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https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Financial Magazine o f the Mississippi Valley & Southwest SEPTEMBER, 1976 ON W A S H I N G T O N , D . C . , O C T O B E R 2-6 Rex Duwe Outgoing ABA President Liddon McPeters Incoming ABA President you’re invited... to a seminar on determining the role of EFTS in y o u r community. □ Consumer Acceptance Criteria 0 Site Evaluation M Financial Analysis i-jL, ■- -------- —*-------------------------¡j— i The development of practical EFT services considers factors beyond hardware and technology. The component parts of EFT S ervices... not just systems... include comprehensive financial analysis, marketing analysis and site analysis. A multi tude of questions must be answered to provide you with realistic * decision making guidelines. Can I afford to offer EFT services? Where are cost savings possible? Will my market accept the EFTS concept? What locations offer the best potential? Liberty can help you find the answers to these ques tions, and more. In fact, w e ll show you a step-by-step method forconducting an in-depth marketing research program on EFTS — including POS and ATM location analysis techniques. A series of one-day seminars will be held this fall for all interested bankers. W ell provide your bank with a package to help you determine the direction of EFTS ■A in YOUR community, according to your own needs and -4 goals. Enrollment in Liberty’s EFTS seminars is limited. Re serve a place for your bank today. Contact Liberty’s Correspondent Department or fill out and return the coupon below. W ell contact you later with complete details. r 1 Ü LIBERTY THE BANK OF MID-AMERICA Send to: Correspondent Department Liberty National Bank & Trust Company P. 0. Box 25848 Oklahoma City, Oklahoma 73125 □ Please reserve a spot for us at one of your EFTS Community Analysis Seminars, and send details as soon as possible. BANK NAME CITY. STATE___________ZIP. OFFICERATTEN D IN G L____________ j MID-CONTINENT BANKER is published 13 times annually (two issues in May) at 403 Olive, St. Louis, Mo. 63102. September, Vol. 72, No. 10. Second-Class postage paid at Fulton, Mo. Subscription: $10. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ► Alabama, Arkansas, Mississippi, O klahom a and East Texas bankers call: At First NBC —New Orleans, our Correspondent Banking Department is service-intensive and were always available to help you find a creative solution to any correspondent banking problem. That’s why we’ve recently improved our incoming WATS facilities —so reaching us is easier than ever. Try one of our brand-new numbers. We’re anxious to hear from you. W H O T HfflONAL M K OF COMMBCI Correspondent Banking 210 Baronne Street / New Orleans, Louisiana 70112 MID-CONTINENT BANKER for September, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis _____ 3 Your bank m akes our Investment service different Continental Bank’s Portfolio Advisory Service is different. Why? Because we know the needs and goals of every bank are different. Our banking and investment specialists initiate the service by doing a thorough analysis of your bank’s trade area along with your deposit and loan trends. Then, weighing these particulars against future market and economic indicators, we help you build the kind of liquidity portfolio and investment port folio that are best for your bank. Join the Continental Correspondents who’ve added our years of commercial banking expertise to their portfolios. Call Barry Johnson at 312/828-4730. You’ll find we’ll go out of our way to find a way to help you. CONTINENTAL BANK ¿'"'SU BSID IA R Y C O N T IN E N T A L ILLIN O IS C O R P O R A T IO N 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for September, 1976 We believe in hard work for what we want, and we know how to work hard together. We think our attitude is one of the most important, most positive of our state’s many resources. We’ll bet you don’t know all the facts about the good things we're doing in Mississippi. * ■> Find out more from First National Bank • • • you’ll be interested in what you hear. > Jackson. Mississippi Member FDIC MID-CONTINENT BANKER for September, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 5 When you need a helping hand, try one of ours. Our staff of professionals is ready, willing and able to provide you and your banking customers with a full range of correspondent banking services. • Clearings • Loan Participations • Demand Deposit Accounting • Bond Portfolio Analysis • Federal Funds • Automated Savings and C/D Accounting • Full Data Processing Services So if you have a financial problem, big or little, . . . don’t hesitate to call for help. Contact Earl Lassere, V ice President and Manager, Correspondent Bank D epartm ent at (713) 225-1551. Bankof the Southwest 910 Travis Houston, Texas 77002 Member Southwest Bancshares, Inc. Member F.D.I.C. 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for September, 1976 lEN'S TOWER Boatmen's is'moving into bold new headquarters, reflecting their strength and commitment to she future. That same strength and commitment backs our corespondent ban< team, a team well-versed in today's banking environment. Put Correspondent bankers who know the answers and have the back-up on your team. Boatmen's Correspondent Bankers, specialists when you need them. ^ m\ : K* ? % \; 2 « THE BOATMEN'S NATIONAL BANK I r l OF ST. LOUIS 314 / 4 2 1 -5 20 0 '^ f e i n i n tirrn rrn r r r r r r m r i r r c r r p r i 11T R T rrrrrrrrrrr ^ lp _ r r r : i: r r r r r r V>1111 * 11 * « I * ï ! i •■* SJi 1 ; -Thttps://fraser.stlouisfed.org Federal Reserve Bank of St. Louis k * - h v: 0 0f 1$ f •r Convention Calendar September Volume 72, No. 10 September, 1976 FEATURES 43 ABA'S 'SPIRIT OF 76' CONVENTION Event-packed meeting to wind up centennial October 45 HOW W ILL NEW CONGRESS AFFECT BANKING? W ill it be as activist as present one? 49 ABA'S CONSUMER ADVISER PROGRAM Women take banking’s message to public 56 W HAT IS YOUR BANK WORTH? Some guidelines for buying, selling Nat S. Rogers 148 KANSAS REGIONALS SET TO BEGIN Three planned in September, three in October 152 MISSOURI REGIONAL PROGRAM ANNOUNCED Holder-in-due-course, EFTS, ECOA on agenda SPECIAL SUPPLEMENT (Between Pages 64 and 113) BG/9 A PLAN TO LOCK IN LONG-TERM DEPOSITS BG/12 LENDERS FAVOR VARIABLE-RATE MORTGAGES BG/26 HOW TO TREAT CUSTOMERS COURTEOUSLY BG/30 MONEY SERVICE FRANCHISE CATCHES ON DEPARTMENTS 10 NEWS ROUNDUP 15 CORPORATE NEWS 22 THE BANKING SCENE 26 BANKING WORLD 30 COMMUNITY INVOLVEMENT 34 EFTS 16 SELLING/M ARKETING 28 COM M ERCIAL LENDING 38 NEW PRODUCTS STATE NEWS 156 ALABAMA 156 ARKANSAS 156 ILLINOIS 160 INDIANA 160 KANSAS 162 KENTUCKY 162 LOUISIANA 162 MISSISSIPPI 164 MISSOURI 168 TEXAS 166 NEW MEXICO 166 OKLAHOM A 168 TENNESSEE niii i i iiii!i i !ii i i i i i i ii iuiiHi irainninn!ni ni nnnMMinniifflininnnnninnnnnimi ni iniiin!i mii mimi ii!inninini niMnranniiinnnnini!!iniini ii ininiinniimi!ii iHii innnnrniinmni Editors Ralph B, Cox Editor & Publisher Lawrence W. Colbert Assistant to the Publisher Rosemary McKelvey Managing Editor Jim Fabian Associate Editor Daniel H. Clark Assistant Editor Advertising Offices St. Louis, Mo., 408 Olive, 63102, Tel. 314/ 421-5445; Ralph B. Cox, Publisher; Mar garet Holz, Advertising Production Mgr. Milwaukee, Wis., 161 W. Wisconsin Ave., 53203, Tel. 414/276-3432; Torben Soren son, Advertising Representative. 8 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Sept. 19-21; Bank Marketing Association, Pub lic Relations Conference, Chicago, Chicago Marriott Hotel. Sept. 19-22: ABA National Personnel Con ference, San Francisco, Fairmont Hotel. Sept. 20-21: Mortgage Bankers Association, President’s Conference, New Orleans, Hyatt Regency Hotel. Sept. 26-29: National Association of Bank Women. Inc., Annual Convention, New York. Waldorf Astoria. Sept. 27-28: Robert Morris Associates, Lend ing to Banks & Bank Holding Companies Workshop, Chicago, Hyatt Regency O’Hare. MID-CONTINENT BANKER is published 13 times annually (two issues in May) by Commerce Publishing Co. at 1201-05 Bluff, Fulton, Mo. 65251. Editorial, execu tive and business offices, 408 Olive, St. Louis, Mo. 63102. Printed by The Ovid Bell Press, Inc., Fulton, Mo. Second-class postage paid at Fulton, Mo. Subscription rates: Three years $21; two years $16; one year $10. Single copies, $1.50 each. Commerce Publications: American Agent & Broker, Club Management, Decor, Life Insurance Selling, Mid-Continent Banker, Mid-Western Banker, The Bank Board Letter and Program. Donald H. Clark, chairman; Wesley H. Clark, president; Johnson Poor, executive vice president and secretary; Ralph B. Cox, first vice president and treasurer; Bernard A. Beg- gan, William M. Humberg, Allan Kent, James T. Poor and Don J. Robertson, vice presidents; Lawrence W. Colbert, assistant vice president. Oct. 2-6: ABA Annual Convention, Washing ton, D. C. Oct. 6-8: National Association of Real Estate Investment Trusts, Annual Conference, Chi cago, Hyatt Regency, Chicago. Oct. 13-17: Consumer Bankers Association, Annual Convention, White Sulphur Springs. W. Va.. The Greenbrier. Oct. 17-20: Robert Morris Associates, Annual Fall Conference, Chicago, Hyatt Regency. Oct. 17-20: Bank Administration Institute, Annual Convention, Philadelphia. Oct. 24-27: Bank Marketing Association, An nual Convention, Miami Beach, Fontaine bleau Hotel. Oct. 24-29: Kansas, Missouri & Nebraska Bankers Associations, Intermediate School of Banking, Lincoln, Neb., University of Nebraska. Oct. 25-27: Mortgage Bankers Association, Annual Convention, San Francisco, San Francisco Hilton. Oct. 27-29: ABA Midwestern Regional Opera tions/Automation Workshop, St. Louis, Chase Park Plaza. Oct. 31-Nov. 5: Kansas, Missouri & Nebraska Bankers Associations, Advanced School of Banking, Lincoln, Neb., University of Nebraska. November Nov. 3-5: ABA International Foreign E x change Conference, New York City, Wal dorf Astoria Hotel. Nov. 3-5: Bank Administration Institute F i nancial Accounting & Reporting Seminar, Dallas, Marriott Hotel. Nov. 4-7: Assembly for Bank Directors, Pinehurst, N. C., Pinehurst Hotel & Country Club. Nov. 7-10: ABA Correspondent Banking Con ference, Dallas, Fairmont Hotel. Nov. 7-10: Independent Bankers Association of America Bank Ownership Seminar/ Workshop, Phoenix, Ariz., Biltmore Hotel. Nov. 7-12: ABA National Personnel School, Memphis, Hyatt Regency Hotel. Nov. 7-19: ABA National Commercial Lending School, Norman, Okla., University of Okla homa. Nov. 8-10: Bank Administration Institute De termining EDP Job Costs, Boston, Colonnade Hotel. Nov. 10-12: ABA Mid-Continent Trust Con ference, Cincinnati, Stouffer’s Cincinnati Inn. Nov. 10-12: Bank Administration Institute Bank HC Administration Seminar, Park Ridge, 111., BAI Headquarters. Nov. 10-12: Association of Bank HCs Fall Meeting, Carefree, Ariz., Carefree Inn. Nov. 13-17: Bank Administration Institute Forum for Presidents of Not-So-Small Com munity Banks, Phoenix, Ariz., Biltmore Hotel. Nov. 14-17: ABA National Agricultural & Rural Affairs Conference, New Orleans, New Orleans Marriott. Nov. 17-19: Bank Administration Institute Float Management Seminar, Key Biscayne, Fla., Sonesta Beach Hotel. Nov. 18-19: Robert Morris Associates Lending to Banks & Bank HCs Workshop, Boston, Copley Plaza Hotel. Nov. 28-Dec. 1: Bank Marketing Association Trust Marketing Workshop, Houston, Sham rock Hilton Hotel. Nov. 30-Dec. 3: Bank Administration Institute Trust Operations Short Course, Park Ridge, 111., BAI Headquarters. December Dec. 8-10: Bank Administration Institute Organization Development Seminar, Park Ridge, 111., BAI Headquarters. MID-CONTINENT BANKER for September, 1976 You’re looking for extra profits. Our cash letter analysis can uncover ’e m. It’s surprising how much potential profit is buried under slow paper. That’s why we’ve developed an effective action program to help you get things moving. Our program includes computerized cash letter analysis ... plus practical methods for improving proof operations and check collection. Start us digging for those profits—call 314-425-2404. We’re with you. m e r c f u it iie B n r x Central Group. Banking Dept • M ercantile Trust Company N.A. • (314) 425-2404 • St. Louis, Mo. • M ember F.D .I.C . MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 9 NEWS ROUNDUP News From Around the Nation CUs Move Toward Banking How soon will credit unions begin offering services that now can be obtained only from commercial banks? Al ready, some credit unions around the country are offering share drafts that look much like ordinary bank checks. In fact, says Edwin S. Hinrichs, manager, Mart Credit Union, St. Louis, "It’s (share draft) no different from a checking account, except we’re paying interest.” The St. Louis CU, which serves military and federal government personnel, has become the first Missouri CU to allow its members to write checks on interest-bearing accounts. Those who participate in the program must deposit their government checks in the CU and then can write an unlimited number of drafts, or checks, against their accounts. The drafts are cleared through a New York City commercial bank. Participants get numbered and im printed drafts, each with a duplicate copy for record keeping. The original drafts aren’t returned to the writers, and participants receive monthly statements of their transactions from the clearing bank. Five per cent quarterly interest is paid on the minimum balance. A number of banks around the country reportedly are processing CU share drafts. Home Mortgage Lending Test The FD IC and Comptroller of the Currency have begun a new program whose objective is to find out whether national and state nonmember banks are being discrimina tory in home mortgage lending. During the test phase of the program, about 300 banks will be required to use a specially designed form in con nection with their home mortgage lending activity. After the form is perfected, all national and state nonmember banks will have to use and retain it. The form has two parts: One part requires banks to retain certain basic economic data on each loan applicant. The other requests the loan applicant to forward directly to the agencies data on race, gender, religion and certain other personal characteristics. Data retention won’t be required when applications or inquiries are made orally rather than in writing. The required data and voluntary data will have match ing identification numbers so that the data can readily be analyzed together. The Fed and Federal Home Loan Bank Board are not taking part in the test, and institutions sampled won’t include state member banks or S&'Ls. 10 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Racial Loan Records Opposed The ABA last month went on record against a proposal that would have lenders make and retain records of con sumer loan applicants’ racial and other characteristics. Such monitoring has been proposed as an additional regu lation under the Equal Credit Opportunity Act. According to an ABA spokesman, who appeared before the Federal Reserve Board in Washington, D. C., this monitoring “would not only needlessly offend many bank customers, but also impose an intolerable burden of paper work.” He reiterated the ABA’s support of the principle of equal credit opportunity and said the ABA believes that including approved sample loan application forms in the Fed regulation— as has been proposed-—would help lenders know what information they can ask for in evalu ating loan applications. However, he continued, the “effects test,” the legal definition of what has the effect of being discriminatory, of information that lenders seek from applicants should be much more specific than the Fed-proposed test. Savings-Checking Transfers OKed The ABA has endorsed proposals made by the Fed and FD IC that would allow bank customers to—under limited conditions— authorize withdrawals from their savings ac counts to cover checks drawn on demand accounts. Pur pose of the transfers would be to avoid overdrafts. However, the ABA, in the person of President J. Rex Duwe, remains on record as objecting to requirements that amounts transferred be in multiples of $100 and that bank customers forfeit an amount equal to at least 30 days’ interest on funds transferred. The ABA believes that charges for the transfer service, if any, should be de termined by local competitive conditions. Women Bank Directors Increasing Financial institutions have almost twice as many outside directors on their boards as the average for all corporations, 16 compared to nine, according to a national study made by the Financial Services Search Division of Korn/Ferry International, Los Angeles. Also, the number of women directors on boards of financial institutions has gone up dramatically, with 41% of those institutions now reporting women directors. This is four times as many as the 10% reported in 1974. Only 20% of the other corporations reported a woman director, the study revealed. MID-CONTINENT BANKER for September, 1976 Twenty-Seventh Assembly for Bank Directors El Camino Real Hotel Mexico City, D. E February 3- 6 ,1977 Sponsored by The Foundation of the Southwestern Graduate School of Banking https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W hat is the Assembly? The Assemblies for Bank Directors are designed to in crease the director’s understanding of how he can serve his bank; to indicate the ways in which the director can best serve as a representative of his bank in the commun ity; to provide better understanding of and respect for bank management’s functions; and to acquaint the direc tor fully with issues of critical interest to his bank and banking. Twenty-three Assemblies were held from 1968 through 1975, and three are scheduled annually, 1976 through 1980. For 1976 and 1977 the programs of the Assem blies have been substantially modified in response to changing conditions in the economy and the banking system, with emphasis placed on director contributions to superior bank performance. During following years each program will be designed in response to changing conditions, and to contribute to further development of directors’ abilities to contribute to their banks. Any inside or outside bank director, advisory director, prospective director or senior bank officer is invited to attend the Assemblies, and past registrants are invited to attend again occasionally. Bank directors, senior officers, senior level bank supervisors and bank educators through out the United States have acclaimed the Assemblies program. The Assemblies are endorsed by the American Bankers Association, the Independent Bankers Associa tion, the Conference of State Bank Supervisors, and by various state and regional banking associations. Faculty of the Twenty-Seventh Assembly DIRECTOR B. Finley Vinson, Chairman of the Board, First Nation al Bank, Little Rock, Arkansas FACULTY Charles A. Agemian, Chairman of the Board, Garden State National Bank, Paramus, New Jersey Robert E. Barnett, Chairman, Federal Deposit Insurance Corporation, Washington, D.C. William H. Baughn, Dean, School of Business, University of Colorado, Boulder, Colorado; and Director, Stonier Graduate School of Banking Donald M. Carlson, President, Elmhurst National Bank, Elmhurst, Illinois Rafael Carrion, Jr., Chairman of the Board and President, Banco Popular de Puerto Rico, San Juan, Puerto Rico H. C. Carvill, Executive Manager, Arkansas Bankers Association, Little Rock, Arkansas Jack H. Chambers, Financial Vice President, The Charter Company, Jacksonville, Florida Albert H. Cloud, Partner, Peat, Marwick, Mitchell & Company, Dallas, Texas Philip E. Coldwell, Member, Board of Governors, Fed eral Reserve System, Washington, D. C. Jack T. Conn, Chairman of the Board and Chief Exec utive Officer, Fidelity Bank, N.A., Oklahoma City, Oklahoma James H. Denman, Chairman of the Board and President, Citizens State Bank, Nevada, Missouri Michael Doman, Regional Administrator of National Banks, Eleventh National Bank Region, Comptroller of the Currency, Dallas, Texas J. Rex Duwe, Chairman of the Board, Farmers State Bank, Lucas, Kansas Robert Y. Empie, President, Stock Yards Bank, Okla homa City, Oklahoma Joe T. Gilliland, Executive Vice President, Oklahoma Bankers Association, Oklahoma City, Oklahoma James S. Flail, President, First Arkansas Bankstock Cor poration, Little Rock, Arkansas John Barry Hubbard, Senior Vice President - Trust, Texas American Bancshares Inc., Fort Worth, Texas Leonard W. Huck, Executive Vice President, Valley National Bank, Phoenix, Arizona https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Denton R. Hudgeons, Executive Vice President, New Mexico Bankers Association, Santa Fe, New Mexico Henry Jaramillo, Jr., President, Ranchers State Bank, Belen, New Mexico Richard B. Johnson, President, The Foundation of the Southwestern Graduate School of Banking, Dallas, Texas Edward S. Laskowski, D.D.S., Palatine, Illinois; and Director, First Bank and Trust, Palatine, Illinois James B. Mayer, Chairman of the Board, Valley National Bank, Phoenix, Arizona A. A. Milligan, President, Bank of A. Levy, Oxnard, California Bookman Peters, President, City National Bank, Bryan, Texas Fred M. Pickens, Jr., Partner, Pickens, Boyce, McLarty & Watson, Newport, Arkansas Frank A. Plummer, Chairman of the Board, First Ala bama Bank, N.A., Montgomery, Alabama DeWitt T. Ray, Sr., Investments, Dallas, Texas Will Mann Richardson, Senior Vice President and Trust Officer, Retired, Citizens First National Bank, Tyler, Texas Robert H. Seal, President, National Bank of Commerce, San Antonio, Texas Henry M. Shine, Jr., Executive Vice President, Cali fornia Bankers Association, San Francisco, California Van Smith, President, Bank of Tuckerman, Tuckerman, Arkansas Wayne Stewart, President, First National Bank, Alamo gordo, New Mexico Edward E. Stocker, Executive Vice President and Senior Trust Officer, Continental National Bank, Fort Worth, Texas Leon Stone, President, Austin National Bank, Austin, Texas Eugene L. Swearingen, Chairman of the Board and Chief Executive Officer, Bank of Oklahoma, Tulsa, Oklahoma Quinton Thompson, Regional Director, Federal Deposit Insurance Corporation, Dallas, Texas William S. Townsend, Administrative Director, South western Graduate School of Banking, Southern Meth odist University, Dallas, Texas Charles M.Van Horn, Regional Administrator of National Banks, Second National Bank Region, Comptroller of the Currency, New York, New York THE ASSEMBLIES FOR BANK DIRECTORS Southern Methodist University P.O. Box 214 Dallas, Texas 75275 A D D R ES S C O R R EC T IO N R E Q U E S T E D https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Schedule & Events TW EN TY-SEVEN TH A SSEM BLY FOR BANK D IREC TO RS El Camino Real Hotel Mexico City, D. F. February 3-6, 1977 B. Finley Vinson, Director D IR EC T O R S ’ PROGRAM TIME TOPIC OR ACTIVITY SPEAKER Registration Reception Banquet and Address-THE FIN A N CIA L ENVIRONMENT Philip E. Coldwell Thursday, February 3 3:30- 5:30 p.m. 7:00- 8:00 p.m. 8:00-10:00 p.m. Friday, February 4 8:30- 8:40 a.m. 8:40- 9:15a.m . 9:1 5- 9:45 a.m. 9:45-10:00 a.m. 10:00-10:30 a.m. 10:30-12:15 p.m. 12:30- 2:00 p.m. 7:00-10:00 p.m. THE FOUNDATION AND THE ASSEM BLY DEVELOPM ENTS IN DIRECTO R L IA B IL IT Y THE REG U LA TO R AND TH E D IRECTO R Coffee DIRECTO R ORGANIZATION AND FUNCTIONS Group Meetings Luncheon and Talk-W HAT TO DO IN MEXICO C IT Y Dinner at Hacienda de los Morales Richard B. Johnson Jack H. Chambers Robert E. Barnett BUDGETING, PLANNING AND C A PITA L MANAGEMENT THE BANK AUDIT AND THE DIRECTO R Coffee C R ED IT PO LICY-W H A T THE D IREC TO R SHOULD KNOW Group Meetings Luncheon and T a lk -T H E MEXICAN ECONOMY Afternoon and Evening-At Leisure James S. Hall Albert H. Cloud FROM TH E INSIDE AND TH E OUTSIDE CONTINUITY AND RETIR EM EN T STANDARDS Coffee MANAGEMENT SELECTIO N AND DIRECTOR-MANAGEMENT RELATIO N S Group Meetingsand Conclusion of Assembly James B. Mayer Edward S. Laskowski Bookman Peters Saturday, February 5 8:30- 9:00 a.m. 9:00- 9:30a.m . 9:30- 9:45 a.m. 9:45-10:15 a.m. 10:15-12:15 p.m. 12:30- 2:00 p.m. Frank A. Plummer Sunday, February 6 8:30- 9:00 9:00- 9:30 9:30- 9:45 9:45-10:15 a.m. a.m. a.m. a.m. 10:15-12:00 Noon Eugene L. Swearingen COUNSELORS Charles A. Agemian William FI. Baughn Donald M. Carlson Rafael Carrion, Jr. H. C. Carvill Jack T. Conn James H. Denman Michael Doman J. Rex Duwc Robert Y . Empie Joe T. Gilliland John Barry Hubbard Leonard W. Huck Denton R. Hudgcons Henry Jaramillo, Jr. A. A. Milligan Fred M. Pickens, Jr. DcWitt T. Ray, Sr. Robert H. Seal Henry M. Shine, Jr. Van Smith Wayne Stewart Edward E. Stocker Leon Stone Quinton Thompson William S. Townsend Charles M. Van Horn SPOUSES’ PROGRAM TIME TOPIC OR ACTIVITY SPEAKER Reception Banquet and Address—TH E FIN A N CIA L ENVIRONMENT Philip E. Coldwell Thursday, February 3 7:00- 8:00 p.m. 8:00-10:00 p.m. Friday, February 4 9:30-10:00 10:00-10:30 10:30-10:45 10:45-11:15 12:30- 2:00 7:00-10:00 a.m. a.m. a.m. a.m. p.m. p.m. R U LES FOR TH E D IR EC TO R ’S W IFE INVESTM ENTS, TRU STS, AND YOU Coffee and Sherry Mexican Crafts Luncheon and Talk-W HAT TO DO IN MEXICO C IT Y Dinner at Hacienda de los Morales Saturday, February 5 10:30-12:00 Noon 12:15- 2:00 p.m. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Craft Tour Luncheon at San Angel Inn Frank A. Plummer Will Mann Richardson Registration In addition to registering for the Assembly with the Foundation, directors should reserve their accommoda tions directly with the hotel. The Foundation has re served rooms for the Assembly. The $350 director’s and $100 spouse’s registration fees cover pre and post-Assembly materials, lectures, discus sion sessions, tours and receptions. A $25 deposit which is applied toward the total registration fee is required with each registration. Directors are responsible to the hotel for their accommo dations and expenses. Hotel accommodation forms will be sent registrants from the Assembly office, which registrants should return to the hotel. The Assembly at El Camino Real will be on the Euro pean plan. The Assembly fees will cover the meals indi cated on the program. Charter flights from Dallas to Mexico City and returning to Dallas and post-Assembly tours may be available. Information concerning the flights and tours will be sent registrants for the Assembly. E L CAMINO R E A L HOTEL M EXICO C IT Y , D. F. REGISTRATION FORM TWENTY-SEVENTH ASSEMBLY FOR BANK DIRECTORS El Camino Real Hotel Mexico City, D.F. February 3-6, 1977 N A M E:___________________________________________ Name called by: Phone, Business Address:________________________________ Company P.O . Box C ity , State, Zip .Title, Profession or Principal Business Interest-------- .Phone. Home Address:___________________________________ Zip Spouse will Attend?______________________________ If yes, spouse’s name:__ Bank Directorship held in:_______________________ President:_________________________________________ _____Size of Bank?__________________________________________ Number of Directors on Board:_________________ ______ Number of years on Board?_________________________ Bank Address:____________________________________ P.O . Box C ity State Zip Directors Committees on which I have served:_ Main Interest: Credit Area____________________________Trust Area___________________________ Other____________________________________ Earlier Assemblies Attended:____________________________________________________________________________________________________________ Deposit ($25.00) Attached:_________ Total registration fee ($350) enclosed:__________Spouse’s registration fee ($100) enclosed:. (Please make checks payable to: The Foundation of the Southwestern Graduate School of Banking. Mail to: The Assemblies for Bank Directors, P.O. Box 214 at S.M .U., Dallas, Texas, 75275.) