Small and medium-sized financial
the nation’s capital.
institutions are primary customers, he
It covers suits arising from the
continued, because they generally
cannot afford full-tim e compliance
officers. He hopes the program will be
serving 4,000 clients by the end of the
first year of its operation.
Financial institutions desiring such
coverage are asked to contact their in
surance brokers and complete onepage applications, which then are sub
mitted to Schinnerer & Co. with a
check for the full amount of the pre
mium.
Schinnerer & Co. last month mailed
information on the program to 16,000
financial institutions and about 5,500
insurance agents and brokers.
Mr. Butler said that approximately
2,000 suits are brought each year to
federal courts under T IL alone, and an
unknown additional number of such
suits are filed in state courts. • •
• B arclaysA m erican / B u sin ess
Credit. Philip F. Strauss Jr. has been
promoted to regional vice president/
manager, Midwest marketing center,
of this firm. He is responsible for man
aging business development activities
in Indiana, Kentucky, Missouri and
portions of Illinois and Kansas. He
joined the firm in 1979 and formerly
was a business-development officer.
• Mosler. John A. Norris has been
promoted to bank standard/commercial products manager for Mosler. He
is responsible for development and
marketing of M osler’s surveillance
cameras and alarm systems to financial
institutions. He joined the firm in
1980.
I
• Diebold. Michael E. George has
been named district service manager
for northeastern Kansas and north
western Missouri for Diebold. He
joined the firm in 1974 and has been
TABS® area specialist since 1975.
• Associates C om m ercial Corp.
Burton Lubow heads a list of promo
tions for this Chicago-headquartered
firm. He has been named senior vice
president of the business loans division
and has moved from the Dallas region-
STRAUSS
10
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
GEORGE
Corporate
News
Roundup
al office to corporate headquarters in
Chicago. Succeeding Mr. Lubow in
Dallas is Tony Dixon, named vice
president/manager, Dallas office. Mr.
D ixon ’s region inclu des Texas,
Louisiana, New Mexico, Kansas, Okla
homa and Arkansas. Other promotions
include R. C. (Dick) Wilkes, Morris
Horstmann and Lawrence E. Fraser to
assistant vice presidents in the South
west region. Mr. Horstmann covers
Texas and Louisiana. Richard E. Cof
fey has been named assistant vice pres
ident for new business development
for the business loans division in South
Bend, Ind.
LUBOW
NORRIS
• American Express. The card and
travelers cheque divisions of American
Express have been merged into the
new consum er financial services
group, headed by William AL McCor
mick. Michael E. Lively, former presi
dent, travelers cheque division, has
becom e vice chairman of the new
group. The firm’s corporate-card unit
of the card division will be merged into
the travel division and will report to
division president Jonathan S. Linen.
Alva O. Way and Robert F. Smith have
been elected chairman/CEO and vice
chairman, respectively, of American
Express International Banking Corp.
Air. Way continues as president,
A m erican Express Co. Jam es R.
Greene continues as president of the
banking corporation.
• D ak tron ics. This firm, which
manufactures sports scoreboards and
electronic signs for the financial indus
try, has been selected as the supplier
of four m ajor scoreboards for the
Southeast Asian Games to be held in
Manila in December.
MID-CONTINENT BANKER for October, 1981
W e're alw ays
ju st one call away.
g
Whenever the situation arises that demands
the immediate attention of a reliable
correspondent bank, just call on the Whitney.
For over 95 years, bankers have counted
on the Whitney's expertise and dependable
service in all areas of correspondent
banking. Prompt personal service has always
been the cornerstone of our successful
working relationships.
The next time you need correspondent
banking services, large or small, simple or
sophisticated, just pick up the phone.
We're always just one call away.
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C o rresp o n d en t Banking
D epartm ent
1 8 0 0 535-9151
IN LO U IS IA N A U S E :
1 8 0 0 562-9016
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-
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SA FE
KEEPIN G
NATIONAL BANK OF NEW ORLEANS
R e liab ility in banking sin c e 1 8 8 3
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1
Washington Wire
What W ill Happen Next in Washington?
HE REAGAN Administration’s
So the attention of the country now
tax and spending programs, which will be focused on the business sector’s
the ABA enthusiastically endorsed and
response to the changes that have been
supported, have been passed into law made in spending and tax policies.
and begin to go into effect this month,
One key to economic recovery is
as the 1982 fiscal year begins. Since correctly seen to be the prompt and
February, the attention of the Con lasting reduction of interest rates to a
gress and the Administration has been
level that will permit business to ex
dominated by the passage of these
pand and stimulate further growth.
parts of the National Economic Recov
If the business recovery is frustrated
ery Program.
by continuing high interest rates, it is
And now that the legislative battles possible that Congress will attempt to
essentially have been won by the
step in and take action to control these
Administration, the big question is:
What will happen next in Washington? If the business recovery is frus
For one thing, work will continue on
trated by continuing high in
further deregulation of the financial
services industry. Congress will have terest rates, it is possible that
the opportunity to consider legislation Congress will attempt to step in
overriding state usury laws and reform
and take action to control
of the Glass-Steagall Act, as well as
these
rates.
other matters of critical concern to the
banking community. And the Task
Force on Regulation, headed by Vice rates. Although it is obviously impor
President George Bush, will continue tant to bring interest rates down, there
the work it has begun so well in reduc is little reason to believe that action by
ing the burden of regulatory demands Congress will have that result. (At one
point last year, Congress apparently
on bankers.
But the state of the economy will recognized this fact when it voted to
continue to dominate the news, for terminate the Credit Control Act next
that is the central issue of the day. One summer.)
However, several political consid
side effect of the success of the Admin
istration in securing the passage of the erations may motivate some members
budget and tax bills has been to create of Congress to tackle the matter of in
an unrealistic expectation among many terest rates if the market does not
citizens that inflation will be ended bring rates down. One is simply the
promptly and that recovery is immi honestly held conviction of many
nent. The Administration has correctly members of Congress that it is the
discouraged this kind of euphoric proper role of the government to reg
thinking, but clearly hopes are higher ulate the economy closely. Another is
now than they have been in years that that although elections are still one
the economy will improve dramatical year away, many officials fear that
there is little time left to start a pro
ly in the near future.
gram
that will produce dramatic re
It is important to realize that the
sults
before
election day.
Administration’s program is only the
Still another reason for some legisla
means to an end and will not cure the
economy by itself. What the budget tors to want to act on interest rates is
cuts and the tax bill were meant to do that tax policy is set into law for the
was to give the private sector the tools next three years. Typically, tax laws
to improve productivity and bring the are debated annually, but the Reagan
economy back to its proper levels of program has established a policy of tax
growth. The Administration is firmly cuts for the next three years.
Now that Congress has determined
committed to the principle that the
free market can take care of itself if it is a three-year tax policy, it should rely
given the opportunity to do so by the on its other main power, that of deter
m ining fiscal policy. I f C ongress
correct government policies.
should begin to falter in its resolve to
Editor’s Note: This column was prepared cut spending, it would be tempting for
some politicians to hide that fact by
by the ABA’s public relations division.
T
12
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Federal Reserve Bank of St. Louis
taking an active part in the regulation
of interest rates.
The continuing reduction of govern
ment spending is in fact an essential
part of the economic program. The
federal budget is still far from bal
anced, and it is not expected to be in
balance until 1984. But continuing
high federal expenditures certainly
have an adverse effect on the recovery
of the economy.
One of the main factors contributing
to the market uncertainty that pro
duces high interest rates is heavy bor
rowing by the federal government,
which is actively competing for credit
with the very businesses whose recov
ery is vital to the success of the Admin
istration’s program. Another $20-40
billion must be cut from the federal
budget promptly if the current levels
of federal borrowing, unprecedented
in peacetime, are to be reduced. B e
cause of the recent budget cuts, there
will be a tendency in Congress to think
that most of the difficult work in fiscal
policy changes has already been
accomplished and that the energy of
the lawmakers could profitably be
turned to the direct regulation of in
terest rates.
Anticipating this possibility, ABA
President Lee Gunderson has written
to President Reagan expressing his
concern that the failure to reduce
federal spending might lead to de
mands for credit controls or other
cou nterproductive m easures. Mr.
Gunderson also urged the President to
continue to cut federal spending, con
cluding that “such action will hasten
the positive market impact of the
national economic recovery plan, par
ticularly in terms of bringing down
market interest rates.”
One of the ironies of politics is that
positions are already being taken on
the issue of credit control, based on the
assumption that the Administration’s
tax and spending policies have failed to
turn the economy around. But the
Administration’s policies did not even
begin to take effect until October 1,
and they can be tested only over a
protracted period of time.
The ABA supported those policies in
the past and will work for their success
in the future. • •
MID-CONTINENT BANKER for October, 1981
When you’re
interested in
bank stock.
Take stock
in us.
Purchasing bank stock is tricky
business. So, when you’re
seriously interested, you want to
deal with someone who’s
seriously professional. Like First
National Bank of Kansas City
We have the expertise, the ex
perience to cut through the com
plex regulatory tape and get the
job done. And we have the com
mon sense to structure the loan
to fit your personal situation.
If you’re considering a bank
stock investment, take stock in a
bank that can help you get it.
Call and ask for any of our
correspondent officers.
FIRST NATIONAL
CharterBank
KA N SA S CITY
10TH AND BALTIMORE □ BOX 38 □ KANSAS CITY, MO 64183 □ (816) 221-2800 □ MEMBER FDIC
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
13
Regulatory News
All-Savers Debut Anything but Smooth
NUM BER of financial institutions
DIDC:
learned that launching a new
• Any loan secured by a lien on a
savings instrument can be a traumatic
single-family or multifamily residence.
experience, at least when that instru
• Any secured or unsecured qual
ment is called the all-savers certificate
ified home-improvement loan.
(ASC).
• Any mortgage on a single-family
While the Depository Institutions or multifamily residence that is in
Deregulation Committee (DIDC) was sured or guaranteed by the federal,
formulating ASC regulations, the 1RS
state or local government or any in
was calling some financial institutions strumentality thereof.
to task for the innovative marketing
• Any loan to acquire a mobile
techniques they were employing to home.
lock in funds that would be placed in
• Any loan for the construction or
ASC accounts on October 1.
rehabilitation of a single-family or mul
The D ID C , acting in accordance tifamily residence.
with the Economic Recovery Tax Act
• Any mortgage secured by single
of 1981, stipulated that ASCs must:
fam ily or m ultifam ily resid en ces
• Have an annual investment yield purchased on the secondary market,
equal to 70% of the average invest but only to the extent such purchases
ment yield for 52-week T-bills.
exceed sales of such assets.
• Be offered in denominations of
• Any security issued or guaranteed
$500, but also can be offered in any by the Federal National Mortgage
other denomination.
Association, the Government National
• Can be issued only from October Mortgage Association, or the Federal
1, 1981, through Decem ber 31, 1982.
Home Loan Mortgage Corp., or any
• Must have a maturity of one year.
security issued by any other person if
ASCs are subject to existing rules for such security is secured by mortgages,
other types of deposits, including rules but only to the extent such purchases
regarding premiums, early withdraw exceed sales of such assets. (The
als and broker s or finder’s fees, the Federal National Mortgage Associa
DIDC ruled.
tion has announced that it will issue a
Depository institutions must give special security that permits financial
ASC buyers notice of the tax implica institutions to reinvest ASC deposits in
tions of interest earned. There is a life
time exclusion from gross income for
DIDC Lifts Passbook Rate
interest earned on ASCs of $1,000
($2,000 in the case of a joint return).
The Depository Institutions De
The executive officer of each institu
regulation Committee (DIDC) in
tion offering ASCs must certify that the
creased the maximum interest rate
on passbook savings accounts by half
institution has satisfied the qualified
a percentage point last month. The
residential and agricultural financing
increase will be effective November
provision required by the tax act; i.e.,
1.
that at least 75% of the lesser of (1) the
The new maximum rate for hanks
proceeds from ASCs issued during a
will be 5.75%. Thrifts will be able to
calendar quarter or (2) “qualified net
pay 6%.
savings,” be used to provide “qualified
Favoring the increase were Treas
residential financing” by the end of the
ury Secretary Donald Regan, FDIC
subsequent calendar quarter if the in
Chairman William Isaac and Nation
al C redit Union Administration
stitution wishes to continue issuing
Chairm an L aw ren ce C onnell.
ASCs.
Opposing votes were cast by Fed
The term “qualified net savings” is
Chairman Paul Volcker and Federal
the amount by which deposits into
Home Loan Bank Board Chairman
passbook savings accounts, six-month
Richard Pratt.
money-market CDs, 30-month smallThe DIDC also voted to create a
saver CDs, time deposits of less than
new retirem en t savings account
$100,000 and ASCs exceed the amount
without an interest-rate ceiling, gave
withdrawn or redeemed from such
banks and thrifts an alternative way
accounts measured at the beginning
to set the interest rate on moneymarket CDs and began proceedings
and end of each calendar quarter.
to create a new 42-month CD that
“Qualified residential financing” is
would be free of federal rate ceilings.
any of the following, according to the
A
14
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Federal Reserve Bank of St. Louis
housing. The security is expected to
siphon off funds that had been ex
pected to be pumped into the housing
industry.)
• Any loan for agricultural pur
poses.
The average T-bill investment yield
is anounced with the results of every
52-week bill auction. Seventy percent
of this figure becomes the offering
yield for all ASCs issued starting Mon
day of the following week. That offer
ing yield remains unchanged until the
week after the next auction, four weeks
later.
The first yield on ASCs was set at
12.61%.
The D IDC has ruled that withdraw
als of earned interest on ASCs are per
missible, but anyone who withdraws
interest during the deposit term will
receive a lower total amount of interest
than if periodic interest earned were
left on account and withdrawn only at
ASC maturity. This is because the
effect of compounding doesn’t take
place on any withdrawn in terest
amounts.
Early withdrawal of all or part of the
ASC principal requires a penalty equal
to th ree m on ths’ in te re st on the
amount withdrawn. In addition, the
tax act provides that early withdrawal
of any portion of the principal elimi
nates the tax-exempt status of the
ASC.
The value of premiums offered to
increase the effective yield on ASCSs
(including shipping, warehousing,
packaging and handling costs for mer
chandise) can’t exceed $10 for deposits
of less than $5,000 or $20 for deposits
of $5,000 or more.
An institution is required to accept
ASC deposits in multiples of $500 but
may accept deposits in any other
amount, higher or lower than $500,
the D ID C stated.
Institutions offering repos at high
rates of interest to lock in funds that
would become ASC deposits on Octo
ber 1 had their wrists slapped by the
IRS when it implied that such market
ing techniques were questionable and
could result in customers losing their
tax-exempt status on ASC yields be
cause there was a question whether
the package arrangement actually was
a single transaction that would violate
the maturity and interest-rate limita
tions on the ASC. • •
MID-CONTINENT BANKER for October, 1981
W hen opportunity knocks,
Harris w ants
the opportunity to
finance it.
For asset-based financing, Harris Bank might be your biggest asset.
HARRIS
jt a j BANK.
That's right. Harris Bank is defi
nitely interested in lending money
for leveraged buyouts. And in lending
working capital. And in just about every
kind of asset-based financing. In fact,
we're more than just interested; we're
downright enthusiastic.
But our enthusiasm do esn’t stop
at lending. We also want to be your
bank. W ell offer you a total banking
relationship in everything from
corporate checking to payroll services
to cash projection and capital planning
So if you or one of your clients
needs capital, don’t settle on a loan
without calling Harris. The num ber is
(3 1 2 } 461-6580. B ecau se w e ’re not
just interested in lending money on
your assets, we want to become one
of your assets.
HARRIS COMMERCIAL
FINANCE DIVISION
H a rris T ru s t a n d S a v in g s B a n k , 111 W. M o n ro e S t.. C h ic a g o , III. 6 0 6 0 3 . M e m b e r F .D .I.C ., F e d e ra l R e s e rv e S y s te m
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
15
Installment Lending
Bank Boosts Loan Dollar Volum e 93.5%
EDITOR’S NOTE: Some of the informa
tion in this article was obtained from The
ICS Report, published by Insured Credit
Services, Inc., Chicago.
OLLAR VOLUM E of the home
im provem ent/hom e equ ity
loan portfolio at Sun Bank, Ocala, F la .,
was increased 93.5% last April and
May!
The bank accom plished this by
creating a “Building Bonus Certificate
Installment Loan Campaign,” which
involved 41 hom e-related dealers.
Each dealer agreed to accept $50 or
$100 certificates and to underwrite
25% of the cost of each certificate re
deemed. The certificates were given
customers who qualified for Sun Bank
loans for any home-improvement pur
pose. Those who borrowed $2,500 to
$4,999 received $50 bonuses; those
who borrowed $5,000 or more were
given $100 bonuses.
In return for the dealers support,
the bank used their names in newspa
per ads and on stand-up easels display
ed in lobbies of Sun Bank offices. The
program also was advertised on radio,
billboards, backs of bank envelopes
and buttons worn by bank employees.
The theme for all forms of advertising
was, “Nail Down a Home Improve
ment Loan.”
In addition, painters’ hats sporting
Sun Bank’s logo were given new homeimprovement-loan customers.
By the way, one building supply
firm taking part in the program
obtained a supply of the buttons, and
they were worn by its employees dur
ing the campaign.
According to W. Carswell Ponder,
vice president/marketing director, the
program was the result of efforts of
many bank departments. It resulted
originally from a suggestion by Gene
Hill, vice president and head of the
installment loan department in Ocala,
who had read of a similar, but not as
comprehensive, program at another
bank. The bank’s head office in Orlan
do was contacted, and artwork and ads
were created there and checked by the
legal department. Then, they were
sent to Ocala, where the installment
loan people called on the dealers and
got the program going.
First of all, says Mr. Ponder, the
Ocala bank’s top management was
solidly behind all these efforts. The
campaign also was helped by referrals
from other bank departments.
Three or four of the participating
dealers asked the bank to set up
perm anent d ea ler-co n tra ct rela
tionships with them so that they can
send their customers to the bank for
loan approval. Also, according to Mr.
Ponder, just about all the 41 dealers
were pleased with results of the pro
gram and want to take part in the next
one. Mr. Ponder says the bank hopes
to run another campaign next spring,
and one or two other Sun banks will
have similar programs.
NAILtf*
DOWN \A
HOME IMPROVEMENT
LOAN
And get a $50 or $100 Building Bonus Certificate good
at any one of these participating merchants:
This ad w as used in newspapers to publi
cize Sun Bank of O c a la 's hom e-im provement-loan program. Names of deal
ers participating were listed in ad.
Although cross-selling was not a big
part of the program, says Mr. Ponder,
the bank did pay $5 to any teller or
new-accounts person who sent cus
tomers to the installment loan depart
ment and whose loan applications
were approved. About a dozen $5 bills
were distributed.
In addition to developing home im
provement loans, Sun Bank encour
aged loan officers to explain the possi
bilities of home equity loans and to
cross-sell other bank services. • •
Installment-Loan-Campaign Results
At Sun Bank, O cala, Fla.
April
Home Improvement Loans
Home Equity Loans
Total
No. of Loans
% Increase
Dollar Volume
% Increase
69%
150%
80%
42%
226%
74%
55%
45%
52%
92%
138%
116%
66%
93.5%
May
Home Improvement Loans
Home Equity Loans
Total
April/May
Total
16
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Federal Reserve Bank of St. Louis
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Communicating
J.1_________ ___________ •..............■■■................................... .
.through
service,
cooperation and
continuity.
«K M
Call Doug Lore
LA Wats 1 8 0 0 462 9511
Miss/Ala/Ark/Tbx Wats
1 8 0 0 535 9601
• First NBC
New Orleans
M E M B E R FDIC
New Weapon for Banks
Against Money Funds
Unveiled by MasterCard
NEW PROGRAM announced
last month by MasterCard Inter
national and Fidelity Management
Group will — according to its sponsors
— enable banks, for the first time, to
compete with the high-return cashmanagement offerings of brokerage
and investment firms. Called MasterCard Money Manager account, the
program combines banking, broker
age, mutual-fund and bank-card ser
vices into one package.
M asterCard Intern ational, New
York City, is worldwide licensor of the
MasterCard family of financial ser
vices. Fidelity Management Group is a
Boston-based investm ent-m anage
ment and discount-brokerage com
plex.
The account is designed to provide a
broad range of financial options, in
cluding a m oney-m arket-fund ac
count, brokerage account, checking
account with a pre-authorized line of
credit, MasterCard bank-card services
and possibly other services such as all
savers certificates, retail-repurchase
agreements, CDs or an account in a
tax-free fund — all integrated into one
master account with a single state
ment.
Now banks can effectively meet
competition from nonbanking institu
tions,” says Russell E. Hogg, presi
EFT System Is Introduced
For Mutual-Fund Accounts
NATIONWIDE electronic funds transfer system that will en
able shareholders to move money electronically between their
banks and their mutual-fund accounts has been introduced by the
Fidelity Group of Mutual Funds, based in Boston. The system is
called Fidelity Money Line.
Fidelity Money Line,” says John F. O’Brien, president, Fidelity
Distributors Corp., “will be a great convenience for people who
maintain active investment programs. Instead of having to go to
banks to wire money, shareholders now can make all their transac
tions from home. No matter where they are, as long as they’re near a
telephone, they have immediate access to their accounts.”
Mr. O’Brien emphasizes that Fidelity Money Line “offers greater
flexibility to all shareholders. When transfers are made by Federal
Reserve wire, the wire must be processed by a commercial bank that
is a member of the Federal Reserve System. With Money Line,
investors can transfer money into or out of any financial institution —
a commercial bank, savings bank or credit union — as long as it is a
member of a regional automated clearinghouse. They (shareholders)
also can make investments and withdrawals in smaller amounts than
are allowed with wires. And unlike a bank wire, the Money Line is
completely free of charge to the investor. ”
Fidelity Money Line has been available to a limited number of
Fidelity shareholders in New England since March. The system now
is being offered nationwide to two of Fidelity’s money-market funds,
Fidelity Cash Reserves and Fidelity Daily Income Trust, which
together have over 380,000 shareholders. Fidelity expects to extend
the service to additional funds in the near future.
The Fidelity Group consists of 25 mutual funds, with 750,000
investor accounts and combined assets of about $12 billion.
A
18
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
dent/CEO, MasterCard International.
“No longer will banking customers
need to leave their banks for high-yield
flexible investments. Those invest
ments now will be available through
their local banks.”
According to Edward C. Johnson
III, chairman, Fidelity Management
Group, “For the American consumer,
this is the most advantageous and
sophisticated financial package ever
assembled. This program will be open
to millions of people who never have
had access to such universal invest
ment services. Customers will have all
kinds of options: They will be able to
tran sfer assets among ch eckin g,
money-market-fund and brokerage
accounts automatically or with a single
telephone call. And the program itself
is flexible. New features will be added
as they are developed cooperatively by
the banks, by M asterCard and by
Fidelity.”
A participating bank will sweep the
account-holder’s checking account
automatically and transfer excess cash
through IN E T (M asterCard’s daily
bank-settlement system) to Fidelity
for investment in one of the eligible
funds designated by the customer.
Sweep levels will be set at each bank’s
discretion. Because of MasterCard’s
existing communications and process
ing systems, the groundwork already is
established. Further technical support
from MasterCard and Fidelity will be
provided to participating banks in de
velopment and linkage of their sys
tems.
“One of MasterCard’s objectives in
this plan,” says Mr. Johnson, “is to
limit portfolio investments to secur
ities issued by participating MasterCard member banks. We have re
searched all the alternatives, and,
under current market and regulatory
conditions, it simply can’t be done on a
dollar-for-dollar basis, but we will con
tinue to move in this direction to the
maximum degree feasible.”
Fidelity Management & Research
Co. will manage the mutual funds, and
MID-CONTINENT BANKER for October, 1981
Fidelity Brokerage Services, Inc., will
provide discount-brokerage services.
The former is investment adviser to
the Fidelity Group of Mutual Funds,
serving more than 7 5 0,000 share
holder accounts with assets of approx
imately $12 billion. The latter is the
n atio n ’s th ird -la rg est discountbrokerage firm.
Investors will need only one check
book (and one statement) for their
bank and m oney-m arket-fund ac
counts, which can be accessed by a
check or the new MasterCard II debit
card. A pre-authorized credit line also
can be accessed by check or by the
MasterCard charge card.
The new program was approved by
M asterCard’s board August 27 and
announced Sep tem ber 1. C ertain
aspects of the plan must be cleared by
the Securities and Exchange Commis
sion, and the sponsors expected to
make the necessary filings within a few
weeks after announcing the program.
MasterCard International is an asso
ciation of member financial institu
tions, with nearly 200,000 banking
offices around the world. Its family of
financial products is recognized and
accepted by more than 3Vz million
merchant outlets worldwide. These
products include the M asterCard
charge card, MasterCard II debit card,
MasterCard travelers checks and the
new gold MasterCard for preferred
Bank Uses a 'Lot of Bull'
To Sell Money-Market CDs
HEN Huntington National, a Right on cue, the 1,800-pound bull
statewide bank headquartered charged across the stream toward a re
in C olum bus, O ., found thatward
its on the other side, only to stop
m oney-m arket C D s would have abruptly to consum e the bushes
yielded higher returns than Merrill strategically placed for realism. He did
Lynch’s money-market funds in seven this not once, but eight times!
Why didn’t those in charge simply
out of 11 months in 1981, it wanted, of
course, to tell the world about it. But procure a new bull? A hero of such
imposing dimensions is not easily re
how?
With input from the bank’s ad agen placed or readily reprimanded. So
cy, Kircher, Helton & Collett, Inc., of filming continued for 12 hours until
Dayton and Columbus, the idea was
conceived that competitive advertis
ing aimed directly at the well-known
Current-Rate Info
Merrill Lynch bull was the answer. So
BIRMINGHAM, ALA. — Bir
the bank decided to get its own bull.
mingham Trust National is offering a
However, the local terrain (to say
new customer service, RateLine,
nothing of a dearth of trained bulls) led
which provides 24-hour access to
Larry J. Sullivan, Huntington National
current rates on money-market and
vice president/director of advertising
large-denomination CDs.
and sales promotion, to seek a better
By dialing a certain number, the
caller hears a recorded message that
site. The right mountainous terrain
states the rates and effective dates
com plete with flowing stream was
for these savings plans. New rates
found at Newhall Ranch north of Los
are posted immediately as they are
Angeles. Hollywood animal broker
released by the Fed so that the in
Frank Inn produced the bull (named
formation always is up to date.
Jim), and Spungbuggy Works, Inc., of
Information available on RateLine
will be expanded to include new sav
Hollywood produced the spot.
ings in strum ents as they are
The scenario called for a simulation
approved by regulatory agencies.
of Merrill Lynch’s “stampede,” with
For instance, on October 1, the rate
Jim to lumber across the stream and,
and effective dates were made avail
through the magic of film editing,
able for the new all-saver certifi
appear to be caught in an “avalanche
cates.
Birmingham Trust believes Rateof harmless foam rubber rocks covered
Line provides a convenient method
with synthetic earth. Large clouds of
for the interested consumer to stay
dust would swirl about the bull, and
abreast of changes in the money mar
finally he would drop to his knees on
ket and that this information is espe
command from his trainer.
cially critical during times of volatile
This was a simple plot, but did not
rates.
allow for Jim ’s appetite for shrubbery.
W
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
banking customers.
Mr. Hogg explains the importance
of this program to MasterCard’s mem
ber financial institutions this way: “Re
cently banks have suffered from disin
termediation of funds and disenfran
chisement of their customers. This
program helps recapture the funds via
new -account relationships and in
creased balances from existing
accounts. Just as important, the Mas
terC ard M oney M anager account
should re-establish banks as pivotal
suppliers of financial services. Partici
pating banks will be in the forefront of
this service, not simply be backroom
processors as in most of the current
broker-sponsored programs. • •
Jim was coaxed, wheedled and bribed
to believe that a bowl of oats across the
stream would, after all, make a tasty
dessert.
Three thousand feet of film were
shot, with 42 feet used for the 30second spot, which was aired first last
June 15 throughout Ohio. It was
backed by coordinated print advertis
ing in business papers in the bank’s
market areas, in the Midwest editions
of the W all Street Jo u rn a l and regional
editions of Tim e, N ew sw eek, U. S.
News 6- W orld R eport, Sports Illus
trated, Money, Business W eek, D u n s
R eview and N ation’s B usiness. The
campaign continued through August.
Donald E. W alters, Huntington
vice president/marketing director,
points out that its money-market-CD
program is not a viable product for
everyone since it requires an invest
ment of $25,000 or more.