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Roundup ■ > > Y Y V * >- > -> > • Bank Building Corp. Carl J. Weis has succeeded Joseph A. Smith as pres ident, Bank Building Corp., St. Louis. Mr. Smith has been elected chairman and continues as CEO. William F. Cann, chairman since 1973, has been made vice chairman. Mr. Weis joined the firm in 1949 as an engineer and, subsequently, was promoted to division manager, group vice president and sen ior vice president before being named president. • Mortgage Guaranty Insurance Corp. Chris Cunnane has been named senior regional underwriter in charge of the newly opened underwriting service center of Mortgage Guaranty Insurance Corp. in Kansas City. Mortgage Guar anty Insurance Corp. is a subsidiary of MGIC Investment Corp., Milwaukee. The new office is in Kansas City’s Plaza Center Building and will process mort gage insurance applications from about 650 institutions in Kansas and Missouri. Mr. Cunnane has been with MGIC In vestment Corp. three years, most re cently as assistant secretary of MGIC Mortgage Corp., the company’s second ary mortgage market unit. • Olan Mills, Inc. A bank marketing division has been formed by Olan Mills, Inc., Chattanooga, Tenn., a family por trait studio. The new division will pro vide banks throughout the country with advertising, promotion and marketing services. Joe Trivett is the division’s company representative and will co ordinate all activities connected with the new services Olan Mills will be of fering. These include a 52-week ad and promotion program that includes 26 newspaper ads, 13 radio spots, 14 out door billboard designs, 12 statement stuffer designs and a budget guide de signed for the retail banking customer. A special feature of the campaign is the portrait promotion, a free color por trait of an individual or family group that will be made available to bank customers. • Howard, Weil, Labouisse, Fried richs, Inc. William H. Walker has been appointed vice president, fixed income department, Howard, Weil, Labouisse, Friedrichs, Inc., New Orleans. Mr. Walker has had extensive marketing experience and most recently was vice president and trust development officer, Hibernia National, New Orleans. SMITH » Federal Signal Corp. Larry A. Stuenkel, Thomas B. Ely and Kenneth B. Cecil have received appointments at Federal Signal Corp., Chicago. Mr. Stuenkel was promoted from director, employee relations, Federal Signal Corp., to vice president-administration, Federal Sign, a division of Federal Sig nal. Mr. Ely was advanced from Mil waukee district manager to sales man ager, national accounts, Federal Sign. Mr. Cecil has joined Federal Signal’s security products division, going from the post of national accounts manager, Rusco Electronic Systems. SWIFT KODL CUNNANE G LA SG O • Diebold, Inc. Willis R. Glasgo has been named director, engineering-con sulting services, bank/systems division, Diebold, Inc., Canton, O. Mr. Glasgo will coordinate guest visits to Diebold’s national display center and will ar range, supervise and participate in pre sentations of the firm’s products. He joined Diebold in 1962. W ALKER ELY ANDERSON POLLARD • LeFebure. Martin R. Swift has been appointed manager of LeFebure’s New Orleans Branch Office. LeFebure, a division of Walter Kidde 6c Co., Inc., is headquartered in Cedar Rapids, la. Mr. Swift will manage sales and service of LeFebure banking equipment and security systems in sections of Louisi ana, Mississippi and Alabama. The New Orleans Branch Office is located at 13555 Old Gentilly Road. • Hibbard, O’Conner & Weeks, Inc. Tom L. Pollard has been elected as sistant vice president of Hibbard, O’Conner & Weeks, Inc., Houston, and subsidiary companies. Before his pro motion, Mr. Pollard was a special rep resentative for the investment banker. Pie has been with the firm since 1975. • Bank Consultants of America. Robert G. Kodl, formerly vice president and director of marketing, Elgin (111.) Banking Group, has been appointed Midwest district sales manager of Bank Consultants of America. Mr. Kodl will be headquartered in the company’s Rolling Meadows, 111., office. • Continental Mortgage Insurance, Inc. Kirk Anderson has been named a district director of Continental Mort gage Insurance, Inc., and will repre- MID-CONTINENT BANKER for September, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W EIS sent the company in the southern Chi cago area. Mr. Anderson previously was a regional sales representative with CNA Insurance, Chicago. Continental Mortgage Insurance is a subsidiary of CMI Investment Corp., Madison, Wis. Selling /Marketing Bank Promises, W e II Find a W ay, Steps Up Q u ality of Customer Service <•£ VV7 E ’LL FIN D a Way” is a promise VV that Continental Illinois Nation al, Chicago, has made to its custom ers. It’s more than an advertising cam paign; it’s a corporate “image improve ment” campaign, designed to heighten the quality of service the bank’s em ployees provide to customers. The program was launched last F eb ruary, with television commercials fea turing theme music and scenes of em ployees helping customers and per forming support services. But backing the ads is a campaign to encourage top-quality service by Continental Bank employees. Each of the bank’s departments initi ated internal programs to heighten em ployee awareness of the importance of the customer and to encourage per formance among the staff. All em ployees have viewed a 12-minute film, in which Roger E. Anderson, chair man, and John H. Perkins, president, give support to the “W e’ll Find a Way” concept, and staffers were provided with peel-tape labels bearing the pro motion’s theme, thus providing con stant reminders of the campaign’s goal of customer service. The stickers also are featured in the bank’s television commercials. Print advertising for the promotion contains illustrations by Franklin Mc Mahon and includes quotations from American business and professional leaders. Each is signed, “We’ll Find a Way.” Since the initial advertising broke, a number of additions have been made to the program: • Two new television, radio and print ads have been produced, one focusing on the “Bank-in-One” ac count, a combination package of free checking, overdraft check protection, Master Charge and a savings account. The other ad features Continental Bank’s 24-hour Automatic Banking Card, which can be used in the institu tion’s electronic terminals. • “Legalese” has been eliminated from all the bank’s savings and check ing account agreements. Simplified, “plain English” descriptions were sub stituted. • A tellers’ seminar series was be gun. During the first three hours of the mini-course, participants view tele 16 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis vision commercials of the bank’s com petitors in order to get an idea of the image each bank projects. The “W e’ll Find a Way’ kind of customer service then is discussed. During a second ses sion of the tellers’ seminars, partici pants take turns in the roles of teller and customer in a number of situations. \ ideotapes of the encounters then are played back so tellers can see their weak points and, at the seminar’s end, evaluate one another’s performances. An instructor is on hand to give an overall view of the encounters. • For trust department customers, the bank has produced a multi-media presentation describing the various ser vices that are available. The “W e’ll find a Way” attitude is emphasized. • A summer T-shirt campaign was conducted for employees. More than 4,000 shirts were sold, at cost, during that promotion. • In addition to the “W e’ll Find a Way” stickers, badges and signage were created and placed strategically in employee work areas throughout the institution. • In Continental Bank’s staff news paper, Coinage, a series of articles fea ture employees who have the “W e’ll Find a Way” spirit of serving custom ers. Also included in the publication was an article on the teller training program and a cartoon supplement illustrating the campaign’s goals. • • viewed from a distance, blend together to form a recognizable picture. To ensure the authenticity of the mural, old photographs from the Tower Grove Park collection were used as sources, and the park’s superintendent from 1943-76 served as archival con sultant. The ice-cream social was held on the parking lot next to the mural. In Jeffersonville, Ind.: Road to Success Charted In Map Marketing Promo Here’s a bank that’s really charted the road to success: Citizens Bank, Jef fersonville, Ind., has a selling tool for its services for which customers actual ly visit the bank and request! Citizens Bank has used area maps to generate new business and commu nity good will, using word-of-mouth advertising only. In need of a map of the Jefferson ville area—featuring points of interest, information on schools, parks, historical sites and photos of new public build ings—the bank contacted K. D. Stearley & Associates, a marketing firm spe cializing in map design and produc tion. After several meetings between the bank and Stearly & Associates, the idea emerged that the map idea and another, separate, bank selling tool could be combined. “It was almost accidental,” said Fred Hale, vice president and marketing di rector for the bank, “but we saw how the map could be included in our ser- Turn-of-the-Cenfury: Ice-Cream Social Held To Celebate 'New' Mural Tower Grove Bank, St. Louis, held an old-fashioned ice-cream social to commemorate the completion of its brand-new 1,050 square-foot mural. The mural, which covers the institu tion’s north exterior wall, is three stories tall. It depicts a turn-of-thecentury theme and is seen by the artists as an extension of an old area park, Tower Grove Park. The painting technique is modeled after “pointillism,” which was of the late 19th century school of art known as impressionism. In pointillism, the canvas or painting surface is covered with tiny dots of color which, when Fred Hale, v.p. and mktg. dir., Citizens Bank, Jeffersonville, Ind., exam ines "Total Service" packag e of institution. W rap-around cover has flaps to contain m ap (I.) and inform ation on vario us bank-offered services. Package has proved to be complete, convenient m arketing tool for officer call program s and new account presentations. MID-CONTINENT BANKER far September, 1976 This checkbook catalog gets down to business. Some time ago, we completely redesigned our personal check catalog . . . inside and out. Now, we’ve done the same to our busi ness checkbook catalog. And the results are hard working. Inside, our new catalog features nearly 60 d ifferent business check selections, ranging in style from our all new Antique Check—uniquely etched with an histori cal flair — to our 3 new contem porary designs . . . with the spotlight on modern efficiency. You’ll find 6 paper colors, over 1100 trademark and emblem cuts, and a lot more; pictured clearly, exactly and hand somely to give your customers the most concise image of what you have to offer. Outside, our new business check catalog has been designed to be compatible with our personal checkbook catalog. Together, these classic looking, book-like volumes should be a welcome addition to your new accounts area. M arket research told us these design changes in our business check catalog would help you better satisfy your cus tomer needs. We made the changes. We made the book. Your Deluxe representa tive will be glad to see to it th at you get one . . . the checkbook catalog th at gets down to business. CHECK PRINTERS, INC. SALES HEADQUARTERS P.O .BOX 3 3 9 9 S T PAUL, M N .55165 STRATEGICALLY LOCATED PLANTS FROM COAST TO COAST MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 17 vice brochure, which contains inserts describing specific bank services. By in serting the map on the left side and placing our service inserts on the right, we had a compact, complete and easyto-use selling tool.” Originally, 10,000 maps were or dered for distribution over a two-year period, but demand was so great that Citizens Bank had to maintain a low profile on their distribution. “Besides the customer business the promotion has generated,” Mr. Hale added, “a spin-off benefit of the pro gram has been the enthusiasm it has generated among the bank’s branch managers. One manager told me it is the best selling tool we’ve ever had and another said that, because of the maps, he’s picking up new accounts from a prestige apartment community across from his office.” Currier & Ives: Trays Draw Customers; Christmas Clubs Swell A series of oval metal trays bearing 1868-era Currier & Ives prints are af fording banks unusual opportunities to more fully capitalize and justify Christ mas club promotions. The trays, marketed by Fabcraft, Inc., Frenchtown, N. J., have proved effective in increasing club member ships. One of the scenes is a winter view that fits the holiday season and the other scenes make the trays useful the year round. posit $50 in an account, which entitled them to one free place-setting of either a stainless, flatware or silverplate pattern. By depositing an additional $25, an ad ditional place-setting could be pur chased. Extra serving pieces and a storage chest were also available for purchase. The promotion ran from September until March and was advertised heavily on TV ’s “Monday-Night Football.” Newspaper ads and statement stuffers also spread the word. The promotion was termed “very suc cessful” and resulted in 4,500 new ac counts and 3,400 additions to existing accounts. This type of promotion appeals to people of all ages,” a spokesman said. “But it’s great for attracting new savers and helping them establish a regular savings pattern.” Bread or Bread': Stitchery on Display: Fewer Slops for Shoppers Wi+h Store's Bank Office Bank of Ladue, Mo., Exhibits Needlework Show Shoppers in Arnold, Mo., have fewer stops to make these days. United Mis souri Bank of Jefferson County has opened an office in Ziegler’s Super Market. Reportedly the first bank facility in a supermarket in the St. Louis area, the office consists of a counter with two tellers windows and a new accounts station. Customers can make deposits, open accounts, buy CDs, apply for loans, have documents notarized or buy travelers checks at the office. The facility takes up the space for merly occupied—appropriately enough —by the market’s bread section, is en closed by a low railing and is carpeted. A number of chairs have been provided for customers and guests. "W in ter" is title of Currier & Ives scene a p pearing on oval metal trays a v a ila b le for use a s Christm as club incentives. Results from using the trays as a club premium include a 54% increase in number of clubs at two institutions. One small-town bank reported an in crease of 1,000 accounts over the pre vious year by using the trays. Another bank’s accounts grew from 3,000 to 7,700 in just one year with the trays. An institution that sold the trays for the self-liquidating price of $1 each ex hausted its original supply of 1,500 in two days. More than 9,000 trays had been purchased before the promotion ended. Variety of Silver Utensils Nets $7 Million for S&L Jam es Boyd, pres., United M issouri Bank of Jefferson County, Arnold, w ields scissors at r., joining Mr. Ziegler, ow ner of Ziegler's Super M arket in Arnold, in opening cerem onies of bank's office in m arket. Looking on a re city dignitaries and bank directors. A p prop riately, facility is situated w here store's bread section form erly w a s. 18 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis There’s nothing like silver incentives to help a financial institution celebrate its silver anniversary! So say the people at Home Federal, St. Louis, who are pretty proud of the fact that a variety of table utensils manufactured by Inter national Silver Co. was responsible for bringing in some $7 million in new de posits in a five-month period. And the incentives were put to work at the last minute to bolster two other premiums that had been originally planned to carry the full load during the promotion. One reason the silver was added was that it was known to be a quality item. In order to get their silver utensils, customers of the S&L were asked to de A display of a traveling needlework show at Bank of Ladue, Mo., has served to raise interest in the art of stitchery and to attract new depositors to the bank. Ladue is located in St. Louis County. Cosponsored in the St. Louis area by the St. Louis Needlework Guild, the exhibition is comprised of selections from “Stitchery ’75,” a biennial show sponsored by the Embroiderers’ Guild, Craftsman Branch, Inc., Pittsburgh, Pa. Last fall, the show hung in the Arts and Crafts Center in Pittsburgh. Representing 78 artists from 23 states and Canada, the show is the fourth of the National Standards Coun cil of American Embroiderers, a non profit educational organization dedicat ed to fostering interest in and raising the quality of needlework. First of Panhandle, Tex., Is 88 G lenda Boothe, sec., First Nat'l, P anhandle, Tex., stands am ong some of the items offered as draw in g or door prizes during the celebra tion of the 88th a n n iv e rsa ry of the bank. An a ll-d ay party w a s held at the institution, featuring musical program s by elem entary and junior high school students and a high school Dixieland band. The celebration attracted about 2,000 people. Prior to the event, the bank dedicated a new 40-foot-tall flagpole in honor of the Am erican bicentennial. FROMCOMMERCIAL HflTIOnflL TRAVELSERVICE fl BflfïKÉRS HOLIDAY Take a well-deserved rest and holiday with a unique tour from American Express and CNB. Let your good customers know about this trip. And remember, our travel service is yours, too. Encourage your clients to think of CNB Travel Service as a free service from your bank to them. Another service to help make your good bank better. CHRISTMAS IN THE CARIBBEAN - Dec 18-Jan. 1 15 DAY CRUISE JAMAICA • HAITI • ARUBA • BARBADOS • TRINIDAD ST. THOMAS • VENEZUELA $1400 per person, double occupancy. Bask in Greek cruise ship luxury with continental meals and Greek specialties in the style only American Express can put together. The most popular shopping and sightseeing ports in the Caribbean . . . 3 meals and a midnight buffet d a ily . . . two lower beds and an outside cabin . . . 20,000 feet of open deck sp ace . . . three pools . . . five bars . . . Fora free brochure call Jim Phillips at (501) 378-3350. Reservation deadline November 1. Other cruises on the Atlas departing Ft. Lauderdale/Port Everglades January 2,15, 29, February 12, 26 and March 12. MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis COMMERCIAL NATIONAL BANK 1 HI m Second and Main Street 8023 Cantrell Road Little Rock, Arkansas R ep resen tative 19 ing attention on the bicentennial cele bration. One map reportedly was the first to use the name “Texas,” while others showed California as an island. Besides using news releases to at tract attention to the display, Common wealth National sent special invitations to Dallas-area history teachers and their classes, to museums and to selected customers. The collection is owned by Preston Figley of Witherspoon & Associates, Fort Worth, the firm that handled PR for the showing. Customers Learn Costs of Banking; Institution s Reports Tell It Like It Is HERE IS an expression that’s pop ular: “telling it like it is,” It means, of course, telling the truth. And that is what Security Bank, Mt. Vernon, 111., has been doing with its customers. Security Bank has prepared a series of written reports—entitled “Telling It Like It Is”—that are sent to many of its customers in monthly mail ings as part of newsletters. One mail ing, “The Farm Picture,” goes to 350 farmers while another goes to 350 busi ness firms. Bank officials saw a need to inform customers of the “facts” in banking concerning costs, rates and procedures that apply to the customers. Says Gil bert E. Coleman, bank president, “Country bankers need to educate their customers orally and in writing. Such bankers traditionally have been hesitant to raise loan rates, charge for services and, in general, require the customer to 'pay his way’ where ser vices are concerned. The fear of losing a customer shouldn’t be so great that the banker would settle for any loan rate, allow any procedure regardless of the additional handling required or permit a customer to name his own terms. “In other words,” Mr. Coleman says, “country bankers need to ‘tell it like it is.’ ” Topics covered by the reports are “Interest Rates,” “Free Service Charge” and “Uncollected Funds.” To reinforce the series, bank personnel are instruct ed on each topic so they can explain them and respond to customer ques tions. The report on “Interest Rates” asks the question, “Interest rates may be too high, but compared to what?” That question is answered by comparing prices and interest rates of today and 25 years ago— 1950. Most prices for goods went up 200400% during that period, while interest rates, the report shows, increased only 70-85% in the past 25 years. Sugar, for example, cost $2.19 for 25 lbs. in 1950. The price for the same amount today is $6 or $7, a 300% increase. Automo biles, which experienced price increases on the lower end of the scale, rose from the 1950 average of $2,300 to $5,000 in 1976, or 200%. During the same period, interest rates grew from 5-6/2 to 8/2 or 10%. Because of such figures, the report concludes, interest rates are the “best buy in town.” T 20 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Zero Equals 32: Gilbert E. Colem an (c.), pres., Security Bank, Mt, Vernon, III., discusses upcoming report on uncollected funds with Roger O . Smith (I.) and John H ow ard , both e.v.ps. Report is one of bank's "Telling it Like it Is" series which is sent to a number of customers, exp lain s costs in volved in business of banking. Similarly, a report by Security Bank on the “Free Service Charge” explains the costs of checking accounts: An “on us” check, according to a Fed study, costs 8.3 cents to process; a deposit, 14.7 cents; a “not on us” check, 3.6 cents; and cashing a check, 12 cents. Other costs are outlined in the re port, which warns that those prices would increase every year. What could the customer expect because of that? The end of “free” checking in the near future! “Uncollected Funds” also are exam ined by a report. It outlines the check processing procedure, explaining that city banks refuse to honor checks drawn on uncollected funds or that the banks charge interest for use of such money which, in essence, is the institu tion’s. “Customers have stated to bank of ficers,” the report says, “that ‘We have put a million dollars through your bank this year.’ They don’t realize that just ‘putting the money through’ does little for the bank. In fact, it could be quite expensive to process that much busi ness unless a portion of the funds stayed on deposit for a week, a month or six months.” * * Old America: Bank’s Display of Maps Charts Territories of Past A collection of original old maps of America— some as old as 400 years— has been displayed at Commonwealth National, Dallas, and, according to bank officials, drew excellent response from bank patrons. The maps dated from the great age of exploration to the mid-1800s, focus Centigrade Temp Message Begun by First, St. Louis First National Bank in St. Louis has begun the switch to the metric measure ment system. It now reports the temper ature on its time-and-temp phone mes sage in centigrade as well as Fahren heit. The b a n k ’s time-and-temperature service has been in effect for over 25 years, receiving about six million tele phone calls monthly. Since conversion to the metric system is currently taking place across the nation, especially in schools where the young are being taught metrics, bank officials felt the addition of centigrade readings would help lay groundwork for public under standing of the system. What is the difference between the two systems of temperature measure ment? On the Fahrenheit scale, of course, freezing of water occurs at 32°, and boiling, at 212°. With the centi grade system, however, 0° is where freezing occurs and 100° is the boiling point. 'Juke' Is Sweepstakes Prize This 1946 mint-condition juke box w a s one of 1,001 prizes given a w a y recently by Financial Institution Services, Inc. (FISI), N ashville. Those qu alifyin g for prizes w ere 36,000 em ployees of banks that are mem bers of BANCLUB, a bank service packag e plan. Making tune selection on juke box is Travis R. Ander son, chairm an, BANCLUB A ssociation, and vice president. Financial Institution Services (FISI). Others in photo (from I.) are Bill G. Looper, FISI vice president; Henry C. M cCall, FISI chair m an and president; and Robert W. Henderson, FISI a rea director for Tennessee-Kentucky. FISI recently concluded its fourth ann ual convention, attended by appro xim ately 300 bank officers w hose banks participate in BANCLUB. MID-CONTINENT BANKER for September. 1976 When Your Special Problem is Insurance . . . call a SPECIALIST! SCARBOROUGH has been solving insurance problems for banks since 1919 . . . Isn’t it time you got to know us? Write or call Bob Marshman for a copy of Scarborough’s Handbook of Bank Insurance. ^ S carborough the bank insurance people Scarborough & Company 222 N. Dearborn Street • C hicago, Illinois 60601 (312)346-6060 MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2f The Banking Scene By Dr. Lewis E. Davids Hill Professor of Bank Management, University of Missouri, Columbia W ill B an ks Go the PA -7 Route? LTHOUGH R ELA TIV ELY tinpublicized, a significant requirefor S&Ls is PA-7, a regulation with which executives of commercial banks should be conversant. Bank executives should consider its potential for adop tion by bank regulators. PA-7 became effective for S&Ls in 1975. In general, it requires many more controls over audit and reporting func tions of both S&Ls and their indepen dent public accountants and expands the 1967 regulation (Sec. 563, 17-1), requiring each insured S&L and related affiliates— service corporations, for in stance—to be “audited” by public ac countants. Of this country’s 14,000 commercial banks, only a small, but a dramatically increasing number, now are being “audited” by public accountants. Banks generally have been reluctant to be subjected to audits by public account ants for a host of reasons, many of which have validity. Some of those reasons probably have been banks’ ra tionalizations based on complacency, overconfidence in internal controls and, possibly, frugality. Many banks have held that their in ternal controls, being subject to sur prise “examinations” by regulatory agencies, statutory or common law re quirements for a directors’ examination, combined with the confidential nature of banking, have been more than ade quate to safeguard the public interest. To require the majority of commercial banks to undergo the inconvenience and expense of an “audit” by outside public accountants wouldn’t, it has been held, produce benefits equivalent to or exceeding the monetary costs in volved. In addition, the use of outside ac countants has meant that confidential records of customers would be exposed to outsiders, even though those con ducting the audits were professionals. Until the last decade, S&L execu tives’ attitudes on the subject had been similar to those of bankers. However, the disintermediation S&Ls experienced in 1966 and 1969, for example, and the fact that many—probably most— recognized that their real reserves val ued at market weren’t adequate in view of their long-term mortgage situations, changed those attitudes. The mortgages didn’t have market values anywhere near book values shown on S&L state ments. This made the S&Ls dependent on borrowing from the FH L B B system to meet their disintermediation and mox'tgage commitments. In turn, the FH L B B and the FSL IC became concerned about a situation that might have been triggered by con tinued increases or withdrawals of sav ings shares and deposit and certificate accounts from S&Ls. In that economic and political environment, it was diffi cult for S&Ls to resist the pressure for tighter control of S&Ls and their new service corporations, controls that would result from more professional regular outside “audits.” Also, the nature of the “audits” was acceptable to both the S&Ls and the FSL IC , since they would be conducted by public account- " W h ile th e public ra th e r ca lm ly a ccep ted th e p ublication o f the n u m b er a nd n am es o f 'p ro b le m ' b a n k s, the se e d has g erm in a ted in the m inds o f influential W ash in gton le g is la to rs th at the re g u la to rs h a v en 't b een fu lly successful in tu rning b ack the tid e of b a n k fa ilu re s." 22 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ants, making the new regulation (Sec. 563, 17-1) more palatable. It repre sented a policy of putting more respon sibility on S&L management and wasn’t an expansion of direct regulatory inter vention in the operations of the thrifts. Regulators of commercial banks, un til now, have been somewhat reluctant to force banks to employ outside audi tors, especially those institutions em ploying internal auditors. Regulators are aware of the additional costs that would be imposed on banks by such a requirement. (“Public” banks, that is. Those listed on exchanges and subject to indirect SEC requirements are re quired to be “audited” by CPAs, as are “public” bank HCs. Thus, the ma jority of bank funds today are covered by the public accountant audit require ment. The majority of banks, especially the smaller institutions, aren’t required to be “audited” by CPAs.) If the statutory or, in some states, common law requirements of the di rector-conducted audit were profession ally and competently performed by means of the typical bank’s outside di rectors’ examination or by an audit com mittee, there wouldn’t be grounds for banks’ candidacy for PA-7 treatment. What is at issue is this: Is the typical examination/ audit, as conducted by the outside directors’ examination commit tee, of a professional scope comparable in reliability to one conducted by CPAs? Most aren’t, in the judgment of many knowledgeable bank directors, inside executives and supervisors! A toosmall proportion of director-conducted examinations are highly competent and professional in scope, it is felt. An increasing number of many firms’ outside directors who serve on their companies’ audit committee are dele gating this task, but not the responsi bility, to CPAs. Such directors, in ef fect, have voluntarily adopted the ob jectives of PA-7, if not the exact form. The SEC and major stock exchanges have espoused the concept of outside- MID-CONTINENT BANKER for September, 1976 UMTEDMISSOURI BAIK OF KANSAS CITY’S CROSBY KEMPER, JERRY SCOn, ED HUWAIDT, JOHN KRAMER, LYNN MTKHEISON, DON THOMASON, BUDCOX, FRITZ KROHMER, MIKE FIENUNG, E.L. BURCH AND HAL HOUISTER LOOK FORWARDTO SEEMGAU OUR BANKMG FRENDS AHNE ABA IN WASHINGTON, D.C. m i BE CAPINLL IN THE CAPITAL. MID-CONTINENT BAINKEK for Seplember, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 23 director audit committees employing outside CPAs to examine their re spective companies. The idea of a directors’ examination/ audit committee is relatively new in its acceptance by nonbank firms, but is well established in state and federal statute applicable to banks. In states without laws calling for a directors’ ex amination, most students on the topic hold that the common law concept of the prudent man calls for directors to examine or employ competent account ants to examine or audit a bank. One of the most widely misunder stood aspects of this subject is what constitutes an “examination” or “audit” under the prudent-man concept. A problem of semantics must be over come. Regulators, legislators, banks and the public, almost without excep tion, have a lack of ideas and confi dence as to what constitutes an “exami nation” or “audit.” Throughout this article, the words “audit” and “examination” have been in quotes. This has been done to high light those words, which Webster de fines in this way: Audit: “A formal, often periodic ex amination and checking of accounts or financial records to verify their correct ness. A settlement or adjustment of ac counts. An account thus examined and adjusted. A final statement of account by auditors. Any thorough examination and evaluation of a problem.” Exam ination: “An examining or be ing examined; investigation; inspection; scrutiny; inquiry; testing. Means or method of examining. A set of questions asked in testing or interrogating; test.” Now, examine your bank’s Report of Examination. Notice the broad quali fications of what is examined by the bank examiners or regulators. Frankly, it leaves much to be desired as far as what the “man on the street” thinks is done by bank examiners. Until fairly recently, much of the “examination” processes of regulatory bank examiners concentrated on areas of the bank which were rather pedestrian: checking and counting tellers and vault cash, the book value of assets rather than their market values, contingent liabilities of the institution, probable cash flow and quality of management. With few exceptions, regulatory ex aminers have avoided most types of direct verification (except correspon dent balances not collected). They have lacked sophistication in tracing triangu lation techniques, takeouts of overlines, etc. There were little or no appraisals of maximum legal ratios of loans to market values of real and personal col lateral. Frankly, a good argument can You haven’t heard? Well, things have really been happening! There’s a virtual explosion in growth— almost a billion dollars in new and expanded industry in just 2 years! And Merchants National is booming along with the community, almost doubling in size in the past 5 years. We’re helping celebrate the bicentennial by observing our own 75th year with a 5 million-dollar expansion program. Mobile! The nation’s economic bright spot! Merchants National Bank be made that bank examiners should not get involved in the “audit” area as long as the bank is profitable, has good internal controls and an effective board of directors with a competent examina tion subcommittee. The sad fact is that the basic rule of federal bank examiners in the lastdecade has been tragically convoluted and diverted from concern for the basic solvency of banks to such well-intended but often counterproductive areas as pursuing social enigmas and will-of-thewisps like “Truth,” affirmative action, redlining and now, ensuring that banks serve as enforcers of manufacturers’ and retailers’ warranties on goods and ser vices purchased through cu s to m e r credit. Most of the latter are likely to erode profits, growth and vitality of banks. They divert operating bank manage ment from sound and creative banking and instill in that management ambig uous compliance efforts far outweighing their highest social results to date. “Buzz” words such as “audits” and “examinations” have been used by al most all the various parties concerned with banking. The images and impres sions conveyed by such terms often are at considerable variance with what actually is done or intended by the party or agency conducting the audits or examinations. The original objectives of audits and examinations have been superseded by social goals that often aren’t compatible with those original objectives. PA-7 is a needed and valuable action delineat ing audits of S&Fs. It spells out a more specific role for the audit committees of boards of the thrifts and their out side public accountants. While more commercial banks today are engaging public accountants than in the past, there is the likelihood that this tendency will continue to increase. At some point, individual bank regulators may emulate the actions of the F SL IC and the FH L B B and impose a regula tion similar to PA-7. While the public rather calmly ac cepted the publication of the number and names of “problem” banks, the seed has germinated in the minds of in fluential Washington legislators that the regulators haven’t been fully successful in turning back the tide of bank fail ures. They believe that a more effective audit/examination committee of the board might be a significant step in the right direction. Should the number of bank failures and forced mergers con tinue at a rate similar to that of the last few years, commercial bankers may ex pect regulations similar to PA-7. • * Mobile, Alabama M em ber F D.I.C AN AFFILIATE OF SOUTHLAND BANCORPORATION 24 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for September, 1976 y > > Central National Bank Is now offering seven automated financial systems designed to help you fine tune your management controls, evaluate the performance and profitability of your departments, and spot problems, opportunities and trends early enough to do something about them. These systems give you crisply-reported data on your operations that you can interpret easily and apply quickly. They represent the most advanced state of the data processing art, are fully integrated and will interface with the next-step programs we are currently developing. The seven new Central Automated Financial Systems are: On-Line Savings Certificates of Deposit Demand Deposit General Ledger Installment Loan Commercial Loan Payroll Processing We would welcome the opportunity to discuss these systems with you and to answer any questions you or your operations officers may have. Call your Central Automated Financial Systems Representative at (312)443-7200. C E N T R A L A U T O M A T E D F IN A N C IA L S Y S T E M S A DIVISION OF CENTRAL NATIONAL BANK 120 South LaSalle Street, Chicago, Illinois 60603 > MID-CONTINENT BANKER for September, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 25 BANKING WORLD » Dean Rusk, former U. S. Secretary of State and professor of international law, University of Georgia, Athens, has been elected to the advisory council of Trust Co. of Georgia, Atlanta. The 11member advisory council meets month ly to review current economic and banking matters and to advise with the company’s management in various pol icy areas. * Tracy Kelly, president and chair man, American National, Bristow, Okla., will deliver the commencement address to the 1976 graduating class of the Southwestern Graduate School of Banking (SW IG SBIE), Southern Methodist University, Dallas. Mr. Kelly, besides being chairman and past president of the Oklahoma Bankers As sociation, is chairman, Citizens State, Okemah, Okla. In addition, the 1976 SW IG SBIE freshman class has named the following class officers: president— G. William Cone, president, National Bank of Commerce, Austin, Tex.; first vice president—James B. Rodgers, com mercial loan officer, First National, Little Rock; second vice president— Ronald N. Giddiens, executive vice president, West Side National, San Angelo, Tex.; and secretary—Phyllis C. Perry, assistant vice president, First National, Little Rock. • Robert A. Barley has joined First Tulsa Bancorp, and its wholly owned subsidiary, First National of Tulsa, as chairman, CEO, president and director. He went there from United California Bank, where he was vice chairman. Mr. Barley joined UCB, a state-wide bank ing operation, in 1957 and served as its president before being named vice chairman. In his new Tulsa posts, he succeeds John L. Robertson, who re quested early retirement as chairman, president, CEO and director of the HC and bank. RUSK 26 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis W ILLIAM S Historic Arms Exhibited Jack T. Conn (1.), ch. and C EO , Fidelity Bank, O klahom a City, looks over part of the bank's historic-w eapons lobby disp lay with Jordan B. Reaves of the O klahom a Historical Society. The exhibit, w hich w a s a rra n g ed by the His torical Society as part of the bank's bicen tennial observances, featured a "M ilitary W alk Through H istory" and included w eap on s used in every w a r during this nation's history—from the Revolution to the Korean conflict. • Southwest Bancshares, Inc., Hous ton, has had its stock listed on the New York Stock Exchange. The IIC, whose lead institution is Bank of the South west, Houston, listed 6,599,064 shares of common stock. • Thomas R. Williams has been elected chairman, First National, At lanta, succeeding Edward D. Smith, who continues as chairman, First Na tional Holding Corp. Mr. Williams has been CEO of the bank since January 1 and also is president and CEO of the HC. D. Raymond Riddle has been elected president and a director of the bank and executive vice president and a director of the HC. He had been ex ecutive vice president of the bank since 1973 and HC corporate vice president RIDDLE RADEM ACHER since 1975. Virgil D. Jones was elected vice chairman and a director of the bank and HC. He had been executive vice president of the bank since 1974 and of the HC since 1975. • Continental Illinois National, Chi cago, has named the following senior vice presidents: Hollis W. Rademacher, commercial banking; Caren L. Reed, multinational banking; Edward S. Bottum, operations and management; Joseph P. Coriaci, operations and man agement; and Philip J. Dambach, trust and investment. Mr. Rademacher is re sponsible for his department’s central division, whose officers serve correspon dent banks and corporate customers in that region of the country. Miss Reed serves overseas corporate customers, Mr. Bottum heads the planning divi sion, Mr. Coriaci is the bank’s cashier and Mr. Dambach heads the invest ment section. • Randall Meyer, president, Exxon USA, has been elected a director of First City Bancorp, of Texas, Inc., Houston. • Cyril C. Ling, executive vice presi dent, American Assembly of Collegiate Schools of Business, Washington, D. C., has been named senior vice president and director of educational develop ment for Bank Administration Institute, Park Ridge, 111. Mr. Ling succeeds Richard M. Seaman, who will continue as principal adviser to Mr. Ling. • Don C. Steffes, president, McPher son (Kan.) State, has been named to the newly formed Task Force on Ven ture and Equity Capital of the U. S. Small Business Administration by its administrator, Mitchell P. Kobelinski. Purpose of the task force is to study the entire realm of problems small busi nesses face in obtaining risk and seed capital. BARLEY KELLY MID-CONTINENT BANKER for SeplemWr, 1976 W ork with a banker who knows what his bank can do for you. At First National Bank in St. Louis, our corre spondent bankers are trained in what our bank can do for you. Across the board. Department by department. The result is men with solid experience and individual authority. So they can make fast decisions for you on their own. They’re backed by a bank with strong, steady growth. And total banking capabilities including overline loans, bond department services, computer ized check collection, cash management systems. Plus our annual correspondent seminars where you can exchange ideas and learn about new profit opportunities. Get to know your First National correspondent banker. He knows his bank. He’d like to put us to work for you. First National Bank in St.LouisSjf1 ^ Member FDIC H I I H MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 27 Commercial Lending Factoring Partnerships O ffered Banks As Prospects for Added Growth ACTORING—the broad range of credit services related to the outright purchase of accounts receivable—is gain ing added strength with industrial re covery, says Robert S. Sullivan, Walter E. Heller & Co. senior vice presi dent in charge of factoring. W h i l e there’s n o t h i n g new in banks and com m e rc ia l f i n a n c e companies working together in lending partnerships, many banks are unaware of how the two ser vice organizations also can work in tan dem in factoring, he points out. But re covery has increased sales and, there fore, receivables. So the volume of po tential factoring business is growing rapidly. Although some banks are experi enced in factoring relationships, most are not, Mr. Sullivan told M id -C o n ti n e n t B a n k er . Factoring is a natural adjunct to banking, as evidenced by the entry of some of the nation’s largest banks into this specialized field. They’re finding new opportunities where factor ing can help banks serve new groups of customers. But, Mr. Sullivan notes, the recent growth of bank factoring is not a phe nomenon of interna] expansion. Banks that have internal factoring operations got them by buying out long-estab lished, independent factors. Only in this way could they acquire what no firm has ever built in a short time from scratch on its own. “That’s a professional credit and col lection staff with the factoring savvy it takes to keep clients and their custom ers happy, while still avoiding excessive credit losses and making a profit on the operation,” he opines. “With higher production opening up more volume for factoring, but virtually no suitable independent factors now available for acquisition, the logical move for most banks is an arrangement with a factor to structure an indivdiual factoring package for a specific bank customer.” The partnership route is not a com- F 28 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis plex path, Mr. Sullivan explains, citing factoring operations of Heller, said to be the world’s largest integrated factor ing organization with $2.2 billion of factoring in its $8-billion non-banking volume last year. “Basically, the partnership works like this: Heller provides the factoring ser vice and the bank provides the financ ing,” he notes. “The bank and Heller share the profit equitably—but Heller absorbs the risk of any non-collection losses.” However, the fundamental aspect of factoring often is overlooked, Mr. Sulli van emphasizes. That is the fundamen tal service supplied to a bank’s custom er, for which the factor is paid a com mission on sales. “Factoring eliminates the time-con suming, costly responsibilities and ex penses of credits, collections, receiv ables bookkeeping and bad debts,” he explains. “At the same time, factoring offers the optional opportunity, at the client’s choice, of instant cash pay ment at the time of shipment. “And—most important— the bank’s customer has no obligation to repay the cash advance, for the factor has pur chased rather than lent against the re ceivable.” As illustrated by a case from Heller’s files, a factoring arrangement can be tailored to conditions peculiar to a spe cific bank-customer relationship. A medium-sized manufacturer of plastics products for many years had borrowed on an unsecured basis from a moderate ly sized, regional bank. Several natural disasters—including floods and a hurri cane—forced the company to relocate its operations from a single plant to a less-efficient multi-plant setup. As a result, the company operated at a loss for two consecutive years. It fell behind in its trade obligations. Not un expectedly under the circumstances, the bank became uneasy over continuing its unsecured credit. So, through its local Heller branch, the bank turned to fac toring as the solution to immediate and longer-range problems. Here’s how this partnership works, as outlined by Mr. Sullivan: Heller struc tured a factoring arrangement suitable for the company’s particular type of trade and manner in which its invoices turned. In consideration of the com pany’s assignment of factoring proceeds to the bank, the bank agreed to ad vance to its customer up to 100% on re ceivables. Under this agreement, Heller pays the bank direct, 10 days after the average maturity date of invoices. The bank’s position is secured by assignment of the only account receivable on its customer’s books—that which is due from the factor in payment for the ac counts receivable on maturity. Mean while, the bank has protected its future relationship with the company by re taining it as a customer. Deposits are growing as sales increase, and there is increasing opportunity to provide ad ditional bank services. Heller also enabled the company to bring its payables to a current basis by providing supplemental chattel financ ing. Trade credit now is obtainable on satisfactory terms, and the company’s management can concentrate on pro duction and marketing, without distrac tion by financial problems. “This case involved an existing bank customer that had problems,” Mr. Sulli van notes. “But the same bank-factor partnership techniques can help bring in new customers with prospects bright ening as their sales pick up, yet whom the bank might not be able to serve through its ordinary banking relation ships.” * * A factor specializes in jobs a manufacturer (or wholesaler) is happy to let other people do. MID-CONTINENT BANKER for September, 1976 >r* YOU'VE HAD A ROUGH TIM E! It’s been a rough year for commercial lending. Many established businesses didn’t make it through the recession, and banks were often left with inadequate collateral to cover loans. Many banks brought SLT into their problem loan situations and we helped them control and liquidate collateral without a loss, or at least a minimum loss. But that was after the fact. Now that the economy is turning upward, banks will be called on more than ever to finance expansion. Your problem of course, will be how to do this profitably. Try talking to your SLT representative. We can help you put together a collateral package based on inventory to insure a safe loan right from the start. We know we can help you make new loans to your customers and avoid the problems of the past year. Since we introduced our Field Warehouse service over fifty years ago, SLT has been helping banks and industry work together. If you feel that we can help you, please let us know. Before the fact. SLT WAREHOUSE COMBENY P.0. Box 24 2 , St. Louis, Mo. 63166 • 314/241-9750 • Offices in Major Cities N A T IO N W ID E C O L L A T E R A L C O N T R O L S E R V I C E S MID-CONTINENT BANKER for September, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 29 Bird Prints: Bank Donates Artwork To Local Home for Boys Springwood Ranch, Little Rock, a newly developed treatment center for boys, has received 15 framed prints of birds from the art collection of First National. Community Involvement “What To Know When You Buy a Home,” “Money Management for the Two-Income Family” and “A Guide to Careful Credit Use.” Joseph M. Grant (r.), pres.. Fort W orth N at'l, presents $1,000 fellow ship a w a rd s to M adell Cornelius and C arl W atson, local public school teachers. Grants are aw a rd e d anu aliy to a re a public school educators for use tow ard a d vanced study or research. Plain Talk: Publication From Bank Explains Role of Profits Charles Stew art (c.), urban affairs dir., First N at'l, Little Rock, presents one of 15 prints of birds to Ray Tribble (1.), dir., A ld ersg ate Meth odist Cam p com plex, and Tom O'Connor, dir., Springw ood Ranch, Little Rock. A rtw ork from bank's collection w a s given to ranch, w hich is new home for treatm ent of boys. Ranch is part of A ld ersg ate com plex. The prints previously were hung in the bank at its old location at Third and Louisiana streets. Its art collection at the new location is predominately Arkansas art, so the bird prints had been stored for future use. Springwood Ranch is an 80-acre es tate which had been given by a local doctor to the Alder state Methodist Camp complex. Capacity of the home is 15. How To': Bank of America Reports Illustrate Financial Matters Bank of America, San Francisco, has released four issues of a new series of reports to help consumers with their financial affairs. ' flow To Balance Your Checkbook,” “Ways To Save Money,” “How To Establish Credit” and “Rights and Re sponsibilities: Age 18” have been de signed to help consumers with personal money management and increase under standing about banking language and services, according to a Bank of America spokesman. The reports are illustrated and in clude step-by-step procedures on their respective topics. They have been made available at the bank’s offices through out California and a number of future issues are planned for release through out the year: “Planning for Retirement,” 30 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis “Plain Talk About Profits” is a book let from American Fletcher National, Indianapolis. The publication explains the role of profits in the national econ omy and how they enhance the stan dard of living. “Plain Talk About Profits” is a sequel to another booklet by the bank, “Ameri ca: the Trillion-Dollar L e m o n a d e Stand,” which also served to interpret the American free enterprise system. The new booklet, like its predecessor, has been geared for a teen-aged audi ence. According to a bank spokesman, the booklets have been designed to help remove suspicion of business from young people by showing how the prof it motive makes it possible for this country to enjoy a high standard of living. Have the publications been popular? The American Fletcher National spokes man said the institution has received requests for more than 100,000 copies of the first booklet. Copies of “Plain Talk About Profits” were available at all bank offices and in the lobby of Indianapolis News papers, Inc., Indianapolis. For Advanced Studies: Fort Worth N at’l Grants Awarded to Area Teachers Fort Worth National has awarded fellowship grants of $1,000 each to two outstanding career teachers in the Fort Worth public schools. Purpose of the grants is to assist them in advanced study in their specific educational fields. Recipients of the grants this year were Madell Cornelius, counselor, and Carl Watson, fourth-grade teacher. This is the eighth year the bank has presented the fellowship awards to teachers. To be eligible for a grant, a teacher must have taught in the Fort Worth public schools at least three years, must plan to work for an ad- vanced degree or do research, must be recommended by his principal and must be a member of the Fort Worth Class room Teachers Association. Winners are chosen by a committee appointed by the teachers’ group. Fort Worth National also presents a $1,000 Series E savings bond to the association’s “Teacher of the Year.” Management and Control: Bank-Association Team Offers Financial Courses State National, Evanston, 111., has teamed up with the Northern Illinois Industrial Association to offer two con current 10-week courses in financial management and control to small and medium-sized businesses in the Chicago area. A similar course was held last Janu ary. It is designed to familiarize smallbusiness owners or managers with man agement and control techniques that can help maximize profits. Also covered are comparative analysis and capital budgeting. The case method is used throughout the course, to “bring home the realities of difficult financial de cisions,” according to a bank spokes man. While the course is designed to bene fit owners and managers of companies with sales of $1 million to $5 million annually, an enrollee doesn’t have to be a bank customer or an association mem ber. 'YO U R -PA C: H C Establishes Committee To Offer Political Support Detroitbank Corp. has formed a po litical-action committee, YOUR-PAC, to determine and financially support candidates and elected officials whose efforts are deemed to be in the best MID-CONTINENT BANKER for September, 1976 Here at Citibank, w e are committed—you could even say dedicated— to the principle of cooperation with our correspondents. We regard any project on which you enlist our help—or we yours—as a joint endeavor, in which each of us has an indispensable part. And in which we work together, sharing interests and resources and experience, to achieve a common objective. Not surprisingly, that makes for close, continuing and mutually beneficial relationships—which is what correspondent banking is all about. Because good correspondent banking, as we see it, has a single, significant purpose: to strengthen and expedite and make even more effective what either of us could accomplish alone. Without, incidentally, leaving any loose ends. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CITIBANKO How does the energy capital move its energy? Helping it reach its destination is First City National Bank. O ne-quarter of the nation’s major pipeline companies moving natural gas are found in Houston. Together these 14 Some thirty underground pipelines carry companies operate more than 1 2 2 ,0 0 0 Texas Gulf Coast resources to major U .S . miles of natural gas pipeline. cities thousands of miles away. These First C ity N ational B ank uses its pipelines move millions of gallons of oil, financial strength to help move Texas natural gas, petrochemicals and other Gulf Coast resources. This involvement liquid products. has taught us even more about the energy This area of Texas has become one of field. And what we know is yours for the the nation’s most important oil and gas asking. transmission centers — connecting the W e’re becoming involved with more products of plants and refineries along the and more industries every day. And we’re Houston Ship Channel with inland desti nations as far away as New York City. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis proving to correspondents that more ser vice is the result of more experience. Understanding business as well as bank ing has made us . . . A major financial strength behind Texas industry. FIRST CITY M TIO M L BANK O F HOUSTON MID-CONTINENT BANKER for September, 1976 interests of the corporation, its em ployees, shareholders, customers and the communities they serve. YOUR-PAC has been underway for several months and conforms to federal and state regulations. It initially con sists of 21 executives of the HC’s principal subsidiary, Detroit Bank, and all employees of the HC’s subsidiaries voluntarily contribute recommendations on whom the committee should support. Strict record-keeping procedures have been adopted to account for all funds collected and distributed and to provide confidentiality for contributors, a YOURPAC spokesman says. The spokesman added that employees contributing to the committee receive detailed reports on how funds have been allocated. to purchase 10 shares of the bank’s stock. Citizens & Southern National has made its second such loan and has had inquiries from other classes. Aid to PTA: First of Atlanta’s Book Details Dangers of Drugs When PTA leaders from Georgia met for their state convention in April, they received an assist in the understanding of the danger of drugs in society. The 600 who attended the convention re ceived complimentary copies of Bridge Over T rou bled W aters— Drug Abuse from First National, Atlanta. Authored by Roger Solomon, about 2,000 copies of the book will be do nated to the Georgia PTA over the year, according to a bank spokesman. Bridge Over T roubled W aters— Drug A buse provides advice on how to solve problems and symptoms of drug abuse, how to prevent the problems before they begin and how to treat and re habilitate youngsters who have drug problems. Mr. Solomon, the book’s author, taught at Emory University in 1972 when the book was published. 4th-Grade Entrepreneurs: Bank Makes $ 10 Loan; Thriving Business Results Living up to its philosophy of “no account too large, none too small.” Citizens & Southern National, Athens, Ga., made a $10, 14-day loan to help a new business venture. And the busi ness showed a profit of 743%! Having completed a course of study on free enterprise, Mrs. Mary Ann Horton’s fourth-grade class at Ogle thorpe Avenue School in Athens de cided to put its new-found knowledge to use by beginning a popcorn busi ness. With the bank’s loan, the class was able to buy an electric popcorn popper and enough popcorn, bags and oil to start the business. The children sold their product during 15 minutes of their lunch period for five days at 10 cents a bag. Demand proved so great that they had to rent additional poppers for use in peak periods. After repaying their loan of $10 plus three cents interest, the class had a profit of $74.30. The profits were used The new Brandt®Model 570 Electronic Cashier®combines a simple 10-key calculator keyboard with accurate change delivery from 1$ to 99$. So every transaction is faster and more efficient. Tellers can visually verify each coin delivery, thanks to the electronic audit display. Sturdy construction, instant accuracy and unparalleled dependability are the same time-proven characteristics of all Brandt Cashiers. Only now you have some good reasons to trade. Call your local Brandt Representative today. Or write us for more information. BRANDT SYSTEMS is a strong chain of products and services to provide you with an efficient, coordinated money processing system. Our nationwide team of specialists provides the links of Analysis, Equipment, Training and Service . . . to generate new profits for your operation. A $10 loan from Citizens & Southern Nat'l, Athens, G a ., helped fourth-grade class at local school begin this thriving lunch-hour popcorn business. Children not only learned about freeenterprise system firsthand, but m ade profit of $74.30! MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 33 EFTS (Electronic Funds Transfer Systems) Check-Verification System Started by 4 Memphis Banks M EMPHIS— Cashing a check at re tailers here should be easier with “The Answer Man” on the job. This is the name four Memphis banks have given a check-verification system now avail able to the city’s retailers. This electronic system includes pointof-sale terminals that are being in stalled at stores and businesses. In 30 seconds, they tell a merchant whether a check being presented is good. Ini tially, the system allows any checkingaccount customer of participating banks to cash their checks with mer chants who have installed terminals in their stores. These banks are Commerce Union, First National, Memphis Bank and National Bank of Commerce. About 200 terminals have been installed. Potentially, the system will permit all bank customers to cash checks by presenting cards issued by their banks. To use the Answer Man, the mer chant simply inserts the customer’s bank card into the terminal. The cus tomer punches in his or her secret num ber on a special keyboard. The merchant can decide either to have the amount verified or receive a guaranteed au thorization that the check won’t bounce. By way of a central computer, the Answer Man will tell the merchant whether to accept the customer’s check. At no time will the customer’s account balance be revealed. All this takes 30 seconds. LAMACHA Begins Operations Serving Sixth Fed District; S. J. Loup Jr. Is President Formation of the Louisiana-AlabamaMississippi Automated Clearing House Association (LAMACHA) has been an nounced and membership in the ACH is open to financial institutions in the Sixth Fed District. Serving as president of FAMACHA is S. J. Loup Jr., executive vice presi dent, New Orleans Bancshares, Inc., parent HC of Bank of New Orleans. John B. Tullos, executive vice presi dent and cashier, First National, Jackson, Miss., is association vice president, while William E. Deneke, senior vice president, Merchants National, Mobile, is secretary. Serving as LAMACHA treasurer is Thomas J. Rafferty, vice president, National American Bank, New Orleans. ACH directors are William R. Boone, executive vice president, Deposit Guar anty National, Jackson, Miss.; Michael J. Hoseman, Louisiana National, Baton Rouge; Leo L. LeBlanc III, president, Bank of Commerce, White Castle, La.; and Guy W. Byrd Jr., senior vice presi dent, First National Bank of Commerce, and Donald J. Modenbach, vice presi dent, Hibernia National, both of New Orleans. Special advisory member to the LAMACHA board is Henry L. Borgaux, assistant vice president, New Or leans Branch, Atlanta Fed. Applications for membership are be ing prepared for distribution in the near future, according to a LAMACHA of ficial, and a target date of February, 1977, has been set for the association to begin the processing of transactions. ATM Battles Continue With New Developments In Chicago, St. Louis Here are equipm ent and prom otional m aterial tor four M emphis hanks' "A n sw e r M an" checkverification system. Poster at left show s grocer who isn't w orried about check he's holding because system w ill tell him w hether it's good. Poster also show s cards being issued by four banks for use in system. In front of poster is special keyboard on w hich customer enters his or her secret identification num ber. A lo ng side it is term inal into w hich m erchant inserts customer's card and on w hich he or she punch es out amount of purchase. Voice on receiver w ill tell w hether check should be accepted. At fa r right is sym bol of "A n sw e r M an ." 34 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The automated teller machine (A TM ) battles in Chicago and St. Louis reached new stages last month. In St. Louis, the U. S. Court of Ap peals for the Eighth Circuit held that First National there could continue op erating its two off-premises customerbank communications terminals (CBCTs) pending the outcome of a decision on their legality by the U. S. Supreme Court. The bank had announced it would ask the High Court to review a Branching Curb Eased S P R IN G F IE L D , IL L .