As for Merrill Lynch, Mr. Walters
says, “We re not claiming that our new
service will bring Merrill Lynch to its
knees, but we do offer a unique and
comprehensive service for our custom
ers interested in the high return, li
quidity and safety of their invest
ments. We call it a better breed of
investment.”
The impact of the campaign is borne
out by the fact that the bank daily re
ceives inquiries from all over the state,
and one bank associate spends much of
her day sending out inform ation.
Another indicator was a call from Mer
rill Lynch’s New York City office
asking for clarification of the concept.
Then there was a note from a leading
New York City brokerage firm re
questing a four-color picture of the bull
on its knees for display in its office.
By the way, Jim the bull was com
pletely unscathed by his TV experi
ence. • •
19
Checking A ccounts Linked to M M Fs
Through N ew D reyfus Program
PROGRAM that links checking
accounts with high yields of
m oney-m arket funds (M M Fs) was
launched last month by the Dreyfus
Corp., headquartered in New York
City. The program is being offered
nationwide to both individual and
corporate depositors through banks
and thrift institutions.
Called the Dreyfus Overflow, the
program already has been started in 25
offices in 11 Florida counties by F ree
dom Savings & Loan Association,
based in Tampa. In addition, a multi
city pilot program, using Bank of New
York NOW checking, started last
month.
Under the Overflow plan for indi
viduals, all deposits in a NOW check
ing account that exceed a minimum
balance of $2,500 are transferred auto
matically on a daily basis into one of
two Dreyfus MMFs — Dreyfus Liquid
Assets or Dreyfus Government Series.
Both funds have been yielding today’s
A
high m oney-m arket rates, says a
spokesperson for Dreyfus. Money in
NOW checking accounts continues to
receive the maximum 514% interest
permitted by law.
At Freedom S&L, the new account
for the consumer requires at least
$3,500 to open. All deposits in the
Freedom M oney-M arket Checking
Account are eligible for insurance by
the Federal Savings & Loan Insurance
Corp. W h en ev er deposits in the
account drop below the $2,500 level as
a result of personal checks drawn
against the account, a transfer is made
that day from the Dreyfus moneymarket fund back to the Freedom
checking account to return the balance
to the $2,500 minimum required for
M o ney -M arket-C h eckin g-A ccou n t
participation.
Freedom’s Money-Market Check
ing is available to individuals, pro
prietorships and nonprofit organiza
tions, using the 514% FreedomNOW
Open your account today.
Money Market Checking is a unique personal banking
package found only at Freedom Savings.
Through the Dreyfus Overflow, it combines the advantages
of current high money market yields with the
convenience of an interest-bearing FreedomNOW account.
With Money Market Checking, you can
have your checking, savings and investment funds in one plan.
That's because Money Market Checking assures that you'll earn current money
market rates on your extra funds. ..automatically...through the Dreyfus Overflow.
Money Market Checking's flexibility
permits you to withdraw those excess
funds for any purpose without early withdrawal penalties.
Money Market Checking also pays
interest on your FreedomNOW checking
balance and provides for unlimited
checking privileges for $2 a month. Here's
how it works:
Open your Money Market Checking
Account with $3500 or more, and then any
time the balance in your checking
account exceeds the $2500 minimum by
$100 or more, this excess automatically
“flows over" into a Dreyfus money market
fund.
And you can choose either the popular
Dreyfus Liquid Assets or the Dreyfus Government Series (a 100% governmentguaranteed money market portfolio),
This totally new checking plan lets you
earn interest on your Money Market
Checking Account and also get the high
yields of the money market fund you
select.
/
Investments in Dreyfus Money Market
funds are not in a savings account or
deposit, and are not insured by the Federal
Savings and Loan Insurance Corporation,
For more information, call Toll-Free
1-800-345-8505 at any time— 24 hours a
day, 7 days a week. Or mail the coupon
below. Or stop in at your nearest Freedom
Savings office.
This ad is being run by Freedom S&L, Tampa, Fla., to tell public about its new
Money Market Checking Account, which is being offered under Overflow
program instituted by Dreyfus Corp., New York City. Program links bank and
S&L checking accounts with high yields of money-market funds.
20
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
account.
Dreyfus says a business depositor
may choose one of two options to
obtain the high money-market yields.
At Freedom S&L, which calls its busi
ness program Money Management
Checking, Plan A requires a $9,000
opening balance and an $8,000 mini
mum balance and carries a $100
monthly service charge. Plan B re
quires a $21,000 opening balance and a
$20,000 minimum balance and has no
service charge.
Under either option, deposits that
exceed minimum balance require
ments are transferred automatically
each day into the D reyfus fund
selected by the customer.
Each month, Freedom S&L issues
statements to Overflow participants
itemizing all checks drawn, all deposits
m ade, funds tran sferred , incom e
earned and current account balance.
Freedom S& L’s Overflow package
also includes a Visa credit or debit
card, an American Express gold card
and an overdraft line on the NOW
account. In addition, participants have
access to their M M F balances through
the S& L’s automated teller machines.
“The Overflow program now offers
checking-account users a simple, auto
matic method of cash management and
access to high-interest yields,’’ says
Howard Stein, chairman of Dreyfus.
“By combining bank checking, savings
and money-market-fund investment
capabilities, the Overflow program
provides a totally new level of cashmanagement service.”
D reyfus Liqu id A ssets, says a
spokesperson, invests in a wide range
of high-quality, short-term moneymarket instruments, including U. S.
government securities, bank CDs,
bankers’ acceptances and commercial
paper. The Dreyfus G overnm ent
Series invests only in short-term U. S.
government securities and provides a
100% U. S. government-guaranteed
money-market portfolio.
“We believe,” says the S& L’s president/CEO, Fred F. Church Jr., “that
these new accounts face up to realities
of today’s marketplace. They are a
program whose time has come — both
for our customers, corporate and re
tail, and for the association. • •
MID-CONTINENT BANKER for October, 1981
W hat we sell, everybody’s selling!
W hat makes Westcap any better?
Th e W estcap C orporation is a
m ajor regional distributor of cer
ta in ty p e s o f fix e d -in c o m e
securities to prim arily small and
m edium sized financial in stitu
tion s— nationwide.
A n d so a r e a lo t o f o th e r
com panies.
Our sales people sit in the same room
with our traders. They personally know
one another. When you call Westcap you
can reach your contact. He or she will
know your name; you’ll know his or hers.
It’s a nice kind o f attention we both
benefitfrom.
What makes Westcap a better
option in this kind o f market?
In one overused word— service.
In another oversimplified phrase:
We are able to give our customers
the kind of attention they deserve,
and quite frankly in the computer
ized business world, the kind of
attention they crave and appreciate.
There are simple reasons fo r our
claims.
Now let’s talk about size.
We are not the smallest firm of
our kind by any means. We don’t
rank among the giants either.
We are a modest sized company,
capable o f performing every service
you’ll need. And, though we have no
argument with the giants, we believe
our size favorably affects the quality
o f service we offer.
U nder one roof
Primarily it’s because we are a
“one roof” operation. Sales persons,
Size
D. Ann Orr, Vice President-Trading,
keeps an ear to the ground to know
what and where the attractive invest
ments are. That’s her job. “My ability
to perform for our customers,” says
D. Ann, “is directly related to my
knowledge of what they are trying to
accomplish in their investment goals.
Through our sales people, I have
immediate and constant access to our
customers and can communicate to
them what is available in the market
relative to their goals at any given
time. This ‘dialogue is vital’.”
Because we’re not a Goliath, we strive
fo r a better and closer customer relation
ship. That means putting our personal
ities upfront in an honest effort to serve
our smallest customers as we would our
largest.
Anybody can sell securities! We
do it just a little closer to our cus
tomers. They appreciate the difference.
traders, operations and manage
ment enjoy a physical proximity at
our Houston offices.
That means immediate execution over
the phone— buying, selling or trading.
It also means everyone’s available
at the other end o f your phone— at
one number.
What is the Westcap advantage? Jim
Ogg, First Vice President, Sales
points out that “our trading desk is on
the sales floor. So when we ask a
trader for a bid, we often get it— now
while the customer is still on the
phone. In today’s volatile market that
kind of service means more than
convenience— it could mean money.
Time is^ money where a customer
is concerned, whether he’s buying or
selling. We’re very much aware of
that, here at Westcap.”
And, the person you talk to on
Monday will be there Thursday
when you call again.
It eliminates the problem of call
ing New Y ork for one service,
Chicago for another and never
reaching the same person twice.
Even when in the same city, some
firms are so fragmented, you can
b eco m e d isco u rag ed by being
sw itch ed from d ep artm en t to
department.
Not so at Westcap!
Mobley E. Cox, Jr., Executive Vice
President............. “The chore of man
agement is made easier when your
resources are close at hand. Our
resources are our people. And they’re
right here, sharing a rooftop, trading,
buying and selling together. We are
close-at-hand people at Westcap.
That’s one of the reasons manage
ment, like everyone else, is available
to you with a phone call.”
The W estcap Corporation
1300 M ain Street ! Houston, Texas 77002/713:631-1111
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
21
'Aggressive Competitor'
Against MMFs Offered
By Trust Company
New Money Fund on Horizon:
This One's From Sears, Roebuck
I
N A MOVE toward becoming “a
leading provider of consum er
financial services,” Sears, Roebuck &
Co., Chicago, last month announced
plans to start a money-market trust in
vesting in U. S. government securities
later this year. According to Edward
R. Telling, chairman/president/CEO,
in a Fortune magazine interview, the
new instrum ent will be called the
Sears U. S. G overnm ent M oneyMarket Trust.
“We also are planning a major posi
tion in residential real estate broker
age and other services that are impor
tant to the sale of a home, including
home-owners’ insurance, mortgage
origination, m ortgage in su ran ce,
e tc .,” he continued. ‘‘Our goal is to
become the largest consumer-oriented
financial-service entity.
“With the new tax law, working
Americans are going to be in a position
to save and in a mood to save. We are
well positioned to be a part of that. ”
Sears is preparing to file a registra
tion statement with the Securities and
Exchange Commission regarding the
proposed public offering of the moneymarket trust, which, said Mr. Telling,
will not be connected with the U. S.
government.
The minimum initial investment by
individuals is expected to be $1,000,
with additional in v estm en ts in
amounts of $100 or more. There is to
be no sales charge. Plans call for de
posits to be made initially by mail or
wire and ultimately at Sears retail
stores.
The first money-market fund will in
vest only in U. S. government secur
ities, according to Mr. Telling, and its
growth will determine how quickly the
activity will be expanded. Plans call for
investment in U. S. Treasury bills,
notes and other obligations maturing
in one year or less. Many are sold in
large denominations and at a higher
yield than U. S. securities available to
small individual investors, he added.
Noting that Sears is diversified in
retail, insurance, real estate and finan
cial-services businesses, Mr. Telling
said its recent restructuring freed the
corporate organization to concentrate
on strategic issues, including diversi
fication.
“We already hold a considerable
stake in consumer financial services,”
said Mr. Telling. “We have Allstate,
22
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
which has about 10% of the auto and
home-owners’ markets, and it’s also
rapidly gaining in the life insurance
field . W e have 40 m illion cred it
accounts, of which close to 25 million
are active at any one time. With the
active credit accounts, we have about
$8 billion outstanding in receivables.
We sell H & R Rlock services through
our stores. We own a $3-billion S&L in
California and recently formed the
Seraco group (real estate and financial
services).
“The merchandise group now stands
on its own,” he pointed out, “as do the
Allstate group (insurance) and Seraco
group (real estate and financial ser
vices). We are just extending that phi
losophy.
“We now are in a position that we
can operate different businesses, and
we see an active and strong position for
Sears, Roebuck & Co. in the financial
world that’s developing. ”
The company, he continued, has
been studying financial services “for a
long, long time, and it has become ob
vious that the financial world has
changed for all tim e.” • •
S&L Investment Services?
Two federal S&Ls have asked the
Federal Home Loan Bank Board for
permission to offer investment ser
vices to thrift customers. They are
Coast Federal S&L, Sarasota, Fla.,
and Perpetual American Federal
S&L, Washington, D. C.
Both S&Ls want to form the Sav
ings Association Financial Corp.,
which, in turn, would form a wholly
owned service subsidiary, Savings
Association Investment Securities.
The subsidiary woidd handle broker
age activities of the service corpora
tion for participating S&Ls and he
able to provide credit for securities
purchases.
Savings Association Investment
Securities would be fully registered
with the Securities and Exchange
Commission, the National Associa
tion of Securities Dealers and state
securities commissioners.
In applying for this new service,
the two S&Ls pointed to the moneymarket-mutual-fund industry (which
reach ed $ 1 5 0 billion early in
September). The only way to answer
this challenge is head-on, say the
S&Ls.
OKLAHOMA CITY — First Okla
homa Trust Co. has come up with what
it believes is an aggressive competitor
to money-market funds, according to
Josh C. Cox Jr., president. It’s an in
vestment program called RediCash
Trust Account, which offers a rate
equivalent to the 13-week U. S. Treas
ury bill rate.
RediCash offers immediate invest
ment credit and a wire-transfer service
to any bank, without time restrictions.
Only Oklahoma residents qualify for
the RediCash Trust Account.
“The program’s many beneficial
characteristics are highlighted with
the assurance that entrusted funds are
invested in this market area,” says Mr.
Cox.
First Oklahoma Trust, whose parent
HC is First Oklahoma Bancorp., head
quartered here, offers personal and
corporate savings programs and var
ious types of savings instruments rang
ing from passbook to money-market
trust certificates.
MasterCard, Visa Cards
Offered at Phone Stores
Under Bank Agreement
ST. LOUIS — MasterCard and Visa
now are accepted in 154 Southwestern
Bell PhoneCenter stores as a result of
an agreem ent betw een the phone
company and Mercantile Trust.
Participating PhoneCenter stores
are located in suburban shopping cen
ters and downtown business districts
of major cities served by Southwestern
Bell in Missouri, Kansas, Oklahoma,
Arkansas and Texas. They were intro
duced in 1976 to provide customers
more convenient access than formerly
to the phone company’s products and
services. Among services offered are
telephone sales, repair, communica
tions consultation and phone acces
sories.
Under the new arrangement, Mer
cantile is the merchant bank for the
bank cards. According to C. Philip
Johnston, Mercantile vice president,
Bell’s acceptance of MasterCard and
Visa will be of great assistance to the
hundreds of thousands of persons in
the Southwestern Bell territory who
use bank cards as their primary source
of retail credit.
MID-CONTINENT BANKER for October, 1981
W hen you want faster availability
on cash letters,
think Bank of Am erica.
When Bank of
America processes \
cash letters the emphasis is on speed,
accuracy and minimizing float. With
operations centers in both Los Angeles
and San Francisco—plus a new trans
portation system—we’ve made the
commitment to collect your
dollars fast.
Also, you’ve probably noticed that
Bank of America items can add up to
a big part of your California cash letters.
Perhaps as much as 35%. S o when
you clear those items with us, you can
get a lot more same-day availability.
And a lot less float.
Of course, we handle your “mixed-
sort” items, too. Let us
send you our new avail
ability schedule.
Need balance information? Our
BAMTRACII system lets you decide
exactly what you want and in what for
m a t-h a rd copy or audio response.
Our detailed reporting includes all
debit and credit items posted to your
account during the past 5 days.
You’ll even get free money market
representative quotes twice daily.
When it comes to managing your
cash, think Bank of America. We think
you’ll be glad you did. In San Francisco,
call (415) 622-6909. In Los Angeles,
call (213) 683-3288.
BANK o f AMERICA
C o rre sp o n d e n t B an kin g S e rv ic e s
BANK OF AMERICA NT&SA
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Think what we can do for you.
23
At Bank Marketing Assn. Convention:
All-Savers Premium Ruling
Creates Pandemonium
By Rosemary McKelvey, Editor
n ger
and
c o n f u s io n !
. These terms best describe one of
the sessions of the Bank Marketing
Association’s 66th annual convention
last month in Washington, D. C.
The question-and-answer session, a
special luncheon arranged just before
BMA members descended on the na
tion’s capital, featured six representa
tives of the Depository Institutions
D eregulation C om m ittee (D ID C ).
The topic, which turned out to be a hot
potato for the D IDC speakers, was the
all-savers certificate, specifically pre
miums that could be offered in con
junction with it.
On the day of the luncheon, the
DIDC had announced that regulations
did not allow financial institutions to
offer premium s when existing ac
counts were converted automatically
into all-savers certificates. This did not
set well with the 1,900 convention del-
A
egates, many of whom already had
their advertising campaigns for the all
savers lined up and ready to go, and
these programs were featuring pre
miums.
The heated questions and com
ments made at the luncheon were fol
lowed by a letter from incoming BMA
President Leonard W. Huck to Gor
don Eastburn, acting executive secre
tary of DIDC. Mr. Huck, executive
vice president, Valley National of Ari
zona, Phoenix, asked for immediate
clarification of the new ruling, pointing
out that the situation had to be re
solved before October 1, when the all
savers certificate became available.
On September 17, the day after the
BMA convention ended, the D ID C
announced that depository institutions
would be allowed to give premiums to
customers rolling over existing de
posits into all-savers certificates. Such
premiums would be allowed for a
period of not longer than six months
after the official ruling came down.
The DIDC added that it was going to
issue a 10-page statement clarifying its
opinions on several questions about
all-savers regulations. It was to include
a provision permitting one premium
for each all-savers account converted
from an existing account.
The premium ruling was confusing
to others besides BMA members, as
was shown in remarks made by con
vention speaker, Senator Jake Gain
(R.,Utah), chairman, Senate Banking
Committee. Senator Garn minced no
words when referring to the ruling.
“The business you got into yester
day (at the D IDC luncheon),’’ said the
senator, “I don’t even understand.
“W hatever you think of the all
savers, the intent of Congress was to
stimulate saving. It is obvious to any
New BMA Officers
President: Leonard W. Huck, executive vice presi
dent, Valley National of Arizona, Phoenix.
First Vice President: Richard M. Rosenberg, vice
chairman, Wells Fargo Bank, San Francisco.
Second Vice President: Barry I. Deutsch, vice presi
dent, Mellon Bank, Pittsburgh.
LEONARD W. HUCK
RICHARD M. ROSENBERG
BARRY I. DEUTSCH
JAMES W. WENTLING
24
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
T reasu rer: James W. Wentling, corporate vice
president/marketing, Flagship Banks, Miami.
MID-CONTINENT BANKER for October, 1981
This sextet occupied "hot seat" during BMA convention. It w as made up of representatives
of Depository Institutions Deregulation Committee (DIDC). In question-and-answer ses
sion September 15, they tried to justify DIDC's announcement that morning that its
regulations don't permit offering premiums when existing accounts are converted auto
matically into all-savers certificates.
senator pointed out that it had taken 40
years to build up the nation’s $985billion debt. Thus, it’s ridiculous to say
that the President hadn’t solved the
econom ic problem in ju s t eight
months.
Senator Garn also showed his sym
pathy for bankers by referring to their
non-regulated competitors, such as
Merrill Lynch, who protest they’re not
in banking. However, they are, he
continued. They don’t want regulated
financial institutions freed to compete
with them. The senator said the GlassSteagall and McFadden acts must be
looked at again, and he announced that
within a couple of weeks, he was going
to introduce a bill just to get dialogue
started. There will be hearings on the
bill this fall, and he guaranteed de
positary institutions will be freed to
compete with these other groups.
However, he warned that the banks
and thrifts must come together and
end their inside warfare. He said he
doesn’t want each segment of the in
dustry to give up defending itself, but
everyone should try to compromise on
one position that “we can pass.”
Although he has long been a foe of
interstate banking, the senator said,
“We must live in a real world. What is
happening is that interstate banking
already is occurring.” Again, he re
ferred to activities being carried out by
firms such as Merrill Lynch.
T om orrow ’s Banking M arkets. Us
ing this as his theme, Nat S. Rogers,
chairman, First City National, Hous
ton, and a former ABA president, de
scribed the current climate for banks.
He pointed to out-of-state and foreign
banks moving in; thrift institutions
offering checking accounts, credit
cards, installment loans and branching
Leo Cherne (I.), exec, dir., Research Insti
where many banks cannot; finance
tute of America, New York City, and con
companies getting ATMs; credit un
vention speaker, is pictured with Leonard
ions paying higher rates than banks can
W. Huck, newly elected BMA pres, and
and locating conveniently near work
e.v.p., Valley Nat'l of Arizona, Phoenix.
non-attorney that for a new account,
you can get a premium. You can get
the money for the account out of your
savings account, your back pocket, the
glove compartment of your car. That’s
all okay. But a little automatic conver
sion, and suddenly it’s not okay.
“Am I the one who is simplistic or
are these damned attorneys creating
issues that don’t exist?” Of course, this
question brought applause and cheers
from the frustrated bankers.
Senator Garn had no kind words for
another facet of the all-savers — the
IR S’ ruling to prohibit mandatory roll
over of interim repos into these certifi
cates.
“Some damn fool at the IRS who
doesn’t have anything else to do all day
sits there and thinks how can I get my
name in the paper and comes up with
this thing.”
The senator also addressed less vola
tile subjects, such as the President’s
eco n o m ic-reco v ery program . He
pointed out that the program wasn’t
even scheduled to start until October
1, yet various groups and individuals
were saying it wouldn’t work. The
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ers; Merrill Lynch’s cash-management
account; the money-market-fund ex
plosion (it had reached $150 billion at
the time of the BMA convention); in
surance companies getting into IRA
and Keogh accounts; the new Amer
ican Express/Shearson combine, as
well as the Bache/Prudential.
“And our customers,” he said, “are
turning to collectibles — antique cars,
porcelains. You name it.
Mr. Rogers foresees geographic
boundaries falling within the banking
industry, with both domestic and for
eign banks expanding across state
lines. He pointed out there are only
500 Fortune 500 companies to go
around, and so the next foray for these
banks will be the launching of aggres
sive programs to reach quality middlemarket companies. He believes these
firms will be offered advantages that
historically have been reserved for
their much larger brethren.
In turn, he continued, this will lead
regional banks to be defensive in their
markets and to seek more protected
areas. They will gravitate down to the
lower middle-market companies, and
some of the money-center banks will
be quite active in this market, too.
Finally, he said, a few major banks
and many new nonbank competitors
are invading community banks’ retail
markets. The most extensive competi
tion, he forecast, will be highly auto
mated and intensely price competi
tive.
“All this suggests,” said Mr. Rogers,
“that margins will be narrowed be
cause of increased competition. The
two benchmarks of success will be de
livering quality services economically
and putting an emphasis on fee in
come. Intelligent costing and pricing
are going to be much more necessary
than in the past.
“These trends will take their toll,
Nat S. Rogers (r.), ch., First City Nat'l, Hous
ton, and former ABA pres., talks with
BMA's incoming treas., Jam es J. Wentling,
corporate v .p ./m k t., Fla g sh ip B an ks,
Miami, before delivering speech at conven
tion.
25
This BMA convention panel w as made up
of (I. to r.): Dhan G. Mukerji, pres., Mac
Donald Motivational Research Center, Inc.,
Dayton, O.; T. Joseph Semrod, pres./CEO,
United Jersey Banks, Princeton, N. J., and
former pres., Liberty Nat'l Corp., Oklaho
ma City, and Norman F. de la Chapelle,
director/new business development, NCR
Corp., Dayton, O.
and not every bank will be successful.
Advantages of increased size will be
more pronounced. It will lead to more
mergers — and larger units. No doubt,
we re some years away from national
banking organizations, entirely free of
geographic constraints. But we will,
nevertheless, see a significant erosion
of the traditional geographic bound
aries and substantially larger organiza
tions pursuing these expanded mar
kets.
“Marketers will view the business in
segments, and banks will seek market
niches.”
Banks today, he said, are looking
closely at available markets and are
asking questions. First, where can
they be viable and effective? And
second, where can reasonable profits
and margins be earned? In other
words, they’re segmenting their mar
kets, looking for their niches.
With few exceptions, according to
Mr. Rogers, this process of segmenta
tion will leave banks with less than a
full arsenal of services. Some, he said,
already have concluded that retail
banking is a risky business to be in and
have curtailed services there.
Mr. Rogers also looked at bank cus
tom ers, saying that not only have
banks’ competitors changed, but so
have their customers. The individual
customer is better educated and more
comfortable with technology. He’s less
future-income oriented than was his
predecessor. He’s living for now, not
leaving idle deposits in commercial
banks. Money-market funds, said Mr.
Rogers, have given him a taste of mar
ket rates, and he’s unlikely to accept
Reg Q ceilings in the future.
The corporate customer, too, he
continued, is smarter. With interest
rates at 20% and more, corporations
have become adept at managing cash,
cash that used to appear in banks as
free deposits.
“To achieve success in this new
26
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Federal Reserve Bank of St. Louis
world,’’ Mr. Rogers counseled, “new
marketing techniques — techniques
specifically geared to the markets
chosen — will have to be created.
That’s a major challenge facing every
member of this audience.’
Summing up, Mr. Rogers said: “You
must help guide the management of
your institution to find its niche in the
market. You must design specialized
programs to reach markets on a costeffective basis. You must participate in
a management matrix that will success
fully integrate technology, planning,
operational and banking skills.
“In the new world of banking, your
expertise and creativity will be in
greater demand than ever.”
A B ank s R epu tation . This should be
regarded as an asset to be developed,
improved and reported on, advised T.
Josep h Sem rod, president/C EO ,
United Jersey Banks, Princeton, and
until last spring, president, Liberty
National Corp., Oklahoma City.
Mr. Semrod said even a bank’s fund
ing efforts are affected by its reputa
tion. If financial markets have confi
dence in an institution, he pointed out,
a bank can borrow funds as cheaply as
or cheaper than its competition. The
lower the cost of funds, the higher the
Corp. Marketing
Council
The BMA formed a corporate
marketing council last spring. Its
mission, as announced during the
convention last month, is to identify
and effectively meet the many needs
of senior corporate marketing pro
fessionals within commercial banks
and particularly those with assets of
$500 million or more.
The first major initiative will be a
corporate marketing conference
May 16-19 at Innisbrook Resort, Tar
pon Springs, Fla. It will cover mar
ket segmentation, sales management/training, nonbank competition
and differentiation. In addition to
bank professionals, speakers will in
clude marketing leaders from other
businesses, such as IBM, Merrill
Lynch and Xerox.
In 1982, the BMA Information
C en ter’s collection on corporate
marketing will be expanded.
Chairman of the new council is
James J. Smith Jr., vice president/
com m ercial marketing d irector,
F irst National, Chicago. Among
council m em bers are two other
bankers from the Mid-Continent
area — Serge Uccetta, vice presi
dent, Continental Illinois National,
Chicago, and Marshall C. Tyndall
Jr ., senior vice president, Texas
Commerce Bancshares, Houston.
Two BMA convention speakers are shown
in action. At I. is Senator Ja ke G arn
(R.,Utah), ch., Senate Banking Committee.
At r. is Charles E. Lord, acting Comptroller
of Currency.
earnings and vice versa.
In addition to giving banks an edge
in financial markets, he continued,
reputation can make the difference in
consumer marketing. “For customers
faced with commodity products of
comparable price and quality, a bank’s
reputation can break the tie.” Inter
nally, he noted, “a bank’s reputation
among its em ployees can sustain
morale during times of disappointing
earnings and minimal profit sharing.
Externally, it can make the job of the
recruiter easier by making his bank
competitive with industries that have
more glamour and fewer troubles.”
How does a bank turn facts into a
reputation? Mr. Semrod outlined
strategic activities that marketers are
uniquely qualified to carry out: persua
sive communications, including corpo
rate advocacy, employee communica
tions, investor relations and public
affairs.
L ooking F orw ard. Charles E. Lord,
acting Comptroller of the Currency,
stepped forward a few years to look at
how he believes banking will be at that
time. Long before 1990, he believes,
all deposits, including transaction
accounts, should be paying market
rates of interest. “Core deposits” —
the touchstone for prudent bank man
agement a decade ago — will be all but
a meaningless concept.
He foresees fewer geographic re
strictions — perhaps they may be re
moved altogether. He foresees com
petition among depository institutions
becoming intensified by the progres
sive easing of restrictions that mandate
product segmentation and specializa
tion. By 1990, he continued, differ
ences between depository institutions
will have blurred to the point where
any remaining distinctions between
lending and deposit services offered by
banks, thrifts and credit unions will be
due to market pressures, not statutory
(C ontinued on page 76)
MID-CONTINENT BANKER for October, 1981
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Federal Reserve Bank of St. Louis
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28
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Federal Reserve Bank of St. Louis
GD
MID-CONTINENT BANKER for October, 1981
New Tax Act Encourages Rehabilitation
O f Old Buildings, Historic Structures
HE ECONOM IC Recovery Tax
Act of 1981 constitutes the largest
single tax reduction legislative act
history. One of the provisions in the
act is an expanded investm ent tax
credit for rehabilitating buildings and
certified historic structures. This pro
vision allows for a direct credit against
tax equal to 15% of expenditures to
rehabilitate qualified buildings 30 to
39 years old, 20% of expenditures to
rehabilitate qualified buildings at least
40 years old, and 25% of expenditures
to reh a b ilita te ce rtifie d h isto ric
structures.1
Bankers considering the establish
ment of a new facility or branch or
construction of a new bank building
should consider rehabilitation of the
existing building or another building
in a different location to take advantage
of the expanded investment tax credit
provision. In order to receive the cred
it, q u a lified reh abilitation ex p en d i
tures must be incurred with respect to
a qu alified reh abilitated buildin g.2
Q u alified R eh abilitation E xpen di
tu res. A qualified rehabilitation ex
penditure is any amount properly
charged to a capital account that is in
curred after Decem ber 31, 1981. The
expenditure must have a recovery
period under the act of 15 years and
must be incurred in connection with
the reh a b ilita tio n of a qualified
building.3 Qualified rehabilitation ex
penditures do not include (1) the costs
of acquiring any building, (2) any ex
penditures attributable to enlarging an
existing building, or (3) costs of acquir
ing property that already qualifies for
investment credit. The taxpayer must
elect to use straight-line depreciation
for those expenditures on which the
rehabilitation credit is claimed and
must reduce the depreciable basis of
the rehabilitated structure by the
amount of the rehabilitation credit, ex
cept in the case of a certified historic
structure as discussed hereinafter.4
Q ualified R eh abilitated bu ildin g. A
qualified rehabilitated building is de
fined as any building that was placed in
service before the beginning of the re
habilitation and which has been sub-
T
1.
2.
3.
4.
IRC
IRC
IRC
IRC
Section
Section
Section
Section
46(a)(2)(F)
48(a)(1)(E)
48(g)(2)A
48(g)(5)(A)
By James W. Koeger*
Tax Supervisor
inPeat, Marwick, Mitchell & Co.
St. Louis
stantially rehabilitated. In the rehabil
itation process, 75% or more of the
existing external walls must he re
tained as external walls.0
A building will be considered to be
substantially rehabilitated only if the
qualified rehabilitation expenditures
incurred during the prior 24-month
period exceed the greater of (1) the
adjusted basis of the property, or (2)
$ 5 ,0 0 0 . An altern ativ e 60-m onth
period can replace the 24-m onth
period if the rehabilitation is to be
com p leted in phases set forth in
architectural plans and specifications
completed before the rehabilitation
work is commenced.6
In order for the building to qualify,
there must exist at least a 30-year
period between the date the rehabil
itation began and the date the building
was first placed in service.' The bank is
not required to have owned the build
ing throughout this initial 30-year
period.
Exam ple: In 1982, the bank incurs
$500,000 of qualifying rehabilitating
expenditures on its 40-year-old build
ing that is fully depreciated. The bank
will claim a tax credit of $100,000 (20%)
and reduce its basis in the rehabilita
tion expenses by $100,000. The depre
ciable basis is, therefore, $400,000,
and is written off over a 15-year life on
a straight-line basis.
T ransitional Rule. The rehabilita
tion credit is not a new concept. The
Revenue Act of 1978 provided for a
credit of 10% of qualifying expendi
tures with a useful life of five years or
more on buildings at least 20 years old.
5. IRC Section 48(g)(1)(A)
6. IRC Section 48(g)(1)(C)
7. IRC Section 48(g)(1)(B)
*Mr. Koeger works extensively in the bank
ing industry and serves many bank clients
o f Peat, Marwick, Mitchell iz Co. He is a
member o f the American Institute o f Certi
fied Public Accountants and the Missouri
Society o f Certified Public Accountants
and has taught fo r the latter organization
and the American Institute o f Banking.
MID-CONTINENT BANKER for October, 1981
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Federal Reserve Bank of St. Louis
This credit did not reduce the depreci
able basis of rehabilitation expendi
tures. The new act repeals the current
10% rehabilitation credit for expendi
tures incurred after D ecem ber 31,
1981, but provides for a transitional
rule.8 If physical work on a rehabilita
tion is begun prior to January 1, 1982,
on a building that meets the old 20year rule but does not meet the new
30-year rule, the current 10% credit
will apply to expenditures on the proj
ect including those incurred after
January 1, 1982.
Therefore, if a planned rehabilita
tion of the bank’s building will not
meet the new act’s requirement of a
period of 30 or more years since the
building was placed in service, or the
requirement of a substantial rehabil
itation, the bank should consider
accelerating the rehabilitation project
into 1981 and com m encing the
rehabilitation prior to January 1, 1982,
in order to take advantage of the cur
rent 10% credit.
Other incentives to qualify under
the current credit are that the expendi
tures can be depreciated on an acceler
ated method instead of the straightline method and the basis in the re
habilitation is not reduced by the
amount of the credit.
C om p on en t D e p r e c ia tio n . Under
old law, a bank would be able to
accelerate depreciation deductions on
a large remodeling or building pro
gram by using component deprecia
tion. Taxpayers were allowed to segre
gate the total cost of remodeling or
new construction into various ele
ments such as structure, heating and
air conditioning, plumbing, wiring,
e tc., and assign separate useful lives to
each elem ent. Shorter useful lives
than those normally assigned to a
building would be assigned to some
com ponents resu ltin g in a faster
write-off for construction costs.
However, under the Accelerated
Cost Recovery System provisions in
the act, all property acquired is
assigned to one of five classes of prop
erty. The useful lives and depreciation
methods are predetermined for each
class of property except that taxpayers
may elect to use the straight-line
8. Economic Recovery Tax Act of 1981,
Section 212(e)(2)
29
method instead of the accelerated
method for each class. As the act estab
lished a 15-year useful life for most real
property, taxpayers are no longer able
to use component depreciation.
The only costs that need to be segre
gated are those that would be assigned
to one of the other classes, such as the
five-year class for tangible depreciable
property. Draperies, carpeting and
movable partitions are examples of
property that must be assigned to the
five-year class. These items qualify for
regular investment-tax credit and do
not qualify for rehabilitation credit. All
other rehabilitation costs probably
would be assigned to the 15-year re
covery class and would meet that re
quirement for qualifying rehabilitation
expenditures.
C ertified H istoric Structure. A cer
tified rehabilitation of a certified his
toric structure qualifies for a 25% cred-
it and no reduction is required to the
basis for the credit on such structures.
In order to qualify for this 25% credit,
the Secretary of the Interior must cer
tify to the Secretary of the Treasury
that the rehabilitation of the certified
historic structure is consistent with the
historic character of such property and
the district in which such property is
located.9
The term “certified historic struc
ture” means any building which is
listed in the National Register or is
located in a registered historic district
and is certified by the Secretary of the
Interior as being of historic signifi
cance to the historic district.10 It nor
mally is not difficult to qualify for certi
fication and listing in the National Reg
ister, but the process does take time. If
a stru ctu re has any h isto ric or
architectural significance, it usually
will qualify. A bank building was re
cently added to the register because it
was once robbed by Bonnie and Clyde!
The act repealed both the special
60-month amortization provision and
the special rule perm itting use of
accelerated methods of depreciation
for substantially rehabilitated certified
historic structures.11 It also repealed
the present rule requiring use of
straight-line cost recovery over the
useful life of a building placed in ser
vice at the site of a demolished or sub
stantially altered certified historic
structure.12 Thus, cost recovery rules
under the act will apply to a building
that is constructed or reconstructed at
the site where a historic structure was
demolished or altered.
(C ontinued on page 72)
11. Economic Recovery Tax Act of 1981,
Section 212(d)
9. IRC Section 48(g)(2)(C)
10. IRC Section 48(g)(3)(A)
12. Ibid.
Rehabbed Buildings Can Be Show places!
IN A N C IA L in stitu tion s have
ern structure. The building, which is
been taking advantage of rehabil the original home of American Nation
itating old structures to house their
al, St. Joseph, is ideally located on St.
quarters for some time, even without
Joseph s new pedestrian mall. The
the new tax advantage that becomes
building is listed in the National Regis
effective January 1, 1982 (see adjoining
ter of Historic Places and dates from
article).
1889. The exterior bears reminders of
First Federal Savings & Loan, St.
the original occupant in the form of two
Joseph, Mo., took over the old Ger
shields over the main entrance — one
man American Bank building in 1974
depicts an American eagle and the
and rehabilitated it to make it a modother an imperial German eagle. Style
F
LEFT: First Federal
Savings & Loan, St.
Jo se p h , Mo. BE
LOW: V a lle y N a
tional, Des Moines,
la.
30
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Federal Reserve Bank of St. Louis
of the structure is Richardson Ro
manesque, in honor of its designer,
Henry Hobson Richardson.
The rehabilitated structure of Valley
National, Des Moines, la., has pre
served what is termed one of the finest
examples of art-deco design in the
Midwest. The bank built the structure
in 1932 and was considering moving
out when it was realized that the build
ing’s prime location and distinctive
ness warranted a rehab job, which was
completed in 1977. The building has
since been added to the National Reg
ister of Historic Places. The exterior is
Indiana limestone and the three-storytall main entrance and first story are of
polished black granite. The main bank
ing room contains four massive chan
deliers and features windows 22 feet in
height.
These institutions have proved that
a satisfying blend of the old with the
new is not only possible, but desirable
under the right conditions • •
MID-CONTINENT BANKER for October, 1981
In today’s banking environment, bankers’ heads
are filled with thoughts and questions about com
peting for those most valuable commodities,
“retail or commercial banking customers.”
A s a Central Bank correspondent or potential
correspondent, you can rely on the specialized
talents and expertise available from our $2.1
billion corporation. Our brains are our experts.
Throughout the year Central’s
correspondent team provides semi
nars on consumer and commercial
lending, investments and executive
management. Even seminars on
specialized topics and services such as Individual
Retirement Accounts and compliance survival.
T hese seminars are conducted by recognized
specialists and are based upon practical applica
tion. You learn from experts. More importantly,
you enter into idea exchanges with bankers from
all over the southeast.
So, pick our brains. You’ll find them full of
information. Information that
can help you become the most
innovative, full service bank in your
area. Call us and let us put your
mind at ease.
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In the Southeast:
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Member FDIC
CORRESPONDENT SEMINARS.
ANOTHERGOODREASONTORANKATCENTRAL
MID-CONTINENT BANKER for October, 1981
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Federal Reserve Bank of St. Louis
31
Anti-Holding Company Resolution
Adopted by Kentucky Bankers
By RALPH B. COX, Publisher
HE ISSU E of banking structure
flared briefly last month at the
annual Kentucky Bankers Association
convention in Louisville. The flare was
extinguished — for the moment — as
bankers supported a resolution that
put the KBA on record “as opposing
any bill that might be introduced in the
(state’s) next General Assembly to per
mit banks to cross county lines.”
There is little doubt, however, that
the flame is still smoldering and could
easily flare anew when the state’s
General Assembly convenes in Janu
NEW KBA OFFICERS — President Allan S. Hanks, pres., Anderson Nat'l,
Lawrenceburg; President-Elect F. C. Ke iser, ch./pres., Farmers Deposit,
ary, 1982.
Eminence; and Treasurer Berks Brown, e ,v.p./cash., Southern Deposit, RusIt has been generally anticipated —
sellville.
and also somewhat encouraged by
Kentucky’s Governor John Y. Brown
Jr. — that a bill would be introduced in
1982 to permit multi-bank HCs in bankers at a breakfast session. He lier in the summer that Kentucky
Kentucky. Currently, Kentucky oper announced that bankers should not ex banking laws should be examined be
ates under a county-wide branching pect any movement” from his admin cause of the increased competition
law that prohibits the crossing of state istration on the controversial issue. from such firms as Merrill Lynch,
lines and also prohibits formation of Nonetheless, he said, he remained Sears, Roebuck and others.
multi-bank HCs.
very strong for statewide banking.”
Although the governor, in his break
Kentucky Governor Brown spoke to
Governor Brown had suggested ear- fast speech to some 1,000 bankers,
seemed to be backing down on his ear
lier announced position of pushing
hard for banking-law change, he did
urge bankers to have “vision” toward
the future. Apparently, he still expects
“recom m endations” on multi-bank
legislation from some sources in the
state, but the legislation, in view of the
KBA position, could have an uphill
fight.
Shortly after the governor spoke,
bankers met in their final convention
session and adopted a resolution from
the floor putting the KBA on record as
opposing multi-bank HCs. Although
the wording of the resolution was
questionable to some bankers — it
Convention speaker Margaret L. Egginton, FDIC, Washington, D. C.;
said, for example, that the association
Willis G. Moremen, e.v.p., KBA; Joe Stacy, outgoing KBA pres., and
speaker Harry Gatton, retired director, North Carolina Bankers Asso
opposes legislation that “would permit
ciation.
banks to cross countv lines to establish
32
MID-CONTINENT BANKER for October, 1981
T
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Federal Reserve Bank of St. Louis
new branch offices” — the intent of the
resolution was to thwart multi-bank
HCs.
This resolution was introduced from
the floor by W. R. Smith, chairman,
Bank of Hindman, a bank of about $25
million in assets. Mr. Smith apparent
ly did not wish to submit his resolution
through the normal channels of the
convention committee, preferring in
stead to present it from the floor.
KBA president Joe Stacy graciously
recognized Mr. Smith, called for a
voice vote (twice) and then announced
the resolution had carried. It was ob
vious that the convention was not
unanimous, but those voting for the
tucky banks. Kentucky bankers argued
that such a policy would work against
the state’s economy because those
funds would not be loaned to local
business and if the governor chose that
course of action, it actually would work
against his desire for a better business
climate in the state.
G overnor Brown stated at the
breakfast meeting that he would be
willing to discuss a regional rate that
would be lower than that offered by
New York or Chicago banks, but the
wouldn’t say how much of a lower rate
would be acceptable. Several hours la
ter, at their business session, Ken
tucky bankers passed another resolu-
Convention speaker Angelo R. Bianchi, pres., Conference
of State Bank Supervisors, is flanked by W illiam G. Grannan, administrative v.p., KBA; and W illis G. Moremen,
e.v.p., KBA.
David Holland, e.v.p., Citizens Bank, Hickman; Martha
Layne Collins, lieutenant governor of Kentucky; and
Pauline Crump, Trigg County Farmers Bank, Cadiz.
J. W. (Billy Joe) Phelps, pres.,
Liberty Nat'l, Louisville,
accepts Community Service
Award from F. Harrison Poole,
v.p./treas., Philip Morris, Inc.
¡r c g n s n È n S
resolution made more noise than those
opposing it and they carried the day —
at least for the moment.
G overnor Brown also has been
somewhat critical of bankers for their
reluctance to pay higher rates for the
state’s surplus funds. Currently, Ken
tucky banks now pay 25 to 100 basis
points less than so called moneycenter banks in New York, Chicago,
etc. Earlier in the summer, Governor
Brown had intimated that in order to
earn the maximum for Kentucky sur
plus funds, he would entertain bids
from out-of-state banks as well as Ken-
tion, which recommended that the
state’s “General Assembly recognize
fully the benefits derived from a wide
distribution of state funds in banks
throughout the state when considering
any proposals for change in state in
vestm ent policies.” The resolution
obviously was aimed at the governor’s
implications that state funds could be
invested in out-of-state banks.
Kentucky bankers also adopted one
other resolution that was especially
pleasing to State Banking Commis
sioner Randall Attkisson. The KBA
recommended that statutory changes
MID-CONTINENT BANKER for October, 1981
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Federal Reserve Bank of St. Louis
were necessary to ensure that fees col
lected by the department of banking
(from state banks) be used exclusively
to fund the department and to improve
the quality of examinations. The res
olution also recommended that the
commissioner of banking be given
greater authority to determine person
nel salaries.
Resolutions Chairman Ralph E.
Buchanan, chairman and president,
Bowling Green Bank, stated that fees
collected from state banks currently
are commingled with other state funds
and “could be used for other purposes
than that of funding the state banking
department. There was no indication,
he said, that this actually was being
done, but the resolutions committee
felt that some statutory changes were
necessary to insure that all funds be
used properly for the state banking de
partment.
Another resolution adopted by the
KBA asked for “action” by Congress
and the Kentucky General Assembly
“to deregulate lending rates to provide
lenders the flexibility needed to re
spond to credit needs of borrowers at
rates consistent with the cost of money
as determined by the market. Dereg
ulation of deposit rates,” the resolution
stated, “must be matched with dereg
ulation of lending rates. ”
One of the convention’s featured
speakers, Angelo R. Bianchi, presi
dent, Conference of State Bank Super
visors, was warmly received by Ken
tucky bankers as he voiced strong sup
port for the dual-banking system and
also for a sharp attack on “all those”
who propose that interstate banking
would prom ote more com petition
among banks and thus be a better sys
tem for the nation. Actually, it is the
banking monopolists, charged Mr.
Bianchi, who attack the McFadden
33
and Douglas acts as bein g a n ti
competitive. These statutes are not
anti-competitive, said Mr. Bianchi,
but they are anti-monopolistic.
Mr. Bianchi also expressed concern
that bankers are “lackadaisical” about
the dual-banking system and take it for
granted. The dual system, he said is a
unique structure — a partnership be
tween the states and the federal gov
ernment where the federal govern
ment is not totally dominant. Bankers
sometimes take this system for granted
and because of this, he said, “we could
lose the sy stem .” To com bat this
lethargy, stated Mr. Bianchi, commis
sioner of banking in New Jersey, the
C SBS has developed an expanded
communications program designed to
remind bankers that the dual-banking
concept provides checks and balances
within the system as a defense against
monopoly in banking and in bank su
pervision.
Mr. Bianchi was especially tough on
proponents of in terstate banking.
What do they mean, he asked, by their
terminology of interstate banking?
Does it mean interstate ownership? If
it does, he said, we already have inter
state banking because we have Edge
Act corporations, loan production
offices, interstate lending, correspon
dent banking, etc.
What it doesn’t permit at this time,
he stated, is the “interstate acquisition
of deposits!” The present system, he
argued, “keeps the money in your
state for your depositors. ” If interstate
banking does become a reality, he
said, then more and more deposits will
be drained toward the major moneycenter banks and loaned to foreign
countries and/or major corporations.
Mr. Bianchi also had a word about
money-market funds. They should be
regulated, he charged, because they
“take money out of your state and in
vest it in Eurodollars or in countries
like Zaire.” The funds, he said, should
be required to meet the same regula
tions as financial institutions.
ABA President Lee E. Gunderson
also expressed concern about moneymarket funds and stated that the ABA
was committed to a policy of achieving
some fair means of competition with
banking’s non-regulated type of com
petitor. Banking’s competitors used to
be one another, he said, but now we
have Sears, Roebuck, Merrill Lynch
and many others. Mr. Gunderson indi
cated the ABA would never cease to
fight for some means of “equality ” with
these newer competitors.
Mr. Gunderson, president, Bank of
Osceola, Wis., also commented on the
issue of interstate banking. The ABA
ABA Ag Conference Set
HE IMPACT of banking dereg
ulation, increased competition,
high volatile interest rates, farm com
modity outlooks and new farm pro
gram d irection s under P resid en t
Reagan’s Administration will be key
discussion topics for bankers planning
to attend the ABA’s 1981 National
A gricultural B ankers C o n feren ce
N ovem ber 8-11 at the Sheraton
Washington (D.C.) Hotel.
For the first time in the 30-year his
tory of the conference, ag bankers will
meet in the nation’s capital to discuss
the issues identified by the conference
them e,
“ F in an cin g
A m erica’s
Strength.”
The conference format will be struc
tured around a series of general ses
sions and workshops that will focus on
understanding the national lead
ership, coping with near-term farm in
come problems and the more favorable
long-term outlook and adjusting to a
new banking environment.
Keynote speaker for the opening
general session will be Llewellyn Jen
kins, vice chairman, Manufacturers
Hanover Trust, New York, who will be
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34
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Federal Reserve Bank of St. Louis
ABA president at the time of the con
ference. Other speakers at the opening
session will include Conference Chair
man W. D. (Bud) Wilier, executive
vice president, Decorah (la.) State,
and Gerald M. Lowrie, executive
director, ABA government relations
group.
A farm-policy panel of government
ag officials will be moderated by Orion
Sam uelson, agricultural broadcast
spokesperson and vice president/farm
service director, WGN Continental
Broadcasting, Chicago.
A general session on the second day
of the conference will feature a farm
commodity international trade outlook
presentation and a general agricultural
outlook panel of speakers who will cov
er topics that include the general eco
nomic outlook and the outlook on
livestock and feed/food grains.
The final session will feature an ac
tivities report on the ABA agricultural
bankers division and a presentation by
Frank Naylor, under secretary for
small community and rural develop
ment for the Department of Agricul
ture. • •
policy continues to support both the
Douglas and McFadden acts and has
not deviated from the original intent of
these laws. “We continue to talk about
it in our leadership conferences,” he
said, “but that doesn’t mean we (the
ABA) advocate change.”
ABA policy is established by its
members through the leadership con
ference. Those who go to the lead
ership conference, letters from bank
members, grassroots opinion deter
mine whether change will or will not
come in the ABA’s policy toward the
Douglas and McFadden acts. At the
moment, there is no ground swell in
congress nor among ABA members to
change the Douglas and McFadden
acts, said Mr. Gunderson.
At one of their sessions, Kentucky
bankers elected the following new
officers to serve for the coming year:
As president, they named Allan S.
Hanks, president, Anderson National,
Lawrenceburg, to succeed Joe Stacy,
chairman, Bank of the Mountains,
West Liberty.
As president elect, they named
F. C. K eiser, chairman/president,
Farmers Deposit Bank, Em inence;
and as treasurer, Berks Brown, execu
tive vice president/cashier, Southern
Deposit Bank, Russellville.
The KBA also named three new
directors:
Arch M ainous J r ., p resid en t,
Citizens Union National, Lexington;
J. W. C arey, p re sid en t, Union
N ational, B arb o u rv ille; and J. P.
Cooney, executive vice president,
Bank of Maysville.
Kentucky ABA members elected
Robert E. Sutherland a member of the
ABA governing council. Mr. Suther
land is president, Wilson & Muir
Bank, Bardstown.
One annual event of growing in
terest to Kentucky bankers is a Com
munity Service Award presented by
the Philip Morris tobacco company.
Banks are nominated for their work in
effective community programs, and a
winner is selected from among several
nominees.
This year’s w inner was L ib erty
National, Louisville, for a program
that united art and education groups in
providing events ranging from a mask
art exhibition to a “mask and music
b allet.” The bank received $1,000.
O th er nom inees w ere: Peoples
Bank of B erea; Citizens National,
Bowling G reen ; C itizen s Bank,
Glasgow; United Am erican Bank,
Somerset; and Citizens Deposit Bank,
Vanceburg. • •
MID-CONTINENT BANKER for October, 1981
Mosler invents
the drive-in system, again.
Easy for
your customers.
Captive where it
helps most, free
where it works best.
The new Mosler CF 1000™
Remote Transaction System fea
tures a fixed, captive carrier at the
customer unit— where captive is
most convenient. And a remov
able, free carrier at the teller sta
tion— where free is most efficient.
There’s no other drive-in
system like it. The CF 1000 com
bines the engineering excellence,
practical experience and on-line
performance you’ve come to
expect from Mosler in the 25
years since we invented financial
drive-in service.
Now our CF 1000 offers you
the best features of captive and
free drive-in systems at a price
that’s remarkably affordable for
such a remarkably advanced
design.
Your drive-in customer places
the transaction in the open waiting
carrier, pushes a button to send.
The Mosler CF 1000 makes it that
quick, that simple.
The carrier is
captive, to eliminate
handling. Horizontal, making it
easier to see into and reach into.
Round, with big capacity for
checks, currency, coins.
Your customers like the hori
zontal presentation in Mosler freecarrier systems. They’ll like hori
zontal in our CF 1000, too.
Easy for your tellers.
At the teller station, the CF
1000 carrier becomes free for
easy handling by your teller.
There’s no fumbling around under
the counter, no worry about
leaving something behind in the
carrier, no risk of mixing transac
tions together.
Loose coins trouble a con
ventional captive carrier, but
they’re no problem for CF 1000.
Neither is dispatching transac
tions to the right lane. Your teller
just drops the color-coded carrier
into the matching color-coded
terminal.
If you’re planning to expand
or improve your drive-in facilities,
you have something new to plan
around. Write Mosler, 1561 Grand
Boulevard, Hamilton, OH, 45012,
Dept. CF-81 for free CF 1000
literature.
T H E C A P T IV E /F R E E R E M O T E T R A N S A C T IO N S Y S T E M .
Mosler
An Am erican-Standard Company
Hamilton, Ohio 45012
Where quality products
are the product of quality people.
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
35
Bank Builder Survey -
What Bankers Want From Builders:
Facilities Enabling Them to Compete
Tougher Competition
Among Major Concerns
O U G H E R com petitive situ
ations, changing consumer life
styles, growing a ccep tan ce of
technological innovations and in
creasing availability of alternative
financial services are creating pres
sure for more effective banking fa
cilities, says Frank Bottini, market
ing manager for Bank Building
Corp., St. Louis.
“The risks involved in making a
building decision have increased
with deregulation, so it’s essential
to carefully evaluate the alterna
tives before making commitments,”
he says.
A clear statem ent of a bank’s
strategy and marketing goals is im
portant input prior to any discus
sion of design. Professional assist
ance is valuable in analyzing market
competition and evaluating alterna
tive locations.
Today, many bankers are show
ing considerable interest in mod
ernizing and expanding main
offices, Mr. Bottini says. Such re
modeling can pay big dividends if
properly planned. But it rarely is
simple. It pays to obtain expert pre
liminary analysis of a specific situa
tion as well as current and projected
requirements before making any
decision.
Changing state regulations on
what constitutes a facility, coupled
with liberalized branching provi
sions in other states, are undoubted
ly increasing the total number of
manned and unmanned locations,
Mr. Bottini says. Consumer de
mand for greater convenience as
well as the individual banker’s de
sire to increase market coverage are
pushing this expansion. The cost of
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36
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
low-transaction manned facilities
has become a drain on earnings for
some banks in some parts of the
country and it illustrates the ne
cessity of careful planning.
Mr. Bottini points out that the
Economic Recovery Tax Act of 1981
contains two incentives for building
and/or remodeling financial facili
ties.
The Accelerated Cost Recovery
System (ACRS) creates a 15-year
write-off period and a 175% declin
ing-balance depreciation rate for
most depreciable real estate. This
allows a much faster recovery of in
vestment in physical facilities than
under previous law.
Secondly, he says, buildings that
are substantially rehabilitated yet
retain 75% of their existing external
(C ontinued on page 42)
Reducing Number of People
Vital to Bank Operation
O D A Y’S bankers want and
need the following characteris
tics in terms of design and function
to serve customers better at home
offices, branches and facilities,
according to Wally Geoghegan,
vice president, Bunce Corp., St.
Louis:
• Functional space planning to
facilitate efficient use of equipment
and personnel.
• Good looking bank quarters
that will attract new customers.
• F lexib ility to accom m odate
potential operational changes or ex
pansion.
• Exceptional value for their ex
penditure.
Mr. G eoghegan sees more
routine banking transactions taking
place at facilities or remote loca-
T
tions due to the convenience factor.
Therefore, he says, banks will
need more facilities or remote loca
tions, many of which will be of mod
est size. However, he adds, there
appears to be a strong preference
for a home office of adequate size
and stature to represent the institu
tion where senior banking officers
can interact with their major com
mercial, retail and trust customers.
In discussing the justification of
the loss of immediate income from a
banker’s investment dollar by in
vesting in bricks and mortar for the
long term, Mr. Geoghegan says the
long-term vs. short-term considera
tion of the investment dollar always
is the entrepreneural consideration
in any new business venture. A
banker must believe that his build
ing project is a well considered,
creative investment in the institu
tion’s future, one that will serve his
bank functionally in the present and
will attract new customers, adding
to the bank’s growth. The banker is,
finally, making a statement about
the future in choosing to build.
When asked how a banker can
best determine how much space he
needs for a new p ro je ct, Mr.
Geoghegan replies: “To build a new
bank building to satisfy only current
needs is short-sighted and ensures
that the new building will be obso
lete long before its life cycle. Pro
jecting long-term space needs is dif
ficult to accomplish. Thus, often it is
done by gross space allocation for
future use. This usually is a waste of
money and will cause problems in
the future. A good space projection
process differentiates between de
partm ents and is based on the
bank s own history and operational
practices.