— Governor Dan W alker signed into law August 16 a bill that permits any bank in the state to open a second pedestrian or drive-up facility within 3,500 yards or two miles of its home office. The facility will be able to cash checks, handle withdrawals and take deposits, but other banking services there will be forbidden. The law goes into effect October 1. Previously, Illinois law had pro hibited branching except for remote facilities within 1,500 feet of a bank’s main office. Governor W alker signed the bill just a few days after a newly en acted Chicago Financial Services Or dinance (see adjacent story) had been struck down as unconstitution al under state and federal law. decision made last November by U. S. District Judge James H. Meredith, and concurred with by the Eighth Circuit Court of Appeals, that the CBCTs are branches and must be discontinued. The machines were installed at two suburban locations following the De cember, 1974, ruling of the Comptrol ler of the Currency that such devices aren’t branches and could be installed by nationally chartered banks. How ever, Missouri Banking Commissioner William Kostman filed suit charging that the CBCTs are branches and do violate state branching law. In Chicago, a Cook County Circuit Court judge struck down the City’s new Financial Services Ordinance, saying it was unconstitutional under state and federal law. This new law would have permitted banks and S&Ls to operate six community offices apiece and an un limited number of off-premises banking machines within city limits. The Chicago ATM controversy began about a year ago, when two of the city’s banks, First National and Con tinental Illinois National, started operat ing networks of ATMs and point-of-sale (PO S) terminals away from the banks’ own locations. After last month’s decision by Cook County Circuit Judge Raymond K. Berg against the new Chicago or dinance, First National announced that it, too—like First National in St. Louis —will appeal the ruling to the U. S. Supreme Court. Continental Bank had not made known what its next action would be. MID-CONTINENT BANKER for September, 1976 That’s the title of our new booklet about in surance for banks. With laws, regulations and market conditions constantly changing, new risks keep coming along. Are you sure your bank is protected? F in a n c ia l In s u ra n c e S e rv ic e , In c ., w as founded in 1969 just to deal with the insur ance needs of banks. We write every kind of coverage a bank should have. As experts, we are happy to answer your questions and share our knowledge. Call or write today for your free copy of T h e R i s k s T h a t T a k e B a n k e r s . (It may be risky not to.) FINANCIAL INSURANCE SERVICE, IIVC. 2 2 0 0 EAST DEVON AVENUE DES PLAINES, ILLINOIS 6D01B 3 1 2 /2 9 7 - 4 6 6 0 MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Representative of W ater Utility Says Banks Are Reluctant To O ffer EFT Services By JIM FABIAN A ssociate Editor HE RELUCTAN CE of banks in California to encourage use of their E F T S capability in the area of direct debit services was scored by the chair man of a water utility recently. Mrs. Betty B. Roeder, chairman and president, Great Oaks Water Co., San Jose, Calif., told members of the MidAmerica Payments Exchange (MAPEX), St. Louis-based ACH, how she had to talk her bank into offering direct debit automatic bill-payment service to the utility’s customers. “My bank was less than enthusiastic about the service,” she said in remarks designed to caution bankers in the Mid west not to do likewise. For, if bankers don’t utilize their E F T capability, she implied, they’ll find their customers switching to banks that do. Mrs. Roeder’s firm was the first com pany to use electronic transfer for pay ment of bills of varying amounts. Cus tomers of the utility can, if they choose, have the amount of their monthly water bill deducted automatically from their checking accounts and paid to the water firm. The customer receives a card showing the amount of the bill in time to hold up payment if there is a ques tion. The transfer is processed through the California Automated Clearing House Association, which performs the same functions as MAPEX. MAPEX became operational July 1 and is handling direct deposit of pay roll checks only during its inaugural period. Billing features will be added later, according to Lawrence R. Chap man, MAPEX president and vice presi dent, First National, St. Louis. Mrs. Roeder described in detail the inauguration of her utility’s direct debit bill payment service, which now affects about 18% of the utility’s 10,000 cus tomers. Early in 1974, after she had con vinced her bank to cooperate in offer ing the service, the utility polled its customers to see how many would take advantage of the service. At that time, she said, it was thought that few cus tomers had knowledge of such a ser vice. However, the 14% initial response convinced her that the public is more T 36 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis knowledgeable than is often suspected. The utility pointed out savings to cus tomers, including no postage, no checks to write, no danger of a check being lost with resulting water cutoff, no con cern about taking extended vacations and having water bills pile up. The firm also offered to wave hookup charges for new customers if they sign up for direct debit. Savings to the water company are important, she said, and include elimi nation of check handling and faster receipt of funds. Every check coming to the utility must be handled four times, Mrs. Roeder said, and if cus tomers pay in person, additional ex pense is involved in having a clerk on hand to accept payments. The utility is building a new office and has placed it in a remote part of town to discourage payment of bills in person. Since water bills vary from month to month, the utility must send bills to those who sign up for direct payment. However, these bills are imprinted with a notice telling the customer that the bill will be paid automatically by the customer’s bank on the 12th day after receipt of the bill. Since the average customer pays his water bill 20 days after receipt, automatic payment by the 12th day assures the utility of speedier M A PEX Begins O perations ST. L O U IS— The Mid-America Payment Exchange (M A P E X ), St. Louis-based ACH, became opera tional July 1, the target date set during the founding stage of the or ganization in early 1975. During the inaugural period, M APEX will handle payroll checks only, with billing features to come later. August transactions consisted primarily of Social Security pay ments to individual recipients and Air Force pay. M A PEX currently has 195 mem ber banks in Illinois, Indiana and Missouri. These banks hold some 85% of total bank assets in the St. Louis Regional Check Processing Center and represent almost 100% of the assets of all commercial banks in the city of St. Louis. cash receipts. Customers have the option of asking their bank to withhold payment if they question the amount of the bill. They also have the option of asking the bank to reverse a payment when a bill is disputed, in which case the customer and the utility negotiate independently of the bank. However, Mrs. Roeder added, so far no customer has asked to have a payment reversed. Mrs. Roeder said the utility had little start-up expense when initiating the service, since no special machinery was necessary. Actually, there is a pos sibility that direct debit can result in decreased processing costs for both the bank and the utility, she said. Although considerable interest on the Principals at recent meeting of members of M A PEX, St. Louis-based ACH , include (from I.) La w rence R. C hap m an, M APEX pres., and v.p., First Nat'l, St. Louis; H. L. (Ted) Baynes, N ACH A pres., and s.v.p., United V irgin ia Bankshares, Richmond; Mrs. Betty 8. Roeder, eh. & pres.. G reat O a k s W ater Co., San Jose, C a lif.; Donald W. M oriarty Jr., s.v.p., & compt., St. Louis Fed; and Ed True, M A PEX exec, dir. MID-CONTINENT BANKER lor September, 1976 part of other utilities has been ex pressed about direct payment, Mrs. Roeder said, few have begun offering the service. As far as California is con cerned, she said, little progress will be made until the banks get their act to gether and stop considering E F T as a competitive tool rather than a coopera tive one. H. L. (Ted) Baynes, president, Na tional Automated Clearing House As sociation (NACHA) and senior vice president, United Virginia Bankshares, Richmond, also spoke. He reported on the progress NACHA is making toward becoming operational. NACHA is expected to have opera tions procedures and policy standards ready by January 1, 1977. According to Mr. Baynes, NACHA is an agency whose purpose is to develop operational procedures to enable regional auto mated clearing houses to work with one another. It will supply standards by which the regional ACHs will operate. Regional ACHs are expected to con form their operations to NACHA’s stan dards. He said interchange of items between regional ACHs will not be at tempted for some time, but a pilot pro gram will get underway later this year as a test. He urged bankers to get on the ACH bandwagon and said bankers must ex pect to market the ACH concept in dividually, rather than expecting their ACH to do it for them. He said bankers should educate themselves about the ACH concept so they won’t tend to botch the service and give the public an opportunity to develop negative at titudes about it. He said membership in an ACH should enable a bank to cut its costs and increase its share of market. * * Bank Expands Check Program ; V erifications M ade at 55 Stores C IN C IN N A T I— Central Payment Systems, a division of Central Trust, and the Kroger Cincinnati Market Area Division have announced the expansion of their joint check cashing program to eight additional retail locations. The expansion brings to 55 the num ber of stores using the system. Customers are able to authorize their own checks for cashing by means of an AmCat 1C terminal. The terminals are activated by entering a Kroger or the bank's “owl” card and indexing a per sonal identification number for verifi cation by the bank’s computer. Then the customer inserts the check for pre approved authorization, which th e terminal imprints on the check. The Kroger-Central Trust check cash ing program was initiated in 1974. Cus tomers may apply for Kroger Check cards at the retail locations and the bank’s checking account customers use their own Central cards, which bear a stylized picture of an owl. ACH Promotional Film A v a ila b le to Banks, A CH s A consumer-oriented film selling the benefits of automated clearing house services is available to ACH groups and financial institutions. Title of the film is “Easy Money,” and it demonstrates how an ACH makes receiving pay and paying bills attractive to consumers. The film is designed to be shown to employee groups whose employers have agreed to participate in automatic pay roll deposit. It also can be used to ex plain ACH services to civic groups and at investor meetings. For information, write: “Easy Money,” 1705 Soo Line Building, Min neapolis, MN 55402. LO O K IN G P R O F E S S IO N A L IS W HAT IT ’S A L L A B O U T Career apparel... by Creative Image... to make your corporation as individual as you. Don't compromise with one of your most valuable assets-your personnel.Your corp oration and personnel are d iffe re n t-w e show your difference the fashionable way. CREATIVE IMAGE M C B -9 for the corporate image 1709 N. Market, Dallas, Tx. 75202 Name of Co. _ Name Title Address City jI L ' K ' Phone ---- Zip TAKE A GOOD LOOK... THE IMAGE IS YOU THROUGH , ■ ¡ ■ IIP * ® * 1 MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis State # of Women “ 37 • Diebold, Inc. The Guardian Door from Diebold, Inc., Canton, O., incor porates a 3/2-inch thickness of security steel plus proprietary high-securitv monolithic material protecting the lock ing mechanisms. It exceeds require ments of the Bank Protection Act and the Insurance Rating Board. Other fea tures of the Guardian Door are two full-height locking bars, a daylight holdup device to prevent forced lockins, a three-movement 120-hour chro nometer time lock and three relocking systems. Two four-tumbler locks are capable of one million settings. The door is finished in jeweler’s-quality stain less steel, hinges are of cast, polished stainless and the door swings on ta pered bearings. A modular system of cladding options allows custom design of the vault door installation without a premium charge. Write: Diebold, Inc., Canton, OH 44711. • MGIC Indemnity Corp. Counsel is a customer newsletter that is being published four times yearly by MGIC Indemnity Corp., a subsidiary of MGIC Investment Corp., Milwaukee. The principal audience of Counsel will be directors and officers of financial insti tutions that are insured through the directors’ and officers’ (D&O) liability insurance division of MGIC. Consulting editor of the newsletter is Joseph W. Bishop Jr. of the Yale Law School. Counsel will include articles by guest authors who are prominent in the aca demic, legal and business communities and a special page will be devoted to aspects of D&O liability. Write: MGIC Investment Corp., D&O Underwriting Offices, MGIC Plaza, Milwaukee, WI 53201. • Bank Administration I n s t it u t e . “Modern Teller Training is a self-ad ministered audio-visual training pro gram for bank tellers from Bank Ad ministration Institute (BAI), Park Ridge, 111. Designed by a team of bankers, BAI staffers and training experts, it is intended to standardize, simplify, per sonalize and improve teller training. The basic program consists of 12 co ordinated units combining audiotape cassettes and workbooks which focus 38 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis New Products and Services on everyday teller transactions. “Mod ern Teller Training” is self-paced, al lowing as many as 15 tellers to par ticipate alone or in groups. An adminis trator’s guide tells how to get the most out of the program and summarizes content and objectives of each unit. Cost is $350 ($450 to nonmembers). Write: Bank Administration Institute, Publications Division, P.O. Box 500, Park Ridge, IL 60068. • Brandt, Inc. Automatic bag stop capability is a key feature of the Brandt Model 934 Totalizer Coin Sort er/ Counter from Brandt, Inc., Watertown, Wis. A predetermined count for each denomination is programmed into the machine and when the count is satisfied, the System 934 automatically stops counting. At that time, an indi- eator light alerts the operator. The Sys tem 934 totalizing unit registers and displays a total for each batch of coin, as well as a cumulative total. A bank of mechanical meters for each denomi nation records count for fast verifica tion and an optional printer is avail able to record batch and cumulative totals. Write: Model 934, Brandt, Inc., Watertown, W I 53094. number per book. An automatic reorder feature is incorporated. Each book can be personalized as to type of savings account and vinyl jackets are imprinted with institution name. A register for in sertion in the jacket or registers inserted in the back of the book are standard features. It can be ordered via mag netic tape, card or electronic telecom munications. Write: Rand McNally & Co., 8255 North Central Park Avenue, Skokie, IL 60076. • Sheshunoff & Co. Credit File Re port is a new service from Sheshunoff & Co., Austin, Tex. The service is said to allow bankers and bank customers to better evaluate individual financial institutions. Contained in the service is information about a bank’s financial position based on four years of data from reports of condition. Included are ratios showing relative earning power of banks. The Credit File Report for mat is based on an analytical approach developed by Sheshunoff & Co. from a number of consulting assignments with a variety of banks and corpora tions. Write: Sheshunoff & Co., P. O. Box 13203 Capitol Station, Austin, TX 78711. • Daktronics, Inc. Time, tempera ture in centigrade and Fahrenheit and baeklite identification are features of message systems by Daktronics, Inc., Brookings, S. D. The completely solid state systems are designed, manufac tured and installed by the company. Write: Daktronics, Inc., 331 32nd Ave nue, Brookings, SD 57006. • Rand McNally & Co. A New savings deposit/withdrawal coupon sys tem has been announced by the F i nancial Systems Division of Rand Mc Nally & Co., Skokie, 111. The system al lows variance in the number of cou pons and several changes of transit MID-CONTINENT BANKER for September, 1976 * This book, and the company behind it, made the job of opening our new bank almost easy.” > Phillip R. B o y ce , P resid en t P acific Valley B a n k San Jo se , Ca. * > y > “Several months prior to opening P acific V alley B ank, I contacted Harland about providing us with a basic check list of forms and supplies we might need in our day to day opera tions. Soon, a Harland representative showed up with this New Bank Plan ning Book and a sincere desire to help us. No strings attached. “The New Bank Planning Book was invaluable. I t listed ex a ctly what items we needed, some of which were not even produced or provided by Harland. “ Our Harland rep resen tativ e helped us immensely, giving us the benefit of his experience in opening new banks. He pointed out some prob lems we might experience, and helped us to avoid them before they hap pened. Again, no strings attached. “ To make a long sto ry short, P a cific V alley B an k has grown ex tremely well, as has our relationship with Harland. The interest they showed in helping our small bank get started is still evident, and they continue to help us solve our day to day problems. “I am extremely gratified with the relationship we enjoy with Harland, and I look forward to continuing it in the future’.’ UHARtANU ► At Harland, we do more than print checks. We print good ideas. m H A R lA N D BANK STATIONERS. PO. BOX 13085. ATLANTA. GEORGIA 30324 > MID-CONTINENT BANKER for September, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 39 "Inflation's legacy is a shrunken housing market. Between one-half to two-thirds of all American families have been excluded from the market." —Kenneth J. Thygerson, Chief Economist U.S. LEAGUE OF SAVINGS ASSOCIATION S https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "This'M AGIC LOAN' Kit sure helps brokers show first-time buyers how to own a home with a low down payment." https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Today's continuing inflation is pricing more and more potential buyers out of the home market. Yet with current savings levels, lenders have high loan targets to meet in order to maintain profits. Studies indicate that the most promising market segment is the 25 to 35 year old first-time homebuyer with limited funds for a down payment. And with new starts still low and sales of existing homes running higher than ever, one of the best ways to reach these prospects is through Realtors® . To help you do this job, MGIC has developed a new information/marketing program featuring the "MAGIC LOAN" Kit. It contains one booklet which tells Realtor sales people how mortgage insurance can help them close more sales. And a second that explains directly to their prospects how mortgage insurance makes possible low down payments. So far, we have provided more than 300,000 of these kits to lenders. They are currently being used by more than 20,000 realty firms. If you are not already taking advantage of this timely marketing help, contact your MGIC representative. He'll quickly provide you with a free supply of "MAGIC LOAN" Kits. After all, part of his job is helping you get loan money out. When it comes to mortgage insurance, there's no substitute for experience. MGIC experience. M GIC Because experience pays. Mortgage Guaranty Insurance Corporation, a Subsidiary of MGIC Investment Corp.. MGIC Plaza. Milwaukee. W1 53201 What can we do for you? Just askanyone ofthese Commerce Bankers attending the ABAConvention. Fred N. Coulson, Jr. David J. Miller Tom C. Cannon Ben F. Caldwell John J. Williams Senior Vice President Senior Vice President Vice President Vice President Vice President € 'Commerce Bank of Kansas City' 9th & Main 234-2000 42 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 10th & Walnut 12th & Charlotte MID-CONTINENT BANKER for September, 1976 V Jefferson M em orial in W ashington, D. C ., is situated on Tidal Basin and is considered by m any to be most beautiful structure in city. M em orial is popular site for visitors to nation's cap ital, and ABA members pro bably w ill find time during convention to go there. Photo courtesy W ashington Areo Convention & V is itors Bureau. ABA to Wind Up Centennial Celebration With Event-Packed 1976 Convention HE NATION’S CAPITAL always is an interesting city to visit, but for five days next month it will be unusual ly exciting for members of the Ameri can Bankers Association. From October 2 through 6, the ABA will wind up its own centennial celebration and obser vance of the country’s bicentennial with its annual convention in Washing ton, D. C. The meeting, which is ex pected to attract about 12,000 com mercial bankers, may—with a little bit of luck—have the two Presidential con tenders on the program. Time has been set aside, the ABA says, so each can didate may address a general session. The first of three general sessions will be held the morning of October 4 in the DAR Constitution Hall. Opening remarks by ABA President J. Rex Duwe will be followed by a speech by news commentator Paul Harvey and an analysis of “Election ’76” by TV per sonality Martin Agronsky and panelists Peter Lisagor, George Will and Eliza beth Drew. Mr. Duwe is president and chairman of two Kansas banks, Farmers State, Lucas, and Traders State, Glen Elder, and chairman of another, also in Kansas, Sylvan State. A forum on current value accounting concepts and their impact on restruc tured debt will begin that afternoon’s activities. It will be followed by a forum on the nation’s economic and invest ment outlook. Panelists will include Samuel B. Stare, vice chairman, ABA T A "A v v ► Bank Investments Division, and senior vice president and treasurer, Union Bank, Los Angeles; and Beryl Sprinkel, chairman, ABA Economic Advisory Committee, and executive vice presi dent and economist, Harris Trust, Chicago. The next morning, many conferees are expected to attend a breakfast dis cussion of current political realities. Later that morning, government regulation of banking will be the topic of a general session panel, with John H. Perkins as moderator. He is chair man, ABA Government Relations Coun cil, and president, Continental Illinois National, Chicago. He also is a candi date for ABA president-elect in 1977. All federal bank regulatory agencies will be represented on the panel: Stev en Gardner, vice chairman, Federal Re serve Board; Robert Barnett, FD IC chairman; and Garth Marston, acting chairman, Federal Home Loan Bank Board. On Tuesday afternoon, three forums allowing conventioneers to “rap with n rù I\J)frtf ( J / f ) ABA CONVENTION MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the regulators" will be held. The October 6th general session will feature a discussion of the needs and challenges of financial policy by Alan Greenspan, consultant to the President’s Council of Economic Advisers, and Arthur M. Okun, senior fellow, Brook ings Institute, Washington. TV news man Walter Cronkite also will appear, and ABA Executive Vice President W il lis W. Alexander will speak during that portion of the Wednesday general ses sion devoted to ABA business. During the closing general session that day, ABA officers for 1976-77 will take office, to be led by W. Liddon McPeters. Mr. McPeters, who will succeed Mr. Duwe as association president, is president, Security Bank, Corinth, Miss. Special-interest seminars will be available on the following topics: • Federal Legislation and Regula tion— an open discussion (to be repeat ed three times to allow maximum par ticipation). • Problems in Evaluating Municipal Securities. • Determinants of Loan Portfolio Profitability. • Implications of Interest-Bearing Checking Accounts. • Lending Policy and Credit Admin istration for Medium/Small-Sized Banks. • Agricultural Lending Outlook. Special-interest sessions specifically for community bankers will cover the following subjects, with special atten43 tion to the community banker’s perspec tive: • Profit Planning. • Automation—Going on Line. • IRA Marketing. • Capital Adequacy—What to Do About It. • Automation— Small Computer Ap proach. • How to Organize an Effective Community Bank Marketing Program. • Bank Directors— Defining Their Responsibilities. • Sharing New Profitable Services. • Municipal Financing in the Small er Community. • Financing Industrial Develop ment in the Smaller Community. • Union Activities in the Commu nity Bank. • Investment Portfolio Management. • NOW Accounts and the Commu nity Bank. • Community Bank CEO Program— What Is It? Is It for You? The convention will get underway Saturday, October 2, with registration and the grand opening of the meeting schedule and exhibits, E F T Theater (see this page), activities center and tours. A management forum to be con ducted by Thomas K. Connellan, presi dent, the Management Group, Ann Ar bor, Mich., will run concurrently with the first of 24 special-interest sessions. The first of two ABA receptions, whose theme will be “The Way We Were,’ will salute America’s original 13 states with a Colonial-era festival and feast Saturday evening. The theme of the ABA’s second re ception, on Tuesday evening, will be We the People,” a pageant represent ing America’s diversity and ethnic richness. The following day, a fellowship gathering will be held at the DAR Constitution Hall, with an address by former Iowa Senator Harold Hughes. Afternoon activities will include a man agement forum to be led by Larry W il son, chairman, Wilson Learning Corp., Eden Prairie, Minn.; and a personal development forum with David E. Mor rison, Morrison & Associates, Topeka. Other special-interest sessions will complete the day’s activities. In defer ence to Yom Kippur, no official ABAsponsored events will take place Sun day night. Throughout the convention, a full program will be offered for spouses, as well as tours of historical places in the capital area. * # Houston and New Orleans To Be Convention Hosts Before End of Decade Before the end of this decade, two Mid-Continent-area cities will be hosts to annual ABA conventions. Next year, Houston will be the meeting site for the first time since November 14-17, 1938. In 1979, New Orleans will have the convention for the first time. Here is the ABA convention schedule for the next six years: 1977— Houston, October 15-19 1978— Honolulu, October 21-25 1979— New Orleans, October 6-10 1980— Chicago, October 11-15 1981— San Francisco, October 3-7 1982— Atlanta, October 16-20. The Houston Clearing House As sociation, composed of 118 banks (eight regular members and 110 as sociate members), reports that the com bined deposits of these banks at last year-end were $11.2 billion and com bined resources, $23.7 billion. Accord ing to the Houston CHA, First City National is the city’s largest bank, with year-end 1975 deposits of $2.7 billion and resources of $3.3 billion. New Orleans will have 6,000 hotel rooms available for ABA conventio neers in 1979, says the New Orleans CHA, with the two newest hotels to be the Hyatt Regency and the New Or leans Hilton. The Rivergate at 4 Canal Street will be the site of convention business sessions. There are 11 banks in the city of New Orleans and 26 in surrounding parishes (counties), for a total of 37 banks. The New Orleans CHA says Whitney National is the largest bank, with total resources of $1.2 billion and deposits of $1.01 bil lion as of last June 30. Last year, New Orleans-area banks reported total assets of $5.2 billion and total deposits of $4.2 billion. Election Coverage by ABA W ASH INGTON, D. C.— The ABA will cosponsor C B S-T V coverage of this year’s election clay (November 2 ) and the campaign leading up to it. The ABA is cosponsoring a series of 30-minute campaign specials each Friday night from September 3 to October 29. Also included in the coverage will be a pre-election special, October 31, and a post-election special, No vember 3. The ABA has scheduled at least 12 of its vault-opening, con sumer-service commercials for the November 2 election day coverage on CBS. ABA Bicentennial Exhibit Awaits Conventioneers at Smithsonian Institution Here are two sam ples of the bicentennial exhibit being sponsored by the ABA at the Sm ithsonian Institution in W ashington, D. C. LEFT: An old Rideout safe, w hich survived an attempt by robbers to " b lo w " it in the late 1800s, stands next to life-sized blow ups of early bank notes. RIGHT: Bank security is illustrated in this exhibit, which con tains a Thompson subm achine gun from the Bonnie and Clyde era, as w ell a s modern electronic surveillance equipm ent of today. A Mos lem surveillance cam era is in foreground. The Smithsonian exhibit, 44 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis called "A m erican B ankin g ," w a s opened officially Septem ber 17, 1975, and is scheduled to rem ain open to the public for at least two years. Designed by Joe W etzel Associates, Stam ford, Conn., the chronological d isp la y takes visitors through 200 y ears of U. S. history. Most of the exhibit is d isp layed in three dim ensions and features the latest in audio visu al techniques. Much of the m aterial w a s supplied by ABAmem ber b anks, and the ABA provided the services of banking his torian C h arles F. H ayw ood a s technical consultant. MID-CONTINENT BANKER for September, 1976 W ill next next w hy Republican or Democratic President be occupying White House (I.) beginning Ja n u a ry ? W hat kind of Congress w ill be meeting under dome of capitol (r.) y e a r? A BA President J. Rex Duwe believes it w ill be activist and exp lain s in accom panying article. Photos courtesy W ashington A rea Convention & V isi tors Bureau. How Will New Congress Affect Banking? Will It Be as Activist as Present One? S BANKERS look forward to the November 2 general election, they, naturally, are wondering how its out come will affect the banking business. All seats in the House and a third of those in the Senate are to be filled by voters this bicentennial year. Of course, they’ll also be choosing the man to lead the country as President for the next four years. Will he be Jimmy Carter or President Gerald Ford? According to the ABA, the Presi dential election will result in few, if any, immediate changes for banking. In the long term, however, the associa tion believes the Republican President would treat monetary policy about the same as the present Administration has, leaving it in the Fed’s hands with little or no “jawboning” about interest rates and the money supply. On the other hand, says the ABA, the Democratic candidate, Jimmy Carter, has said he favors more ex pansion of the nation’s money supply than the Fed has achieved so far so that interest rates would be lowered. He also has called for "closer coopera tion” between the Fed and the Execu tive Branch and has suggested that the Fed chairman’s term should begin and end with that of the President’s. A measure providing for this type of change has passed the House and is expected to get Senate approval. The A bill would allow the President to ap point a new Fed chairman six months after the President takes office. However, it’s actually the U. S. Con gress, not the President, that can have the most influence on the country’s af fairs, including banking. What will the new 95th Congress bring? Will most of the members be Republican or Dem ocratic? Will it be as activist as the 94th Congress was? Will it try to "re form” banking? In a recent talk before the Central States Conference’s annual meeting in Durango, Colo., ABA President J. Rex Duwe pointed out that the present Congress says much about what’s to come. When it convened in January, 1975, said Mr. Duwe, there were a lot of new faces on Capitol Hill— 92 new repre sentatives and 11 new senators, all un known quantities. No one knew, he continued, what positions they would take on legislation, but it was evident they had high hopes of enacting or- ABA CONVENTION MID-CONTINENT BANKER for September. 