“It deals with the difficult issues
(C ontinued on page 42)
MID-CONTINENT BANKER for October, 1981
All the
Country’s
here in the Mid-South.
Steelcase, K noll International,
H erm an M iller . . . all the best are as close as your telephone and A rrow Business
Services, just down the road in M em phis.
You don't have to go to New York, Chicago or the W est C oast to give your bank the
benefit of the m ost m odern and space-efficient concepts in office design. W e have them
all, expertly displayed and in inventory in our huge M em phis show room and warehouse.
A s a bonus, the professional design consultants on our staff specialize in bank facilities.
O ur totally self-contained m odular units can help you m axim ize space utilization and
flexibility while achieving a bright, open atmosphere in your entire bank. Unlike adding
or m oving walls, the cost of m odular units can give you additional advantages such as
investm ent tax credits for capital equipment, and provide you w ith office space that
changes easily when your needs do.
W e'll be happy to send you inform ation on
m odular systems or visit with you personally.
BUSINESS SEfA'CES INC
So give us a call or visit our show room .
an affiliate of Memphis Bank & Trust
Let us show you w hat Arrow’ Business Services
3C50 Millbranch, Memphis,Tennessee 33116
can do for you and your bank, no further
901/345-9861
away than here in M em phis.
/tRRCW
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
This 1958 building doesn't
look or act its age.
Inside and out, both the form and
function of this bank were recently
updated by Bank Building
Corporation.
Decades of success and growth
had committed Citizens National
Bank to their established location,
and they'd outgrown their building
in the process. Total redesign was
needed. Both inside and outside
wall surfaces were removed and
replaced. Floor area was doubled.
In the process of becoming a more
use-filled building, the new Citizens
has made a strong visual impact on
its community.
This project was completed on
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Bank Building
Corporation
budget and on time, with minimum
inconvenience to customers and
employees. Which comes with
practice: since 1913, Bank Building
Corporation has completed over
8000 projects—many of them
remodeling assignments.
Wfe know that some older
buildings are right for remodeling,
while others are not. And we've
learned to know the differences
between them.
Before your need to remodel or
build becomes acute, please call
Tom Spalding at 314/647-3800. Let’s
become acquainted and share
more information.
Ask us to show you a new
beginning or two.
^ ^ 1
1130 Hampton Avenue
St Louis, Missouri 63139
Performance According to Plan.
Builder Survey (Con't)
On the Cover
A selection of recent bank building projects in the
Mid-Continent area include Boatmen s Raytown (Mo.)
Bank (top photo), a project of architects Design
Collaborative, Parkville, Mo.; National Bank of
Commerce, Lincoln, Neb., (2nd from top), a project of
Bank Building Corp., St. Louis; First Security National,
Alexandria, La. (3rd from top, on left), built by HBE
Bank Facilities, St. Louis; McPherson (Kan.) Bank (3rd
from top, on right), a project of Cawthon Building
Systems, De Soto, Tex.; and United Missouri Bank,
Kirkwood, Mo. (bottom photo), a project of Bunce
Corp., St. Louis.
Few Dramatic Changes
Occurring in Designs
RE ANY dram atic changes
occurring in bank design —
changes that could be related to
EFTS, ATMs, bulk filing, trunca
tion or other services that might be
on the horizon in the next decade?
Not really — at least for moderate
size banks in the Midwest, accord
ing to Robert R. Keyes, executive
vice president of H BE Bank Facili
ties, St. Louis. It is true, he stated
when interviewed recently by this
publication, that designs and lay
outs must have enough flexibility in
order to anticipate changes that
might occur in bank services.
As one example, Donald R. Flott,
financial service consultant for
H BE Bank F acilities, cited the
ATM. Many states in the Midwest
have restrictive branching laws that
severely restrict a bank’s ability to
capitalize on the use of ATMs.
Although most banks are not actual
ly installing ATMs, almost every
new build ing is d esigned to
accommodate one at a later date.
The same would hold true, Mr.
Flott said, for any other department
or service that might be added by a
bank after a building program is
completed.
In states with more liberal bran
ching laws, banks are finding great
er use of ATMs, free-standing facil
ities and often smaller branches,
but there seems to be no big tren d
in this direction in the Midwest,
primarily because of regulatory re
straints.
Thus, when asked if bank home
offices might decrease in size in
those states where banks a re adding
more facilities, Mr. Keys said he did
not foresee such a development.
A
T h ere has b een some talk, he
admitted, that banks might build
smaller home offices, but he com
pared that somewhat to the predic
tions of the ch eck less society.
“There’s been a lot of talk about the
checkless society but it isn’t here
yet! The trend to more customer
services creates a demand for more
support personnel, more staff func
tions and m ore m anagers that
generally are located in the home
office,” Mr. Keys said.
Banking practices vary consider
ably from state to state, depending
on regu lations and m arket. In
general, midwestern area banks
tend to be smaller units or operate
under limited branching laws. With
this banking environment, he said,
traditional operation and building
concepts are prevalent.
(C ontinued on page 42)
ATMs to Revolutionize
Bank Building Concepts
LD BANK building patterns
are o b so lete, says Bob
Crumpton, vice president/marketing, in the financial division at
Cawthon Buildings Systems, De
Soto, Tex.
“We re in a different world — a
different m ark et,” he says. He
points out recent happenings that
have brought this different world
into being:
• The playing field has been
leveled. Commercial banks, thrifts
and credit unions will offer essen
tially the same services. This will
result in smaller and more numer
ous branches.
“ In the few rem aining u n it
banking states, pressure will inten
sify for bank branching in order to
meet competition from thrifts and
O
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
credit unions,” Mr. Crumpton says.
“It will be increasingly hard for
those who oppose branching to hold
out. Competitive economics can
force the issue.
“Thus this ‘dam’ will break,
branches will spring up and new
home office buildings will be smal
ler.”
• More free-standing ATM facili
ties will be installed in prime loca
tions such as shopping centers and
other popular places, Mr. Crump
ton says. These facilities will be the
branches of the future. Such loca
tions generate the most activity be
cause they are popular with custom
ers. Given the choice, customers
will use ATMs over manned facili
ties by a more than three-to-one
margin. Traffic will be drained from
bank lobbies and congested drivein lanes, he adds. ATMs mean more
profit for banks — as ATM transac
tions increase, their cost drops dra
matically, which translates into
more profit.
• More ATM sharing is develop
ing, Mr. Crumpton says. City net
works will become regional and re
gional netw orks will becom e
statewide and national in scope.
More free-standing ATMs will be
needed by these expanding net
works.
• Pressure will intensify for in
trastate branching.
• Treasury S e creta ry Regan
plans to review and “improve” the
total financial field (banks, thrifts
and credit unions) toward an im
proved and more responsive ser
vice for the customer.
Such a move by the secretary will
mean change. Whether this means
buildings will be smaller or other
wise different — and in what way —
it’s difficult to determine now, but
such a move will create change.
(C ontinued on page 42)
39
Builder Survey (don't)
BankBuildings of Today
Provide Glimpses of Future
Bankers Want Convenience
Combined With Security
ANKERS are concerned with
placing an emphasis on cus
tom er service and the ease of
obtaining such service at the home
office, says Homer L. Williams of
Architects Design Collaborative,
Parkville, Mo.
A pleasant, modern esthetically
pleasing design is important and
use of the most efficient equipment,
combined with a security minded
building and fixture plan is re
quired.
To project this security and, at
the same time, allow for ease in
banking operations w hile im
plementing a design with energy
saving mechanical systems is para
mount, he says, and it always must
be done within a desired budget
limit.
A bank branch office has its par
ticular requirements: The car often
is more the customer than the per
son is, he says. Site planning that
allows for ease in getting the cus
tomer’s vehicle to the teller is im
portant. Also important is a plan
that will allow flexibility for growth.
Efficient expansion can be done
only with good master planning,
especially when it comes to the
vault, future drive-up lanes or
allowance for future equipment in
interior working spaces.
Today’s banker expects a profes
sional consultant or architect to be
able to assist him at the outset, Mr.
Williams says. Valuable input rela
tive to site selection can be made by
the consultant. His office recently
serviced a client who asked for pre
liminary design work for an expansion/renovation project. After much
con sid eration , supported by
B
40
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
graphic planning, it was mutually
decided that an entirely new facility
should be constructed at a location
different from the one previously
selected rather than undertake an
expansion project at the original
site. The reverse has been the case
on other jobs.
Energy is a major topic when
planning a bank project, he says,
and the use of simple low-cost, but
efficient, planning can result in low
er operating costs. The age of the
all-glass curtain-wall building has
passed. Active solar systems may be
cost efficient in time, he says, but
passive systems are being used effi
ciently now.
As a designer of banks, Mr. W il
liams says, he sees some move to
smaller facilities because of ATM
(C ontinued on page 42)
there seems to be a large demand
for ATM locations and small facili
ties. Banks are locating these facili
ties in grocery stores, shopping cen
ters, nursing homes, etc. These
facilities, however, don’t seem to be
lessening the demand for a fullservice operation where the market
area indicates full service is needed.
Banks seem to be continuing to
build full-service branches.
“In the 21 years I have been with
Mosler’s planning department, the
number of main offices and branch
es we have planned for banks
throughout the U. S. has remained
pretty consistent at around 320 a
year,” Mr. Clybourn says.
Projecting into the future, Mr.
Clybourn says that manned branch
es will continue to be in the picture
until the state of the art progresses
to the point that a full-service un
manned facility is feasible.
“Over the years,” he says, “we
Functional Space Planning
have seen state regulations change
Key to Efficient Operation
from allowing only a drive-up facil
ity to allowing a full-service branch.
In these instances, banks build fullu n c t i o n a l i s m and effi
service branches wherever the mar
ciency are paramount among
the needs of bankers desiring toket seems capable of supporting
them. In states where county-wide
serve customers better at all types
branching laws have been changed
of installations, says Jim Clybourn,
to contiguous-county banking, most
manager, facilities planning depart
banks embark on programs of enter
ment at Mosler, Hamilton, O.
ing into competition in the con
“Bankers are interested in reduc
tiguous counties.”
ing the number of people required
These days, he says, there is a lot
to maintain any of their installa
of talk of interstate banking and, if
tions, be they home offices, bran
laws are changed to permit this type
ches or facilities,’’ Mr. Clybourn
of operation, many bankers will en
says. “ By properly working out
ter into this competition with fullspace requirements, interdepart
service facilities.
mental relationships, bank person
nel traffic flow and work flow, the
“W hile we have watched the
growth of ATM networks, drive-in
bank can minimize the space re
facilities and small manned facilities
quired and maximize the efficiency
of the operation to make the facility
in shopping centers and stores, we
also see the continued growth of
function at a profit.
full-service branches.” • •
At the present time, he says,
F
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Tougher Competition
(C ontinued fr o m p age 36)
walls can qualify for a new tax credit.
The credit is 20% for com m ercial
buildings at least 40 years old, 15% for
those at least 30 but less than 40 years
old and 25% for qualified historic
structures. This tax credit is in lieu of
the previous 10% investment tax cred
it on rehabilitated buildings (at least 20
years old) that expires this December.
The new rehabilitation tax credit, cou
pled with the faster cost-recovery sys
tem, should make remodeling even
more attractive to many banks.
Owners of buildings more than 20
but less than 30 years of age still can
qualify for the 10% rehabilitation
under a transitional provision if physi
cal work is started before the end of
1981, he says. • •
Reducing Number
(C ontinued fr o m p age 36)
of change in competition, marketing,
regulation and technology. Despite
the difficulty of the process, it is possi
ble to come up with useful projections
on which planning decisions can be
made.
“Bankers tend to approximate space
needs in relationship to growth of foot
ings, deposit base, loan volume or
numbers of employees. This is highly
inaccurate and not suitable for detailed
planning. Computerized projection
systems lack the ability to interject
judgment into the projection process
and result in standardized projections.
“The process of space projection
cannot be treated simply as a numeri
cal projection, but must combine judg
ment, experience and understanding
of the industry as well as the bank’s
own plans. • •
merger of three S&Ls in widely sepa
rated states.
• Girard Bank, Philadelphia, has
expanded its ATM “fleet in five years
from five off-line units to 168 on-line
units.
• Shawmut Bank, Boston , has
opened an unmanned personal bank
ing center. The center’s previous three
manned teller stations now are re
placed by two ATMs operating 24
hours a day, seven days a week.
• Visa USA has announced that
members can use the firm’s comput
erized authorization and billing system
to interconnect local proprietary and
regional non-Visa shared ATM net
works. Visa card holders will be able to
withdraw funds wherever an agree
ment has been worked out. The poten
tial exists for a national switch.
• Master Card expects to have a
national ATM interchange capability
this year.
• American Express has its express
cash program that enables gold card
holders to get cash from ATMs in ma
jor cities.
“It’s our considered opinion that if
all bankers knew the cost of their overthe-counter and drive-in transactions
— using live tellers — the move to
ATMs and the promotion of ATM ser
vice would be accelerated. For those
bankers who have seen the light, it’s
not a question of getting into the pro
gram, but one of going in all-out. The
primary problem becomes one of find
ing choice locations and pinning them
down.
“Rarely has a new-customer banking
service emerged that offers so much
satisfaction to bank customers while at
the same time improving bottom-line
figures and reducing personnel prob
lems of banks. ATMs are the competi
tive edge,” Mr. Crumpton says. • •
Bankers Want
Convenience
(C ontinued fr o m page 40)
ATMs to Revolutionize
(C ontinued fr o m page 39)
Mr. Crumpton points out the fol
lowing instances of change that “are
happening almost too fast to keep up
with.”
• The Federal Home Loan Bank
Board (FH LBB) has authorized feder
ally chartered S&Ls to establish ATMs
and other kinds of remote services on
an intrastate basis.
• The F H L B B has approved a
42
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
locations, but, for the most part, his
clients are staying with previously
accepted spatial considerations. Some
even are thinking bigger because of
future eq u ip m en t and p erson n el
needs.
Mr. Williams says he and his firm
are interested in establishing a council
or organization of bank designers that
would provide mutual input and assist
ance in seeking answers to banking
facility questions. Such a group could
share the expertise of its members in
exploring ways to minimize energy
consumption, reduce initial construc
tion costs and maintenance or operat
ing budgets. • •
Few Dramatic Changes
(Continued from page 39)
In many cases, said Mr. Keys, banks
are de-emphasizing the old “openplatform” idea. Space must be pro
vided on the main banking floor, of
course, for proper customer contact,
but there is a trend toward more priva
cy in all types of banking transactions
that has led to creation of more confer
ence rooms and/or private offices.
Mr. Keyes also noted that many
open areas of banking today are not
partitioned off permanently. Movable
walls are set up that do not reach the
ceiling. These walls can be adjusted as
departments grow or contract. But, in
all cases, employee privacy provides
better working conditions and leads to
greater productivity on the part of em
ployees.
There also is a definite trend for
greater employee comforts and bank
ers rarely consider a modernization or
building program that does not include
upgraded em ployee lounges, em
ployee lunch rooms complete with
dishwashers and limited cooking fa
cilities. It is obvious, he said, that bank
management considers a happy em
ployee to be more productive and
these facilities are no longer consid
ered frills but necessary and vital to the
function of the bank.
Energy saving, too, is a usual con
sideration today in any building pro
gram. The techniques and materials
are available, said Mr. Keyes, to pro
vide bankers with much more efficient
buildings than might have been the
case several years ago. As a matter of
fact, these tools were available several
years ago but since energy was cheap,
not as much consideration was given to
energy conservation. Probably, he
said, we ll see fewer glass-enclosed
buildings in the future.
Commenting on drive-up facilities,
Mr. Keyes indicated that bankers were
continuing to emphasize the need —
in fact, an increasing need — for a
greater number of drive-up facilities.
Where a bank formerly was served by
one or two lanes, it is now recognizing
the need for a third, fourth or even a
fifth lane. Drive-up facilities of eight or
10 lanes are becoming common in
some areas. But banks also, he said,
are concerned about the productivity
(C ontinued on page 47)
MID-CONTINENT BANKER for October, 1981
S O L U T IO N S
Construction and remodeling problems require
creative, competent solutions.
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Federal Reserve Bank of St. Louis
The Bunce Corporation. Providing solutions to
complex construction problems through creative
planning, design and construction management
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BUNCE
Study by Outside Firm Helps Bank
Decide Size, Location of New Home
W
HEN management of a bank
realizes it’s time to start plan
ning a new building, the first consid
eration usually is where to erect it. But
how is the new location to be chosen?
Should the bank move to the suburbs?
To the other side of town? Or maybe
just stay where it is?
How can a bank come up with a
logical solution to this problem? How
can it locate its new quarters where
they will not be in the wrong place in
just a few years? Bankers don’t have
the time, staff or expertise to project
trends in population, industry, busi
ness, socioeconomic data, etc.
A few years ago, First National,
Dickson, Terni., a $50-million bank in
the north central part of the state, had
outgrown its facilities and needed to
prepare for the future. According to
the bank’s president, Dan Andrews,
who also is the current president of the
Tennessee Bankers Association, “The
bank’s directors did not have the data
on which to base the decision to relo
cate our headquarters, or if we were to
relocate, just where we should be to
adequately serve the growth of our
community.”
The solution was to place the prob
lem in the hands of an expert, a firm
that had the facilities and staff to make
a study of Dickson and its surrounding
area and come up with the right
answer. The firm chosen— after many
interviews — was Design/Build Con
cepts, Atlanta (hereafter referred to as
Concepts).
Purpose of the study, as set forth by
the firm, was to reach conclusions that
would be in accordance with bank
management’s objectives: to ensure
proper operating efficiencies and prof
itability; to better provide customer
services; to enhance the bank s image
within its community and to maintain
lead market share.
Determination of size and location
of the Main Office of First National
within these objectives was the pri
mary purpose of the study.
In mid-1980, Concepts representa
tives conducted various m eetings,
workshop sessions, interviews and re
search projects, resulting, says the
firm’s president, Dick Domurat, in
what he believes is the only valid basis
on which to prepare for the future. The
information gathered was continually
This is artist's rendering of future home of First Nat'l, Dickson, Tenn. When
completed, structure will be result of planning and design program of
Design/Build Concepts, Atlanta.
44
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Federal Reserve Bank of St. Louis
reviewed and assessed by the bank’s
management, and operating objec
tives were established based on data
input and the bank s intended operat
ing philosophy. The final study was
accepted unanimously by the bank’s
directors, based on the validity and
soundness of the conclusions reached.
The study was divided into three
general phases.
The first phase — program plan and
feasibility study — was divided into
four parts: general-service-area/market-area profile; financial institutions
within the bank’s general service area;
First National’s long-range require
ments and site/location analysis in the
primary service area.
The second phase was focused on
site selection and the third on actual
program development.
To help the bank prepare within a
logical planning sequence for its future
growth, Concepts analyzed historical
patterns of the past as well as present
trends for First National’s general and
primary service areas. Using these
data, the firm developed forecasts to
determine the market-area profile of
the future and outline requirements
for the bank to prepare properly for the
intended growth.
The study included an examination
of Main Office requirements and con
sideration of the bank s other operat
ing units as they related to location and
market strategy.
Concepts collected data population
trends by region and for Dickson
County, gathered statistics for future
telephone usage, obtained data from
other utilities, studied employment
trends and status of agriculture, which
is an important economic factor in the
bank’s region and market.
In addition, the firm looked at other
Dickson County industries, wholesale
and retail sales, health/medical facili
ties, housing, education and recrea
tion. Concepts also studied Dickson
County’s transportation/mobility sta
tus, evaluating the impact of highly
traveled highways going through the
region, as it relates to the bank’s poten
tial market. The firm found, for in
stance, that the county enjoys advan-
MID-CONTINENT BANKER for October, 1981
T h is m odel o f a new financial
institution currently un der co n stru ction in
M etairie, La. ty pifies the extensive
experience o f H BE B an k F acilities in
plan n in g, designing an d bu ildin g.
We lo o k e d at this p ro ject as a direct
cataly st fo r m ore b u sin ess fo r the b an k ,
creatin g an o verall ap p e aran ce to enhance
co m m u n ity im age w hile designing a
h igh ly fun ction al facility w hich will
directly affect cu stom er satisfactio n w ith
service.
O u r fun ction al know -how in term s of
sp ace utilization , lay o u t, w o rk flow , inter
d ep artm en tal relatio n sh ip s an d equipm ent
u sage w ill result in sm oo th er w o rk flow ,
greater efficiency an d a stron ger b o tto m
line.
We can also ad v ise y o u in site selection
an d help y o u p lan fo r future grow th .
O u r sk ills h av e w o rk ed in bu ildin g the
b o tto m line strength o f m an y oth er b an k s.
A sk fo r o u r broch u re d em o n stratin g this.
C a ll L in d a Z iegler at H BE (314) 567-9000.
*¿*4
W E PLAN. W E DESIGN. W E BUILD.
W E M AKE IT HAPPEN.
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Federal Reserve Bank of St. Louis
MID-CONTINENT BANKER for October, 1981
tages from being only 40 miles by car
from Nashville via Interstate 40, thus
increasing the potential market from
just its primary service area.
In discussing this part of the study,
Concepts points out that although
financial communities’ markets are not
necessarily of the transient variety,
high-identity location and easy access
are assets to a bank’s location. Accord
ing to Concepts, the city of Dickson is
fairly accessible to the majority of its
general service area (GSA), and resi
dents in the county and surrounding
towns can easily shop, bank and con
duct their business affairs in Dickson.
The economic profile was another
facet of the Concepts study, which
looked at per-capita personal income,
effective buying income and past and
present trend analyses. Then, it pro
jected these data into the future to find
the bank’s potential future market.
Concepts examined the deposits of
each of the financial institutions in the
entire GSA to establish respective his
torical growth trends not only of the
deposit base, but market share. Re
sults of this historical data were used to
support projections for the planning
period and future markets. W hen
proof of a total potential market was
established, based on data from the
study, the specific future growth plan
and m ark et-sh are o b je ctiv e were
formulated for First National.
Turning specifically to First Nation
al and future requirements for the
planning period to 1992, Concepts
gathered data on which to forecast de
posits, assets and personnel so as to
arrive at a conclusion for gross space
req u irem en ts of the Alain O ffice
through the planning period.
“ Such c o n clu sio n s,’’ says Mr.
Domurat, who has 23 years’ experi
ence with financial facilities, “must be
reached before a geographical location
or specific site can be analyzed. The
character and personality of the Main
Office, or any facility for that matter,
must be determined by market profile,
anticipated volume, personnel fore
casts, overall size and anticipated
operating philosophy established by
the bank’s management. To arbitrarily
or subjectively invest the bank’s capi
tal funds in fixed long-term assets with
out a sound planning process is like
making the worst loan possible. We
have developed an approach that plans
from a business standpoint first and
then designs a facility to meet the in
tended demand and the bank’s objec
tives.’
Based on results of data developed,
Concepts was able to determine an
asset and deposit objective for the
planning period and a market-share
target that was accepted by the bank s
management in view of the potential
profile. Since historical data have
proved a valid relationship among de
posits, assets and personnel required
to support such volume, it was deter
mined that the bank would need to
plan for a total staff of from 148 to 163
people. It is interesting to note that
while deposits increase approximately
10% per year on a national level, em
ployees increase only slightly over half
that amount, and projected ratios de
cline dramatically, according to Con
cepts’ computer analyses.
“Planning on today’s ratios can lead
dangerously to overbuilding,” warns
Air. Domurat.
Conclusions reached were that ac
cepted ratios indicated that a range of
betw een 2 9 ,0 0 0 and 3 5 ,0 0 0 gross
square feet (an average of 32,000
square feet) was required for all Main
Office functions necessary to handle
the projected volume.
After establishing the market pro
file, the bank’s placement in the mar
ket and the size of the new quarters,
Concepts turned its attention to the
bank’s primary service area (PSA), the
city of Dickson. It was divided into
zones, north and south, and subdi
vided into 33 sectors. The sectors were
created using rivers, streets and other
physical barriers as boundaries. The
firm says this method of subdivision
provided a common denominator for
rating north/south activity and addi
tionally segmenting activity within the
zones.
In developing prospective locations,
Concepts studied direction of growth
and future residences, employment,
retail sales areas, traffic patterns,
general building trends, accessibility,
competition and impact of prospective
branches.
A fter all m aterial gathered was
analyzed, the study showed clearly
that First National should remain near
its present location, with acquisition of
another parcel of land. Therefore, a
construction program, scheduled to be
completed in the spring of 1982, is
going on while the bank continues
operating in its old quarters.
According to President Andrews,
the bank feels confident it has made
the right decision because it was based
on a professional and specialized
approach to the design of a financial
facility, with emphasis on sound longrange planning and future personnel
and anticipated market requirements.
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Few Dramatic Changes
(Continued from page 42)
of tellers who operate those facilities
and are asking for designs that would
enable tellers to do other work while
they wait for a car to arrive.
In some cases, he said, bankers are
asking for drive-up ATMs. Access to
these is somewhat difficult because the
auto driver never seems to get close
enough to operate the drive-up ATM
properly from his car. But it is a service
facility that will be asked for more
freqently.
What should bankers do when they
plan to build or remodel?, Mr. Keyes
was asked. His answer was not all that
surprising, although many bankers
apparently do not take this step into
consideration.
Don’t buy the ground before con
sulting the building designer, he
advised. Too often, he said, there are
restrictio n s on a building site or
physical conditions such as the cost of
bringing in utilities or foundation
problems that may make the alreadypurchased site too expensive on which
to build.
Air. Keyes recognized the need for
secrecy in a bank’s acquisition of prop
erty; but plan ahead, he advised. Get
technical assistance first; plan your
needs and then buy that property.
Furtherm ore, he said, once the
banker sits down with the builder, he
can outline his plans and hopes for the
future, his growth prospects, growth
prospects of the trade territory he
serves, and then — and only then —
can the builder make some reasonable
recom m endations in the building
plan.
Every building program, too, he
em phasized, must recognize that
“time is money.” A building program
should proceed quickly, once data are
gathered, analyzed, evaluated and
converted into plans. Building and re
modeling costs escalate daily. No firm,
he argued, would recommend hur
rying the planning stages, but all un
necessary delays and procrastinations
should be kept to a minimum. • •
47
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Recent breakthr oughs in computer
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a revolution in humanity’s ability to
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With this in mind, it’s inevitable
that correspondent banking will be
revolutionized as well, providing both
respondents and correspondents with
the ability to do business on a vastly
faster, more comprehensive scale.
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Federal Reserve Bank of St. Louis
What began as a simple
system of barter has evolved
into a highly complex and
demanding business. In the last
two decades alone, technical
advancements have dramatically
changed the way funds are kept,
moved, and used.
In order to meet the stringent
requirements of an increasingly
sophisticated marketplace,
financial institutions cannot rely
on outdated services. Instead,
they must strive to offer their cus
tomers the latest and the fastest.
But before financial institutions
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barrage of technological innova
tion. another kind of technology
must be there.
Financial technology.
And in a city like Houston,
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economic growth, that financial
technology already exists.
At First Gtv National Bank .
As correspondent to nearly
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tions, First City National Bank
has the ability to give our
correspondent customers service
based on insight, speed, and
technological excellence.
For example, we can provide
quick turnaround on most cor
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And as a major check - clearing
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FIRST CITY NATIONAL BANK OF HOUSTON
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Federal Reserve Bank of St. Louis
MEMBER FD IC © 1981FCBO T
Exterior of Jacksonville (Ala.) State features early American design. Wing at r. houses office of
Pres. David W. Pearson.
Bank Takes Advantage of Special 'Breaks'
To Construct 'Bargain' Structure
HEN A NEW bank building
comes in at half the cost esti
mated by a construction-firm bidder,
it’s obvious that things went right for
that bank. In fact, many things went
right, according to David W. Pearson,
president, Jacksonville (Ala.) State.
And three years after moving into its
new quarters, Mr. Pearson appreci
ates his bank’s “bargain’ more and
more.
Admittedly, the procedures fol
lowed in design and construction of
Jacksonville S ta te’s building were
somewhat unusual, but they indicate
the diversity of options a banker can
draw on when engaging in a building
project.
To begin with, Mr. Pearson con
tacted several architectural firms,
asking them to run feasibility studies as
to the best location for the facility. He
agreed to pay each of the firms a fee for
their work and stipulated that the bank
would not be obligated to do further
business with them, if it chose not to.
The architectural firms agreed to
this stipulation and provided Mr.
Pearson with estim ated sizes and
rough cost estimates for the structures
they designed for the bank.
Through a process of elimination,
Mr. Pearson narrowed the choice of
architects down to one — Richard L.
Bacon & Associates in Ste. Genevieve,
Mo. Mr. Pearson contacted Mr. Bacon
after seeing his advertisement in M i d -
under the guidelines that we would lay
down.”
Next came another somewhat un
orthodox move: Mr. Pearson said he
decided that the bank wouldn t need
the services of a construction firm be
cause “quality craftsmen who could
follow instructions” were available
locally. The bank hired a foreman who
provided the workmen and subcon
tractors necessary to get the job done.
This arrangement gave the bank great
latitude in working with its customers
who were in a position to supply mate
rials and expertise for the construction
job, Mr. Pearson says.
C o n t in e n t B a n k e r .
“As is typical with most ‘do-itSince we are a small home-owned, yourself artists,’ at the time we de
local-grown bank,” Mr. Pearson says, cided to proceed with our building, we
“we enjoyed working with a firm that wanted the plans and specs yester
was agreeable to working with us day,” Mr. Pearson says. The Bacon
firm provided the bank with partial
plans so that construction could pro
ceed while final plans were being
drawn.
The entire arrangement — especial
ly the use of local contractors — added
immensely to the reception the bank
received within the community for its
new building, Mr. Pearson says.
The building is of early American
design, with 6,450 square feet of space
on the first floor and a second story of
5,000 square feet. The second story
wasn’t completed at the time of con
struction, but now is finished.
Interior of Jacksonville (Ala.) State features attractive tellers' line and new-accounts
“We were most pleased with the
desk. Total floor space in two-story structure is 11,500 square feet.
construction costs which were approx50
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
“C’est magnifique! Bon appétit!” say Master Chef
P ierre’ Foret and friend ‘A nto in e ’ G riffith shown
above using just the right ingredients to help
the folks at Bridge City, Louisiana serve the best
Gumbo you ever tasted.
If your specialty happens to be banking—not
gum bo—and you need help with your banking
problems, d on ’t trust to ‘pot lu ck’. Calf banking
expert ‘P ierre’ Foret at (504) 525-7761. (Friend
‘A n to in e ’ can be reached at the same number.)
The Gumbo Festival had its origin in 1973 at Bridge City,
La. and is celebrated annually in early October. Special
Events: Creole Gumbo; Pageant Building Competition; Art
Exhibit; Continuous Live Entertainment; Gumbo Cooking
and Eating Contest; Baking Contest; Beautiful Child Con
test; Pee-Wee Gumbo Bowl; Game Booths; Camper Site.
A sa lute to Festivities in L ou isia n a
(O n e in a se rie s by the A m e ric a n B a n k )
AMERICAN BANK & TRUST CO. CORRESPONDENT BANKING DIVISION
200 Carondelet Street • New Orleans, La. 70130 • 504/525-7761
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
51
imatelv half what one firm had quoted
total construction and overhead costs
would b e,” Mr. Pearson says. “Our
total expenditures for the building and
all furnishings was $416,000 (1978
prices). This figure also includes the
cost of land and site preparation.”
Architect Bacon says the Jackson
ville project was one of a kind, made
possible only because the client pos
sessed the necessary background and
skills to make the project successful.
He says that it’s important for an
architectural firm to be flexible in
meeting the needs of clients, especial
ly in this time of economic turmoil.
It’s important for any bank building
project to realize as many cost savings
as possible, and it’s up to the designer
to build such savings into his plans.
Mr. Bacon says banks can realize
cost savings in the following three
ways:
• Make sure the architect designs
the building to fit the building site and
the work-flow requirem ents of the
bank. In this way, the design provides
for only that which is required and
there is no danger of “overdesigning”
plans, which can occur if a standard
plan is forced to fit the bank’s require
ments.
“This phase also includes the in
terior-designing portion of the proj
ect,” Mr. Bacon says, “whether it be a
completely new project or a remodel
ing needing to coordinate with existing
interiors. It’s necessary for a designer
to present what he thinks best fits a
bank’s needs and then be open to sug
gestions bankers may have before a
project is finalized.
• It’s important that the architect/
engineer provide detailed working
drawings and specs, with which com
petitive bids can be solicited from
qualified contractors. With complete
details at hand, bidders can be confi
dent when making their bids, which
enables them to be most competitive.
• During the construction phase,
the architect/engineer should act as
the bank’s representative in checking
shop drawings and observing the con
struction.
The architect should keep in mind
that his supervision of the project
should permit the banker to be free to
function as a banker, not as a construc
tion specialist. The arch itect also
should be prepared to be available
beyond the move-in date and to coor
dinate any adjustments that may be
necessary to make the building as func
tional as possible. • •
Now,
First National
Bank
h a s a new
source of funds
available
for cattle and
grain loans.
FIRST AGCORP.
agricultural cred it corporation th at is
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F irs t A g co rp is another of the
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Call: (816) 279-2721
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52
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Federal Reserve Bank of St. Louis
M e m b e r F.D .I.C .
MID-CONTINENT BANKER for October, 1981
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Federal Reserve Bank of St. Louis
53
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New Colors, Fabrics, Designs
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HE O U TFITS illustrated on the
opposite page show the variety of
career apparel now on the market for
financial institutions interested in out
fitting their personnel.
The career apparel division of the
N ational A ssociation of Uniform
Manufacturers estimates that about
three million people are outfitted in
career apparel in the U. S. today.
Eleven years ago, the figure stood at
only 2 5 0 ,0 0 0 . The annual dollar
volume of the industry is growing at a
steady rate and is projected to be close
to $750 million by the end of this dec
ade.
Trends in the financial-institution
area of career apparel indicate that in
stitutions that began outfitting only
employees that were in contact with
customers now are expanding their
program s to inclu d e b eh in d -th escenes personnel. This has resulted in
organizations previously outfitting less
than 100 personnel doubling the num
ber of people outfitted.
Some banks employing charge-card
sales rep resen tativ es who call on
potential clients and existing accounts
are dressing their personnel in outfits
that pick up the colors of the charge
cards they promote.
Some banks are arranging for ma
ternity career apparel in order to per
mit pregnant employees remain on
the job longer prior to giving birth. In
most cases, career apparel suppliers
provide extra material when an order
is filled so any employees becoming
pregnant can have maternity career
apparel made locally.
More financial institutions with
tight apparel budgets are opting for an
apparel look without having complete
outfits. Ties and scarves are used that
bear the colors and, often, the logos
of the sponsoring institution. These
items often are worn at meetings and
special events to identify employees
with the bank or thrift.
Career apparel is seen by firms as a
tangible fringe benefit for both em
ployer and employee.
Benefits for employees include cut
ting the cost of working wardrobes,
T
New Career Apparel Outfits
Herald End of Building Project
At Chicago's Lake Shore Bank
A REER APPAREL is practically synonymous with a new building
— or a remodeling job — or perhaps both!
The people at Lake Shore National, Chicago, have outfitted the
bank’s 40 tellers with brand new outfits — the second time the bank has
gone into career apparel. The occasion sparking the new outfits was
two-fold: The bank has just completed a redecorating and expansion
project and it recently acquired Upper Avenue Bank, located a few
blocks down the street — which happens to be Michigan Boulevard on
Chicago’s Magnificent Mile.
The new apparel made its first appearance in July, actually a couple of
months before construction activity was completed. The new outfits
served to beautify the area during construction, says Robert A. Kubicek,
vice president/marketing. Customers were so busy eying the new
apparel that they tended to overlook any inconvenience caused by
construction activity!
Each teller received 10 items of clothing, including a blazer, blouses,
vests, a jumper and choice of slacks or skirt. The outfits were manufac
tured by G. Carlyle Struven, In c., of Chicago in texturized woven fabric
of polyester in a redwood, marsala and white color combination.
According to Liz Thorpe of Struven, the material is ideal for the bank.
It’s washable, lightweight and crisp. The colors are exclusive to the bank
in the downtown Chicago area and the bank paid for three-quarters of
the cost, with employees picking up the rest. As soon as the employee
pays her portion of the cost, the outfits belong to her.
The 16 customer-contact employees working at Upper Avenue’s
C
(C ontinued on page 57)
Tellers at Lake Shore Nat'l, Chicago, model new outfits in front of bank on
Michigan Boulevard. At I. is Lynda C. Gherardini, a.v.p./career apparel coordi
nator. Outfits were supplied by G. Carlyle Struven, Inc., Chicago apparel
manufacturer.
(C ontinued on page 57)
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
55
APPEALING
Luxury
condominiums
of the
Gulf of
Mexico at
Gulf Shores,
Alabama . . .
at an
affordable price.
Now you can ch o o se your own condominium at a pre-completion
price. Driftwood Towers is a mid-rise complex consisting of two six story
buildings each containing 24 two-bedroom units. All units face directly on
the Gulf with a completely private patio overlooking the white sugar sands
and sparkling blue waters of this tropical paradise.
Enjoy the lush landscaped area, generous swimming pool and covered
patio directly on the beach.
Driftwood Tow ers is located in Gulf
S h ores, A lab am a, south of Mobile, and
ju st a short distance west of the Alab am a/Flo rid a line.
Construction inform ation:
PHASE ONE - SOLD OUT.
Phase O ne (the first 6-story unit) is sold
out and under construction.
PHASE TWO RESERVATIONS BEING
ACCEPTED.
Phase Tw o is scheduled for co m p le
tion in Ju n e '82. Reservations are
being taken.
Luxurious
Floor Plans
Each bedroom has a private bath.
All rooms are large scale. There’s a
fully equipped kitchen with break
fast bar, and the extra-large living/
dining area opens to a private bal
cony. A larger pent-house plan is
also available.
W hether for personal use or invest
ment, you owe it to yourself to get all
the details.
B R F J W Y 3D
1CM/EF5
DEVELOPED BY
Thompson, Baird & Kyser
Beach Properties
Montgomery, Alabama
56
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
For Information call
CALLOWAY
REAL ESTATE CO., INC.
205/968-6101 or write us at
P.O. Box 434, Gulf Shores, Al. 36542
Free brochure available.
MID-CONTINENT BANKER for October, 1981
Planning RM A Conference
Making plans for the 67th annual fall con
ference of Robert Morris Associates Novem
ber 15-18 in New Orleans are Henry G.
McCall (I.), s.v.p., First Nat'l Bank of Com
merce, New Orleans, and M. G. Sanchez,
pres., First Bankers Corp. of Forida, Pompa
no Beach. They are co-chairmen of the con
ference.
highly tailored business attire, while
washable blends of 85% polyester and
15% wool have recently been intro
duced to provide high performance at
reasonable cost.
Warp and raschel knits of 100%
polyester play an important role in
popular-priced career apparel that re
quires easy maintenance and a long
wear life. These knits present a crisp
tailored look.
Fashion colors used in career ap
parel are primarily earth tones. Rust,
brown, beige, blue, gray and forest
green all are popular at this time. • •
corporate image to the public, solving
of dress codes for employees, an aid in
recruiting new employees and reduc
tion of em ployee tu rn ov er and
absenteeism.
Since its inception, the traditional
career apparel wardrobe for women
has included skirts, blouses, pants,
blazers, vest and scarves. These still
are the basic components but some
manufacturers have added dresses to
their lines. Sweaters are becoming
common items in career apparel outfits
for both men and women.
Polyester/wool blends are used for
/
“
\
W E G IV E Y O U R P E R S O N N E L
T H E IM A G E YOU D E S E R V E
Apparel Outfits
(C ontinued fr o m p age 55)
office in the John Hancock Center will
be outfitted shortly in similar garments
with the same color scheme. The col
ors were chosen to harmonize with the
new decor of the bank, which is egg
plant and gray at Lake Shore National
and beige-grey at Upper Avenue.
Lake Shore National s management
has proof that ca re e r apparel is
appreciated by customers. A portion of
a recent customer survey was devoted
to apparel. “Customer reaction is ex
cellent,” says Lynda C. Gherardini,
assistant vice president. The new
apparel design and colors offer Lake
Shore tellers options: They can mix
and match their apparel into any num
ber of different, but coordinated out
fits. • •
Creative Image provides self expression...individual
recognition...personal identity. Offering a classic
look with ultra femininity that makes Career
Apparel very appealing. Styled with 1/1*1®*
/
polyester fabric for easy care and
y
breathable comfort. For further
information call or write today.
4 °
Apparel Suppliers
(C ontinued fr o m p ag e 55)
solving problems of what to wear to
work and eliminating dress competi
tion among employees.
Benefits for employers include a
more professional appearance on the
jo b , the presentation of a unified
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ü Jißotive Dnuige, ine
P.O. Box 15827
Dallas, TX 75215
(212)428-4995
/
/
♦ VISA
is
a re g istere d tra de m a rk of
M illik e n & C o m p an y for fabrics.
/
57
Storage Room
Is Converted
To Complex
For Customers
HAT WAS formerly a storage
area on the fifth floor of Texar
kana (Tex.) National now is a strikingly
attractive directors’ room with adja
cent dining and reception areas.
Purpose of the conversion was to
create a place in the bank for the ac
quisition and retention of high-balance
customers. The composition of the
bank’s deposit base follows the “80-20”
rule where 20% of the bank’s deposi
tors represent 80% of the bank’s bal
ances. The new complex gives the
bank a facility where bank officers can
entertain and strengthen relationships
with this special category of customer.
The directors’ room seats 30 and can
function as a cen ter for training,
roundtable discussions, officer meet
ings and correspondent seminars. The
room is equipped for audio-visual pre
sentations.
The dining room can accommodate
28 persons and the adjacent kitchen is
managed by two retired women who
prepare business luncheons and spe
cial meals at a cost of less than $6 per
person.
The entire area comprises 2,900
square feet and is open daily to bank
officers wishing to meet with custom
ers and prospects in a relaxed and pri
vate atmosphere. Business luncheons
currently are being held bimonthly in
W
TOP: Directors' room seats 30 in green
suede upholstered chairs at Texarkana
(Tex.), Nat'l. Paneling at center of w all to I.
opens to reveal blackboard and visual
aids.
:
i
MIDDILE: Lounge/reception area of Texarka
na (Tex.) Nat'Ts entertainment complex
features parquet floor, walnut paneling,
grid ceiling, antiques from Asian countries.
Seated, from I. are Jo Link, bank loan pro
cessing officer; B. Stan Cook, ch., Texar
kana Nat'l Bancshares; and H. H. Wornmack Jr., ch., Twin City Bank, Texarkana.
BOTTOM: Portion off dining room at Texar
kana (Tex.) Nat'l that accommodates 28
diners. Special table in background seats
eight and is positioned under circular ceil
ing light fixture and is backed by curved
paneled w all. Wall covering is grass doth
and brass accessories accentuate table set
tings. Porcelain plates on w alls date to
1700s. Colors ere forest green, rust and
beige,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
è
:
RANKING c e n t e r
Competition
For Your
Customer
Deposits . • •
Commercial National Bank, Shreveport,
Bank of Oklahoma
Tulsa, Oklahoma
L o u is ia n a
>urth N H W B iI Bank
Tulsa, Oklahoma fi!
«
li III
J Ï 1cPHER5 0 n BdlU i
Ridglea Bank
Ft. Worth, Texas
. . . Has Never
Been Tougher.
McPherson Bank'S. Trust
Me Pherson, Kansas
You can now protect your market with Cawthon’s
free-standing ATM Facilities.
Our buildings have been “ battlefield” tested and proven for the past 5 years in
Oklahoma, Louisiana, Kansas, Colorado and Texas.
With Cawthon you deal direct. We
handle planning, sales, manufacturing,
installation and service on a turnkey
basis.
Creative designs to identify your bank
at no extra cost.
Your complete satisfaction is
guaranteed by our comprehensive
warranty.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Call or write today for important
information. Ask for Bob Crumpton,
ncAWTHon
BUILDING SYSTEM S, INC.
505 Interstate 35 E
DeSoto, Texas 75115
(214)223-4900
RepublicBank Dallas
doesn’t stop here.
Dallas
City Limits
RepublicBank Dallas isn't
limited by geographic bound
aries. Today, our activities ex
tend to every part of the coun
try. And the leading activity
that touches banks all over
the country is our Financial
Institutions Division. We have
the services and the experience
to meet every kind of correspon
dent banking need.
Our Financial Institutions
Division has a full range of ser
vices from cash management
to bank financing and loan par
ticipations. Last year, we
bought and sold loans with
over a thousand banks and
handled over two million cash
letter items daily. In our cor
respondent relationship, we're
more interested in the relation
ship than in transactions alone.
And we can tailor our services
to meet your individual institu
tional needs.
Along with a full range of
services, we match your needs
with a group of top correspon
dent professionals. They have
in-depth, up-to-the-minute in
formation on money markets,
economic trends, and current or
proposed legislation that may
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
affect the financial institutions
industry. They know the ins
and outs of credit needs, loan
sales, and acquisitions. They
know how to put together a pro
ject from a stmctural to a legal
standpoint. As well as how to
create a solid non-credit pack
age of services.
At RepublicBank Dallas,
you'll find the people and the
services you expect from the
correspondent institution, and
you'll discover there is no limit
to what we can do.
^R epublicB ank
Dallas
We know no limits.
Member FDIC
addition to a regularly scheduled
d ire cto rs’ lu ncheon on the last
Wednesday of each month.
Future plans call for Monday night
football TV gatherings and receptions
in conjunction with performances at
Texarkana’s Perot Theater. The bank
also plans to conduct a series of finan
cial forums for women at the facility
next year.
Decor is described as “male orien
tal” by Ann Sperry of the bank’s staff.
H erbert V . Prochnow Retires
As Banking School D irector
N ERA came to an end September
. 15, when Herbert V. Prochnow
New Board Officers
retired as director of the Herbert V.
Truman L. Jeffers, e.v.p ., Minne
Prochnow Graduate School of Banking
sota Bankers Assn., was elected ch./
at the University of Wisconsin/Madiboard of trustees, Herbert V. Proch
son. He had held that post for the en
now Graduate School of Banking at
tire 37 years of operation of the school,
the University of Wisconsin/Madiwhich he co-founded in 1945.
son at the board’s annual meeting
A resolution honoring Dr. Proch
August 21. He succeeds Robert C.
now was presented during the school’s
Nelson, e .v .p ., Indiana Bankers
1981 com m encem ent in August by
Assn.
Other new officers are: v. ch.,
Robert C. Nelson, executive vice pres
Bryan K. Koontz, exec, dir., Wis
ident, Indiana Bankers Association.
consin Bankers Assn., and treas.,
The resolution says, in part, that the
Roger M. Beverage, e.v.p., Nebras
school owes much of its success, repu
ka
Bankers Assn.
tation and influence to Dr. Prochnow.
The school is sponsored by the
It acknowledges that as director, he
Central States Conference of Bank
guided the school’s developm ent,
ers Associations.
helped select and train its faculty and
taught every student who has been
graduated from the school, sponsored
by the Central States Conference of
During his long career, Dr. Proch
Bankers Associations.
now has been a banker, author, editor
Dr. Prochnow was honored pre and lecturer and has been in govern
viously when, last D ecem ber, the
ment service. He joined Chicago’s
school’s board authorized changing the
First National in 1929 and held several
name of the school to the Herbert V.
posts, including head of the correspon
Prochnow Graduate School of Bank dent division, before becoming presi
ing. It formerly was known as the
dent in 1962. After retiring in 1968, he
Graduate School of Banking.
was made an honorary director.
Dr. Prochnow was deputy under
secretary of state for economic affairs
in the Eisenhower Administration and
was counselor to various foreign gov
ernments. He was founder and presi
dent of the International Monetary
Conference and a financial columnist
for the Chicago Sunday Tribune from
1968-70.
Author and editor of numerous
books considered standards of banking
literature, this summer Dr. Prochnow
edited “Bank C red it,” an in-depth
study of credit and loan practices au
thored by 34 outstanding banking au
Dr. Herbert V. Prochnow (2nd from I.) re
thorities. He had also edited “The
ceives honor resolution from Robert C. Nel
Changing World of Banking Dilemmas
son (2nd from r.), e.v.p., Indiana Bankers
Facing the Nation,” a 1979 commen
Association, marking Dr. Prochnow's 37
years as director of school, which he co
tary of vital issues affecting this coun
founded. He retired from post September
try’s future.
15 and w as honored at school's 1981 com
Dr. Prochnow, a lecturer, has com
mencement in August. Also pictured are
piled
many handbooks for public
Richard I. Doolittle (I.), school adm inistra
speakers and toastmasters. With his
tor, and Bryan Koontz, exec, dir., Wisconsin
son, Herbert Jr., he has written severBankers Association.
Antiques from Asian nations decorate
the facility and the color schem e
evolves around earth tones. From con
cept to completion, the conversion
took about eight months. • •
al books on the topic of public speak
ing.
He holds a P h .D . degree from
Northwestern University, Evanston,
111., and an M.S. degree from the Uni
versity of Wisconsin/Madison. • •
A
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Bank-Credit Authorities
Contribute to Book
On Borrowing/Lending
Thirty-four of the nation’s leading
bank-credit authorities have been
brought to g eth er by H erb ert V.
Prochnow to examine and evaluate the
art of borrowing and lending money.
What they have to say is revealed in a
book called Bank C redit, sponsored by
the Herbert V. Prochnow Graduate
School of Banking at the University of
Wisconsin/Madison and edited by Mr.
Prochnow. He retired September 15
after 37 years as the school’s director.
Contributors to the book discuss re
cent changes in types of bank loans and
in the relative significance of different
kinds of loans, as well as other major
credit challenges facing bankers.
Throughout B ank C redit, the au
thors use concrete examples, charts,
tables and statistics to dramatize and
demonstrate their points. Pertinent
subjects covered include consumer
credit, bankers’ acceptances and let
ters of credit, term loans, equipment
leasing, loan-portfolio management,
legal aspects of bank loans, futures
markets in agricultural lending, unau
dited financial statements, loan-loss
reserves, credit problems, workouts
and recoveries. In addition, loans to
foreign governm ents, banks, com
panies and multinational corporations
are examined, along with syndication
of foreign loans.
Contributing authors include: W il
liam A. Adkins Jr., senior vice presi
dent, First National, Topeka; William
J. Korsvik, retired senior vice presi
dent, worldwide banking department,
First National, Chicago; and Jerry H.
Pearson, vice president, Harris Trust,
Chicago. All are faculty members of
the Prochnow school.
61
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
TOP LEFT: Open planning on re
tail floor of Nat'l Bank of Jackson, Mich., w as achieved w ith
out denying privacy to lending
personnel and their customers.
CENTER: Em ployees of Nat'l
Bank of Jackson, as result of re
design program, enjoy acousti
cal conditioners (round white
ball), under-shelf lighting and
am ple work surfaces. Action
Office panels created by Her
man Miller, Inc., not only sup
port components, but provide
visual and acoustical privacy.
BOTTOM LEFT AND RIGHT:
Bank's executive area is de
scribed as "attractive, but not
lavish." Says Robert Kendall,
s.v.p./cash., "It w as designed to
look like what it is — a place
where work is accomplished."
Open-Plan System
Throughout Bank
Creates Good Image
ANKS, perhaps more than other
business organizations, have
been aware of the importance of their
physical facilities. They’ve long recog
nized that a well-planned working en
vironment can result in economic ben
efits, including increased productiv
ity. And, as service-oriented organiza
tions, they’ve learned the facility’s
value in creating a positive image.
Th ese and oth er ben efits were
achieved by the redesign of National
Bank of Jackson, Mich., a middle-sized
bank located in a small town. Among
its peer group of $100 million to $499
million, it had the second highest re
turn on assets in the state, at 1.46%, for
1980.
When space problems and reorga
nization of the consumer services area
dictated a redesign of the bank’s in
terior, management was determined
that the new interior should also re
flect the image of an open, efficient and
profitably run institution.
Says Senior Vice President and
Cashier Robert Kendall, who had the
main responsibility for the renovation
project, “In the banking business you
rely on financial information, but you
B
MID-CONTINENT BANKER for October, 1 9 8 1
... s I ^
S
Wmm .
Third National’» Trust Division helps you help your custom ers
As a banker, you’re well aware of the impor
tance of maintaining strong personal relation
ships with your depositors. So, when you’re
asked for a service your bank is not yet ready
to provide... like Personal E state Planning, for
exam p le... offer ours.
Fo r any trust services beyond
your own bank’s capabilities,
get in touch with Third Na- ^
tional Bank in Nashville.
Call Sonny Johnson,
head of the C orre
spondent Bank D e
partment, or the
/
representative who serves your area: Ish Smitl
or Wayne Whisman, E a st Tennessee; Clarence]
Suiter or Ed Lowery, Middle Tennessee and ‘
abama; Roy Law rence, W est Tennessee; Lee
Owen, Kentucky. Our Tennessee WATS is
(800) 3 4 2 -8 3 6 0 . In neighboring states, dial
(800) 251-8516.
We can save you the expense
of developing a full-service Trm
Department of your own whil
helping you to strengthen pe{
, sonal ties with your deposi]
tors and remain competf
tive in your community.
THIRD
NATIONAL
BANI^
____
In Nashville
M em ber F .D .I.C .
Sonny Johnson
Senior Vice-President
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
also learn to look at other things. As a
banker, one of the things you look at in
a business is: ‘How do they run their
place? Does it look as though they’re
efficient? Does it look as though they
know what they’re doing?’ This seems
like a little detail, but it can give you
the key to their attitude, the key to
how well they have control over
things.”
Mr. Kendall explains, “Often as a
bank grows larger, it loses some of its
customer orientation. As one grows
larger, one has to compensate for this
loss of personal contact. Our refur
bishing was part of this effort. We
looked at it as an investment from a
marketing standpoint.
An essential part of the
processing area's redesign was
transferring utilities from an
u n d er-flo o r system to an
overhead electrical and phone
grid.
“We had recently reorganized our
different consumer-services functions.
Areas such as new accounts, personal
loans and residential mortgages were
centralized into one consumer service
department, which could handle any
kind of consumer request. We wanted
to use the facility to bring people re
sponsible for these different functions
together and to make it easier for the
customer to find people he needs to
see.”
It was important for the bank to have
a bright, open feeling. Mr. Kendall
considers this essential for establishing
a good rapport with clients. “We
wanted to maintain an open atmos
phere. In a banking institution, per
sonal contact is vital. When you walk
into a bank, you want to be recognized.
You want to be able to walk in and
wave to the manager. On the other
hand, a certain degree of privacy is
required for the personal nature of
some customer-service transactions.
To accomplish these aims, the bank
turned to open planning. Instead of
fixed, flo o r-to -ceilin g w alls, this
approach to office design uses movable
panels of varying heights, together
with components as work surfaces,
storage bins, files, etc. After a careful
analysis and comparison of several
manufacturers’ systems, Mr. Kendall
proposed that the directors approve
the purchase from the company that
first introduced the systems approach
of panels and modular components in
1968.
“There were a lot of considerations, ”
he says. “In the banking business you
64
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
rely on financial information, a com
pany’s financial stability and its man
agement style. We visited the Herman
Miller facility and were impressed.
Not only did it appear to be the leader
in its ability to develop functional
products, but we were convinced that
Herman Miller has an organization
commitment to make future equip
ment compatible with its previous de
signs. We knew that today’s purchases
would not be made obsolete by tomor
row’s creations.
The banking floor was entirely rede
signed with the firm’s Action Office
system. In that respect, National Bank
of Jackson became a bellwether in
stitu tion . F o r, w hile banks were
among the first to recognize the eco
nom ic advantages of this o n ce
revolutionary approach to office de
sign, it was used mostly in the opera
tions departm ent and seldom ap
peared in areas that had heavy custom
er involvement. National Bank of Jackson, among oth er pioneer banks,
shows that the open plan works just as
well for the banking floor as in behindthe-scenes departments.
On the main floor, traffic flow is
directed by a reception and waiting
station located near the entrance and a
sign plaque pointing the way to various
departments. A row of tinted glazed
panels divides the consumer-service
space from the teller-transaction area.
It also provides each consumer lender
with the privacy needed, while main
taining the desired open feeling.
Consum er lenders are given Ushaped stations with a free-standing
pull-up round table and three comfort
able chairs for customers. The thinking
is that bank representatives assume
less of an adversary posture when seat
ed next to a client than when facing
him across an imposing desk.
Management offices are located on
the second and third floors along the
perimeter walls. For the private na
ture of transactions in the trust depart
m ent, com pletely enclosed offices
were constructed of fabric-covered
and glazed panels. A “super room,” a
plug-in relocatable room, was pro
vided for larger confidential meetings.
For the processing areas, also on the
second and third floors, the bank
started out using its existing desks
together with Action Office panels.
The desks later were replaced with
panel-hung work surfaces and storage
units.
An essential part of the processing
area’s redesign was transferring utili
ties from an under-floor system to an
overhead electrical and phone grid.
“Previously, outlets were never in
the right place when you moved a
desk,” says Mr. Kendall.