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ganizational reforms, of making their mark on Capitol Hill. Some people believe they were suc cessful, and some said they didn’t ac complish the sweeping organizational reform anticipated, said the ABA presi dent. He added, though, that he be lieves they did, in fact, do a great deal to change the environment of Congress, and they didn’t do it alone. They formed a coalition with more expe rienced congressmen and senators who also wanted change. Mr. Duwe gave this example: Repre sentatives in the House looked at the seniority system and decided it needed to be changed. Consequently, a House committee chairmanship no longer au tomatically goes to the member with tenure. The job’s open to any com mittee member. Mr. Duwe also pointed to another reform measure adopted by the 94th Congress—“government in the sun shine.” This means committee sessions of the Senate and House are, for the most part, open to the public, and that includes executive sessions where bills are marked up. In fact, he continued, this Congress is so committed to gov ernment in the sunshine that there’s legislation pending that would apply this standard to federal regulatory boards and commissions. “From these two examples,” said 45 Mr. Duwe, “let me generalize: The 94th Congress indeed has been able to effect major changes in its own or ganization.” But what has been the mood of the banking committees, he asked. Have they reflected the changing congres sional atmosphere? Mr. Duwe then told his audience that these committees’ memberships have changed dramatical ly, with almost half of those on the House Banking, Currency and Housing Committee being freshmen (20 out of 4 3 ). The Senate Banking Committee has three freshmen members out of 13. Not only are many committee mem bers new to their jobs, said Mr. Duwe, but these committees’ leadership also is new, with Representative Henry Reuss (D.,W is.) having taken over the House Banking Committee chairman ship and Senator William Proxmire (D.,W is.) heading the Senate Banking Committee. Both, according to ABA President Duwe, have been and still are reform minded. Granted, both are up for reelection, but it’s generally thought they each will retain their seats. Mr. Duwe told how Representative Reuss made several proposals that the ABA opposed and, subsequently, were abandoned or not accepted by his com mittee. He proposed that credit be politically allocated to national priority uses, that the Federal Reserve Board and Federal Open Market Committee be asked to boost the money supply in the first half of 1975 at an annual rate of no less than 6% and that the Fed be instructed to lower long-term interest rates and that it report to the two bank ing committees on the progress it was making toward this goal. PROXM IRE REUSS 46 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. Duwe then turned to Senator Proxmire, saying his committee ap proved the Financial Institutions Act; it discussed a moratorium on E FT , which was not adopted; and the Prox mire bill to consolidate federal bank regulators died in committee after lengthy hearings. The senator also pro posed a Competition in Banking Act that would prohibit banks from engag ing in certain activities now permitted by statute and regulation. That bill is still pending in committee. Although the above examples teach bankers a great deal about the activist mood on Capitol Hill, said Mr. Duwe, there’s still more for bankers to learn. He listed the following: First, members of the 94th Congress are a very data-oriented and fact-ori ented group. Congress and its staff have a “show-me” attitude, and that means banking’s positions must be doc umented carefully and well thought out. Second, there are a lot more people on Capitol Hill with whom bankers must talk. The size of the House Bank ing Committee has grown, and the staffs for both House and Senate com mittees are larger. In the past, bankers could single out a few staff members who needed to be contacted for the in dustry to explain its position, but to day bankers must talk to a much larger number of people. Third, because two banking com mittees are headed by activists and be cause more staff people work for these committees, the agendas are more am bitious. The ABA must testify on more legislative issues, and that means as sociation spokesmen are spending much more time on Capitol Hill. Fourth, the banking committees aren’t the only ones whose actions af fect banking. The ABA has presented the industry’s viewpoint to tax-writing committees and also has testified be fore the Agriculture committees and has had an interest in the House In terstate and Foreign Commerce Com mittee. According to President Duwe, there’s one basic message in all the lessons learned from the 94th Congress: Gov ernment is going to stay very interested in banking matters, and, for that rea son, banking must stay interested in government relations matters. Having set the stage for the next Congress, Mr. Duwe asked two ques tions: What does the future hold? What will be the mood of the new Congress? In his opinion, the 95th Congress will be an activist one and with a great many new faces. He explained this by pointing out that more than 50 repre sentatives have announced that they are retiring from the House or that they are running for other offices. This means, he continued, 50 new House members even before counting the number of representatives who won’t be reelected. At the same time, the Senate will see a number of changes; for starters, eight senators already have announced their retirements. What about congressional leader ship? Mr. Duwe forecast a dramatic change in leadership. In fact, the changes next year, he believes, will be even more extensive than in the 94th Congress. He said there will be a new Senate majority leader, new Senate minority (Continued on p age 50) Although Senator William Proxmire and Representative Henry S. Reuss, both Wisconsin Democrats, are running for reelection this year, it s generally believed they will be back in Congress next January. Thus, they’re expected to retain their committee posts— Senator Prox mire as chairman, Senate Banking, Housing and Urban Affairs, and Representative Reuss as chairman, House Banking, Currency and Housing. Senator Proxmire originally went to Congress in 1957 as the result of a special election to fill a vacancy created by the death of Senator Joseph McCarthy. In addition to chairing the Senate Banking Committee, he’s vice chairman, Joint Committee on Defense Production; member, Appro priations Committee, and chairman of its Subcommittee on Housing and Urban Development and Independent Agencies; member, HouseSenate Joint Economic Committee, and chairman of its Priorities and Economy in Government Subcommittee. Representative Reuss has represented Wisconsin’s Fifth Congres sional District (northern portion of Milwaukee) since 1955. He also is chairman, International Economics Subcommittee of the Joint Eco nomic Committee. He lists among his legislative achievements the Peace Corps, Mass Transit Research Act and a series of measures- to bring about full em ployment without inflation. MID-CONTINENT BANKER for September, 1976 4 4 * A -A ABA CONVENTION ABA President Du we Spends Busy Year On Financial Reform. EFT, Politics in a n c ia l r e f o r m , e f t and banker political involvement have taken up much of J. Rex Duwe’s year as ABA president. He was the ABA’s key witness and spokesman on financialreform problems and, through a series of four legislative priority letters mailed to the association membership last March and April, was instrumental in keeping the industry up to date on fast breaking congressional decisions. Mr. Duwe is an officer of three Kansas banks—president and chairman, Farm ers State, Lucas, and Traders State, Glen Elder; and chairman, Sylvan State. Mr. Duwe worked to rally ABA membership into a unified position for action and results. Each letter urged individual contact with local congress men and senators, and, according to the ABA, its membership responded. As a result, the legislation opposed by Mr. Duwe—on the grounds that it would treat both customers and banks in an unfair, inequitable manner—was largely shelved for this congressional year. Testifying on E F T matters, President Duwe maintained that electronic funds transfer systems simply are a new method of delivering traditional bank ing services and, as such, are some thing banks should be concerned about and allowed to experiment with. Mr. Duwe, who headed the Kansas Bankers Association in 1972-73, was Kansas state highway commissioner from 1962-68 and formerly was presi F https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis dent of the Kansas Council on Eco nomic Education. He is vice chairman and executive committee member of the Kansas Development Credit Corp. He also has held several public service posts in Lucas, including two terms as mayor. He entered banking in 1938 at the Lucas bank, which then was con trolled by his father, the late John F. Duwe. After World War II service and college, he returned to the bank and bought control of it in 1948. Incoming ABA president is W. Liddon McPeters, who has been president elect the past year. Mr. McPeters— a fourth-generation member of a banking family—is president, Security Bank, Corinth, Miss., which he joined as a director in 1943. Later, he was cashier, then vice president and executive vice president before becoming president in 1961. He headed the Mississippi Bank ers Association in 1967. From 1972-75, Mr. McPeters was chairman of the ABA Centennial Com mission, which was charged with the responsibility of recommending and overseeing development of suitable in ternal and external programs to com memorate the association’s 100th an niversary in 1975 and the nation’s bi centennial this year. As chairman, he spearheaded a three-pronged educa tional program designed to tell the story of banking’s role in this nation’s growth. The projects included a major exhibit in the Smithsonian Institution’s Mu seum of History and Technology, ‘‘Amer ican Banking”; a soft-backed pictorial Current A B A Officers history of banking, C hartered for Prog ress: Tw o Centuries o f American Bank ing; and a 30-minute documentary film, “An American Account.” George L. Whyel is chairman of the ABA Governing Council and immediate past ABA president. He is vice chair man, Genesee Merchants Bank, Flint, Mich., which he joined in 1947. Mr. Whyel is a former president of the Michigan Bankers Association. Roger A. Lyon, president and chief administrative officer, Valley National, Phoenix, has been ABA treasurer the past year and, by tradition, will serve a second term during 1976-77. Mr. Lyon joined Valley National last April, coming from Chase Manhattan, New York City, where he was executive vice president in charge of the institutional banking department. He entered bank ing at Chase in 1950 and, during his career there, worked in correspondent banking, investments, lending and bank management. He is a former head of the ABA Correspondent Bank Division, wrote the text, “Investment Portfolio Management for the C o m m e rc ia l Bank,” and for 12 years, lectured at r e g io n a l and specialized banking schools. Willis W. Alexander is ABA execu tive vice president. He is a former president of the Missouri Bankers As sociation, serving while president of Trenton (Mo.) Trust, which he joined in 1947. Mr. Alexander joined the ABA immediately after completing a year (1968-69) as ABA president. * * Contests for ABA Pres.-Elect, Treas. Loom on Horizon H ERE are no contests for ABA posts at this year’s convention, but there are two candidates each next year for the posts of president-elect and treasurer. The two bankers who have an nounced their candidacies for 1977-78 president-elect are John H. Perkins, president, Continental Illinois National, Chicago, endorsed by ABA’s Region Two; and William J. Copeland, vice chairman, Pittsburgh National Corp., and the HC’s lead bank, Pittsburgh Na tional, endorsed by Region One. Next year’s candidates for ABA trea surer are Hermann Moyse Jr., president, City National, Baton Rouge, endorsed by Region Four; and Thomas R. Smith, president, Fidelity Bren ton Bank, Mar shalltown, la., endorsed by Region Five. These candidacies, by the way, are the first to be announced under newly passed amendments to ABA bylaws. According to the new amendments, nominations for the offices of president elect, chairman of the Governing Coun cil and treasurer will be made by rep resentatives of the six ABA regions in stead of by the state associations, as had been done in the past. The only candidate for ABA presi dent-elect for 1976-77 is Arthur Achille “Bud ’ Milligan, president and chairman, Bank of A. Levy, Oxnard, Calif. He joined his bank in 1940, saw service in the Navy, then returned to the bank to rise through the ranks to president and chairman in 1955. He is a former president of the California Bankers As sociation and Independent Bankers As sociation of Southern California. Mr. Perkins joined his bank in 1946 in the commercial banking department and later moved to the bond depart ment, which he headed from 1956-65. As senior vice president in 1966, he was named head of administrative ser vices, a bank-wide responsibility. Mr. Perkins became executive vice presi dent in 1968. vice chairman in 1971 and president in 1973. He is chairman, ABA Government Relations Council, T M ILLIGAN PERKINS COPELAN D M OYSE SMITH 48 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis and was president, ABA Marketing Di vision in 1971-72. Mr. C opelan d joined Pittsburgh Na tional Bank’s predecesser, Peoples First National, in 1947 after earning a doctor of law degree from the University7 of Pittsburgh. Starting as a trust adminis trator, he moved through the trust di vision until he became executive vice president and head of that division in 1969. In 1972, Mr. Copeland assumed his present HC and bank posts. He has been active in the ABA and in the Pennsylvania Bankers Association and has taught at the Stonier Graduate School of Banking at Rutgers Univer sity, New Brunswick, N. J. Mr. M oyse joined his bank in 1946, became a director in 1962 and presi dent in 1972. He also is on the board of the Bank of Zachary, La. He headed the Louisiana Bankers Association in 1967-68 and has chaired three LB A committees in addition to being state chairman for BankPac in 1972-74. He also has been on the ABA Federal Leg islative Committee and its Government Relations and Governing councils. Mr. Moyse was a member of the first class of the School of Banking of the South, Louisiana State U n iv e r s ity , B a to n Rouge. Mr. Smith, in addition to his bankpost, is a vice president and a director of Brenton Banks, Inc., a $400-million bank HC, and is on the boards of four other Iowa banks— First National, Per ry; Brenton Bank, Cedar Rapids; Brent on Bank, Urbandale; and Brenton County Bank, Vinton. He was chair man of the ABA’s Agricultural and Community Bankers Division for two years and a member of its Marketing Division, also for two years. Mr. Smith has taught AIB courses in commercial loans and investments and has lectured at these schools: Bank Marketing; Graduate School of Bank ing, University of Wisconsin; Graduate School of Commercial Lending, Univer sity of Oklahoma; Stonier Graduate School of Banking, Rutgers University; and Washington (D. C.) School of Bank Examiners. * * MID-CONTINENT BANKER for September, 1976 Banking s Message Is Taken to Public In ABA s Consumer Adviser Program LTHOUGH banking isn’t the mys tery to the general public that it once was, many people still have mis conceptions about it. To help dispel any misunderstanding, the American Bank ers Association is conducting a con sumer-oriented program, whereby bank ers communicate directly with consum ers via TV, radio and newspaper in terviews. Its objective, says the ABA, is to build a better public understanding of banking while providing useful in formation to consumers. The project had its beginning in 1974, when—as part of an effort to ad dress problems surrounding women and credit and mobility of women in the bank work force—the ABA Communi cations Group began thinking about de veloping a bank spokeswoman program. A pilot program was begun after it was carefully reviewed by staff, bankers and outside public relations counsel. In Phase I, Sandra McLaughlin, vice president, Mellon Bank, Pittsburgh, was selected to be the ABA spokeswoman for the one-year pilot program. She was chosen after interviews with a number of women candidates suggested from many sources. According to the ABA, the decision to select a woman and a banker was made after research indi cated ( 1 ) the news media would far prefer interviewing a working banker than a celebrity claiming to have knowl edge of banking and (2 ) a woman would be much easier to place than a man on TV talk shows. Miss McLaughlin, a member of the ABA Communications Council, was given several training sessions involv ing mock interviews and news con ferences. These included videotape re cordings and playbacks with a TV coach making critical comments. The ABA says Miss McLaughlin’s own superior communications skills and knowledge of consumer banking (she runs Mel A lon’s Master Charge plan) made her training quite easy. Media tours then were arranged for Miss McLaughlin, with appearances on local daytime TV programs, participa tion in radio shows and interviews by local newspaper reporters. In less than a year, while taking off from her bank only a day or two at a time, she accumulated 25 hours of air time in 10 major market cities. Miss McLaughlin stressed the per sonal nature of banking. She pointed out advantages of various bank services and discussed the role bankers can play in helping consumers manage their fi nances. The news media proved to be inter ested in what she had to say. The ABA gives this example: After appearing on the ABC TV Network program, “Good Morning, America,” Miss McLaughlin was invited back for further discussion about banking. At the end of the year, the ABA Com munications Council reviewed Phase I, found it to be extremely successful and decided to proceed with Phase II. The second phase involves two major changes from the pilot project: 1. The name of the program was changed from Spokeswoman to Consumer Adviser Program (while women continued to be the spokespersons, the name change was made to emphasize the consumer aspects of the program). 2. Additional women have been selected to broaden the scope of the program. Two of these women are from the Mid-Continent area: Barbara Pendleton, executive vice president, Grand Avenue Bank, Kansas City; and Esther H. Smith, vice presi dent, Commerce Union Bank, Nash ville. The new consumer advisers were given training sessions comparable to the one given Miss McLaughlin and now are beginning their first round of MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis appearances. Since they are going out on a regional basis, travel costs in curred and time spent away from their banks are being kept to a minimum. Now that Phase I of the program is finished, and Phase II is under way, the ABA has the following observations to (Continued on p age 124) SMITH PENDLETON The two Mid-Continent-area mem bers of the ABA’s Consumer Adviser Program are Barbara J. Pendleton and Esther H. Smith. Miss Pendleton entered banking dur ing World War II as a messenger for City National (now United Missouri), Kansas City. In 1947, she went to Kan sas City’s Grand Avenue Bank as a discount teller, became an officer in 1951 and held several titles before be ing named executive vice president last spring. In 1972-73, Miss Pendleton was president of the National Association of Bank-Women Inc. Mrs. Smith joined Commerce Union, Nashville, in 1953 and was elected as sistant corporate secretary of the bank’s HC, Tennessee Valley Bancorp., Inc., in 1972. A vice president of her bank, she works in its correspondent banking division. She now is secretary of NABW and was its southern regional vice presi dent in 1973-74. 49 and “Investment Portfolios.” In addi tion, there will be informal talk ses sions. Mr. Ingram said special emphasis will be given to new service and mar keting opportunities as well as to cor respondent profitability, interbank lend ing and electronic funds transfer sys tems. According to Mr. Ingram, the pro gram was developed in response to in put received from correspondent bank ers throughout the country. To that end, he continued, a variety of working sessions was put together geared to the interests of all professional correspon dent bankers. * * New Congress Shown discussing ABA Correspondent Banking Conference, scheduled for Nov. 7-9 in D allas, a re (I. to r.): John F. Ingram Jr., conf. ch. and s.v.p.. Citizens & Southern N at'l, A tlanta; John S. C la rk, A BA Correspondent Banking Div. director; W alter W riston, conf. keynoter and ch., Citibank, N ew York City; W illiam M. R. M apel, ch. of division's Gov't Relations Committee and s.v.p., C itibank; and W illiam T. Dw yer (seated), div. ch. and v.p., First Nat'l, Chicago. Workshops and Informal Talk Sessions Planned for ABA Correspondent Conf. HE ABA’s fifth National Corre spondent Banking Conference will focus on the technological, social, legis lative and regulatory changes in the banking industry, with emphasis on how these changes will affect interbank relationships. The conference will be held November 7-9 at Dallas Fairmont Hotel. John F. Ingram Jr., senior vice president, Citizens & Southern Nation al, Atlanta, is conference chairman. T The conference theme will be “Vulner ability-Innovation-Performance." Key note speaker on November 8 will be Walter Wriston, chairman, Citibank, New York City. Among the 30 partici pants in this year’s meeting will be ad ministrative heads of the major bank regulatory agencies. Concurrent workshops are planned on such subjects as “Interbank Credit,” “Uncommitted Credit Vulnerability” EFT Theater Planned Oct. 2-5 for ABA Conv. E F T (electronic funds transfer) will be an important part of this year’s ABA convention, with a daily series of E F T programs sched uled for the E F T Theater in the Sheraton Park Hotel, Washington, D. C. The hotel will be the site of 1976 convention exhibits. The E F T Theater, designed to hold 300-500 persons, will run three 90-minute programs October 2 through October 5. Performances will begin at 10 a.m., 1:30 p.m. and 3:15 p.m. Titles of the E F T programs are: “The Consumer in E F T ,” “Honest Face/Wells Service,” “ATM Justification and Evaluation,” “Shared Facilities,” “Planning E F T Services for Community Needs,” “The Kroger Stores Experience,” “Cash Card,” “The Leesburg, Fla., Experi ence,” “E F T for Community Banks,” “Pay-by-Phone,” “Debit Card Development” and “Current Activities Affecting E F T .” “E F T is the hottest subject of interest to all bankers,” ABA Con vention Director Arthur L. Johnson Jr. says. “This will be the first time E F T will be given in-depth treatment, right in the exhibit hall, with the equipment on display and available for hands-on demonstrations.” 50 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (Continued f rom p age 46) leader, new speaker of the House and a new House majority leader. Once the process of change begins at the top, he added, it affects everyone, with jockeying for each vacant position. It’s possible, said Mr. Duwe, that there will be a 50% turnover in the House Banking Committee’s member ship. Each time a new member joins that committee, he pointed out, the banking industry has a responsibility to explain its position. “We must take our message to the new member and document why our stands make sense and how they will benefit the American public,” he ad vised. “We must take the time to learn all we can about new members of Con gress and to help them learn all they can about us.” What issues will the 95th Congress address? One example, said Mr. Duwe, is fi nancial reform, which is anything but dead. It’s been with banking consistent ly since the Hunt Commission made its recommendations in December, 1971, he continued, and it will be with bank ing next year, with the only question being what form it will take. Mr. Duwe then predicted that the new Congress would concern itself with the following: Regulation Q and com petitive in equalities. The ABA has made its views on this issue known, has testified be fore the House Banking Committee and said the interest-rate differential should be removed immediately in states— like those in New England—where the thrifts have checking powers or what are perceived by the public to be checking powers. Privacy o f custom er records. Again, banking has made its views on privacy known. The ABA said that government agencies should be required to notify MID-CONTINENT BANKER for September, 1976 Maybe you'll be lucky and get Cheryl. When our top correspondent banker, Glenn P. "Red” Ward is out of town, Cheryl Cross minds and she can his business probably help with your’s too. No matter what your ques tion m ay involve, Cheryl knows where to find the an swer. She knows our people, and she knows their specific talents. C a ll R ed. K e e p your fin g ers crossed and hope for a soft voiced answer. Call Cheryl, the better banker's banker. (918) 587-9171 MID-CONTINENT BANKER for September, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 51 a bank customer if they want to see his or her bank records, that a bank cus tomer should have the right to prevent the government from seeing his or her bank records unless the agency goes to court, that if the government goes to court to get the records, the bank customer should have the right to in tervene in the proceedings. Banking also has proposed that banks be reim bursed by the government for the costs of complying with subpoenas. E lectronic fu n d transfers. Congress can be expected to take an even great er interest in E F T than it has in the past as the work of the National E F T Commission reaches fruition. The com mission’s timetable is as follows: Some time before March 1, the commission will issue preliminary findings and recommendations on E F T . In the suc ceeding eight months, recommenda tions will be reported to Congress and the President, as those positions or recommendations are reached. The commission will issue its final report October 29, 1977, and this report will be a roundup of previous recommenda tions. Mr. Duwe reminded his listeners that all material prepared by the E F T Commission will be grist for legislative proposals and will affect the way banks do business in the future. E ffectiveness-o f - b a n k - s u p e r v i s i o n study. The Government Accounting Of fice began this study at the request of Congress. Nine-hundred banks super vised by the Fed, FD IC and Comp troller will be analyzed. The GAO has given its assurance that it “will not dis close the identities of banks or bank customers to anyone outside the GAO. The study will survey overall policies of the supervisory agencies and will pay special attention to an analysis of 36 banks that have failed since Jan uary 1, 1971, and 294 banks that have required special attention. The GAO also will review applications for char ters and conversions of charters and will survey agency personnel and training practices. The study’s results are expected to be released in Decem ber. No matter what the results, Mr. Duwe warned, the report will be a stimulus for congressional action in 1977. Finally, during the next session of Congress, said Mr. Duwe, Senator Thomas McIntyre (D.,N .H .) can be expected to introduce legislation that would change or supplant the McFadden Act. Mr. Duwe reminded his au dience that the senator has said an old law cannot be expected to be appli cable to a new and changing financial environment. For this reason, he has advocated a study of the act. Mr. Duwe believes legislative proposals al most certainly will emanate from this study, and the proposals probably will touch on the use of E F T . “The ABA and the banking industry have gained a great deal from the 94th Congress,” said Mr. Duwe. “We have reaffirmed that we must make our voice heard while legislation is being formu lated. We have reaffirmed that all bankers must remain alert to proposals on Capitol Hill. We have reaffirmed that our job of explaining our positions is an ongoing task that demands the efforts of each and every banker. W e have reaffirmed that our concern can make a difference. “But perhaps the most important thing that we have learned from the 94th Congress is that bankers can work together to achieve a unity of legis lative purposes. And that unity of pur pose can leave every banker better able to serve the needs of his or her community and the nation.” * * House Study Hits Business-Bank Control of Fed T ^ H E ABILITY of the Federal ReA serve System to make objective monetary decisions has been challenged by a study made by the staff of the House Banking, Currency and Housing Committee. The committee has charged that the Fed is dominated by corporate execu tives and heads of large banks serving on the boards of district banks. This dominance has been termed a threat to sound decision-making. The study questioned whether basic economic information collected through the Reserve banks could be trusted; whether the Fed’s responsibility to en force consumer financial laws against business and banking might be com promised; and whether commercial banks and bank HCs could be regulated with objectivity. Committee Chairman Henry S. Reuss (D.,W is.) said, “It is difficult to imag ine a more narrowly based board of directors for a public agency than has been gathered together for the 12 banks of the Federal Reserve System.” He said the findings of the committee raise “serious questions about the quality of economic intelligence and opinion which the district banks presumably feed into the Fed system and its mone 52 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tary policy machinery. He also said that “the heavy links to banks and bank HCs raise doubts about the ability of district boards to regulate the indus try.” The study identifies every director of the district banks and lists their cor porate affiliations as well as interlocks between their firms and other firms and banks. The report charges that this network of directors, in addition to being re sponsible for economic intelligence to the Fed board for monetary policy de cision, constitutes a major lobbying ap paratus for business and banking in local as well as national aspects. The report goes on to state that the “political clout” of directors derives from the fact that they are often “domi nant figures in their areas,” associated with “the biggest of the big business community.” The report said that, “at the national level, some of the activities of the Fed directors are masked behind their cor porate shields, and it is often difficult to distinguish the lobbying generated by the Fed banks from that of the cor porate banking lobby.” Several examples of Fed-director lob bying were listed, dealing primarily with efforts to kill legislation that would have permitted Congress to audit the Fed. The legislation was sponsored by the late Wright Patman (D .,Tex.) who was also credited with initiating the study. The study said that 89 of 108 direc tors of the 12 district banks have large business or banking affiliations; that, of the total, 29 of the Class C directors were executives or directors of corpora tions; that 30 of the Class A directors came from leadership positions of bank ing trade associations, an affiliation that would tend to give the directors a “monolithic position on bank issues"; that 30 of the 36 Class B directors came from “mostly large” businesses. A Fed spokesman said the Fed board and its Open Market Committee feel independent decisions can be made re gardless of the views of district bank di rectors. He also said that small busi nessmen and farmers are represented. The report cited the fact that there are no women on the district boards, that family-sized farmers are absent and small business is barely visible. It also said that only two members were from minority groups and no labor or con sumer spokesmen were included. * * MID-CONTINENT BANKER for September, 1976 Everything about the portfolio added up. But the earnings. A correspondent bank faced a big problem. Their million dollar portfolio wasn’t per forming. And with rising expenses and de creasing loan demands, it looked like they wouldn’t meet their income goals in the years to come. Faced with this dilemma, they came to a bank with a proven earnings record. First in Dallas. Where a team of Asset and Liability Management Specialists rolled up their sleeves. And got down to business. They started by looking long and hard at the bank. Where it was and where it was go ing. The debt structure, their customer pro file, and a dozen other factors. Then, after they knew the bank and the town, they used their market knowledge and the experience they had gained from manag ing their own portfolio to recommend changes. Like the wider spread between “agen cies” and “governments.” A strategy for ad vance refunding maturities. And active man agement of both assets and liabilities. The result was a higher earning portfolio. One that was better geared to market condi tions. And supported by continuous, up-todate management strategy. And all it took was good thinking. Based on 100 years of experience and a concern for the customer’s best interests. If that’s the kind of creative thinking your bank needs, call Charles Dunlap, Vice Presi dent of our Correspondent Division at 214744-8030. Because at First in Dallas, good banking starts with good thinking. First National Bank in Dallas Member F.D.I.C. A subsididry O t ■■■ First International Bancshares.Inc. Branch offices in London, Paris, Singapore and Cayman Islands. Representative offices in Tokyo and Sao Paulo. MID-CONTINENT BANKER for September, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 53 LO U ISIA N A N A TIO N A L B A N K IN TER IM FIN A N CIA L R EPO R T! https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ■< ■4 CONSOLIDATED BALANCE SHEET June 30 1975* 1976 ASSETS Cash and due from banks investment securities: $ 42,479.086 S 43,050,732 36,061,215 4,000,000 62,603,204 618.831 57,247,907 17,000,000 46,872,417 551,931 121,672,255 Securities of other U,S. Government agencies Obligations of states and political subdivisions Other se cu ritie s................................................................... 103,283,250 Federal funds sold and securities purchased under agreements to r e s e ll............................................................ 3,650,000 21,835,000 278,768,921 ( 15,967,509) ( 2,718.127) Reserve for possible loan losses 2 60.083,285 Less: Unearned interest income ( ( 11,950,240 1,908,612) 232,238) 243,623,820 ( 10,738,562) ( 2,727,760) 230,157,498 ( ( 9 ,809,390 1 1,182,386 1,941,509) 237,745) 9.003,132 $466,3 23 ,72 3 $ 466,323,723 18.164,281 490,874 431,800 8,034,852 $434,655,424 $13 7,0 57 ,22 3 2 48.626.348 $126,892,647 212.804,928 385,683,571 339,697,575 Liabilities for borrowed funds ................................... Mortgage note p ayab le ................................................ Liability on letters of c re d it........................................ Accrued interest payable and other liabilities 22,400.000 7,272,661 8.739,497 349,214 5,494.125 Subordinated n o te s........................................................ 4 29,939,068 5.000,000 46,185,000 2,219,200 8,941,500 431,800 4,530,501 402,005,576 5,000.000 19,183.139 2.514,408 349,214 6,786,951 Other real e s ta te ....................... ......................... Customers liability on letters of cr edi t . . . . . . Accrued interest receivable and other assets TOTAL A S S E T S .............................. . LIA BILITIES Deposits: Demand Federal funds purchased and securities sold under S T O C K H O L D E R S ' EQUITY Common stock, $5 par value Shares authorized Shares issued 1976 1975 1,745,074 1,676.850 1,661,975 1,586,561 8,384,250 10.033,642 12,966,763 31,384,655 $ 466,323,723 Outstanding commitments on standby letters of credit .................................................... . ............................ $ 3 ,5 8 9.4 25 7,932,805 8,354,127 11,362,916 27,649,848 $434.655,424 $ 3,699,868 ‘ C e rta in re c la s s ific a tio n s and a d ju s tm e n ts to p re v io u s ly p u b lis h e d 1 9 7 5 fin a n c ia l s ta te m e n ts h a v e b ee n m ade to c o m p ly w ith c u rre n t re p o rtin g re q u ire m e n ts . A N D SU B SID IA R IES A S O F JU N E 3 0 ,1 9 7 6 CONSOLIDATED STATEMENT OF INCOME ► v a O PER A TIN G INCOME Interest and fees on loans .................................................................... Interest on federal funds sold and securities purchased under agreements to resell ................................... Interest and dividends on investments: U.S. Treasury se cu ritie s............................................................ Securities of other U.S. Government a g en cies................. Obligations of states and political sub divisions......... Other se cu ritie s.................................................................................... Income from direct lease financin g ....................................... Trust department in co m e ................................................................... .. Service charges on demand deposit acco u n ts............ Other service charges, exchange and fees ............................... Other operating in co m e ........................................................ .. TOTAL O PERATIN G IN C O M E ................................... S ix Months Ended J u ne 30 1976 1975* $ 13.487.798 $ 12,230,618 387,353 352,240 1,624,571 277.804 1,486.343 49.473 745 .69 5 257,866 631,018 681,199 483.335 2 0 .1 12 ,45 5 1,929,813 800,406 1,200,444 14.570 710,604 248,514 557,085 525,1 19 114.083 18,683,496 4,472,441 6 ,6 5 0 ,4 6 9 3,780,553 6,350,347 7 14,383 93,544 185,139 769 .56 0 912,844 1 ,224.266 2.134.476 1,599,786 96,208 209.618 647,366 724,539 728,933 ____ 2,050,589 17,157,122 16,187,939 2 .9 55,333 642 .69 9 2,495,557 606.658 2,3 1 2,6 34 1,888,899 O PER A TIN G E X P E N S E S Salaries and employee b e n e fits............................................... Interest on d e p o sits.................................................................................. Interest on federal funds purchased and securities sold under agreements to repurchase .................. .. Interest on other borrowed funds .................................................. Interest on subordinated n o te s ............................................ Occupancy of bank premises expense, n e t ...................... Furniture and equipment expense ................................................. Provision for possible loan lo s s e s .................................................. Other operating e x p e n se s.................................................................. TOTAL O PERATIN G E X P E N S E S .................................... INCOM E B E F O R E INCOME T A X ES AND S E C U R IT IE S G AIN S ( L O S S E S ) ........................................ Applicable income ta x e s .................................................................. INCOM E B E F O R E S E C U R IT IE S G A IN S ( L O S S E S ) ............ Securities gains (losses) less applicable income tax effects (credits) of ($5,518) in 1976 and $988 in 1975 ......................................................................................................... N ET IN C O M E ............................................................................... $ 2.306,657 $ 1.070 1.889,969 EA R N IN G S P ER S H A R E Income before securities gains (lo s s e s )...................................... Net in co m e .................................................................................................... $ $ 1 38 1.38 $ $ 1.14 1.14 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY y ~r Balances at January 1 ...................................................................... Net income for the p e rio d ............................................................. Cash dividends p a id ........................................................................... Sales of Common Stock under employee stock option and savings p la n s ............................................................................ Balances at June 3 0 .......................................................................... https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ( 5,977) Six Months Endec! June 30 1976 1975* $ 2 9.4 77 .95 4 2,306.657 ( 442,943) $ 26,040,433 1,889,969 ( 380,234) 42,987 99,680 $ 31,3 84 .65 5 $ 27,649,848 LOUISIANA NATIONAL BANK What Is Your Bank Worth? HAT IS your bank worth? I personally have been haunted by the question for some 25 years, as, periodically, I have been involved in bank purchase, sale and merger trans actions. There’s no single answer to the problem of valuation, for willing buy ers and sellers of bank ownership are motivated by a legion of varying per sonal and economic considerations. However, there are common-sense benchmarks that may be used to indi cate a useful range of values, and these benchmarks guide and facilitate pur chase and sale decisions, which reflect the final consensus judgment of buyer and seller. Our organization has made extensive use of such guidelines to add banking capacity through acquisitions, mergers and de novo activity. In recent years, we have looked at many banks and have developed the most rational stan dards I know for evaluating the eco nomic worth of a bank. Sometimes this process has led us to success in ex panding our company, but on other oc casions it has left prospective buyer and seller miles apart. What is your bank worth? Remem ber that worth, like beauty, often is in the eye of the beholder. Guidelines, however rational, can not be set into a lone mathematical model and fed into a computer, yield ing a single answer of what a bank is This article is based on a talk given by Mr. Rogers at the 24th Assembly for Bank Directors held early this year in Honolulu. 56 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By NAT S. ROGERS President First City N ational Bank Houston worth. It takes experience and knowl edge of the banking business, coupled with market information gathered from statistical data and financial informa tion gathered from computer models. In our organization, computer model ing is an important aid for determining worth. When broad-scale analysis final ly is concluded, it takes only a matter of minutes for us to project results for a bank years into the future. Using al ternative growth assumptions, we pro ject profiles of assets, earnings, capital requirements and cash flows. The ob ject is to fix the parameters of a bank’s future worth and then make the best decision about its present value. Key elements of our evaluation pro cess are classified into five basic cate gories : 1. Management. 2. Market. 3. His- Naf S. Rogers, ABA pres., 1969-70, also is a form er head of the M ississippi Bankers Assn. He joined De posit G u ara n ty , Jackson, M iss., in 1947 and w a s its pres, w hen he joined First City N a t i in 1969. Mr. Rogers also is pres.. First City Bancorp, of Texas, HC w hose lead bank is First City Nat'I. toric Performance. 4. Current Condi tion. 5. Future Prospects. W e place management first because management quality is the root stock of value—the universal key to any or ganization’s success. If a bank is to operate profitably and achieve sustained success in carrying out its obligations to shareholders, employees and the community it serves, competent man agement is a sine qua non. The build ings, bonds and loans of a bank aren’t worth much unless they are admin istered soundly and productively. Generally, a bank’s track record gives an insight into management’s fulfill ment of these obligations. Incidentally, it’s the first obligation of a bank’s board to ensure that the institution has quali ty management. Remember, however, that any change or improvement in management cannot happen overnight. Miracles in the banking world are rare. It takes hard work and many months, if not years, to turn a problem bank into a good performer. Sometimes, the accu mulated liability of poor management effectively bars acceptable asset quality or satisfactory earnings for years to come. To our corporation, such a bank would be a liability rather than an as set and represent a negative value. Re member, in judging the worth of your bank, the key element is its ability to perform in the future. Management must have the skills to satisfy needs of regulatory authorities, depositors, borrowers, employees and investors. This requires an adequate MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis response to each of these groups, so as to articulate objectives, balance con flicting interests, invest funds profitably and maintain sufficient liquidity. Sys tems and procedures that promote con servation of manpower, but also satis fy customer needs for banking services, are essential. Elimination of unwanted fat and promotion of operating efficien cies are what good management is all about. Just because a bank’s books reflect good profits for a year or two doesn’t necessarily mean the bank is being managed properly. We need the addi tional affirmatives that management is running a sound bank, controlling loan quality, avoiding speculative bonds and generating profitable business within its primary market, rather than depend ing on the sale of federal funds and purchase of participations. For example, look at the banks that were riding high in the last money crunch, but now are paying the price for an excessive de pendence on high-yielding federal funds. Our organization looked at a num ber of such Texas banks during 1973 and 1974, when they were enjoying unprecedented profits the easy way by selling fed funds. At that time we told them that our projection of their eam- ings in the future was based on “normal ized” fed funds rates; we didn’t ac quire or merge with many because they disdained our income projections. Now it can be noted that their recent earnings are well down from those of prior years. The main point here is that high earnings for one or two years are not necessarily a sign of good management —they may even demonstrate the op posite. The next standard for determining the worth of a bank is its market. Bank ing markets vary widely, depending on access, geography, structural con ditions, relative convenience of com petitive options and merchandising and service capability. Sometimes, I think the market for a bank is limited only to the imagination and aggressiveness of management. For all practical purposes, however, typically there is an inherent geographical limitation. The most important question con cerning a bank’s market is how the growth of the market is going to devel op. Market development is a function of 1) its rate of growth and 2) the ex tent of its potential development. If the market is growing at a reasonable and sustainable rate, a representative bank has greater potential value, and it enjoys a higher current worth than similar-sized but more slowly growing banks. However, if the service market for your bank is expanding rapidly, you must be prepared to commit more capital and human resources to meet that demand for services, and these commitments must be included in the valuation process. Moreover, unful filled banking needs inevitably must be met by new banks, and competitors will move in and take a share of your bank’s future potential growth. Simply because a bank is located in a rapidly expanding area does not guarantee that the bank will grow over a sustained period. Suburban banks usually are “leapfrogged” by de novo entrants, which probably will serve to restrict market potential over time. Always, it takes awareness and judg ment to determine the prospects for reasonable, sustained growth, but the effort should not be based on guess work. Census data, investment patterns, real estate values, income levels and zoning patterns have to be taken into account. Naturally, if a bank is in a mature area, the prospects for growth are mini mal. There an institution cannot rely (Continued on p age 60) Current Fair Market Valuation of Capital Stock Is Must for Small Bank HE DISCUSSION of a bank’s worth, as outlined in the accompa nying article by Texas banker Nat S. Rogers, is applicable to almost any size bank. However, Ray E. Reents, a Springfield, 111., bank stock appraiser, has some opinions on this subject spe cifically for small banks. He defines the latter as in the $l-million-to-$150-million-asset range, whose stock is not ac tively traded or sold through an ex change. Although such stock is sold occasionally, he explains, the “price of the last sale” ordinarily is not the “cur rent fair market price.” Mr. Reents emphasizes that it’s ex tremely important to each shareholder of a small bank that his bank maintain a current, fully supported fair market valuation of its capital stock. In many cases, he says, a large per centage of an individual’s net worth is in the value of his bank stock, this val ue having a broad range, depending on the percentage of total shares out standing held by the stockholder. Con trolling interest (51% or more), he maintains, sometimes will have a fair market value of two to three times the value of minority interest stock (under 51%). This fact, he says, also is recog58 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis nized by the Internal Revenue Service and other taxing agencies. Mr. Reents points out that situations often arise when there’s a need for a current fair market price on a small bank’s capital stock and listed the fol lowing examples: 1. Estate and Inheritance Tax. When a bank stockholder dies and his estate contains this type of stock. A fair tax will be paid only if the failmarket value of the stock is known as of the date of death. 2. G ift Tax. When a bank stockhold er wants to give this type of stock to his wife, children or others as a gift. 3. “Outsider ’ Stockholders. When a bank stockholder who isn’t an officer or director of a bank wants to sell his stock, and it’s purchased by an “insid er” officer or director. By paying a fully supported, fair market price, the “insider” buyer can avoid or legally de fend possible lawsuits by the “outsid er” seller. 4. M arketing Purposes. When a buyer, buying group, bank HC or oth ers offer to buy a bank’s capital stock. 5. Buy-ajid-Sell Agreem ents. When two or more stockholders agree to sell a bank’s stock to each other in the event of death of one of the parties or under certain other conditions. 6. S pecial Taxes. In states where a bank’s capital stock is taxed. 7. L oan Collateral. When a stock holder wants the maximum loan on his stock when it’s pledged as collateral for the loan. 8. P ledged C ollateral Sold B ecause o f N onpaym ent o f Loan. When a lend ing institution that holds this type of stock as collateral sells the stock be cause of nonpayment of the loan. A fully supported, fair market valuation can be a good defense against possible lawsuits by the borrower or possible second lien holders. Mr. Reents suggests that a fully sup ported appraisal report should contain a detailed analysis of a bank’s growth, earnings and condition for the past five-year period. In addition, the report should contain Federal Reserve aver age ratios as compared with the bank being analyzed. Actual, current market prices and bids of actively traded bank stocks should be contained in the re port for purposes of comparison with the value price. # * MID-CONTINENT BANKER for September, 1976 In correspondent banking services, w e’re the specialists. Here’s how First Chicago, a $19 billion banking corporation, can help you serve your customers more productively. You know what your correspondent banking needs are. You also know what services your present correspondent bank provides. Check this list of First Chicago's com prehensive services. See if there aren't many ways we can work together more productively. Then call a correspondent banker at First Chicago, (312) 732-4101, or write us. DATA PROCESSING Point-of-Sale Techniques Bank Accounting Services Bank Information Systems Electronic Funds Transfers CREDIT FACILITIES Holding Company Lines of Credit Participations: Upstream and Downstream Intermediate Term Credit Liquidity Lines of Credit Commercial Finance Services: Inventory and Receivable Financing Corporate Financing Advisory Services Leasing Activities and Analysis Credit Information Small Business Administration-. Loan Counsel MANAGEMENT ASSISTANCE Loan Portfolio Review Techniques Economic Forecasting Profit Planning and Forecasting Marketing and Business Development Advice Operations Planning Organization Planning SPECIAL CORRESPONDENT SERVICES Annual Correspondent Conference Account Referrals Mini-conferences and Workshops, Special Events Planning Record Retention and Reconstruction Cash Management Consulting: Collection, Concentration, Disbursement and Control FOCUS: Lockbox Location Model Visual Aids: Slides and Closed Circuit TV Production TRUST BANKING Personal and Corporate Trust Services Trust Investment Advisory Services Monthly Investment Services Stock Transfer and Shareholders Services Dividend Reinvestment PERSONAL BANKING ASSISTANCE Bank Promotions YES Card’” BankAmericard® Savings Programs Automobile Leasing Program Bank-At-Work/Direct Deposit Program OPERATIONAL SERVICES Cash Letter Clearings: End-Point & Float Analyses Coin and Currency Collections Money Transfer Federal Reserve On-Line Settlement Securities Custody Security and Coupron Collection Payroll Accounting INVESTMENTS Government Securities Municipals Federal Agency Securities Federal Funds Repurchase Agreements Commercial Paper Certificates of Deposit Treasury Tax and Loan Accounts Money Desk Reviews Portfolio Analysis Services INTERNATIONAL BANKING Worldwide Locations Merchant Banking Money Market Instruments Letters of Credit Foreign Exchange Transactions Transfers and Remittances Ex-Im Financing FirstChicago The First National Bank of Chicago Productive services for banks and bank holding companies. MEMBER FDIC MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 59 What's Your Bank Worth? (Continued from p age 58) on rapid resource expansion as a pri mary means of increasing earnings. Or dinarily, this type of bank is worth considerably less than one of similar size that lies in the path of expanding commercial, industrial or residential de velopment. A third requisite for determining a bank’s worth is its historic performance. Usually, history reveals more than any other factor, since it puts the manage ment linen on display. Almost invari ably, we believe we can contribute something to increased profitability, but we rarely factor this potential benefit into the valuation equation if the bank has above-average management. After all, there are few magicians in the ranks of bank holding company manage ments. Analysis of historic performance gives us insights into the market the bank serves and helps us perceive lo cal competitive practices and untapped investment opportunities. These insights into the bank’s future growth and the quality and mix of its earning assets can be translated into a range of prob able earnings that reasonably may be anticipated in future periods. Historic performance leads to a fourth consideration that we describe as current conditions. The most sig nificant key to the future is the “here and now,” which requires an X-ray view of current conditions much like an examination or audit. The six aspects we examine closely are: 1. Quality of assets. 2. Quality of liabilities. 3. Physical plant. 4. Book value of the equity. 5. Capital adequa cy. 6. Fair market value of tangible assets. Today, more than ever, bank ana lysts focus on quality of assets in their pursuit of market value. The current condition of assets will produce future income or serve as a detriment by burdening the future with charge-offs or non-accruals. Low coupon bonds and term loans with low fixed rates should be discounted and factored into future income projections. Obviously, they al so impact the liquidity position. The quality of bank liabilities re lates to their cost, source, term and volatility. Is the deposit base stable, and is the mix between time and de mand deposits balanced? Are deposits drawn from the primary market area or purchased out of locality? Will large amounts possibly disappear because of rebidding of public funds contracts? Is too much reliance placed on highcost, large-denomination CDs? Liabili ty management is a sophisticated exer cise for regional and money-center banks, but when undertaken by a small er community bank, it becomes specu lative mismanagement. Physical plant has a definite impact on bank value. A modern, attractive building is more likely to afford effi cient work flow and customer service than an aged mausoleum. Adequacy of parking and drive-up windows re quires study, and land for expansion must be examined. Occupancy costs or dinarily are one of the major costs in banking, and future building require ments call for new capital commit ments more often than not. A new location may be needed, or perhaps we should redefine our future projected capabilities to lower levels because of physical plant limitations. The value equation has to include these costs in analyzing future income pros pects. Until recent years, the most com monly used benchmark for valuing in frequently traded bank stocks was a multiple of book value. Assuredly, book value is pertinent and has regained SM A LL BA N K S T O C K H O L D E R S Know the "Fair Market Value" of your MINORITY <5, CONTROLLING Capital Stock. W e prepare professional, fully supported, appraisal re ports. Reports can be used effectively to "Buy or Sell" Stock, for all "Taxation" purposes, for "Buy & Sell A gree ments," and for many other purposes such as "V alua tion for Loan Collateral." Write: 60 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis RAY E. REENTS, Appraiser 2730 S. MacArthur Springfield, IL 62704 PH. (217) 528-3790 some favor in these days of keen inter est in capital adequacy. A prospective buyer must know if capital accounts are sound and have been recorded in agree ment with generally accepted account ing principles. Future dividends will be significantly controlled by capital ratios, and capital deficiencies inevita bly place a high priority claim on fu ture earnings. Capital adequacy is important not only to public confidence and operating effectiveness; it is an article of faith for all bank regulators as well. A prospec tive buyer must understand regulatory requirements and project additional fu ture costs, if any, that will accrue from a current or prospective undercapitali zation. Capital today is a high-cost fac tor of production, and an unusual cap ital need will reduce value proportion ally. Ideally, a bank should be able to generate its future capital requirements via earnings and still be able to pay 30% or more of its earnings to share holders as dividends. Such a bank or dinarily has more worth to the share holder than a comparable bank that must rely on outside infusion of capital to comply with the regulators’ capitali zation guidelines. While the earnings stream is our primary interest in the valuation proc ess, it is essential that the fair market value of tangible assets be studied. Here we depart the realm of book val ues and regulatory capital require ments and seek to determine the fair market value of all the bank’s assets. We appraise the bond portfolio, de termine whether the reserve for loan losses is adequate and value the phys ical plant and equipment. Hidden val ues may be carried in the other-assets account and in other real estate with a low-cost basis or written down by regulatory requirement. These are fac tors pertinent to the evaluation, for which alert sellers will demand recog nition. All these efforts to develop the full facts about current conditions are cal culated to help us accurately ascertain future prospects. How do we envision the future of the institution? Generally, a range of future models is run to establish parameters of what the bank’s earnings over the next five to 10 years will look like. Some of the common variables we plug into the computer model include various growth rates for assets by year, as well as the required capitalization needed to support the asset growth. An other integral part is the dividend pay out as a percentage of each year’s earnings over the next five to 10 years. All these exercises lead us to a con- MID-CONTINENT BANKER for September, 1976 elusion of how the bank is going to perform in the future; this is what distinguishes the worth of a bank from the fair market value of tangible as sets. On the basis of all the information gathered in the previous exercises, we make a pro forma projection of earn ings, based on the highest probability we believe the bank can realistically achieve year by year for five to 10 years. This future stream of earnings makes allowance for capital input, new plant, possible redeployment of assets, expected growth of the market and probable dividend payouts. The final computation is to capitalize this future earnings stream at an appropriate rate and then to reduce it to present value. Present value forms the basis of a spe cific offer to buy shares or to merge. This whole value concept has been developed on a theoretical basis, but it is modified repeatedly by current conditions, experience and judgment. It’s tested on the basis of comparables and verified against prices paid for banks of similar size, market potential and quality. There are some final distinctions between values based on a cash pur chase and those involving an exchange of shares. Equity analysis requires de velopment of comparable information on both parties. An acquiring bank will wish to avoid earnings dilution—pres ent or prospective. After future earn ings streams have been constructed on both banks and appropriately discount ed to present value, the price offered normally approaches a break-even posi tion in terms of future earnings per share. Marketability of the acquiring organization ordinarily is entitled to a premium, the size of which will de pend on amount of established trading and prospects for market appreciation. Cash-purchase valuations utilize an “alternative cost of funds” approach. The acquiring party must compute its overall capital costs based on its costs of debt capital and its minimum ac ceptable rate of return on equity. The purchase price cannot exceed an amount that will permit this minimum return to be achieved. In conclusion, it’s worth noting that the values of your banks also are af fected by market trends, public con fidence and rate of inflation. Recent months have seen few banks sell at normal values relative to their current and prospective earnings. My advice is: Don’t sell your bank today—it should be worth a great deal more in the future. * * MID-CONTINENT BANKER for September, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Salute to an Historic Site On Ju ly 11, 1796, the Am erican flag first flew over Detroit. In commemoration of that event, officers of Detroit Bank and; mem bers of the Fort lerno ult M ilitia, a local group, hold © brief cerem ony, raising a replica of that first flag. The actual site of Fort Lernoult, w here the orig inal flag w a s situated, iis w here the bank now stands, land that has been designated a registered historic site by the M ichigan Histor ical Com m ission. 61 First Session Is Completed At Alabama Banking School; W. P. Walker Is Chairman M O BILE—The Alabama Bankers As sociation has opened the Alabama Bank ing School. Classes for the first group of 60 freshmen stu dents have been conducted on the Brookley Campus of the University of South Alabama. Serving as school chairman is W il liam P. Walker, chairman and pres ident, City Nationw a lker al, Dothan. Mr. Walker, who also is executive vice pres ident and director of the bank’s parent HC, First BancGroup-Alabama, Inc., Mobile, for the past six years has served as an instructor at the School of Banking of the South, Louisiana State University, Baton Bouge. The Alabama Banking School was conceived by the banking education committee of the Ala.BA. The commit tee researched other banking schools and the result was a recommendation that a three-year curriculum of one week or a minimum of 40 classroom hours yearly be offered. The school is governed by a ninemember board of trustees with Mr. Walker as school director. Other trust ees are: Kay Ivey, assistant cashier, Merchants National, Mobile, Ala. BA education committee chairman and Ala bama Young Bankers president; Howard Morris Jr., Ala.BA executive vice presi dent; James S. Gaskell Jr., president, First Alabama Bank, Montgomery; A. Lee Hansen, executive vice president and cashier, Citizens Bank, Oneonta; Bichard P. Morthland, vice president, Peoples Bank, Selma; John Russell Thomas, vice chairman, First National, Alexander City; and Mary George Jor dan Waite, chairman and president, Farmers & Merchants Bank, Centre. The ninth trustee will be the immediate past chairman. Assisting Mr. Walker in the school’s administration are Richard E. Oliver, president, American National, Hunts ville—class director; Paul Pietri, pro fessor of management and director of management development, College of Business at the university— educational director; Ed M. Bunnell, dean, Division of Continuing Education and Evening Studies at the university—university co ordinator; and Ross L. Byrd, Ala.BA E F T S specialist—registrar. O fficials w alk across Brookley Cam pus of Uni versity of South A la b a m a , w here A la b a m a Banking School classes a re held. Located on Mobile Bay, secluded, w ood like setting of school is conducive to study. The 60 freshmen students attended classes or worked on study problems daily from 8 a.m. until 9 p.m. and a number of films on management were aired at night on television sets in the students’ suites, via the school’s closedcircuit TV system. Courses of study were management, bank law and regu lation, accounting, economics and credit analysis. In addition to that, during their junior and senior years, students will study EDP, marketing, money and banking, financial planning, investments, forecasting, trusts, profit planning and personnel policy. ■ D EPO SIT GUARANTY NATION AL, Jackson, has opened its Terry Road Office. The ribbon that was cut was of currency totaling $500. Man ager for the new office is Charles Mc Ghee, assistant vice president. Sem inars for the Trust Industry Announced by Kennedy Sinclaire What’s a banker’s banker? It’s an in v estm e n t b a n k in g firm that can raise capital through the sale of securities. Either by public offerin g or private placem en t. It’s a firm that’s arranged m a n y m u n icip a l and corporate und erw ritings. It’s one of the 5 0 best capitalized in v e stm e n t b a n k in g h ou ses in the country. It’s .. . ern Brotes 6 Co. 9 West 10th Street, Kansas City, Missouri 64199 (816) 471-6460 Chicago • Omaha • Ft. Worth • Denver • Albuquerque 62 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis WAYNE, N. J.