Acoustical ceiling tile, along with
fab ric-cov ered panels and Action
Office acoustical conditioners, help re
duce noise in this heavy machine area.
Efficient use of space and the ability
to easily rearrange work groups were
basic requirements for all areas of the
bank. The BankAmericard depart
ment, for example, has expanded and
contracted, on the average of every six
months. Similarly, six other depart
ments have been changed — all with
no downtime.
Says Mr. Kendall, “The system’s
flexibility has permitted us to make
departmental changes as the work na
ture changes, the style changes and
"We've tried to keep our
institution fa ir ly non-rank
conscious. Our president has
essen tially the sam e office
equipm ent as a consum er
lender."
people change.”
Another advantage, he adds, is that
departmental personnel have been
able to do their own space planning
without outside help. They simply
check any changes with the bank’s own
facility manager.
Problems of status are avoided by
making equipment specifications rel
evant to functional needs. “W e’ve
tried to keep our institution fairly non
rank conscious,” says Mr. Kendall.
“Our president has essentially the
same office equipment as a lender.”
This attitude prevails throughout
the entire bank. “Attractive but not
lavish,” is how Mr. Kendall describes
it. “We don’t want to gold-plate any
thing. Profit-oriented banks are get
ting out of the monument-building
business and more into establishing a
savings and service-oriented image.”
This determination not to “goldplate anything has given the bank an
atmosphere of efficiency and activity.
The system’s flexibility has allowed
employees to adapt their work stations
to suit their individual job functions
and personal work habits. There also
are fewer visual distractions with work
stations laid out so that people no long
er have to sit facing an entrance.
“I ’m sure there’s greater efficiency
because there are fewer visual distrac
tions,” says Mr. Kendall.
Use of the open-plan system
throughout the entire facility has given
National Bank of Jackson an enormous
potential for growth and change — and
tangible evidence of its reputation for
utilizing assets. • •
MID-CONTINENT BANKER for October, 1981
M AK E M O NEY.
N O T PAPERW ORK
Every time money orders leave
your institution they leave paperwork behind. So do official checks and interest
and dividend checks.
T h in k of all the reconciling, filing
and storing. T h e tracing and refunding.
T h e n think of what those jobs cost in
time and money.
If you use Am erican Express® programs for these items, handling them takes less time and costs
less money. Because we do the paperwork for you.
T h e Financial Institution M oney Orders (FIMO®) are
printed with your name and supplied at no cost. You pay a modest
fee for each money order sold, but you control the profit because
you decide what to charge.
T h e Official Checks are tailored to your design and also
supplied free of charge. W h a ts more, your unlimited-amount
checks guarantee you substantial monthly income from the re
m ittance options we offer.
T h e Continuous Form Checks are tailored to your design
as well. A nd while there’s a modest fee for each, you’ll find it a
small price to pay for the interest and dividend check paperwork
that’s eliminated.
Remember, you’re in business to make money, not paper
work. So send us the coupon for more information. It could be
the last piece of paperwork you handle for a long time.
n
Money Orders
M CB-10
Continuous Form Checks
Please send me more information on
D Money Orders D Official Checks
□ Continuous Form Checks
Mr. Gil Rosenwald
V.P.-Marketing and Sales Operations
Travelers Cheque Division
American Express Company—37 th Floor
American Express Plaza, New York, NY 10004
-Title-
Name_
InstitutionAddressJ__City.------
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-State-
_Zip_
65
Walk-in ATM facility
p ro vid es 2 4 -h o u r
service to customers
of First Nat'l, Chicka s h a , O k la . Both
photos for this arti
cle w ere taken by
C reative Resources
C o rp ., O k la h o m a
City.
Some Important Things to Consider
W hen Buying an ATM Facility
By James A. Pickel, President, Vector Specialized Construction, Inc., Oklahoma City
HE D EV ELO PM EN T of a suc
cessful ATM program depends
greatly on the equipment used. The
equipment used depends greatly on
the vendors selected. And the vendors
selected depend greatly on the bank
er’s knowledge of what he needs and
how he plans to use the ATM.
Sound logical? It is. Purchasing the
right equipment is essential to the effi
cient operation of an ATM program. So
it’s only logical that a banker have a
clear understanding of exactly what
equipment is needed, what purpose it
will serve and what amount of money
can be spent on it. This holds true no
matter what equipment is being in
vestigated. This is especially true
when a banker is looking for new
equipment to expand or enhance an
existing ATM program.
This all-steel modular drive-through ATM
facility will be opened in the Oklahoma
City area this fall by Liberty Nat'l.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
In addition to being president, Vector Spe
cialized Construction, Inc., a specialty
company manufacturing modular facili
ties, the author is president, The Vector
Groupe, a marketing!management firm,
and business manager, Elliott ir Associ
ates, Architects, specialists in designing
financial facilities.
ATM facilities probably are the
greatest single commitment that can
be made toward the enchancement of a
total ATM program. They literally are
facilities in which a bank houses its
ATMs and all support equipment.
ATM facilities can be extremely com
plex since (1) they must be adaptable
for both on-premise and off-premise
use; (2) they must be comfortable for
customers and bank personnel; (3)
they must support the efficient opera
tion and the extreme weight of the
equipment; (4) they must meet the
stringent codes of each location in
which an ATM is placed; and (5) they
must incorporate esthetic appeal with
solid construction. Obviously, ATM
facilities must be multifunctional.
They are not an object of a bank’s
overall strategies, but they are a means
to the fulfillment of the bank’s ATM
program goals. They become neces
sary when a banker wants to take an
ATM program out into the market
place. Thus, their primary purpose is
to provide the enclosure from which
the bank will offer its ATM services.
The type of ATM facility a bank
needs depends on the location chosen
for it. If the location already provides
an enclosed environment; i.e., within
the bank’s lobby, within a store or en
closed shopping center, or within an
office complex, then the need for an
ATM facility can be satisfied with a
simple, open-faced kiosk.
If the location offers little or no pro
tection, the need is for a larger, selfenclosed structure. Always remember
that an ATM and related equipment
must be protected, but the protection
made available to customers is almost
totally up to bank management. It pays
to be extremely conscious of the pro
posed location and the protection it
offers when selecting an appropriate
ATM facility.
Deciding on the right ATM facility
for a given location doesn’t eliminate
the need for further decisions. The
location also may dictate the need for a
portable facility. These facilities —
either kiosks or buildings — are ca
pable of being relocated from one loca
tion to another. They become more
important when the location is not
IC S takes the risk out of
home improvement lending
As the nation’s largest private
insurer of property improvement
loans, ICS offers complete protec
tion against loss. T h e ICS plan
guarantees prompt, 100% reim
bursement of the unpaid principal
plus interest and costs in the event
of loss.
T he ICS plan allows for an
unrestricted rate of return on
home improvement loans. Once
you’ve determined the rate, ICS
guarantees maxim um yield
through complete loss protection.
T h e ICS plan is flexible and
simple. T h e lender continues to
use its own forms, originate its
own business and make its own
credit decisions.
We also extend 27 years of
underwriting and marketing
expertise to our customers.
ICS has insured in excess
of $3 billion in loans. Over 1700
financial institutions are
benefiting from our flexible and
innovative programs.
Mail the coupon today for
further information, or call
William F. Schumann, President
at (312) 621-9400.
Show me how ICS can increase
my loan profit picture.
N am e/T itle-----------------------------------------Company---------------------------------------------Address-----------------------------------------------City___________________________________
State--------------------------Zip--------------------Phone_________________________________
IN S U R E D C R E D IT
\ S E R V IC E S /
307 N. Michigan Ave.
Chicago, IL 60601
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
67
owned by the institution or is ques
tionable regarding results or longev
ity.
An advanced state of portability is
offered by some technically oriented
manufacturers. Their ATM facilities
are referred to as “modular” units.
These facilities offer all the advantages
of portable facilities, but almost always
are of sturdier construction and are in
stalled more quickly than non-modular
units. F u rth e r, they provide the
advantage of allowing the bank to ex
pand an ATM facility into a larger,
broader-purposed structure, should
the need arise. One thing to remem
ber when determining which type of
facility is right for the bank is that port
able facilities are not always modular,
but modular facilities always are port
able.
Portable and modular facilities, by
the nature of what they offer, typically
are more expensive than on-site con
ventionally constructed facilities. But
these higher front-end costs usually
are negated by the fact that modular
ATM facilities can be completed with
little or no down time due to weather.
However, conventionally built facili
ties afford the opportunity for bankers
to work with existing or potential cus
tomers who are vendors, if a qualified
modular vendor is not located in the
bank’s trade area.
Again, the location the bank intends
to use should be the determining fac
tor in choosing the type of facility from
which the bank will offer its ATM ser
vices. To save money in the beginning
by having a favorite local contractor
build a permanent facility may cost the
bank dearly if the location fails to meet
objectives and it must be abandoned.
Don’t be led to think that any contrac
tor can provide the bank with a port
able facility just because he is told
that’s what the bank needs. It takes a
great deal of technology and experi
ence to deliver a truly portable facility,
especially a modular unit.
Probably the most confusing thing
to consider when shopping for ATM
facilities is the additional services
needed to complete a project. Since
most companies offer only a stock
building delivered to a site, what does
the bank do about preparation of the
site? What about utilities to operate
the equipment, landscaping, parking,
etc. ?
Obviously, if the location requires
only a kiosk, needs will be minimal. A
qualified electrician can arrange for
getting utilities to the site. If a kiosk
supplier offers delivery and installa
tion services with his product, there is
little to worry about.
But if the location requires a more
complex modular building, the needs
will be much greater. And since a
banker’s expertise is in banking, the
best choice would be to hire experi
en ced con tracto rs to handle the
monumental headaches that can be in
volved in getting an ATM facility prop
erly installed. Fortunately, some sup
pliers of ATM facilities provide sitepreparation services with their prod
ucts. Typically, they are experienced
with these services and since they have
control of both production and installa
tion, usually can guarantee a particular
delivery date. But don’t assume that all
suppliers have experience in installing
modular ATM facilities just because
they build them. It would be extreme
ly wise to check with previous clients
to make sure they can deliver on their
promises.
If the location will permit conven
tional construction, a reputable gener
al contractor should be able to handle
construction needs. Although the
ATM building probably will be much
smaller than most conventionally con
structed buildings, it should be en
trusted to a competent contractor who
realizes the complex functions the
ATM building must serve. But re
member, a conventional ATM build
ing can’t be relocated.
TIRED of paying for monuments that drain your bottom line? Look to
SON CORPORATION for the sensible alternative: Preconstructed, fully
equipped and furnished financial facilities up to 5,000 square feet. Save
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Temporary buildings also
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Box 684 • Wichita, KS 67201 • Branch offices: Dallas, Mobile
Designers • Consultants • Suppliers
68
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Federal Reserve Bank of St. Louis
ATM facilities are not always de
signed to suit a particular bank’s needs
and tastes. While every supplier of
modular facilities has stock items from
which to choose, the choices may not
be to the banker’s liking. The design of
the bank’s ATM facilities isn’t some
thing to be taken lightly. It is as impor
tant as any other decision. The design
selected will represent the image the
banker wishes the bank to represent to
its customers.
Thus, if the design choices investi
gated aren’t satisfactory, find a capable
firm to design a custom ATM facility.
Whether it is an architect, an indus
trial designer, or just a creative per
son, the individual must be someone
who understands the financial industry
in addition to the ATM industry. Input
at the design stage should enable the
bank to own a handsome facility that is
not only functional but extrem ely
marketable.
Some suppliers of modular ATM
facilities do much more than build
portable structures. It now is possible
to find vendors that offer design, pro
duction and installation services, all
aimed at the needs of the ATM market.
Progressive vendors refer to this total
service package as “turnkey.”
A turnkey package implies that one
company will handle everything from
design through installation of an ATM
facility. This permits the banker to
turn his attention to the other problem
areas that usually exist when institut
ing an ATM program. Although the
turnkey approach is appealing, it
should not be entrusted to any vendor
who offers it. The banker must check
out the firm’s previous experience to
insure that it can, and has, adequately
performed this complex service for
others. The endeavor to design an
ATM facility th a t’s p ractical and
appealing, to produce a modular facil
ity that’s sturdy and long-lasting and to
install a finished module that’s on
schedule and completed without over
sights is no job for a novice firm.
While I have touched on the most
important aspects of ATM facilities, by
no means have I addressed every de
tail necessary for consideration when
shopping for these rather large pieces
of equipment. A great deal of time
must be expended to satisfy specific
needs for adequate signage, reason
able delivery dates, proper selection of
materials that will be appealing and
low in maintenance. Adequate heating
and air conditioning systems, security
and surveillance systems also will be
needed to provide comfort and protec
tion for the bank and its customers. I
would strongly suggest that these deci-
MID-CONTINENT BANKER for October, 1981
You know the situation: Often your cus
tomers’ needs are beyond your capabilities.
Is there a banker you can turn to for help?
Yes. At Bank of the Southwest Earl
Lassere and a group of correspondent
bankers can help expand your range of
services. With assistance in real estate
lending, or equipment and crop financing.
With transit processing. With solid advice
on investments and current banking issues,
and more.
Expanding. Bringing new ideas and
vitality. That’s the spirit of the Southwest.
That’s the spirit we bring to correspondent
banking. Call Earl Lassere, vice president,
at (713) 751-6366. Bank of the Southwest.
910 Travis. Houston.
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Bank
of the _
Southwest
sions be handled by the most compe
tent people who can be found — the
vendors with experienced, proved
track records.
It’s imperative that the banker be
selective not only in the type of ATM
facility chosen, but in the vendor
chosen to provide the services. Based
on knowing what is needed and how to
plan to use the facility, the banker
should be able to select the right ven
dor to provide the best equipment
(ATM facilities included). The result
will help insure the development of a
successful ATM program for the finan
cial institution. • •
Kiosk-Type ATM installed
In Supermarket by Bank
OKLAHOMA CITY — Personnel at
one Safeway store now are relieved of a
lot of check-cashing work thanks to the
new ChecOKard Banking Center in
stalled there by Liberty National. It
was the first such center to go into
operation in an agreement between
Safeway Stores and the bank to set up
banking centers in those stores.
The ChecOKard Banking Center is
a newly designed kiosk-type ATM in
stallation , using a C oncord 770
ATM at Liberty Nat'l of Oklahoma City's
new ChecOKard Banking Center in Safe
w ay store is tried out. Kiosk-type installa
tion stands out with bright gold and black
striped semicircular header containing its
name and semicircular desk area enclosing
ATM. Kiosk manufacturer: Vector Special
ized Construction, Inc., Oklahoma City.
machine, manufactured by Concord
Computing Corp., Bedford, Mass.
A bright gold and black striped
sem icircu lar head er announces
Bank's ATM Network Helps Cut Costs,
Yet Provides Good Custom er Service
costs continue to
soar. No banker needs to be re
minded of that fact. A recent study by
the Wharton Economic Model, ÎBM
and U. S. Department of Labor Statis
tics projects a 3% annual growth in
personnel, computes salary increases
at 7% compounded annually and indi
cates fringe benefits will grow as much
as 23% compounded annually.
Transportation costs also are a signif
icant factor, along with land and con
struction costs, which have had annual
inflation rates of between 10% and
20% the past several years.
In marked contrast, Commercial
National, Kansas City, Kan., points
out that automated teller machines in
its Bankmatic ATM network cost about
a third less now than they did six years
ago.
The importance of ATMs is recog
nized by Commercial National by the
fact that it offers membership in its
Bankmatic network to correspondent
banks. The bank believes these ATMs
can help banks improve operational
p e r a t io n s
O
70
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
efficiency, provide better service and
offset branching operations of other
financial concerns. Bankmatic, accord
ing to C om m ercial N ational, has
proved to be a practical, low-cost and
efficient answer to these and other
Pictured at one of Bankmatic ATM installa
tions of Commercial Nat'l, Kansas City,
Kan., are (I. to r.): Bernard J. Ruysser, pres.;
Robert C. Carlton, a.v.p.; Robert W. Chenoweth, s.v.p., and Michael J. O'Leary, v.p./
correspondent div.
CheckOKard Banking Center and tops
a semicircular desk area enclosing the
ATM. ChecOKard member banks’ de
positors can make deposits, withdraw
als, transfers and balance inquiries on
their checking and saving accounts.
The banking centers are on line with
Liberty’s tandem computer system
serving all ChecOKard Banking cen
ters and interchanging this fall with
Exchequer and Transfund systems in
Oklahoma. Holders of cards on those
systems can use the CheckOKard
Banking centers at the original Safe
way store and other Safeways where
similar centers are to be set up, accord
ing to Willis J. Wheat, Liberty execu
tive vice president.
Customers using the supermarket
kiosk centers for withdrawals receive
receipts for the cash they want to with
draw and present them to the cashier
at any checkout lane to be given their
cash.
The program of supermarket expan
sion into Safeway Stores is another
step in the CheckOKard System ’s
program of making use of ChecOKard
even more convenient than formerly
for custom ers, explains Harvey J.
Dowdy, vice president in charge of
Liberty’s ChecOKard banking pro
gram.
challenges facing banks today.
Bankmatic, says the bank, was de
signed to help reduce costs, while pro
ducing maximum customer service
and convenience and to help banks in
crease their market share, working as
either proprietary or neutral units.
At present, Commercial National
supports 22 ATMs, 13 of which are in
Kansas and nine in the St. Louis area.
Bankmatic units are available in
free-standing, in-wall or kiosk models
and operate on-line through the IBM
3601 Finance Communications Con
troller. Bankmatic card-holders can
make deposits and withdrawals, trans
fer funds, make loan payments, obtain
account balances or receive cash ad
vances 24 hours a day, every day of the
year.
‘Our Bankmatic program for corre
spondent banks is highly comprehen
sive,” says Robert C. Carlton, Bank
matic task force chairman. “It includes
liaison service with suppliers in selec
tion of equipment, site analysis and
recommendations, architectural plans
for drive-up or free-standing models,
interfacing ATM custom er proce
dures, customer-notification and in
formation data, total marketing sup
port and a continuing consultation and
MID-CONTINENT BANKER for October, 1981
CORRESPONDENT BANKING.
FOURTH'S EXPERIENCE IS A RESULT OF COMMITMENT
AND VICE-VERSA.
At Fourth, correspondent
banking means making com
mitments. It means providing
rapid, smooth transactions
when needs are critical. It
means using the latest, high
speed communications and
computer technology.
It’s people like Keith
Wiegand and John Robinson.
Professionals with years of
banking experience who stand
ready to assist you in all areas
of correspondent banking. Who
can handle loans of any nature.
Who have first-hand experi
ence with the needs of banks
in this region and the lending
authority to make critical deci
sions. Immediately.
It’s performance. For loan
participations. For cash letter
services. For bank stock
financing. For quick check
clearances. It means having in
vestment alternatives to ease
your liquidity problems.
Correspondent banking.
To us, it means commitment.
Working together. Fourth
National and your bank.
Keith Wiegand and John Robinson,
correspondent bank officers,
The Fourth National Bank o f Tulsa.
:
■it
SÄ*
4
«j
■
21
FOURTH
NATIONAL
BANK
THE FOURTH NATIONAL BANK OF TULSA
BOULDER AT SIXTH
P.O. BOX 2360
TULSA, OKLAHOMA 74101
(918) 587-9171
MEMBER FDIC
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
71
service support by our Bankmatic de
partment. Participating banks may use
the registered Bankmatic trademark
and colors, and we will arrange for pro
duction of Bankmatic cards and other
support materials, including mailers,
notification forms and envelopes and a
variety of promotional and advertising
material.”
Robert W. Chenoweth, Commer
cial National’s senior vice president
who spearheaded the Bankmatic sys
tem’s development in 1975, points out
that recent competitive trends, cus
tomer demand and regulatory activi
ties have substantiated the bank’s orig-
inal premise, and Commercial Nation
al is fortunate in having a perfectly re
fined and wholly viable system that has
been tested and proved at every per
formance level.
Mr. Chenoweth cites benefits to two
groups. For consumers, he says, Bank
matic offers a new and money-saving
convenience in being able to perform
virtually every retail-banking function
at their discretion, rather than having
to bank only during normal banking
hours. Commercial National’s corre
spondent banks, he continues, have
the advantage of a cost-efficien t,
proved system backed by a proficient
tech nical and m arketing program
within a realistic pricing format. • •
Tax Act
(C ontinued fr o m page 30)
Rehabilitating a certified historic
structure is especially attractive as the
bank will receive a credit for 25% of the
expenditures with no corresponding
reduction in basis. Therefore, if we
assume a 50% effective tax rate, the
bank will receive 75% of the cost of
rehabilitating the structure as tax ben
efits over the life of the rehabilitation;
25% credit up front and 50% over the
15-year useful life as benefit from the
write-off of the building under the
Accelerated Cost Recovery System.
Banks should review their capital
expansion programs in light of these
new provisions. If consideration is
being given to rehabilitating a building
that is over 20 but less than 30 years
old, efforts should be made to com
mence the physical work prior to Janu
ary 1, 1982, to take advantage of the
current 10% rehabilitation credit.
Banks considering construction of a
new bank building or the establish-
ment of a facility or branch should con
sider reh ab ilitatin g th eir existing
building or an older building in a suit
able location in order to obtain the
15%, 20%, or 25% credit. Every effort
should be made to take advantage of
the special credit for certified historic
structures. • •
G lossary of EFT Term s
Published by ABA
WASHINGTON, D. C. — After
nearly two years of research, the ABA
is making available a glossary of terms
and uniform definitions commonly
used by financial institutions for E F T
and payment messages.
The glossary publication, entitled
“Developing a More Efficient Funds
Transfer Service: Phase 1 — A Com
mon Language,” represents the first
phase of an evolving project that sub
sequently will affect funds transfer op
erations throughout the industry,
according to John W. Coombs, vice
president, Bank of America, San Fran
cisco, chairman of the ABA’s funds
transfer terms and usage task force.
The second phase of the project will
propose conventions, based on identi
fied data elements, that support map
ping of wire transfers among the var
ious network formats.
The 16-m em ber task force was
formed in recognition that in the past
two decades the use of electronic
means to move funds among banks and
their customers has increased dramati
cally, in both numbers of transactions
and value of funds. D aily dollar
volume of corporate and correspon
dent payments has increased from
about $16 billion to more than $600
billion per day in the past 20 years.
Copies of the publication are avail
able at $20 for ABA members and $25
for nonmembers and can be ordered
from the ABA’s order processing de
partment, 1120 Connecticut Avenue,
N. W ., Washington, DC 20036. The
p u b licatio n ’s catalog num ber is
064400.
First N atl, Belleville, III.,
Is Real Estate Tax Depository
Just a
phone call fg jj
away-
No waiting
No worry
ill
A v ailab le n ow throughout
the M i d - C o n t i n e n t a r e a .
O th e r te m p o ra ry facilities
in v a r i o u s s i z e s .
72
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
MPA SYSTEMS^
4120 R io B rav o El Paso, T exas 7 9 9 0 2
(915) 5 4 2 - 1 3 4 5
o r (915) 5 4 2 -1 4 6 1
,
J
First National, Belleville, 111., has
been designated as a depository for
county real estate tax payments by the
county collector of taxes.
Taxpayers can make their payments
at any teller’s window at the Main
Bank or any facility. Payments also can
be made by mail. Those paying by mail
receive a postage-free envelope with
their tax receipt to be used for making
the second installment payment of
taxes.
MID-CONTINENT BANKER for October, 1981
FISI VIDEO NETWORK
presents
IRA
INDIVIDUAL RETIREMENT ACCO U N TS
A special one-hour and forty-five minute videotape seminar with complete professional training manual,
INCLUDES THE FOLLOW ING SEGMENTS:
I
ifstp
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
• Opening & Instructions
• Introduction to IRAs
• Rules & Regulations
• Eligibility Requirements
• Penalties
• Distributions
• IRS Reporting
• Regular and Spousal IRAs
• Rollover IRAs
• SEPPs and Keoghs
• Marketing IRAs
• IRA Review by Ernst & Whinney
s /P r o d u c e d fo llo w in g p a s s a g e o f th e E c o n o m ic
R e c o v e ry Tax A c t o f 1981.
The first c o m p re h e n s iv e a p p ra is a l a n d e x p la n a tio n o f
th e n e w IRA m a rk e t.
This videotape seminar and the accompanying training
manual provide management and all contact employees
with the background, understanding, and marketing skills
necessary to develop and maintain IRAs and related
accounts.
Video cassettes available in VHS, Beta, and 3/4".
This IRA video seminar is a special presentation of the FISI
Video Network, the training and communications division
of Financial Institution Services Inc., America's largest
bank marketing firm. Professionally produced, the FISI
Video Network is the only ongoing training product
available to the nation's financial industry. The Network
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fin a n c ia l in s titu tio n s e rv ic e s inc.
49 MUSIC SQUARE WEST
615/329-2400
P.O. BOX 40726
800/342-2109 (TN)
NASHVILLE, TN 37204
800/251-2148 (NATL)
LEFT: This is what Austin Bank of Chicago's new home looked like
before it w as converted from its former function of restaurant. It
also had seen service as series of small retail shops. RIGHT: This is
bank building as it looks today. Remodeling project included
gutting interior to provide area for bank functions. Exterior cano
py at left in both pictures was retained and redesigned to become
shelter for vehicles using bank's drive-up facility. Chicago
architectural firm, Bernheim, Kahn & Lozano, won award for
design of bank building.
Building Goes Through Two 'Life Cycles'
Before Being Redesigned for Bank
B U IL D IN G that had b een
through two “life cycles has be
come an attractive structure housing
Austin Bank, located on Chicago’s far
west side.
The nearly 50-year-old masonry
load-bearing building with woodframe roof saw service first as a series of
small retail shops, then later was ex
panded twice its original size to be
come a restaurant.
In discussing the decision to remake
the building into a bank structure,
President Bobert Callery, says, “We
wanted a design that was clean and
modern — that would look like a bank
and have the character of a bank. What
we had to start with was an old, pre
viously rem odeled structure faced
with concrete panels that had to be
transformed into a modern structure.
Using its imagination and creativity,
BKL did an outstanding job in resolv
ing our problem.”
By BKL, Mr. Callery was referring
to Bernheim, Kahn & Lozano, a Chica
go architectural firm, which received a
third-place design award for the proj
ect in the 1980 national competition
sponsored by the Society of American
Registered Architects.
“Our firm was charged with the task
of creating a new identity for the 8,000square-foot building within the con
fines of a limited budget and to dis
guise the strong restaurant character
with a new image,” says John Wong,
project architect and designer. “As is
74
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Federal Reserve Bank of St. Louis
so often the case with in-city buildings
in older residential neighborhoods,
the building was contiguous to side
walks along one side and the front.
This, of course, made it difficult for us
to incorporate a kind of green area to
enhance the beauty of a concrete and
steel structure. Furthermore, in plac
ing the interior functions, we had to
study traffic-pattern ingress for park
ing and drive-in, as well as egress into a
six-lane arterial street.”
The architect’s efforts in confronting
and resolving these problems were
noted in com m ents of the design
awards’ jury: “It was a sensitive solu
tion to a tight, difficult city site and
made excellent use of the existing
structure in the redesign of that facil
ity, giving it a brand new image. The
openness of bringing the exterior to
the interior on a close site was an excel
lent solution to the problem.”
“Perhaps,” says Mr. Callery, “the
most striking aspect of the design con
cept is the openness and softness of the
lobby, providing an atmosphere of ele
gant comfort. They (BKL) provided an
artificial skylight to give the lobby an
airy, light feeling. In fact, some of our
depositors feel so comfortable that
they consider it an extension of their
homes, and we don’t mind that one
b it.”
Mr. Wong points out that the origi
nal interior had to be gutted to in
corporate completely different func
tions and traffic patterns.
“The steel Lally columns and steel
roof joists that had been added for
strength were re-framed, wood floor
removed and reinforced concrete slabs
added to support cash and safe deposit
vaults, with a storage m ezzanine
above,’ he continues. “We allowed for
future installation of one or more auto
matic teller machines, if needed. Even
the basement was renovated to in
corporate a personnel lounge and
washroom facilities. It was a total re
hab that resulted in no resemblance
whatsoever to the building’s former
use.
“The entire front of the building had
to be reinforced and re-framed with
new steel columns and beams to sup
port the roof prior to removing existing
concrete panels, opening the front
with new dark bronze aluminum
frames and glazing, to accommodate
the new design concept.”
Mr. Callery points to another advan
tage of the building’s design — it
allows room for expansion. “That con
sideration,” he says, “plus the possibil
ity of installing an ATM in the future
gave us the flexibility to cope with in
creased lobby traffic by providing
additional services. We couldn’t be
more pleased.”