— Kennedy Sinclaire, Inc., has announced it will present two "New Horizons Seminars” for the trust industry. The first will be held Sep tember 13-14 at New York City’s Es sex House, while the second seminar will be November 8-9 at the Airport Marriott in Chicago. The seminars have been designed to provide participants the opportunity to discuss with experts innovative, administrative and operational invest ment marketing strategies now being employed by leading institutions. Ex perts will be from Kennedy Sinclaire, the trust industry and firms serving the industry. Also on the agenda will be an analy sis of results of recent market research studies, while current industry develop ments such as index funding invest ment strategies, covered call option, common trust funds, techniques for “unbundling” trust products and use of outside custody and trust accounting services will be discussed. MID-CONTINENT BANKER for September, 1976 ‘I’ve used every correspondent service First National offers. And after 35 years, success has proven the wisdom of it.” The Farmers Bank of Clinton, Missouri is a true success story. A correspondent relationship with First National Bank of Kansas City has given it valuable extra time and expertise to concentrate on serving its growing community. Mr. and Mrs. Harry Finks, Jr., president and vice president, know that size determines a bank’s method of operatiqn. Farmers Bank has the advantage of a community where each ... client and his business neem > ™ ™ are known intimately. But the community is not large enough to support a computer and specialists for just one bank’s daily needs. Ten years ago, Harry Finks, already established in full correspondent relationship with the First, was one of the first to take advantage of our computers and other related specialized services. For his dernagd deposits, savings account^ànd certificates of deposit, daily statements from the First save his people time and help insure accuracy. If your bank could benefit from assistance with overline loans, investments, transit collection, bonds, international services, trusts, cash manage ment and other financial services, call the professional staff of the First National Bank Correspondent Department. We take pride in the success of the Finks and the Farmers Bank of Clinton. Our correspondent banking tradition has been built ori help like this. Why not put our strong tradition of excellence to work for your success. ■ Harry Finks, Jr. M rs.sparry Fin! Fanners Bank William O. Wei! 'irsi National y&ur success is our tradition. F irst . N a tip n a l B an k: KANSAS CITY. , MISSOURI rd An Affiliate of First National Charter Corporation MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member FDIC EFT, Competing With S&Ls, Selling to Women Among Topics Planned for BMA Convention E LECTRO N IC funds transfer, mar keting strategies for the womens market and how to compete with S&Ls are only a few of the subjects that will be thoroughly discussed at the Bank Marketing Association’s 61st annual convention October 24-27 at the Hotel Fontainebleau in Miami Beach. The first general session October 25 will be keynoted by former astronaut Frank Borman, now president and CEO, Eastern Airlines, Miami. In his talk, "How to Compete in a Regulated Industry,” Mr. Borman will trace some parallels between banking and the air lines. As in past conventions, this year’s meeting will feature departmentals, workshops and rap sessions. Subjects to be covered by depart mentals are: “E F T — Competitive Im pact for Today/Tomorrow,” “Advertis ing in the ’70s— the Positioning Era,” “Marketing Strategies: Small Business Market,” "Marketing Strategies: Re tired Fixed-Income Market,” “Market ing Strategies: Women’s Market,” “Marketing Strategies: Knowing the Consumer—Under 30 Market,” “The Bank Marketer’s Dilemma: Cooperation vs. Competition With Financial Service Institutions” and “Responsive Market ing—the Increasing Power of the Con sumer.” Workshops for large banks will be devoted to: “Accepting the Challenge for the Future—What Marketing Should See in That Crystal Ball,” “Cheek Veri fication and Factoring—Should Banks Be in It?,” “Practical Application of Outside Research,” “Staff Cross-Selling That Works,” “How to C o m p e t e Against NOW Accounts,” “Customer Wants—Your Key to Effective Market ing,” “The President’s E F T S Commis- sion,” “Data Processing in Marketing/ Operations— a Team Approach” and “Where Do W e Now Take the Matur ing Product Known as Bank Credit Cards?” Topics at the community bank work shops will be: “E F T Planning for the Community Banker,” “How to Get Management Support for Sales Train ing,” “A Banker’s Dozen of Ideas to Compete With an S&L,” “Business D e velopment for the Community Bank,” “Advertising . . . It Ain’t No Magic Wand’ and “Marketing Planning.” Rap sessions for large banks will fea ture: “How to Effectively Market NOW Accounts,” “Check Verification/Guar antee,” “Planning for E F T ,” “National Debit Cards,’ “Thrift Institution Com petition,’ “Direct Salary Deposit,” “Sales Training— a Professional Ap proach,” “Newcomer Marketing,” “Sen ior Citizens Marketing,” “Student/ Youth Marketing,” “Sequential/Com bined Statements,” “Customer Profit ability,” “Direct Response Marketing” and “Business Savings Accounts.” Topics at community banks’ rap ses sions will be: “How to Sell Individual Retirement Accounts,” “How to Market Commercial Account Services,” “Plan ning a Community Bank Marketing Program in a Metro Area,” “Do Premi ums and Giveaways Work?,” “Extend ed Banking Hours—How and Why,” “Training Employees to Sell Services,” "Budgeting and Forecasting in a Com munity Bank,” “How to Compete With S&Ls,” “How to Motivate Officers to Sell,” “Generating New B us i n e s s Through Directors,” “Customer Profit ability in E F T Techniques” and “How W e Use E F T in Community Banks.” On October 27, a special panel of banking industry authorities will de- BMA Officers CALLAN 64 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis WHITTLE DAVIS BORM AN scribe “The State of Banking Today and Tomorrow.” That same day, dele gates will hear the N ew sw eek peri scope panel, consisting of five top edi tors of N ew sw eek magazine. They will discuss the upcoming general election, current events and foreign affairs. On October 26, the BMA will hold the first screening of the 1976 “Best of TV” commercials film and will make the special Golden Coin awards pre sentations. Also that day— on all Fon tainebleau TV sets—there will be a BMA videotape presentation, “What You Are Is Where You Were When, a 90-minute program given by Dr. Morris E. Massey on helping people understand and deal with their value judgments. Convention Chairman. Alex W. “Pete” Hart is this year’s convention chairman. He is vice president, BankAmericard division, First National, Chicago. BMA Officers. BMA officers for 197576 are: president, Eugene J. Callan, president, New York Bank for Savings, New York City; first vice president, Clifford Y. Davis Jr., vice president, City National, Memphis; second vice president, Martin J. Allen Jr., senior vice president, Old Kent Bank, Grand Rapids, Mich.; and treasurer, Jack W. Whittle, chairman, the Whittle Group, Chicago. * * MID-CONTINENT BANKER for September, 1 976 Four Fad-Filled Manuals For the Bank Diredor (Every Director Should Have a Copy!) “(Many) directors are unable to adopt (an) easy solution to the conflicts dilemma. They must recognize that conflicts of in terest always have and always will exist in bank boards . . . the board obviously can’t have each director resign whenever a conflict . . . presents itself. Rather, the board should . . . police itself (and) openly discuss factors involving conflicts.” That quote illustrates one of many overlooked points of bank board membership that are examined in this book by Dr. Lewis E. Davids, Editor, The BANK BOARD Let ter. Director relationships with the HC, CPAs, legal counsel, stockholders, corre spondents and advisory boards are cov ered. Includes models, exhibits. WOMEN: the “Forgotten” D irectors. $2.50 Could be most helpful to banks contem plating the election of a woman or women to the board. Survey results from women directors across the country show how they view their relationships to other di rectors of their banks, what they feel are their relationships to men and women staff members of the institution, frustra tions and delights encountered in board service and what they see as today’s ma jor banking problems. By A. Ruth Davids, Senior Research Associate, with Dr. Lewis E. Davids, Editor, The BANK BOARD Letter. A Trust Guide for the B an k Director. $5.25 with established trust functions often aren’t fully conversant with direction of trust activities. They will find this book, by Dr. Lewis E. Davids, Editor, The BANK BOARD Letter, to be a valuable aid. It delineates trust department examinations, policies. Includes Comptroller’s Regulation 9, covering fiduciary powers of national banks, collective investment funds and dis closure of trust department assets. The B an k D irector’s World. $6.25 san k Bank Directors W o rld ■ Advisory Board ■ National Banking I ■ Operating Ratios W OMEN: The “ F orgotten ” D irectors • ^ A n . “ JC-O 3C / // / • * // * TRUST G UIDE// / FO* THE / / / / BANK DIRECTOR / • / Dtr. 3E o Behind Board Room Doors. $6.00 B e h in d B o ard ro o m D o o rs Since introduction of the Keogh Act (H.R.10), many small firms and self-em ployed individuals have established pen sion trusts, so the number of banks adding trust functions has increased substantially. Directors of banks with new trust depart ments or newly elected directors of banks T z i Dr. Lewis E. Davids, Editor, The BANK BOARD Letter, provides insights to fine points of bank board membership. Sam ple chapter topics: CEO selection, reim bursement; management audits; finding customers; board minutes; director fees, retainers. Typical paragraph: “The chair man . . . receiving an examination report, Quantity Prices Listed Below Bank Director's World WOMEN: the "Forgotten" Directors 2- 5 $6.00 ea. 11-25 $5.50 ea. 6-10 $5.75 ea. over 25 $5.25 ea 2- 5 $2.25 11-25 $1.85 6-10 $2.10 over 25 $1.75 Trust Guide For Bank Director Behind Board Room Doors 2- 5 $5.00 11-25 $4.65 6-10 $4.80 over 25 $4.75 2- 5 $5.25 ea. 11-25 $4.75 ea. 6-10 $5.00 ea. over 25 $4.50 ea https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis verbally briefs the board on its contents, not permitting each to . . . review it in its entirety. A top bank supervisor told me of an instance (where) a bank director demanded to see the report. He saw it, but only after the CEO had removed pages containing the examiner’s comments and conclusions and violations of law and regulations. Fortunately, the director had the foresight to note the missing page numbers.” The BANK BOARD Letter 408 Olive St., St. Louis, MO 63102 Please send us: ............ ............ ............ ............ copies, Bank Director’s World $ . . .. copies, Women: the “Forgotten”Directors $ . . .. copies, Trust Guide $ •. . ■ copies, Behind Board Room Doors $ . . .. Total Enclosed $ Name & T it le ............................................................. Bank .................................................................... Street .......................................................................... City, State, Zip ....................................................... (Please send check with order. In Missouri, add 4Vz% tax.) BG/1 HELP TOUR EMPLOYEES BECOME VISIBLE ASSETS FOR YOUR BUSINESS. Career Apparel of Dacron" can create a strong, favorable image with your cu sto m ers.. . and build em ployee m orale as well! Transform your employees into valuable public-relations assets, projecting exactly the image you want your customers to see. And, at the same time, it builds employees into a team. The right Career Apparel has a fashion look as modern as your company’s. But it’s also practical and hard-working, because it’s made with long-wearing, easy-care Dacron* polyester. *Du Pont registered trademark. BG/2 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Now where can you find Career Apparel like this? DuPont’s Career Apparel specialists will help you decide what you need and give you names of manufacturers who make the “tai lored-look” coordinates you want. Just contact Du Pont Co., Textile Fibers , Div., Career Apparel, Suite DU PONT 31J6 , Centre Road Bldg., Wilmington, Del. 19898. — >/l I Performance........ from Salem Just one thing has made us the leader . . . Performance. Salem continually performs efficiently and effectively for many of this country’s large, medium, and small finan cial institutions... helping to create new customers, more customers, more deposits... and all at minimal or no cost. Salem has the experience that helps insure smooth running programs. duct and the collateral material to support a good pro gram; and we can assist you in developing the best one for your particular needs. Call us . . „ watch us perform. Or tear off the attached card and send it today. S A LE M CH IN A COM PANY S A LE M S IL V E R S M IT H S South Broadway Extension We know what makes a good program; we have the pro https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Salem. Ohio 44460 Phone Jay Keller: (216) 332-4655 Whatever you’re looking for, SANTA 'h.mksVDt' *w*hopp*nqin \ ELKHART you can find it Right here k thanks YOU H ’11'IV"*! m * C IT IZE N S STA, BANK says there's a sho/i/tni bonanza right /uj in mu t own backyard MflRWNN* https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ^ says [here’s a shop bonanza right h in your own backyard. “T r y Culpeper First w as undoubtedly the m ost successful m arketing effort we’ve ever tried. Th e real ‘’b onus w as the low cost«” .*... When Burton Stacy heard about the “Try (Your Town) First” ^program, he knew it was a natural for Culpeper. Located within * easy driving distance of Richmond and Washington, D.C., Cul peper merchants suffered every year, when local residents did 1 much of their Christmas shopping in the nearby large cities. Things changed last year. The bank sponsored the “Try Cul peper First” program, a tested, proven program for keeping local ^shoppers at home at Christmastime. This copyrighted program enabled the bank to provide each merchant in Culpeper with " the means to promote hometown shopping within his store, in the local newspaper, and on the area radio stations. The bank provided everything. It was a marketing masterstroke. The local "■newspaper commended the bank in an editorial. Letters to the editor praised the community spirit of the bank. Both the radio 'station and the local newspaper provided free press coverage. . And the local merchants loved it. The bank was helping put money in their pockets. * Says Burton Stacy, “We not only gained their goodwill, but a lot of their business.” NOW YOU CAN SPONSOR THE “TRY (Your Town) FIRST” PROGRAM When you sponsor the “Try (Your Town) First” program, you’ll ' find that several things will happen: . *You’ll keep needed dollars at home and in ¡jour bank. *Your bank will be a hero to local merchants, and will probably * pick, up new commercial accounts. *You’ll have an officer call program that works. *You’ll receive free publicity in an amount that will surprise you. .THE SECRET IS TOTAL COORDINATION tising. He may include the program logo in all his regular new paper ads. And he can have the local radio station record h regular radio spots on top of the customized, “Try (Your Towr First” jingle. Your merchants will appreciate that kind of effoi But we want to bring the general public into the act, too. An we want them to realize who’s making it all possible—YOl So we provide you with a press release for your local new paper. Generally, the newspaper will run a front page artic about your sponsorship of the program... along with a phol of one of your bank officers pinning a button on a local me chant’s lapel. We also provide you with newspaper ads th, announce the program, and your reasons for sponsoring it, 1 the general public. And don’t forget the radio spots. Posters f( your bank lobby. And a complete operations manual, so th you can take advantage of the many successful ideas for impl; menting the program that have been generated by participate banks. Total coordination. It makes the difference between succe: and failure. Your program will be a success. BUT DOES IT R E A L L Y KEEP DOLLARS AT HOME Ask Milton Dean about that. Milton bought the program f( the Eufaula Bank and Trust Company mainly as a public re: tions effort. Then he saw what it could do in dollars and cents f( Eufaula and for his bank. The sales tax figures told it all: JANUARY JANUARY JANUARY JANUARY 1 9 7 1 .......... $17,201.85 1 9 7 2 .......... $18,992.10 1 9 7 3 .......... $18,525.28 1 9 7 4 .......... $26,565.34 What did the big jump in Christmas season sales represen We know, of course, that encouraging people to “shop at Since sales taxes in Eufaula are 1% of sales, that meant that tf home” is nothing new. Your Chamber of Commerce has tried year the “Try Eufaula First” program was introduced, an ext ►it. Or the downtown merchants association. Maybe your bank $ 8 0 0 ,0 0 0 was kept at hom e. The program was successful has even made a stab at it. causing Eufaula residents to think about shopping at horn v And that’s precisely why we’ve put it all together. In the course Before heading out of town to do their Christmas shopping the of working with nearly 3 0 0 communities on this program, we’ve tried Eufaula first. learned what makes a shop at home program go. It takes colorful In McHenry, Illinois, the McHenry State Bank reports, “We he ■ quality materials, for one. The kind that every merchant is proud several people comment that th( to display (and the kind of quality did as much as 90% of their shoppir " materials that only volume buying in town this year. In other year ^makes possible). Most important, they had done as little as 20 it takes total coordination. That’s to 40%.” cwhy we provide you with material (6 1 5 ) 3 2 7 -0 1 7 3 Goodwill among merchants. Ne for all media. You’ll give every mer commercial accounts. Favorab chant a kit which includes posters public reaction. Extra dollars sta k for his window, counter cards for ing in town. These are the thin; display shelves, buttons for his em you can expect from the “Try (Yo ployees, vinyl stickers for his front Town) First” program. door. Then you make it possible for MADISON AVENUE ASSOCIATES. INC. the merchant to push the “Try (Your And you and your bank will l 2305 ELLISTON PLACE NASHVILLE, TENNESSEE 37203 Town) First” program in his adver the hero. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TIME IS RUNNING SHORT CALL CO LLECT NOW BG around money the finest is ST 1 2 3 4 A U T O M A T I C COIN W R A P P E R 5 OLD S T Y L E COIN W R A P P E R Amounts and denominations automatically in d ic a te d by Basic coin wrapper in extra strong kraft stock. Printed in 6 patented “ red bordered windows” . A m o un ts in windows different standard colors to d iffe r e n tia t e denominations. always in register. . . eliminates mistakes. Accommodates T rip le d e s ig n a tio n th ro ug h •colors, p rin tin g and letters. all coins from lc to $1.00. Tapered edges. T U B U L A R COIN W R A P P E R 6 K W A R T E T COIN W R A P P E R Especially designed for machine filling . . . a real time-saver. Wraps 4 denominations in half size packages. A miniature of Packed flat. Instant patented "Pop Open” action with finger the popular "Automatic Wrapper” . . . 25c in pennies, $1.00 in tip pressure. Denominations identified by color coding . . . 6 nickels, $2.50 in dimes, $5.00 in quarters. different standard colors. 7 F E D E R A L BILL S T R A P R A I N B O W COIN W R A P P E R Package contents clearly identified on faces and edges by Color coded for quick, easy identification. Red for pennies . . . color coded panels with inverted and reverse figures. Made blue for nickels . . . green for dimes . . . to indicate quantity of extra strong stock to assure unbroken deliveries. Only pure dextrine gumming used. and denominations . . . eliminates mistakes. Tapered edges. D U Z IT A L L COIN W R A P P E R 8 C O L O R E D BILL S T R A P Extra wide . . . extra strong. Designed for areas where halves Entire strap is color coded to identify denomination. Printed are wrapped in $20.00 packs. . . “ red bordered window” for am ount appears on top and bottom of package. Extra wide ease of identification. Accommodates $20.00 in dollars, $20.00 for marking and stamping. Extra strong stock for safe delivery and storage. Pure dextrine gumming. in halves. Tapered edges. 9 BANDING S T R A P S Ideal for packing currency, deposit tickets, checks, e tc .. . . do not break or deteriorate with age. Size 10 x % inches and made of strong brown Kraft stock with gummed end for ease of sealing. Packed 1000 to a carton. SEE YOUR D E A L E R T HE C. L. D O WN E Y COMPANY BG/6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OR SEND FOR FREE S A M P L E S • HANNI BAL , MI SSOURI • DEPT« F A H eller participation loan keeps your customers’ interest in your bank. When a good customer or prospect comes to you with a loan request larger than you may be willing to provide, you don’t have to lose him. A bank/H eller participation loan gives you the leverage to maximize your customer’s credit availability. You provide his normal banking functions, retain his deposit balances and generate interest income from your portion of the loan, typically 30% to 50% Heller assumes responsibility for all administrative and supervisory details, plus keeps you close to the situation with periodic examination reports. Heller has been exercising this kind of financial creativity for over a half-century with banks of all sizes. Today, Heller is not only the most experienced, but very likely, the best in the business of participations. Contact the Heller office nearest you today. Your customers and prospects are too important to lose. Walter E. Heller & Company HELLER Financial Services https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 105 W . A d am s S t., Chicago, III. 60690 N e w York • Boston • Philadelphia • Baltim ore • S y ra c u se • Detroit St. Lo uis • K an sa s City • D enver • Atlanta • M iam i • Birm ingham • N e w O rleans H ouston • Dallas • Phoenix • Lo s A n g e le s • San Francisco • Portland San Ju a n P .R . Heller services also available through Heller Companies in Canada and tw e nty other countries around the world. BG/7 O ur Competitors Do A Pretty G ood Job We’re the firstto admit it. Certainly other companies have good pre miums to bring in depositors. And other com panies can give you reliable service. But we’re the only supplier who says “ full service” ... and means it! W eS & H . We’re the Financial Promo tions Division of the Sperry and Hutchinson Company. Finan cial institutions of every size have relied on us to provide successful promotions ... for 80 years! V ^ D o A Better Job. It’s not that our competition doesn’t try ... it’s just that they don’t have what we have. Like 36,000,000 cubic feet of strategically-located warehousing coast-to-coast. Or third-generation comput ers to keep track of our 6,000,000-item aver age daily inventory. stock your premiums in nearby company-owned and operated mini-ware houses. We c a n . Not only can you keep your T h e y c a n ’t inventory low— we take back 100% of your unopened cartons. Cheerfully. ^ Dont Just Sell M erchandise rcr V m J We d o n ’ t sell you premi ums and then lose interest in you. We work w i t h y o u to research your market. Analyze your needs. Struc ture a program that will attract new money or loans at an attractive acquisition cost. Cell Us. Call S&H at (513) 771 -5590. Collect. Ask us to send you some information. We think you’ll agree that “a pretty good job” just isn’t good enough. Financial Promotions Division 3 0 0 3 £ K em p er Rd. C incinnati,O hio 452Ó 6. Phone (513)771-5590 Direct Prem ium s-Continuity Program s •Branch O p e n in g s Certificate (No Inventory) Programs- Internal Incentive Plans Self-Liq uid ating Prem ium s-C harge Card Program s BG/8 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis New Investment Annuity Plan Enables Financial Institutions To Lock in Long-Term Funds Investors (Depositors) Can D efer Taxes Indefinitely D OES TH E financial institution exist that doesn’t want to lock in its long-term CDs, gain new customers and deposits and earn good marks from its clients? A relatively new combination opportunity for sub stantial depositors—the investment annuity (techni cally, an insurance policy) plus savings and certifi cate accounts—is increasingly being recognized by financial institutions as just the thing to stabilize de posits, increase the flow of new money into the vaults and enable the institution to make a name for itself in the community as a friend to investors. A relatively new investment annuity service is available to banks and thrifts that enables customers to stop paying current taxes on interest earned from savings and CD accounts. Taxes can be deferred in definitely, depending on the action taken by the cus tomer. And, the plan enables the customer to control all his assets so that the value of the account is totally the result of his investment decisions. The service is called “Annuiterm,” and is offered to sponsoring financial institutions by Phoenix Mu tual Life Insurance Co. Among the financial institu tions offering Annuiterm is Clayton Federal, located in a St. Louis suburb. Annuiterm is billed as “a fresh approach to invest ment annuities available to men and women of means who wish to retain investment control of their assets while deferring taxes on interest and dividends.” Under the plan, an investor in the 30% tax bracket putting $10,000 into an Annuiterm plan can expect his investment to total $69,444 in 25 years, with al most $59,444 being tax-deferred. The same amount invested without Annuiterm would yield only $39,437 in the same period after deduction of taxes (see chart on next page). Due to the availability of Annuiterm and other in vestment annuities to financial institutions, banks and thrifts throughout the U. S. are gearing up to offer investment annuity programs to customers. Formerly the province of insurance and brokerage firms, investment annuities were first offered through financial institutions in California a few years ago. One reason financial institutions are beginning to https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis sponsor investment annunities now is their belief that a huge potential market exists. About $350 mil lion is expected to be committed to such plans this year, up from about $200 million last year. The concept did not snowball in the past as was expected by those who promote it. This has been due primarily to the difficulty in explaining the idea, says George G. Everhart, a certified financial plan ner currently servicing Annuiterm plans at Clayton Federal. According to Mr. Everhart, Phoenix Mutual has broken tradition by offering investment annuities through financial institutions that permit the inves tor to control his assets. Phoenix Mutual didn’t pi oneer the entire concept, but it is said to be the first major insurance firm to break away from the tradi tional concept of investment annuities. When Clayton Federal advertised Annuiterm in June, an average of 300 inquiries was received daily, according to Mr. Everhart. Clayton Federal merely sponsors the plan. It cannot do more than that due to rather rigid insurance and securities regulations that probably would require the S&L to issue pros pectuses if it serviced the plan itself, since offering both CDs and annuities may well constitute a type of unit investment trust. Mr. Everhart says that, although S&Ls seem to have a corner on the investment annuity market, there is no reason why commercial banks cannot get into the act. When the Annuiterm concept becomes better known, Mr. Everhart says, it will be easier to sell. At present, it takes an average of from two to three one-hour meetings with an investor and his tax or legal advisor to explain the concept and close a deal. To help dispel the lack of knowledge about the plan, Mr. Everhart has been holding seminars for CPAs and attorneys. He feels that familiarizing these influential people with the concept will help to pave the way for greater understanding on the part of the investing public. “If an investor’s lawyer or accountant is for Annuiterm,” he says, “it will be easier to convince the investor to participate.” Mr. Everhart says Annuiterm can be an important part of an investor’s financial plan, enabling him to BG/9 [slop buying envelopes by guess and )m m by gosh! < * mp W hether you sign purchase orders or business letters, you’ve got a big stake in the envelopes your com pany uses. Why is envelope buying so im portant? Because getting the right envelope can make a big dollar-difference in the operation of a business. The right envelope is right in quality, design, construction and tailored to its job. It performs without waste! No'stuck flaps or w indows. Trouble-free inserting. Jam -free metering. Speedier mailroom handling right down the line. How to select the right envelopes? Get in touch with your Tension representative. He’s a specialist, with the accum ulated know-how of Thousands of envelope problems econom ically solved. His time costs you nothing. His advice can pay you well. Want new envelope ideas? Send for F R E E Idea Kit. reduce taxes and increase his invest ment income. Taxes can be deferred with Annuiterm because the setup with Phoenix Mutual permits the insurance firm’s tax-experience to be substituted for that of the investor. From a current tax standpoint, it’s just as though the annuity was managed directly by Phoenix Mutual, Mr. Everhart says; yet the funds can remain at the sponsoring financial institution. There is no front-end sales or “load” charge on savings or certificate ac counts and only a modest custodial bank charge, which can be as little as $18 per year after an account is opened. Phoenix Mutual charges an an nual premium of $85 per $10,000 in vested. As soon as an account is opened (ideally, by someone in at least a 30% tax bracket who has at least $ 10,000 to invest), current taxation on the in vestment income—as well as on real ized short-term capital gains—ends. According to Mr. Everhart, an inves tor’s Annuiterm policy-protected in vestment and savings account assets are in a custodial account, totally seg regated, with the investor’s name on them as the beneficial owner and policyowner. The investor maintains total invest ment control and makes all investment decisions for his lifetime so that the value of the account is totally the result of his investment decisions. The investor has demand liquidity for all or any part of the account’s value and additions can be made at any time. A wide range of income op Annuiterm Illustration o f Hypothetical Investment Results Prior to the Annuity Commencement Date V a lu e 816 E. 19th St., Kansas City, Mo. 64108 A □ Send F R E E IDEA KIT of EFFEC TIV E + M e n v e lo p e s...□ RUSH! Need is immediate. U ■■■□ Standard processing okay. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of Your 30 10,000 10,564 11,160 11,790 12,455 13,158 13,900 14,684 15,512 16,387 17,312 18,289 19,321 20,411 21,563 22,780 24,065 25,423 26,857 28,372 29,973 31,664 33,450 35,337 37,331 39.437 Tax % Today: o f $ Y ear 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A ssu m ed In v e s tm e n t: A ssu m ed In v e s tm e n t A ssu m ed Tax A cco u n t W ith o u t End TE N SIO N ENVELOPE CORP. tions, similar to those found in more traditional annuities, is obviously in cluded. The account’s achieved value on the death of the investor will be paid in full, in cash, to the investor’s heirs or beneficiaries free of any income tax li ability. In addition, probate expenses can normally be avoided. Investors can use a first-in-first-out election on partial liquidations, which enables them to enjoy living profits without a tax liability. However, if the investor elects to take regular periodic withdrawals of a given amount, the In ternal Revenue Service may view them as an alternative form of annuity pay ments, which may be subject to taxa tion. However, this is usually done at a time in the investor’s life when his income is considerably less than during his prime working years, thus, his tax liability would be proportionally less. Mr. Everhart says about 40% of the prospects his people have interviewed at Clayton Federal have signed up for Annuiterm. He expects about half of the remaining 60% to investigate the plan further. What’s in it for Phoenix Mutual? At first glance, the insurance firm would seem to be cutting oft a source of in come by permitting Annuiterm inves tors’ funds to remain on deposit at sponsoring financial institutions rather than investing them itself. But the long-haul benefits are expected to fur nish the issuer with a long-term stream of sound actuarial income. Phoenix Mutual also expects to benefit by hav ing a head start on its major-firm com petition, which is not yet offering a similar service. • • A n n u ite r m R a te 40 10,000 10,484 10,991 11,523 12,080 12,664 13,276 13,918 14,591 15,297 16,037 16,813 17,626 18,478 19,372 20,309 21,291 22,321 23,400 24,532 25,718 26,962 28,266 29,633 31,066 32,568 % — $ N et 10,000 806 30 40 $ — R e tu rn : . B ra c k e ts: % %, % & 50 % End o f Tax A nnual 50 % :i i o o o o 10,403 10,822 11,258 11,712 12,184 12,675 13,186 13,717 14,270 14,845 15,443 16,065 16,712 17,385 18,086 18,815 19,573 20,362 21,183 22,037 22,925 23,849 24,810 25,810 26,850 W ith P rn m i„ m . and C u s to d ia l C h arg es 0 $133 117 125 134 143 153 164 176 189 203 217 233 251 270 290 312 335 301 389 419 451 486 524 564 n o of Y ear S u rre n d e r V a lu e A n n u ite r m N o n ta x a b le T o ta l — $ 10,000 10,806 11,677 12,618 13,635 14,734 15,922 17,205 18,592 20,091 21,710 23,460 25,351 27,394 29,602 31,988 34,566 37,352 40,363 43,616 47,131 50,930 55,035 59,471 64,264 69.444 A m ount $ 10,000 10,133 10,243 10,360 10,485 10,619 10,762 10,915 11,079 11,255 11,444 11,647 11,864 12,097 12,348 12,618 12,908 13,220 13,555 13,916 14,305 14,724 15,175 15,661 16,185 16.749 A u to Lo an s * D riv e -In s G ra n d O p e n in g s * X m as S a v in g s G iv e - A - W a y s * A d v e rtisin g https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis For M o r e In fo rm a tio n Cali Dale Gosser or Charlie Sharp M A N U F A C T U R IN G & D IS T .C O . 