Mr. Wong notes that the exterior
canopy that once covered the res
taurant now serves as a shelter for
vehicles using the drive-up facility,
which includes remote kiosks.
Addition of greenery in the parking
MID-CONTINENT BANKER for October, 1981
The next time you see Larry Reed or Ted Liles, think of
them as a crowd. Because they represent the First Force in
correspondent banking from the Texas Panhandle's oldest
and largest financial institution. Over 450 full-time
professionals — 50 of them specially trained in
correspondent banking to provide you with the services
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And your needs are very important to us. If you have
special requirements not covered by our comprehensive list
of specialized correspondent services . . . tell us about it!
We'll come up with the program or service you're looking for.
If interpreting controversial, complex federal rules and
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TheFirst N a tio n a l B a n k o f A m a rillo
©FNB 1981
8TH & TAYLOR • 8TH & FILLMORE • (806) 378-1400
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
M EM BER FDIC
75
area serves two purposes: 1. To
beautify the area. 2. To control parking
and drive-through traffic.
"Green areas can be functional and
should be incorporated into any design
concept,” says Mr. Wong. "Our urban
areas are too filled with asphalt and
concrete that only tend to exacerbate
our feelings toward some of the un
pleasantries of our environment.
General parking includes space for
14 vehicles, one of which is reserved
for the handicapped. • •
BMA Convention
(C ontinued fr o m page 26)
Bob Azelton
H. H. “B ean ie” Broadhead
Jo h n K arn
T h at’s what you get from the First Stock Y ards
Bank. Our correspondent bankers are real pros when it
comes to financial expertise and personal attention.
Their specialties are bank stock loans, commercial
loans, agricultural loans, and data processing. Together,
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T eam up with a first string correspondent banker
-o n e of the pros from F irst Stock Y ards Bank of St.
Joseph, Missouri. Where your success
is a tradition
F irst Stock Yards B an k
St. Josep h , M issouri 6 4 5 0 4
Call: (816) 238-0651
Affiliate of First Midwest Bancorp, Inc.
Member F.D.I.C.
76
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Federal Reserve Bank of St. Louis
fiat.
"In a world of increasing competi
tion, said Mr. Lord, “marketing will
be critical for all providers of financial
services. New services and combina
tions of existing services will generate
the need for new and better packaging
and more information aimed at cus
tomers. Financial institutions will
need more sophisticated knowledge of
potential markets for their products.
And they will need consid erable
marketing skills to persuade those
markets of the superiority of their ser
vices.”
As is its custom, the BMA produced
a “working convention,” filled with
“dawnduster” sessions beginning the
days at 7:30 a. m., followed by general
sessions and then departm ental. • •
1982 BMA Convention
The BMA will hold its 1982 con
vention O cto b er 2 4 -2 7 at the
Phoenix Civic Plaza in Phoenix.
Convention chairman is Michael P.
Sullivan, vice president/corporate
communications, First Union Na
tional of North Carolina, Charlotte.
Fannin Bank Brings McEnroe
To Houston for Tournament
Houston’s Fannin Bank recently
served as presenter of the John M cEn
roe vs. Vitas Gerulaitis Texas Cup
challenge match. Purpose of the match
was to bring the No. 1 tennis player in
the world to Houston so thousands of
tennis fans could see him, in addition
to other world-class players.
The bank also sponsors the National
Father/Son Indoor Tennis Cham
pionship tournament in February. The
event began in 1976 and has been rec
ognized as a national tournament for
the past four years.
MID-CONTINENT BANKER for October, 1981
New direction
in financial
insurance
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New management, new symbol, new slogan...
.. .and new aspirations. Financial Insurance
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tants, Inc., has been acquired by Joseph T.
Ambrose and Robert J. Pee le.
Operating primarily in the Midwest and
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management consultant and employee
benefit administrator specializing in a wide
range of risk management services and
insurance products for financial institutions.
As a broker, we provide bankers' blanket
bond, electronic funds transfer, directors’
and officers’ liability, single interest and
property and casualty coverages— alJ the
forms of insurance your financial institu
tion needs.
As risk management consultants, we
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exposures and then establishing loss
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those exposures.
We can also perform the services of a th ird
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The new owners of the company wish
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If you have any questions regarding any
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Schaumburg, Illinois 60194
312/884-3800
F IN A N C IA L
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S E R V IC E , IN C .
Protecting America's Financial Institutions with Integrity
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
TWO TOP PHOTOS graphically show dam
age done by tornado last May to branch of
A m e rica n B an k of C o m m erce, Lake
Charles, La.
LEFT PHOTO shows how bank solved prob
lem and had branch back in business in
five business days. This temporary build
ing w as shipped by MPA Systems, El Paso,
Tex., from Shreveport to Lake Charles and
w as set up and ready to go by Monday,
May 18. Tornado had occurred Saturday,
May 9.
Even Tomado Doesn't Close Branch,
Thanks to Temporary Building
HEN a tornado ripped through
Lake Charles, La., about mid
night Saturday, May 9, one of the
buildings it destroyed housed a branch
of Am erican Bank of C om m erce.
However, as Vice President Eugene
B. Beddell points out, “We were ex
W
tremely fortunate for the branch to
have been closed only five business
days.”
The reason the branch was put back
into operation so fast lies in El Paso,
Tex., home of MPA Systems, a major
supplier of temporary banking facili
Wë talk industrial
I* s sometimes a whole different language.
And really being able to understand the
business challenges and opportunities of
your industrial clients can make all the
^
difference.
y
Th at’s where we can help. Were Armco
AT
Industrial Credit Corporation. With
our participation programs, we can help
y ° u offer your customers equipment or
accounts receivable financing that might
not otherwise be possible. Because we specialize in businesses that
Armco itself has expertise in.
To find out how we can help you help your clients, call or write to:
Armco Industrial Credit Corporation. Dept 171A. 2995 LBJ Freeway,
Dallas. Texas 75234. 214-247-7044. 1-800-527-0488. (In Texas c a lf
1-800-442-3824.)
______
ARMCO A R M C 0
v
78
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Federal Reserve Bank of St. Louis
INDUSTRIAL CREDIT
CORPORATION
ties throughout the Mid-Continent
area.
Mr. Reddell attributes much of the
credit for the branch’s relatively small
loss of business to what he describes as
“the rapid and efficient manner in
which MPA Systems responded when
we needed assistance.”
“I first contacted MPA Systems
about noon May 11,” says Mr. Red
dell, “and 24 hours later, a mobile
banking facility arrived in Lake
Charles.
The tem porary building was
shipped there from Shreveport, where
it had been used previously. Accord
ing to Mr. Reddell, it was in much
better condition than he had expected.
During the remaining three days of the
week, communications, power and
water were connected; Mosler Co.,
Hamilton, O., installed an alarm sys
tem in the temporary building and
helped the bank with the huge cleanup
task, and the facility was opened for
business Monday, May f8.
“We are always happy to assist our
clients when an unexpected tragedy
such as this strikes, ” says John R. Karr,
general partner in MPA Systems. “We
are grateful to Mr. Reddell for the con
fidence he placed in us and for his kind
words about the outstanding perform
ance of our em ployees in this
emergency situation.” • •
MID-CONTINENT BANKER for October, 1981
IT *i * T O G E TH E R
Senior officers and managers of all financial insti
tutions count on this monthly publication for the
latest developments and interpretations in such areas as:
• capital acquisition • portfolio management
• trust
• risk management
• legislation
• marketing
• mortgages
• accounting
• regulations
• leasing and near-bank
• operations
financing
• international
• commercial/consumer lending
Just knowing about a new piece of legislation isn’t
enough. How will it effect your company... Your
competitors... What needs will it fill... Or create...
What about long-range effects... Editorial coverage in
UNITED STATES BANKER treats these kinds of
pertinent questions.
For solid, interpretative views on a wide variety of
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
crucial financial subjects — let UNITED STATES
BANKER put it all together for you.
For your personal subscription, please fill out and
mail the coupon below.
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Perhaps a good customer needs
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The A sso c ia te s
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80
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Federal Reserve Bank of St. Louis
MID-CONTINENT BANKER for October, 1981
LEFT: H. H. Broadhead Jr., pres., First Stockyards, unveils
"homemade" map which gives directions on how to reach
St. Joseph Country Club. Helping is Gary Mowrey, adv.
dir., First Midwest Bancorp. BELOW: Bankers tour BioZyme Enterprises, where they learn about the advan
tages of enzymes added to livestock feed.
Market Day's 25th Anniversary
Includes Tour and Talks
By Ralph Cox, Publisher
W EN TY-FIVE years old and still
offering new ideas. That’s what
bankers were saying last month as they
attended the 25th annual Market Day
program sponsored by First Stockyards and First National, St. Joseph,
Mo.
Originated in 1956, the program was
designed to acquaint rural bankers
with the central public livestock mar
ket in St. Joseph. During each of those
years, bankers who attended listened
to speeches by agricultural educators
and market specialists and also toured
one of the major agribusiness firms lo
cated in the market. This year it was
Bio-Zyme Enterprises, Inc., where
bankers learned some interesting facts
about the Vita Ferm feeding system,
which shows profitable results for
livestock feeders.
During the course of the one-day
program, H. H. Broadhead Jr., chair
man, First Stockyards, and one of the
originators of the Market Day pro
gram, spent a few moments reminisc
ing about the 25-year-old program.
During a luncheon, he presented five
or six of the market specialists who
helped originate the program and who
are still involved in it today.
Mr. Broadhead pointed to some of
the changes that had occurred during
those 25 years, including today’s ab
T
Market Day speaker Max Lennon, dean,
College of Agriculture, University of Mis
souri, is flanked by Roger A. Hegarty (I.),
ch., First Midwest Bancorp., and John Karn,
pres., First Stockyards.
Tom McCullough, retired chairman, First
Stockyards; Larry C. Ehlert, pres., Bio-Zyme
Enterprises; and Carol Brand, pres., Bank
of Osborn, Mo.
sence of two major packing firms —
Armour and Swift. But numerous
other enterprises had started up in the
market area during those years —- one
of those being Bio-Zyme Enterprises
toured last month.
Mr. Broadhead poked a little fun at
one annual situation that always oc
curred. He admitted that he “may
have confused bankers in his direc
tions on how to get to the country club
for the annual steak dinner, and, in a
moment of nostalgia, he broke out an
old map (see illustration), which was
designed to “aid” bankers in reaching
the country club. Many of the old tim
ers didn’t need the map, but to new
comers the directions were as confus
ing as ever.
D esp ite changing m ethods of
marketing cattle, the St. Joseph mar
ket has managed to survive all those
years, explained Mr. Broadhead, and
in fact flourishes quite well today —
particularly with the fat cattle auction
that was originated a couple of years
ago.
A tour of the Bio-Zyme firm opened
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
81
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READY
TO WORK
WITH YOU
on bank participations involving
new or existing bank customers.
READY
TO WORK
FOR YOU
on separate accommodations
providing flexible solutions to
difficult loan requests.
We can help you build strong
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ATLANTA
Regional Center
3340 Peachtree Road • Suite 560
Atlanta, Georgia 30326
(404) 261-9393
CHICAGO
55 West Monroe • Suite 1150
Chicago, Illinois 60603
(312) 346-5015
DALLAS
Regional Center
12201 Merit Drive, Suite 860
Dallas, Texas 75251
(214) 233-6981
KANSAS CITY
Regional Center
10950 Grandview • Suite 250
Overland Park, Kansas 66210
(913) 648-0020
LOS ANGELES
Regional Center
1605 W. Olympic Blvd. • Suite 411
Los Angeles, California 90015
(213) 683-8060
____________
82
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Federal Reserve Bank of St. Louis
J
bankers’ eyes on use of enzymes in
specially prepared cattle feeds. The
company uses a patented product
called Amaferm, which is described as
an almost totally natural additive for
animal feeds discovered by a biochem
ist in 1943. This additive, combined
with other common cattle feeds and
also used as an additive with silage,
reputedly aids in digestion of food for
animals and not only helps them grow
faster with smaller amounts of feed,
but also increases fertility and in
creases likelihood of more live births
for both cattle and pigs.
Larry C. Ehlert, founder of BioZyme Enterprises, is endowed almost
with a missionary spirit as he proclaims
present and future benefits for those
using his specially treated cattle feeds.
Currently, he states, cattle feeders
are aided by the fact that his feed
allows them to use one-third less hay
w hile making fu ller use of oth er
roughage sources.
He also maintains that in a cow herd
d evelop m en t, the enzym e feeds
assure fetus development for a strong
calf, reduce cycling time and increase
first-round conceptions, result in
heavier calves from increased milk
flow and strong positive herd-replacement-development growth.
Herd health also is improved, he
claims. The result is “better bottomline figures for year-round users” of
these special feeds.
Mr. Ehlert also claims that his feeds,
properly used, will help pork produc
ers market 20% more pigs per sow per
year. The statistics presented indicate
that each sow and gilt retained for
breed in g purposes in the United
States today farrows less than 1.7 liters
per year and have fewer than 13 pigs
marketed per year. “We think a 20%
increase (in numbers) is a realistic
goal,” said Mr. Ehlert.
His firm offers a special feeding
program that allows the pig to “adjust
his intake of protein, minerals or en
zyme needs.’’ The pig always has been
a natural consumer of animal and plant
proteins, he stated, “and when given
the opportunity, the pig’s reproduc
tion and production records have re
sponded in kind.”
In one leaflet, distributed to bankers
at the close of the tour, was a study
conducted to investigate the effect in
calves of the addition ofVita Ferm, one
of the company’s special mixes, to a
group of calves receiving a poorquality grass hay similar to that which
would be received on winter-grass pas
ture.
For the entire 150 days of the study,
the average daily gain was 13.5% high
er, and feed efficiency was increased
7.7% in the cattle-fed Vita Ferm as
compared to the control group. Bank
ers were quick to grasp the economics
of this study.
The firm offers a range of its special
treated feeds for cattle and also is be
ginning to market a product for dogs.
A featured speaker at the one-day
program was Max Lennon, dean, Col
lege of Agriculture, University of Mis
souri. Dean Lennon presented some
observations on changes that could
occur in agriculture in the years ahead.
The American farmer has been un
usually productive, he stated, and in
creased production from year to year
has been taken almost for granted.
There are many reasons for this —
for example, improved technologies,
hybrid seeds and m echanization.
Energy, too, has been unusually cheap
— but what will happen to productiv
ity, he asks, as this cheap energy
vanishes.
By the same token, nitrogen has
been cheap, but will it be cheap in the
future? There is no question that credit
costs have increased, and what will
happen to water costs? Water tables
apparently are dropping and water
may cost more in the future.
Our transportation system, which
has been an aid to agriculture, has
been extremely efficient, and there is
no real indication, he stated, that this
system will deteriorate rapidly.
But for the stru ctu re of farms,
change has been occurring year by
year. Dean Lennon predicted that by
the year 2000 it is possible that 1% of
the nation’s farms will produce 60% of
the goods.
Corporate farming certainly will
grow in intensity, and there is no real
way of predicting, he stated, what
effect this will have on the overall agri
culture picture in the year 2000.
Statistically, Dean Lennon was able
to show that U. S. per capita consump
tion of beef has dropped significantly
over the past few years. Back in 1955,
U. S. consumption was 64 pounds per
person. This reached a peak in 1976 of
95.7 pounds and has dropped annually
to a figure of 78.3 pounds in 1980.
Price and com petition certainly
have had something to do with this.
During that same interval, per capita
consumption of chicken rose from 21.3
pounds per person to 51.2 pounds in
1980. During this same period, con
sumption of seafoods increased mod
estly from 10.5 pounds to 13.5 pounds
per person.
During those same years, pork con
sumption rose and fell with the pork
cycle. However, in recent years, the
MID-CONTINENT BANKER for October, 1981
trend of consumption has been up
gently to a new high of 59.8 pounds per
person in 1980.
These trends suggest change, but
also opportunity to agribusiness for
those who want to take advantage of
this change, said Dean Lennon. Com
puter decision making, he said, is just
one example of matching cost with pro
duction models.
He su ggested , too, that new
varieties of crops will develop that will
make more efficient use of the soil and
fertilizers and thus increase farm prof
itability. Genetic engineering could,
he said, help shorten the cattle cycle
and thus improve cattle profits.
Dean Lennon stressed the need for
farmers (and bankers) to strive con
tinually for cost reduction. For exam
ple, he pointed to trucking en ter
prises. Trucks normally run 40% emp
ty. If someone can figure out how to
solve this, it would offer tremendous
cost savings to agriculture.
He also questioned whether “big
farm equ ipm en t” was b etter than
smaller equipment. And should every
farmer own his own tractor, or plow or
combine.
Agriculture, he stated, must con
tinue to examine these cost systems to
stay solvent in the future.
The day-long program concluded
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with some price predictions by various
Market Day specialists, and these, of
course, change daily as reports and
conditions change.
And last, but not least, bankers were
treated to the final end of the cattle
cycle — a charcoal steak that had orig
inated on a Midwest farm, fed some
where on a Midwest feed lot, proc
essed through the St. Joe Stockyards
and then served at the St. Joseph
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Country Club. Officials of both First
Stockyards and First National prom
ised to be back for the 26th meeting in
1982! • •
Philip E. Schmidt has been promoted
to vice president at the Kansas City
Fed. He is supervisor of the bank su
pervision department, which is re
sponsible for examining and supervis
ing state member banks.
83
N ew s
About Banks and Bankers
Alabam a
Edward L. Hilliard has been pro
m oted to vice p resid en t at F irst
National, Mobile. He joined the bank
in 1979. Named branch officers were
Keith C. Anderson and Walter A. Bell.
Eleven of the 12 affiliates of Central
Bancshares of the South, headquar
tered in Birmingham, are expected to
be merged by the end of 1981. Central
Bank, Birmingham, will merge with
Central Banks in Decatur, Mobile,
Montgomery, Auburn, Jasper, Eufaula, Tuscaloosa, Uniontown, Dothan
and Springville. A new name is being
developed for the merged institutions.
The HC’s remaining affiliate, Central
Bank of Oxford, will consolidate with
First City National, Oxford, to operate
as a national bank affiliate of the HC. In
separate action, the HC plans to ac
quire First National of Baldwin Coun
ty, Fairhope.
Federal Reserve approval has been
received for opening Am South Bank
International, said to be Alabama’s
first Edge Act corporation. Joint own
ers of the corporation are First Nation
al, Birm ingham , and A m erican
National, Mobile. The corporation’s
first office is to be opened in Mobile
this month, under the direction of Lee
R. Seifert, former executive vice presi
dent at First National, Mobile.
J. Vann Henagan has been promoted
to senior vice p resid en t at F irst
National, Birmingham. He is mana
ger, public funds administration de
partment and formerly served in the
correspondent banking department.
He joined the bank in 1958. Promoted
to vice presidents in the bond depart-
ment were William B. Ogletree and
Murry C. Vaughan.
Arkansas
Lee White has been elected senior
vice p resid en t at F arm ers Bank,
Clarksville. He joined the bank in 1973
and had been a vice president since
1978.
First State, Conway, has elected Louis
E. Stell and James G. Williamson Jr. to
its board. Mr. Stell is the bank’s execu
tive vice president and joined the in
stitution in 1962. Mr. Williamson is
new to the bank and formerly was
senior vice president/chief financial
officer at Twin City Bank, North Little
Rock.
G. Michael Sigman has been elected
vice president/manager, correspon
dent banking/national accounts divi
sion at Worthen Bank, Little Rock. He
joined the bank in 1971 and succeeds
Michael E. Cissell, who now is execu
tive vice president/director of banking
services. Other new vice presidents
include John Woodworth, who also
was named m anager/operations;
Dwight Goodwin and James Wilkerson. Chris Robertson was promoted to
assistant vice president.
C all Sam M alone, Senior V ic e President and
Investm ent O fficer of First A lab am a B an k of M o n t
gom ery. For your correspondent needs, 2 0 5 / 8 3 2 - 8 3 7 0 .
Personal B anking From Professionals.
R is tA la b a m a Bank
#
84
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
o f M o n t g o m e r y Na
Member FDIC
Illinois
Northern Trust, Chicago, has named
the following second vice presidents:
Leonard J. Coffey and Stephen W.
Rich, personal banking; David A.
Hartley and Mary A. Mortell, trust;
Elizabeth Hart, economic research.
Eli S. Barkhausen and Mary Blackett
Rugo were named trust officers.
MID-CONTINENT BANKER for October, 1981
joined the bank in 1971 and now is in
charge of the consumer lending divi
sion. Stephen R. Carlson has been
promoted to vice president/trust offic
er. He joined the bank in 1977. Greg
ory A. Rosin has been appointed vice
president/controller. He comes to the
bank from a bank in Michigan.
Multibank HC Planned
Michael W. Jump has been promoted
to vice president in the correspondent
banking division at American Nation
al, Chicago. He joined the bank in
1974 and was assigned to the corre
spondent departm ent in 1979. He
formerly was a second vice president.
C o n tin en ta l B an k , C hicago, has
named David E. Maguire, vice presi
dent, manager/corporate personnel
services, and William L. Gunlicks,
vice president, manager/mining, con
struction and utilities group/special in
dustries services department. They
joined the bank in 1966 and 1967, re
spectively. Newly named vice presi
dents include A. James Baka, Chris
topher B. Campbell, Rudolph Wag
ner, financial services; Lawrence D.
Wickter Jr., general banking services;
Jere L. Jones, international; William
G. Drewes, multinational; Craig R.
Nelson, special industries; James R.
McClamroch and Jeffrey D. Tubbs,
U. S. banking; Edward J. Doyle, Ray
L. Brownfield, William O. Leszinske,
Terry L. M cRoberts and Brian K.
Riordan, trust/investment; Rene L.
D eM aris and W illiam L. W eibel,
bond/treasury; Robert L. Moore Jr.,
Christopher J. O’Donnell, Ronald B.
Phem ister, Reinhard J. Schneider,
Former IBA President Dies
Jam es P. Ghiglieri,
pres., Citizens Nat'l,
Toluca, died August
30. He w as 54. He
served as pres., Illi
nois Bankers Associ
ation, in 1973-74.
He had been associ
ated with his bank
since 1951 and was
a p ast ch ., IBA
Group Six.
Madison Bank, Chicago, is orga
nizing a multibank HC with Madison
National of Niles, Des Plaines, and
First National, Wheeling. The banks
had been members of an informal
chain. All will become members of
Madison Financial Corp., HC for
Madison Bank, Chicago. Approval
for the action is not expected before
the first of the year, the effective
date of Illinois’ new law allowing for
multibank HCs.
D ennis J. Stin e and W illiam J.
Wienke, real estate services; Edward
M. Boss, operations/management ser
vices; Donald L. Lippert, personal
banking services; Charles G. Schultz,
Continental Illinois Leasing Corp.
Control of All American Bank, Chica
go, has been acquired by an investor
group headed by First Colonial Bankshares, HC controlling Colonial Bank,
Chicago. HC President C. Paul John
son has been named CEO of All Amer
ican.
200-Bank ATM Network
Established in Illinois
A joint network agreement between
Cash Station, Inc. (CSI) and Electron
ic Funds Illinois, Inc. (EFI) has set the
stage for the largest shared ATM net
work in Illinois.
The arrangement permits banks be
longing to E L I to share ATMs de
ployed by C SI-m em b ers in Cook
County and contiguous counties. CSI
members can arrange to use shared
ATMs established by E F I. Illinois law
limits banks from sharing ATMs in any
but its home or contiguous counties.
Kansas
Tomm y N. Thom pson has b een
named vice president/installment loan
officer at Lyon County State, Empo
ria. He formerly was a loan officer at
Commerce Bank of Harrisonville, Mo.
Lafayette National has elected Bonnie
L. Hobbs and Gregory W. Springer
assistant vice presidents. They joined
the bank in 1972 and 1975, respective
lyR o b ert J. C ro th e rs has been
appointed senior vice president at St.
Jose ph Valley Bank, Elkhart. He
Adm ire B an k, Em p oria, has ap
pointed James O. Myers as president,
LeEtta Holmberg as senior vice presi-
Indiana
CNB
COMMERCIAL
NATIONAL
BANK
Max
6TH & MINNESOTA AV EN U E
KA N SA S CITY, K A N SA S 66101
Member F.D .I.C.
913 371-0035
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Seven Indiana banks have sold $2.5
million worth of student loans to the
Indiana Secondary Market for Educa
tion Loans, Inc.
The purchases represent the cul
mination of more than two years of
planning and effort by individuals in
the private and public sectors, includ
ing the governor’s office.
The seven initial participating banks
are Anthony W ayne Bank, F o rt
Wayne; Bank of Indiana, Merrillville;
Clark County State, Jeffersonville;
First Merchants National, Michigan
City; Irwin Union, Columbus; Mer
chants National and Midwest Nation
al, Indianapolis. A total of 75 lenders
have signed agreements with the Indi
ana Secondary Market for Education
Loans to sell almost $50 million of stu
dent loans.
Funds for the initial purchases were
provided through a $15-million short
term loan from Merchants National,
Indianapolis.
M aurice Linnens has been named
president, National Bank, Wichita. He
formerly was with Wichita State as vice
president/trust officer and, before
that, was vice president/commercial
lending at Kansas State, Wichita. He is
chairman of the Central Kansas Group
of Robert Morris Associates.
BflNKMfITIC*
24-Hour Automated
Teller Machine Network!
Kansas’ Fastest Growing!
$2.5-Million of Student Loans
Sold by Indiana Banks
Lloyd
Burton
Dickerson
85
KBA Trust Seminar Set
The annual fall seminar of the
KBA s trust division will be held
October 29 and 30 at the Red Coach
West Motel in Salina.
Seminar topics will include the
Tax Recovery Act of 1981 as it con
cerns estate planning, trust market
ing, how to handle oil and gas in
estates and trusts and generation
skipping trusts.
Additional information is available
from William Gilles, senior vice
presid en t/tru st officer, National
Bank of America, Salina.
dent and Gene W. Mavity as vice pres
ident. Mr. Myers also was elected to
the bank’s board. He formerly was vice
president in charge of lending activi
ties at the bank. Mrs. Holmberg has
been with the bank for 13 years and
was vice president/banking services.
Mr. Mavity formerly was an assistant
vice president in the loan department.
Banking History Completed
A history of the Kansas banking
industry from 1887 to the present
has been completed and copies are
being sent to banks ordering it from
the Kansas Bankers Association.
The 180-page book, written by
former KBA staff member Roger
Kirkwood, is illustrated and is avail
able at $14 per copy from the KBA.
Stephen B. Ashley has been promoted
to senior vice president/correspondent
department head at Security National,
Kansas City. He joined the bank in
1973 as assistant cashier and served
two years as assistant vice president/
marketing before joining the corre
spondent department in 1977. He has
headed that department for the past
year. He is a graduate of the Colorado
School of Banking.
Wayne A, Becker has been named an
assistant vice president in the corre
spondent banking d ep artm en t at
ASHLEY
86
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BECKER
Fourth National, W ichita. He has
been with the bank since 1970 and
formerly was assistant controller. He is
a graduate of the Graduate School of
Banking at the University of Wiscon
sin.
Kentucky
2nd Nat'l Plaza Topped Out
illllll !
LBA to Sponsor School
An interm ediate-level banking
school will be sponsored by the
Louisiana Bankers Association at
Louisiana State University in Baton
Rouge.
The two-year school will hold its
first session June 13-18, 1982. En
rollment is open to Louisiana bank
ers and, if space is available, to outof-state bankers.
The curriculum will consist of
courses in accounting, economics,
money and banking, finance and
marketing. The faculty will include
bankers and educators working
jointly to develop the program.
Registration is being handled by
the LBA, P. O. Box 2871, Baton
Rouge, LA 70821.
Jake H. Graves III (r.), ch./pres., Second
Nat'l, Lexington, celebrates topping out of
14-story Second National Plaza building
with project's general contractor G ary Pen
nington. Topping out occurred on Mr.
Graves' 55th birthday. Bank's building is
scheduled to open in September, 1982, in
time for bank's centennial.
WATERS
MASILLA
A. Stephen Cooper has joined First
Security National, Lexington, as assis
tant vice president in the regional and
specialized commercial loan division.
He formerly was with First National,
Louisville.
Bowling Green Bank has promoted
Steve Marcum to senior vice president/controller, Rod Carter to vice
president and Mike Stevenson to assis
tant cashier. Mr. Marcum joined the
bank in 1979, Mr. Carter in 1978 and
Mr. Stevenson in 1979.
Mid-South Bancorp. Inc., Franklin,
has become a bank HC through ac
quisition of most of the voting shares of
the successor by merger with Simpson
County Bank.
Louisiana
A reorganization at Hibernia Nation
al, New Orleans, has resulted in the
establishment of four new groups with
in the bank. Each group represents the
consolidation of banking services and
functions. The commercial banking
group and the retail banking group will
report to Richard A. MeNeeee, president/head of banking. The operations
group and the asset-liability group will
report to Thomas A. Masilla Jr., re
SHAW
RODIMON
RUSSEIL
MAHLER
cently promoted to executive vice
president/head of adm inistration.
Stuart Mahler, Stanley J. Rodimon,
O. C. Russell Jr. and Charles J. Shaw,
all senior vice presidents, have been
named heads of the commercial bank
ing, retail banking, operations and
asset-liability groups, respectively. In
other action, the bank has promoted
S. Kyle Waters to vice president/manager, financial institutions depart
ment. He is responsible for correspon
dent relations with banks and thrifts.
He joined the bank in 1973. He has
served in the branch system, audit de
partment and financial division, as well
as the financial institutions depart
ment. He is active in the Young Execu
tives Section of the Louisiana Bankers
Association.
E. J. Guzzo has been promoted to vice
president/manager in the correspon
dent banking department at Bank of
MID-CONTINENT BANKER for October, 1981
Brookhaven Bank has elected Patsy
M. Smith cashier and named Martha
Bates and Martha Smith branch mana
gers. Patsy Smith has been with the
bank since 1963, Mrs. Bates since 1965
and Martha Smith since 1977.
GUZZO
Centerre Plaza Designated
Missouri
New Orleans. He formerly was vice
president/senior commercial relations
m anager, com m ercial loans. Also
promoted was Frank Vandrell, to vice
president/manager of the discount de
partment.
Mississippi
Top-management changes will take
place January 1, 1982, at Deposit
Guaranty Corp. and Deposit Guaranty
National, Jackson. John P. Maloney,
currently ehairman/CEO of the bank,
will assume the additional duties of
ehairm an/CEO of the HC. E . B.
Robinson Jr., bank president, will also
become president of the HC. Robert
MALONEY
McCULLEN
ROBINSON
GARRAWAY
C. Garraway has been named vice
chairm an of the HC and Ray R.
McCullen has been named vice chair
man of the bank, also effective January
1. Warren A. Hood, HC chairman/
CEO, plans to retire on Decem ber 31,
but will remain as chairman of the ex
ecutive committees of the HC and the
bank. The bank has promoted John D.
Adams, D. Joseph O’Brien Jr., H. G.
Parker and Nathan A. Whitehead to
vice presidents and Byron D. Aldridge
to vice president/trust officer.
Consumer Finance Conference
Set fo r O ctober 28-30
“Issues in Bank Lending is the
theme of the 26th annual Consumer
Finance Conference to be sponsored
by the Missouri Bankers Association
October 28-30 at the Lodge of the Four
Seasons, Lake Ozark.
Keynote speaker will be David L.
Schmidt, president, David L. Schmidt
& Associates, Shawnee Mission, Kan.
His topic will be “Time Management.”
Also on the first-day’s program will be
a discussion of SB 326 and other usury
laws by Wade L. Nash, MBA staff
attorney; an MBA legislative update
by Richard H. Mason, MBA’s director
of governmental affairs; a session on
bankruptcy by Frank R. Koger, Kansas
City attorney; a session on managing
for profitability by William W. Quigg,
president, Central Trust, Jefferson
City; size group meetings and a social
hour and banquet featuring Denny
Hilton and the Lake Ozark Country
Shindig Opry Show.
The luncheon speaker will be Ken
neth W. Littlefield, Missouri’s new
Division of Finance commissioner.
The program for the second day will
feature a compliance session with Ken
Keifer of the FD IC , Charles R. Halbrook of the Fed and Earl Manning
representing the Division of Finance.
Final session will be an economic fore
cast by Frank K. Spinner, chairman/
president, Tower Grove Bank, St.
Louis.
C on feren ce chairman is Robert
W alster, president, First National,
Mt. Vernon.
John W. Boyle, chairman, May D e
partment Stores Co., St. Louis, has
been elected to the board of Boatmen’s
Bancshares, St. Louis. He also is on
the board of Boatmen’s National. The
HC has acquired more than 95% of the
outstanding shares of Mountain Grove
(M o.) N ational and the Fed has
approved acquisition by Boatmen’s.
Commerce Bank, Kansas City, has
promoted Edgar W. Schelp to vice
president/operations manager, affili
ate bank operations and relations de
partment. New officers are Charles E.
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
The city of St. Louis recently passed an
ordinance designating the two-squareblock site of the soon-to-be-completed First
Nat'l Bank Building as Centerre Plaza.
Observing the erection of signage on the
site last month were (from I.) First Nat'l
Pres. Richard F. Ford; city Alderman Bruce
T. Sommer, ordinance sponsor; and Clar
ence C. Barksdale, bank ch./CEO.
Ehrhorn, assistant vice president,
metropolitan department, and Bar
bara A. Thomson, consumer banking
officer, retail banking department.
Anne L. Gagen has been elected a vice
president at St. Louis County Bank,
Clayton. She joined the bank in 1979
and is slated to become manager of the
bank’s new office at Clayton Road and
DeM un Avenue. County National
Bancorp, has received Fed approval to
acquire Security Bank, Manchester.
R if faster
service on
BANK
CREDIT
INSURANCE
CALL THESE SPECIALISTS
Harold E. Ball • Carl W. Buttenschon
John E. King • M ilton G. Scarbrough
214/559-1173
Foster (Horsey) Latimer
Missouri General Agent
INDUSTRIAL
LIFE INSURANCE COMPANY
P.0. Box 220998, Dallas, Texas 75222
/ IQ
Q
A member company of
CPLPSju Republic Financial Services. Inc
87
United Missouri, Kansas City, has
elected J. Robert Hardin an assistant
vice president in the correspondent
department. He is responsible for
accounts in northwest Missouri and
has been in banking for five years. New
vice presidents include Robert L. DeWitt and Thomas Lange and new assis
tant vice presidents include Steven P.
O kenfuss, Rita M. A b ern ethy ,
Dorothy J. Schneider and Kent Work
man. Robert E. Pyszka was appointed
director of purchasing.
HARDIN
AZELTON
Bob Azelton J r ., Patrick C. Clark and
Sharaon Hinderks have been pro
moted to assistant vice presidents at
First National, St. Joseph. Mr. Azel
ton is in the agriculture/correspondent
department and comes to the bank
from First Stock Yards Bank, an affili
ate of First Midwest Bancorp. Also
promoted were Flo Smith to assistant
loan officer and Jeanette Venable to
assistant cashier. James W. Doyle was
elected vice president/manager, East
Facility.
M ercantile T ru st, St. Louis, has
named the following vice presidents:
Thomas J. Doherty, James R. Davis,
Charles V. Monaghan and Paul F.
Holmes. Rodney R. Humphries has
been promoted to assistant vice presi
dent and C arleton L. Briggs and
M atthew G. W u ellner have been
named marketing research officer and
South Side Nat'l Breaks Ground
accounting officer, resp ectiv ely .
Daniel W. Eschenbrenner has been
elected vice president of Mercantile
Customs Services, Inc., and manager
of its downtown St. Louis office. Mer
cantile Customs Services is a subsidi
ary of Mercantile Trust and its office is
located in the bank at Eighth and Lo
cust.
First National, St. Louis, has prom
oted Larry D. Hoffman to vice presi
d ent, in v estm en t operations and
Lawrence S. Ross to vice president,
in tern ation al division, Singapore
Branch. Named assistant vice presi
dents were Steven K. D ierin ger,
Charles A. Erker, Susan L. Krieg, Jes
se E. Neyman J r ., and Diane K.
Spencer. New officers include Jo Ann
Dye, personnel; Joseph H. Hempen,
in tern ation al trading; B ev erly A.
Gregory, cash management; Jimmy
Lee Proe, petroleum engineering; and
Philip J. Zemel, commercial banking.
Janet R. Johnston and James C. Nabe
were elected assistant auditors. James
E. Cummins has joined First Union
Bancorp, as director of insurance sales.
F irs t N ational, Kansas C ity, has
electe d Paula L. Hofius assistant
cashier, Michael Ward international
banking officer and Rita D. Neal per
sonal banking officer. First National
C h arter Corp. has receiv ed Fed
approval to acquire First National,
Lebanon.
United Missouri Banks and their
advertising agency, Smith & Yehle,
Kansas City, have won two “awards of
distinction” in the national bank adver
tising awards competition held recent
ly in Denver. United Missouri was
cited for its work in trade magazine and
newspaper campaign advertising. The
bank and its agency also received three
certificates of excellence at the 1981
Kansas City Ad Club Omni Awards
presentation. Winning categories in
cluded trade publications.
Died: M ajor B. E in stein , retired
senior vice president, First National,
St. Louis. He joined the bank in 1951
as a vice president, was elected senior
vice president in 1963 and retired in
1966. He was 81.
New M exico
Ground has been broken for a $2.4 million
renovation and expansion of South Side
National, St. Louis. The building site is
adjacent to the bank's existing structure.
Completion is set for December, 1982.
88
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
F irst National, Albuquerque, has
named Richard Holland vice presi
dent/real estate, Robert J. Valdiviez
vice president/loan review, Raymond
Adamik assistant vice president/dealer
division, and Ed Pittman and Billy
Smith assistant cashiers.
SHEPHERD
GOODWIN
Robert D. Goodwin has been ap
pointed sales engineer for a number of
New Mexico counties by LeFebure.
He is headquartered at the firm’s Den
ver Branch.
Dan R. Shepherd has been named
director of a new business loans divi
sion office for Associates Commercial
Corp. in Denver that will serve New
Mexico. He joined the firm last Janu
ary.
Fidelity National, Albuquerque, has
appointed Gerald J. Libertelli president/CEO and reappointed Robert J.
Kesnowski Jr. chairman. Mr. Libertel
li formerly was president, Citizens
Bank, Albuquerque, and has seen ser
vice with Chemical Bank, New York
City, and Mercantile Bank, Tulsa. Mr.
Kesnowski resumes a full-time role
with New Mexico Banquest Corp. as
senior vice president/head of the com
mercial group.
Oklahoma
FORRESTER
KOTARSKI
Bob Kotarski has been promoted to
senior vice president/correspondent
bank departm ent at Penn Square
Bank, Oklahoma City. He joined the
bank in July, 1980, coming from First
National, Tulsa, where he was assis
tant vice president/correspondent
bank department.
Keith Forrester has been promoted
from assistant vice president to vice
president/correspondent department
manager at Bank of Oklahoma, Tulsa.
He jo in ed the bank in 1976.
MID-CONTINENT BANKER for October, 1 981
J o in y o u r
fr ie n d s a t
th e A B A i n
GO
FIRST
a
T
m
I
■
O VER 5100,000,000 CAPITAL S TR U C T U RE/M E*
A SU B SID IA R Y OF FIRST O K LA H O M A BANCOI
MID-CONTINENT BANKER for October, 1981
THE FIRST NATIONAL BANK AND TRUST COMPANY O F OKLAHOM A CITY
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
89
Vernon D. Ayres Drowned
OKLAHOMA CITY — Vernon
D. Ayres, 61, eh./pres., Oklahoma
Nat l, was presumed drowned after
having been knocked from a boat by
a tree limb September 13 while on a
fishing expedition 60 miles north of
Dillingham, Alaska. As of this writ
ing, his body had not been found.
Mr. Ayres entered banking 40
years ago at City Nat l, Oklahoma
City, and joined Oklahoma Nat l in
1976. He also was president/director, Bank of Tuttle and First State,
Cement.
At the time of the tragedy, Mr.
Ayres was a member of the Oklaho
ma Bankers Association’s senior
bank management committee.
Liberty National, Oklahoma City, has
elected Russell Scott Conn a vice pres
ident in the metropolitan division and
Joe Heitschmidt a loan administration
officer. Mr. Conn was senior vice president/commercial lending at Com
merce Bank, Oklahoma City, before
joining Liberty National in August.
Mr. Heitschmidt was with Fidelity
Bank before joining Liberty National
earlier this year.
First National, Oklahoma City, has
electe d Richard M. L o ck ert and
Carolyn L. Woodward vice presi
dents. Mr. Lockert is new to the bank
and Miss Woodward joined the bank in
1962. Also promoted were Connie J.
Larson and Jack L. Staubus to assistant
vice presidents/trust officers and John
Nowell to assistant vice president.
First Continental Bank, Oklahoma
City, is the new name of Del State
Bank. Primary reason for the name
change, according to Ron Peeler, pres
ident, is the bank’s growth in number
of customers and area of service. The
bank was chartered in 1959 in an
8,000-square-foot building. It moved
in 1974 to an 80,000-square-foot build
ing, now known as Del State Bank
Tower.
D. Mike Moody has joined Commu
nity Bank, Bristow, as president. He
formerly was president/CEO, First
National, Sallisaw, and has served at
other banks, including First National,
Weatherford, and Bank of Hydro. He
is a former FD IC examiner.
Fidelity Bank, Oklahoma City, has
appointed Doyle Groves, vice presi
dent, as assistant division administra
te r/operational support division. Wan
da Cline, assistant vice president, was
promoted to director/check proces
sing. Gary Tillman was promoted to
90
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
assistant vice president/senior bond
salesman and Tariq Mian was elected
assistant cashier.
making executive committee and has
liaison responsibility with chapters in
her area.
Tuck Link has been elected president
at First National, Jenks. He continues
as president/director of First Jenks
Bancorp., the bank’s HC.
Third National, Nashville, has b e
come the first bank in the city to reach
the $ 100-million level in stockholder
equity. On June 30, 1981, equity for
the bank totaled $100,400,000.
Central National, Enid, has named
J. Olivia Vincent consumer loan offic
er. She formerly was with a finance
corporation in Honolulu.
The Fed has approved the application
of Union Planters Corp., Memphis, to
acquire Union Planters Bank, Nash
ville, a proposed new bank.
T ennessee
John Tirrill s promotion to senior vice
president at Third National, Nashville,
heads a list of promotions that include
Garry Forsythe and Ronald Shelton to
assistant vice presidents, Bettye Aber-
TIRRILL
nathy and Rita Willingham to commer
cial officers, Susan West to retail offic
er and Linda Stilz to assistant bank
systems officer. Mr. Tirrill joined the
bank in 1957 and had been a vice presi
dent.
Paula G. Keen, vice president, Third
National Corp., Nashville, has been
elected vice president of the National
Association of Accountants for 198182. She is a member of the policy-
Aaron Helps Open Branch
Texas
Paul Matchniff has been promoted to
district service manager for Diebold.
He is responsible for service activities
in northeastern Texas and a portion of
Oklahoma.
RepublicBank, Dallas, has named 13
new vice presidents, including Urey
“Woody’ Alexander, Frederick R.
B jo rck , Douglas R. D en ton , J.
Lanham Higginbotham III, Sharon K.
Hott, Roberto L. Sanchez, Robert D.
Sanders, James C. Terrell, Michael J.
Cramer, Mary G. Lewis, James M.
McDonald, William F. Moyer and
Donald E. Nelson.
LOWERY
Joe Lowery has been elected corre
spondent banking officer at RepublicBank, Houston. He joined the bank in
January, 1980, as a credit analyst and
was assigned to the correspondent de
partment in February, 1981.
Melvin H. Johnson Jr. has been pro
moted to senior vice president at Colo
nial Frost Bank, San Antonio. He was a
vice president at Frost Bank before
moving to Colonial Frost in 1980.
Baseball's home-run king Henry Aaron
w as special guest at opening of newest
branch of Am erican N ational, C h a tta
nooga. Mr. Aaron signed autographs and
talked b a seb a ll w ith those attending
event after he cut trad itio n al ribbon.
Branch is named East Third Street Branch
and is located in Glenwood, an area of
Chattanooga undergoing redevelopment.
Pictured with Mr. Aaron (I.) are Manager
John Cooper and bank President John P.
Wright.
Frost Bank, San Antonio, has pro
moted Gloria Coker to vice president
and Susan Morgan to assistant vice
president. Thomas N. Delavan was
elected vice president/energy.
Cullen/Frost Bankers, San Antonio,
has promoted Terry E. Maxfield to
vice president/assistant treasurer,
Phillip M. “Mike’ Hardy to vice president/treasurer and Daniel J. O’Connor
to assistant vice president/assistant
secretary.
MID-CONTINENT BANKER for October, 1981
Frank H. Meissner and Ken L. Ricketson have been promoted to senior
vice presidents at First International
Bank, Houston. They joined the bank
in 1972 and 1976, respectively. Mr.
Meissner is a former correspondent
banker.
Robert L. Bintliff has been named
vice president/auditor at First Nation
al, Fort W orth. He also has been
named vice president at First United
Bancorp.
Capital National, Houston, has named
Marvin L. West chairman/chief oper
ating officer and Karl T. Butz chair
man, executive committee/CEO. Mr.
Butz continues as president, Mercan
tile Texas Corp.
Southwest Bancshares, Houston, has
agreed to merge with Preston State,
Dallas; Fort Worth Bancshares; Mans
field State, and First National, Euless.
Other mergers pending include Cop
perfield National, First Pasadena State
and Republic State, Houston, and
Mercantile National, Corpus Christi.
Mason E. Mitchell Dies
DALLAS — Mason E. Mitchell,
61, e.v.p., RepublicBank here, died
September 12 at the University of
Maryland Hospital, Baltimore, after
a long illness.
Mr. Mitchell joined First Nat l,
Tulsa, in 1948 as a teller and was
v.p./correspondent banking depart
ment when he left there in 1959 to
join Republic Nat l, now Republic-
Bank, as a. v.p./correspondent bank
ing. He became v.p. in that depart
ment in 1960, s.v.p. in 1967 and
e.v.p. in 1972. He also was an officer
of Republic of Texas Corp. (RPT),
where he had statewide responsibil
ity for affiliate-bank relations. RPT is
the Dallas-based bank HC that in
cludes RepublicBank, Dallas.
The family has requested con
tributions to the Mason E. Mitchell
Memorial Scholarship in care of
RepublicBank Dallas, P.O . Box
225961, Dallas, TX 75265.
The Banking Scene
(C ontinued fr o m page 6)
mutual savings banks’ books. In fact,
the banks would show tremendous
earnings and growth in capital, at least
in real-world accounting concepts.
Again reverting to the issue of prob
lem banks, I find it cheering that of the
problem institutions cited by the
FD IC since 1973 as “serious problempotential payoff banks,” only about
one-third actually failed in the concept
of the FD IC . Ten percent of those
potential payoffs were merged with
other banks without financial assist
ance from the FD IC , and 1% were
assisted by the agency. If one could
assume “past is prologue,” a rather
optimistic picture emerges. However,
as the FD IC well knows, there typical
ly is a likelihood of an 18-month lag
before a bank is added to a problem
list. One wonders, therefore, whether
the FD IC has a second list that pin
points those institutions likely to be
placed on the problem list in a year or
so.
In the past decade, over half the
bank failures were attributed to insider
self-dealing. As one analyzes mutual
savings banks, such would not be a
normal explanation. In fact, a para
doxical situation is noted. That is, the
banks were doing what they were set
up to do — garner savings, for the most
part, from middle-class citizens and, in
turn, invest the money mostly in real
estate mortgages with a minor portion
in short-term liquidity instruments.
Such an investment program has great
merit when interest rates are positive,
that is, short-term rates are lower than
long-term rates.
For well over a year, we have been
experiencing an inverse or a negativesloping yield curve. Therefore, mutual
savings banks are in the difficult posi
tion of not being able to hold onto
short-term funds, for the most part —
because of Regulation Q. Depositors
have been disinterm ediating from
those banks into much higher-paying
money-market funds. It’s ironic that,
for example, Series E bonds now are
paying 8% and the passbook-savings
rate for mutual savings banks is only
three-quarters of that or less! One nor
mally might say that Series E bonds
pose an unfair competitive investment
for the hard-pressed mutual savings
banks. But the fact of the matter is that
relatively few people are switching
from mutual savings banks into Series
E bonds even though the latter offer
the higher rate. This is because in
MID-CONTINENT BANKER for October, 1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
terest rates are even higher in moneymarket funds.
As a former bank economist and a
former government economist, I know
it is extremely dangerous to attempt to
forecast interest rates. In this context,
it may be recalled that former Presi
dent Jimmy Carter, during the last
portion of his term in office, predicted
an inflation rate of approximately 6%
when the actual experience of inflation
was closer to 12%. This gave President
Carter a 50% accuracy rating.
There may well be reasons why one
or another political party may project
either gross national product or infla
tion rates for political rather than
academic reasons. It is not my purpose
to predict interest rates, but one can
say that if we continue to have nega
tive-sloping yield curves, the plight of
our mutual savings banks will continue
to worsen.
The purpose of this column is to
raise the consciousness level of readers
to the severe plight of mutual savings
banks in particular and, to a similar
degree, to S&Ls — and, to a somewhat
more modest degree, to the commer
cial-banking industry. Many of the lay
public don’t recognize the substantial
differences that exist betw een the
asset and liability structures of mutual
savings and commercial banks.
Commercial bankers should recog
nize that a large proportion of mutual
savings banks currently is insured by
the FD IC . To that extent, the spiral of
failed institutions that occurred in the
late 1920s and early 1930s isn’t likely to
occur again. Still, one must conjecture
just how accurate the published fig
ures of the FD IC are in terms of their
leads and lags in a re-evaluation of the
basic causes of problem banks and
bank failures.
Will failures of an increasing num
ber of financial institutions result from
inappropriate federal monetary and
fiscal policies rather than from incom
petent management of institutions?
Correspondent Conference
Set fo r Kansas C ity in Nov.
W A SH IN G TO N , D. C. — The
ABA’s National Correspondent Bank
ing Conference will focus on meeting
the challenges created by Fed pricing
and new competitive forces. The con
ference is scheduled for November 1517 at the Hyatt Regency Hotel in Kan
sas City.
Keynoter for the conference will be
Thomas G. Labrecque, president,
Chase Manhattan Bank, New York.
He will describe “The Financial Ser91
vices Industry — Today and in the Fu
ture.”
Other speakers on tap include W il
liam F. Ford, president, Atlanta Fed;
Peter Merrill, president, Peter Merrill
Associates, bank consultants, Boston;
and Llewellyn Jenkins, vice chairman,
Manufacturers Hanover Trust, New
York, who will be ABA president by
the time the conference is held. “Pric
ing Bank Services will be examined
by William D. W ilstead, associate
dean, University of Colorado Gradu
ate School of Business Administration,
Boulder.
A panel of bank presidents will offer
perspectives on the past growth and
possible new directions of correspon
dent banking. M oderator will be
Thomas P. Bideout, president, Savan
nah (Ga.) Bank, and chairman, ABA
You'll Get
EXTRA
Profits
corresp on d en t banking division.
Others on the panel will be Richard F.
Ford, president, First National, St.
Louis; Roger A. Lyon, president, Val
ley National, Phoenix; and Hugh L.
McColl Jr., president, North Carolina
National, Charlotte.
Concurrent workshops will be con
ducted on mergers and acquisitions,
managing for productivity, loan partic
ipations, bank stock loans and ED P for
respondents. Small roundtable discus
sions are planned to cover a variety of
topics including Fed pricing, bankers’
banks, compliance problems, cash
management, capital adequacy and
servicing thrifts.
Conference chairman is Wayne G.
Hansen, senior vice president, Chase
Manhattan, New York.
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Commi Loan/Real E s ta te ................................... $25K
Many other fine career opportunities available for
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of KANSAS CITY
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SERVING THE BANKING INDUSTRY
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reports for the FD IC and semi-annual pub
lished statements of the bank. Provide various
financial information to senior officers upon re
quest. Will study NCR computer programs in
order to solve routine computer programming
problems and problems in the bank operations
caused by the programming. Will perform in
ternal auditing of the bank in every department
and the statutory directors examination and
yearly report each year, along with periodical
reports to the Board of Directors on the audit
ing functions. Requires M.S. or M .B.A. degree
in Business. Must have some familiarity with
and knowledge of computer languages and ma
jor or concentration in accounting. Send res
umes to: Mr. Marlin Marks, Indiana State E m
ployment Service, 2301 Concord Road, Post
Office Box 5528, Lafayette, Indiana 47903.
Index to Advertisers
American Express Co. (Money Order Dlv.) ..........
Architects Design Collaborators, Inc..........................
Armco Industrial Credit Corp..........................................
Arrow Business Services, Inc..........................................
Associates Commercial Corp...........................................
•
65
28
78
37
80
Bacon, AIA Architect & Assoc., Richard L ............. 72
Bank-Aide, Inc........................................................................ 92
Bank Building Corp.............................................................. 38
Bank of America, San Fra n cisco ................................ 23
Bank of the Southwest, Houston .............................. 69
Boatmen's National Bank, St. Louis ...................... 93
Bunce Corp............................................................................... 43
Cawthon Building Systems, Inc.................................... 59
Central Bank, Birm ingham ............................................. 31
Cheshire Inn & Lodge ....................................................... 83
Commerce Bank, Kansas City .....................................
7
Commercial Natl Bank, Kansas City, Kan............. 85
Creative Image, Inc.............................................................. 57
Don Howard Personnel, Inc............................................. 92
Driftwood Towers ................................................................. 56
Financial Institution Services, Inc............................... 73
Financial Insurance Service, Inc.................................. 77
First Alabama Bank, Montgomery.............................. 84
First City National Bank, Houston .................... 48-49
First National Bank, Amarillo ..................................... 75
First National Bank of Commerce, New Orleans 17
First National Bank, Kansas City .............................. 13
First National Bank, St. Joseph, Mo.......................... 52
First National Bank, St. L o u is ..................................... 94
First Oklahoma Bancorp., Oklahoma City ............. 89
First Stock Yards Bank, St. Joseph, Mo................... 76
Fourth National Bank, Tulsa ........................................ 71
H B E Bank Facilities Corp..............................................
Hagan & Assoc., Tom .......................................................
Harland Co., John H............................................................
Harris Trust & Savings Bank, Chicago ....................
46
92
27
15
Industrial Life Insurance Co............................................ 87
Insured Credit Services, Inc............................................ 67
Liberty National Bank & Trust Co.,
Oklahoma City .................................................................
2
MPA Systems ........................................................................ 72
Memphis Bank & Trust Co...............................................
3
Mercantile Bancorp., St. Louis ...................................
5
Mosler Safe Co........................................................................ 35
National American Bank, New Orleans .................. 51
RepubllcBank, Dallas ....................................................... 60
Son Corp..................................................................................... 68
Struven, Inc., G. C a rly le .................................................. 53
Third National Bank, Nashville ................................... 63
500 N. Michigan Ave., Chicago, IL 60611
6350 LBJ Freeway, Dallas, TX 75240
New York • New Jersey • Chicago • Atlanta
An
E x e cu tive R ecru itin g and
92
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
(312) 222-1980
(214) 233-9012
• San Francisco •
Dallas
P l a c e m e n t A g e n c y f o r th e F i n a n c i a l C o m m u n i t y
United Kentucky Bank, Lo u isville ..............................
9
United Oklahoma Bank, Oklahoma City ............... 46
United States Banker ....................................................... 79
Webster Safe & Lock Co., Inc........................................
Wells Fargo Business Credit ........................................
Westcap Corp...........................................................................
Whitney National Bank, New Orleans ....................
28
82
21
11
MID-CONTINENT BANKER for October, 1 981
B oatm en's fcmie Hellmich
O perations A ssistan ce.
Boatmen’s Correspondent Banking Officer Ernie Hellmich
and J. D. Moss, President and Chief Executive Officer of
Litchfield Bank and Trust Company. W hatever your
correspondent needs, Boatmen’s has knowledgeable
people to assist you. Call Ernie Hellmich. He can help.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Correspondent Banking Division
THE BOATMEN'S
NATIONAL BANK
OF ST. LOUIS
314 425-3600
-
Member FDIC
Everett Knight. President, Gallatin County State Bank,
Ridgway, Illinois. Born: Rosiclare, II., 1942. Education: Southern
Illinois University, 1963. Recently coordinated and led small investor
group in purchase of three Illinois banks.
“All banks have bricks, mortar, and money. The difference is
the people. I’m looking for good people with a positive attitude.”
His St. Louis bank: Firstbank. “They go the extra mile to get things
done. They’re pros.”
First National Bank in St. Louis. The bank that puts Firstperson
performance to work for every correspondent customer.
Firstperson.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Firstbank.
r /^
First National Bank
in St. Louis
I l f lH
A First Union Bank
W
^ -
510 Locust Street • St. Louis, Missouri 63101 • (314) 342-6967 • Member FDIC
@FedFRASER