4813 R A Y T O W N R O A D K A N S A S C IT Y M IS S O U R I 64133 P H O N E : A R E A C O D E 816 F L 3 - 4 5 3 0 BG/11 Variable-Rate Mortgages Favored As Successor to Fixed-Term Loans -< But the Public Must Be Sold on Any New Instrument S TH E fixed-rate, level-payment mortgage ready for the scrap heap? How long will it remain in favor with lenders and borrowers? These, and other, questions were asked of leaders in the financial industry recently in an attempt to determine the coming trends in mortgage lending. It s no secret that the fixed-rate, level-payment mortgage has seen better times in the area of popu larity. While it remains relatively popular with bor rowers, according to lenders, the lenders themselves would, for the most part, like to see other types of mortgage plans take the place of fixed-rate, levelpayment mortgages as the sole instrument for financ ing single-family housing. What’s right with conventional mortgages, accord ing to lenders who were polled? Borrowers who are conditioned to continuing in flation like the idea of a fixed-rate, level-payment mortgage because their payments will not rise out of sight. In fact, lenders state, this type of mortgage is becoming more popular with borrowers when they see how interest rates have escalated in recent years. Borrowers want lenders to be locked in on loans. Of course, lenders were vocal about what’s wrong with conventional mortgages. Complaints included the following: • They don’t allow for rate adjustments during tight money periods. The long-term nature of these loans locks banks in for too-long periods. • It’s difficult to project money costs over a long period, such as that involved in a mortgage loan, especially during the volatile rate period experi enced over the last few years. • The lender is locked in on his rate for the duration of the loan. This is unfair— the rate should move with the market. • Conventional mortgage loans are unpopular with lenders because they are forced to borrow short and lend long. • The availability of mortgage credit is limited during tight-money periods. The rate a borrower re ceives is largely dependent on at what point in the business cycle the loan is granted. Four major defects of the conventional mortgage were outlined recently in the F ed eral H om e L oan I BG/12 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank B oard Journal by Dr. David L. Smith, vice president and chief economist, Glendale (Calif.) Federal Savings. He said that mortgage lenders must charge high interest rates to new borrowers to offset losses on low-yield loans on the books from earlier years, when interest rates were much lower. This, he said, forces new borrowers to subsidize old bor rowers who are still paying the low rates granted be fore the inflationary period began in earnest. Conventional mortgages price many potential bor rowers out of the housing market, he said. This is because they don’t have the inflated downpayments necessary or because they can’t manage the high monthly payments. This latter instance is unfortu nate because the typical homebuyer’s income rises after his mortgage is granted, yet his income at the time the mortgage is negotiated determines his eligibility. Lenders are forced to estimate the future rate of inflation and build this cost into their rates, thus forcing borrowers to pay an inflated premium. Conventional mortages prevent lenders from pay ing competitive rates for deposits because their port folio yields are locked into fixed-interest-rate loans. Dr. Smith concludes that the conventional mort gage does not fit the needs of either the borrower or the lender. The question is, what type of mortgage does fit the needs of both borrower and lender? Lenders polled favored some form of variable-rate mortgage. This type of plan, which is in use in Cali fornia, Canada, Britain and some other countries, is designed to improve the ability of lenders to offer competitive rates on savings and, thus, to attract savings during high-interest periods. The mortgageloan rate is adjusted up and down within limits in relation to some market rate of interest. An advantage of this type of mortgage is that in terest rates will tend to be lower than they are for fixed-rate mortgages. Lenders will not be trying to recover higher costs on their new loans because rates on existing loans also will be hiked if interest rates rise. Surveyed lenders favor variable-rate mortgages because they offer flexibility, which is something -4 V Thermal Blankets Y ear around thermal blan kets, 100% virgin acrylic thermal blankets by Bea con. Four different colors, 4" nylon end finish. This is a great one-shot premium promotion using all four colors. W e also have three other woven blankets to choose from. Ç t A M E R IC A N P R E M IU M The Great Stainless Steal ► American Baroque Stoneware Give your customers a choice of these two exciting new earth tones— V IV A & FIESTA. 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With this type of consumer acceptance it’s no wonder Corning Ware can bring in millions for your Financial Institu- UVINGWARE by CO RN IN G “The World's Largest Selling Dinnerware” >• û t AMERICAN PREMIUM 1 1 ^ Third & Ringo https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Little Rock, Arkansas 72201 Phone 501-376-3127 American Premium offers more than merchandise alone. We furnish ad layouts for your newspapers, mailout brochures, and suggested radio and T.V. copy. We offer a no-risk, 100% buy-back guarantee. BG/13 lenders need. This type of mortgage will ease the sharp fluctuations in the supply of mortgage credit and shift the burden from the saver to the bor rower, according to lenders. Lenders stress the fact that, in order for the variable-rate mortgage concept to be acceptable to borrowers, consid erable education would be necessary. Emphasis would have to be placed on the possibility that rates could be re duced as well as increased. The bene fits can’t be one-sided. The principal problem with the vari able payment mortgage, Dr. Smith said, is that, while it meets the lender’s needs, it fails to provide a stable pay- »• 5 ' U ment-to-income ratio for the borrower. This situation can be tempered by lim iting the amount of change in any giv en period or by using a reference index that has low volatility. Of course, other types of mortgage plans are in the discussion stage, but few, if any, are expected to become popular in the foreseeable future, ac cording to surveyed lenders. Among these plans is the graduated payment mortgage, which is designed to meet the needs of young families de siring to become homeowners. Under this plan, monthly payments are low at the beginning of the loan and are in creased until they rise above the level ..A,-' , „a ~- Let s discuss what w e can do _with your next building project. o s» “ « a i d e ................ ................ v v : ; V Y Bank Consultants of America H Q.: 777 S. Yarrow St., Bldg 4, #102-D enver, Col. 80226 (303) 988-4465 Midwest: 2701 Algonquin Rd., Rolling Meadows, III. 60008 (312) 394-5370 _________________________________________________________ BG/14 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis that a standard conventional mortgage would have required. This type of loan is geared to the in come gain of the typical breadwinner in that the rising monthly payment schedule can be met with little or no problems on the part of the borrower. The principal drawback of such a plan is the possibility that the bread winner’s income will not rise sufficient ly to enable him to meet the rising mortgage payments. Flexible-payment loans are a form of graduated-payment mortgage. They permit the borrower to pay only inter est charges for the first five years of the loan. For the remaining loan period, the payments cover full amortization of principal and interest charges. Deferred-interest mortgages also have been proposed to reduce payments dur ing the early years of a loan. The bor rower is charged a low interest rate during the first few years with the dif ference between the rate charged and the market rate being deferred. The lender would receive the deferred in terest plus a fee upon sale of the home in the first five years, or the mortgage could be refinanced as a conventional loan with the deferred interest and fee being charged to the borrower. According to Dr. Smith, this plan would enable the borrower to choose a more expensive home rather than re duce his monthly payments. In keeping with the trend to protect the consumer, mortgage lenders can ex pect to see features engineered into mortgage loans that will aid the bor rower. According to Dr. Smith, these fea tures should include the following: • Using equity in a house as col lateral for additional credit at the cur rent mortgage interest rate. Such a mortgage would function as an open line of credit and be available to pro vide funds for a new auto, education, vacations, etc. • Skip-payment provisions in case the borrower becomes disabled or is temporarily short of funds due to lay offs. • A provision that any form of vari able-rate mortgage can be assumed by a new borrower, thus eliminating from contracts the due-on-sale clause that provides the loan is due and payable upon resale. Dr. Smith feels strongly that the mortgage and housing markets would be best served if borrowers were free to choose from a variety of mortgage instruments that would, in effect, en able a lender to come up with tailormade loans to fit the needs and expec tations of individual borrowers. • • If you think Bank Packaging is all “wrapped up”, better see us in Miami BMA Convention Booth #213-214 Find out how 1000 banks Coast-to-Coast use BANCLUB. If you won't be in Miami, call National 800/251-8442 Tennessee 800/342-8303 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Administered by Financial Institution Services, In Box 40726 Nashville, Tn. 3720 BG/15 Current, Future Trends in Mortgage Insurance Executives o f Leading Firms Give Their Views By BRUCE THOMAS Chairman & CEO Continental Mortgage Insurance, Inc. Madison, Wis. By LEON T. KENDALL President Mortgage Guaranty Insurance Corp. Milwaukee By JAMES R. PERRY Secondary Market Center United Guaranty Corp. Greensboro, N. C. I N TH IS highly competitive industry, P RIVATE mortgage insurance is a fi T HE PRIVATE mortgage insurance insurers are endeavoring to extend the fastest, most efficient service possi ble to lenders and prospective home buyers by establishing nationwide net works of underwriting offices, develop ing shorter and simpler application and commitment forms and tailoring their insurance programs to meet special needs, such as the requirements of Fannie Mae, Ginnie Mae and Freddie Mac. With housing costs rising faster than family income, the need for over-90% mortgages is growing. Approximately one-third of Continental’s mortgage in surance applications now involve over90% loans. The proportion of insured loans for condominium purchases is also increasing despite a present slump in condo sales. We can anticipate increasing use of variable-rate mortgages, flexible-pay ment mortgages and mortgages with terms extending beyond 30 years. No frill and smaller homes are also on the increase to meet cost limitations. Builders are awakening to the hard fact that there are more “VW ” and “Pinto” home buyers than “Cadillac” home buyers. Reverse-annuity mortgages could pro vide an effective means by which re tirees on limited incomes may continue to occupy their homes and receive ad ditional income in exchange for sur rendering equity. For lack of such a tool, many retirees on fixed incomes are being forced to sell their homes because they cannot afford increased property taxes and maintenance costs. Children are seldom interested in ac quiring the family home; so, although the value of their parents’ estate would be reduced to the extent their equity in a home has been reduced, I am sure the heirs to a home would prefer re ceiving the remaining equity in cash. Continental has recently published a short pamphlet explaining how private mortgage insurance can help families obtain high-ratio loans to purchase homes. The pamphlet is being dis tributed to prospective buyers by lend ing institutions and real estate firms. (C o n tin u ed on p a g e B G / 2 0 ) BG/16 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis nancing tool designed to help young families with reasonable income, long on potential but short on down-pay ment, achieve home ownership. The pri vately insured loan generally has been a more flexible instrument than the FHA-insured loan and holds a broader appeal for lending institutions and their customers. There has been increased use of the privately insured conventional loan for existing homes at MGIC and fewer 95% borrowers. In June, about one out of four MGIC-insured borrowers put 5% down; the other three-fourths put 10% or more down. In the building boom of 1972-73, MGIC saw almost 40% of its insured borrowers using the 95% loan. About two-thirds of M GIC’s cur rent commitments to insure are on ex isting homes. In most years, the ratio is 55% existing, 45% new. The reasons for these changes include the following: • Lenders generally are insisting on more equity in property as an aftermath of the foreclosures that occurred in the recession of 1974-75. • 1975 saw the highest home sale activity in 10 years, despite few housing starts. Therefore, many more loans are being made to existing homeowners who are using built-up equity for large down payments to purchase their next homes. • Fully 75% of the net increase in conventional mortgage lending today is done by S&Ls. Mortgage bankers, who tend to originate more high-ratio loans, withdrew from the conventional mort(C o n tin u ed on p a g e B G / 2 2 ) KENDALL PERRY THOMAS industry, with its inherent strength and adaptability to the needs of lenders, assures safe and mutually beneficial business in the housing markets. Cur rently, 65% of the private mortgage in surance written in the U. S. is through S&Ls, 25% through mortgage bankers and 10% through commercial banks. Trends in the industry will parallel changes in financial intermediaries. A major change could come for both banks and the mortgage insurance in dustry with a change in Regulation Q, or the abolition of interest-rate controls. The mortgage insurance industry has historically been adaptable to the needs of financial intermediaries, developing insurance coverages to fill the needs and requirements of the thrifts and their governing bodies. It is increasingly ap parent that greater services mean in creased business in terms of market share, premium dollars and greater fi nancial strength. As legislation is passed and the FSL IC and FD IC change their regu lations, there will undoubtedly be changes in the services offered by the mortgage insurance industry. Of primary concern now is the Financial Reform Act, which will be considered in the 95th Congress. Other changes in the mortgage insur ance industry will be caused by changes in mortgage documents and the han dling of mortgages by financial insti tutions. Home mortgages are viewed as needing to be more responsive to the homeowning public and to the financial institutions that finance a large measure of homeownership. A number of opportunities exist with in the financial intermediary structure in the U. S. Thrifts, for example, suffer from the problem of taking deposits on an uncertain term and lending them in mortgages on a long term. Even though the 30-year mortgage normally pays off between seven and 10 years, there is still a major difference in the 10-year assets as receivables and the liability of deposits that can be withdrawn in, at most, four to six years. As the timemismatched assets and liabilities of the (C o n tin u ed on p a ge B G / 1 8 ) Charly Baumann of Ringling Bros.Barnum & Bailey has to deal with considerable risks everyday... f So does any Banker entering the Insurance ■ \ Underwriting Arena! THEY ARE DIFFERENT 'W ISKS, to be sure, but ones that are as important to a commercial banker as those of the tiger cage are to Mr. Baumann. We are experts at reducing risk. We have done it for hundreds of corporations who are now our partners in the insurance business. We can do it for you — especially if you are forming an underwriting company or indirectly acquiring an underwriting subsidiary. We can help you organize a new insurance operation or revitalize an old one. We can show you how to reduce start-up time and maximize profits. And we can take care of difficult tasks for you when your business is underway, like claims handling and rate filings. To do all of this well requires a lot of understanding of risk... and fifty years of success in the middle of the insurance arena. PARTNERSHIP FOR PROFITS OLD REPUBLIC international corporation https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis INGENUITY IN INSURANCE for more information or a copy of our Annual Report, please contact William R. Stover, President, Old Republic International Corporation, 307 North Michigan Avenue, Chicago, Illinois 60601; 312-346-8100 BG/17 D A K TR O N IC S disnlavs «rive IM P A C T A Daktronics display is the efficient advertising medium that creates traffic, new business, image and pro vides community service. Daktronics has taken the service ex pense out of time and temperature displays with 100% solid state electronics. Our engineers will custom design a time and temperature display, that will enhance the appearance of your facili tyCall or write us today! Daktronics will give you the edge over your com petition with 100% solid state displays. M ESSAGE CEN TERS Daktronics offers entirely solid state message display centers with chang ing and traveling messages, and time and temperature information. DAKTRONICS, INC. BOX 299 BROOKINGS, S.D. 57006 PH. 605-692-6145 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis JAMES R. PERRY (C o n tin u ed fro m p a g e B G / 1 6 ) predominant housing/financial vehicle in the U. S. become more and more pronounced, political and market pres sure will be exerted to change the types of instruments utilized in the market. An important new type of document will be the variable-rate mortgage, probably similar to those now being used in California and elsewhere. Vari able-rate mortgages as controlled by law in California have a half percentage point maximum change in any given year and a 2/2% maximum gain over the life of the loan. There will have to be parameters built into the laws for the protection of the public before variablerate mortgages will be accepted on a general basis and, indeed, allowed by Congress in federally chartered thrifts. An alternative to varying the rate of the mortgage is to vary the term. Under this method, payments stay the same, but the term on the end of the mortgage increases as the amount of principal is increased due to rising interest rates, or the term can be shortened as princi pal is reduced due to decreasing interest rates. Another major type of mortgage change being considered is the renego tiated mortgage with a cap on the increase. This is similar to the five-year mortgage now prevalent in Canada. It seems to offer viable alternatives to the variable-rate mortgage. The renegoti ated mortgage will give a lender the benefit of having mortgages roll over at periods roughly similar to the life ex pectancy of savings deposits. This mort gage will have to be written to allow reinstatement a sufficient number of times to preclude an existing mortgagor from being denied a mortgage on his existing home. Just as the mortgage document will change in years to come, so will the concentration of the private mortgage insurance industry. Because of a viable premium structure approved by each state insurance commission and financial strength attested to in an Arthur D. Little study, as well as usual audit examinations, the private mortgage in surance industry will be able to grow and adapt to the changes required by the housing sector. At present, the in dustry is concentrated primarily toward the financial intermediaries and heavily within that category to the S&Ls. There will be a trend in the industry toward lower levels of sales in the vertical market. Specifically, realtors and builders, and perhaps ultimately, the individual home buyer, will be the market aims. Changes in the private mortgage in surance industry will come as a result of changes in the financial intermedi aries served by the industry, an evolu tionary process, and as information about mortgage insurance is dissemi nated to the consumer. As the industry changes, so will the special types of services being offered. Some of these services—such as free secondary markets, localized under writing, professional field staff, property improvement lenders insurance, com mercial mortgage insurance and con ditional commitments for condominium projects—will be expanded and changed as the demands of the thrifts change. One of the major free services offered by mortgage insurers is secondarymarket assistance. Even with the normal relationships within financial intermedi aries and the advent of GNMA certifi cates and A M M I N E T (Automated Mortgage Market Information Net work), there is still a need for second ary marketing by private mortgage in surers. Approximately a third of a billion dollars is moved in an average month by private mortgage insurers. This equates to approximately $4 billion on an annual basis. If the private mortgage insurance industry did not provide secondary-market services, the liquidity ■O (4 ■ # IS IT ENOUGH? To operate successfully in the long run, it is not enough. . . to copy your competitors . . . to repeat last year's programs this year. . . to rely on the regulators to preserve your markets. It is necessary to learn what services your prospective customers use, need, and want for today's and tomorrow's activities. . . and to structure your offerings so that providing those services generates a sound bottom-line result. F IN A N C IA L M A R K E T IN G G R O U P , marketing and economic research con sultants, provides consultation, design, implementation, analysis and evaluation . . . all facets of research for financial institutions. C all or write for our personal attention to your research problem. NOW... you can advertise effectively on a small budget! Walter W . Wagner, President F IN A N C IA L M A R K E T IN G G R O U P 7600 S.W . 57th Avenue, Suite 200 Miami, Florida 33143 (305) 665-5414 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Look into the new Passante Newspaper Advertis ing Program—check the savings of syndication with the a p p e a ra n c e and results of the best tailormade advertising. If you want to add new customers . . . if you’re anxious to increase your business among those you already serve, these informative and com pelling ads may be the low-cost sales and imagebuilding tools you’ve been looking for. A n d , available o n an ex clu siv e basis! Gay 90’s Wagon $1195.00 The proven p.r. tool which more than pays for itself. POPCORN. Sold inside or outside your savings institution, popcorn creates a friendly atmosphere. Create excitement and be a good neighbor. Sell it, or give it away. A regular serving costs only 31/2 0, retails @ 150 to 250.For interest/income it’s great for you, and your customers. Write today for details and success stories. Gold Medal. . . the nation’s leading producer of popcorn equipment. In this series of 52 ads, each one depicts an in teresting fact about money. The question head line, the dramatic illustration and covering text make this series an unusual and high readership type of promotion. This is a proven technique which is seen, read and remembered. For informative brochure and low rates, write or call today. THE PASSANTE COM PANY F in a n c ia l A d v e r t is in g Two Wheel Wagon $949.00 Passante Professional Center Windsor, CT 06095 Tel. (203) 688-5231 BG/19 provided to housing by these trans actions would not exist. Local underwriting and free second ary-market services lead to many situ ations of benefit to our clients. A lender approaching liquidity limits can be as sisted on a timely and profitable basis by having current loan originations underwritten locally to facilitate rapid closing. With secondary-market assist ance from the private mortgage insurer, the loans can be closed, sold and funded in the secondary market almost immediately, thus promoting liquidity for the originated institution. This is also a benefit to the investing insti- tution, since interest on monies invested is received as soon as possible. The private mortgage insurance in dustry, with a wide range of products and services, plays an increasingly im portant role in the thrift institutions and housing markets of the U. S. and will relate on an ever-growing basis with the nation’s commercial banks. * * BRUCE THOMAS (Continued from p ag e B G /16) We have also provided lenders with a free booklet for home buyers explaining the provisions of RESPA, truth-in-lend Our Unique Family Portrait Program can do Great Things for Yon! For those of you who aren’t familiar with our service, Depositor’s Portrait Service International provides complete portrait programs to financial institutions. The programs are designed to improve cus tomer relations, add new accounts, and celebrate the opening of a new location or the anniversary of an existing one. They are also effective as seasonal pro motions: summer, when the whole family is together, or fall, so your customers have portraits in time for the coming holidays. For an economical fee of $250 we take professional 8x10 natural color photographs of your customers’ families — which you can offer at no charge — and provide all advertising materials and trained personnel. All you do is provide the location — we do the rest! We provide complete advertising and promotional materials to make your program a success! we have a free gift tor you.! anôxJO portrait o f yen orarteliY m R AD IO COPY NEW SPAPER FUI L COLOR LOBBY SIGNS ADS .er; 1 L I T ( OI.OR SI A I EMI N T INSERTS To arrange a portrait program for your institution, or to request more information on our services, give us a call at the number below or send in the attached coupon and our representative will contact you. DEPOSITOR’S PORTRAIT SERVICE INTERNATIONAL " Mr. T. C. Riggins 1706 Washington Avenue • St. Louis, Missouri 63103 • (314) 231-1575 □ Please contact me, I’d like to discuss a DPSI portrait program. □ Please send me additional information on your program. N AM E AND T IT L E IN ST IT U T IO N N A M E A D D R E SS C IT Y BG/20 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis STA TE ZIP PHON E ing and buyers’ rights and describing how to go about finding a home, a real estate firm, a lender and an attorney. Through speaking appearances and publications, Continental personnel have encouraged home buyers to look for “affordable” homes rather than housing beyond their means. We have also en couraged the purchase and rehabili tation of inner-city homes, the modifi cation of zoning and building codes and the use of such techniques as factorybuilt components to reduce housing costs. The following are some of the special services Continental provides lenders: • A free secondary-market center to help them buy and sell loans and par ticipations nationally. • Sponsorship of symposiums, at no charge, to educate lenders on new de velopments in mortgage financing, con do financing, secondary-market trans actions and the mortgage futures con cept. • Secondary-market clinics where training in underwriting, loan processing and secondary-market transactions is provided for personnel sent to Madison by lenders. • Toll-free WATS line service to each of Continental’s offices. • Provision of on-line real-time data processing service to thrifts. • Provision of special data processing service to lenders, including our com puterized FHLM C underwriting matrix. • Telephone review of insurance ap plications with lenders to resolve any problems that might prevent issuance of an insurance commitment. • A special task force of builder representatives who specialize in as sisting builders engaged in condo, planned unit development (PUD) or tract development and in obtaining fi nancing for such projects. • A special “pre-approval” program for condos and PUDs that minimizes the paperwork required of lenders when applications for insurance of individual units are submitted. With the development of new mort gage instruments, such as variable-rate and flexible-payment mortgages, as sup plements to the traditional fixed-rate, fixed-term mortgage, insurers are adapt ing their programs to these new in struments. Mortgage insurers will also play an increasingly important role in the secondary-mortgage market, in the insurance of mortgage-backed bonds and in mortgage futures trading. The availability of private mortgage insurance is expected to attract ad ditional mortgage lenders—notably, in surance companies, credit unions and pension funds—into residential mortgage lending. • • T h e c h o ic e is y o u rs . There’s a Money Service card that’s right for your institution. Whether you want “Bank Money Service” or “The Money Service,” each name is supported by the same great graphics to showcase whatever financial services you provide for your customers. Should you become involved in terminal sharing (which is of necessity becoming more popular), banks can issue Bank Money Service cards — thrifts, The Money Service cards and both can be jointly promoted at ATM’s or point of sale locations as simply, “Money Service.” If you want to use them, Money Service marketing and advertising materials, technical support and operation manuals are available. Control is in your hands, too. You decide whether to keep it as simple as a card or develop a complete Money Service system. Whichever way you go, you’ll have exclusive use in your market area and we’ll have cards in your customers’ hands in 45 days. Wouldn’t you like to see how your logo will look on a Money Service card? (Most of the face carries your institution identification!) Write us on your letterhead. W e’ll send you a sample and more information. TMS Corporation of The Americas, 1235 N Street, Lincoln, NE 68508 / Phone (402) 474-2166 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BG/21 LEON KENDALL (Continued from p ag e B G /16) gage market this year and are focusing on government-insured or guaranteed loans. Statistics for MGIC show the aver age user of high-ratio finance to be 33 years of age, purchasing a home in a price range of from $32,600 to $36,400. The average amortization term is 27-28 years. The interest rate averages 8.9%. The borrower’s gross income is about $1,500 per month and the typical monthly mortgage payment is between $306 and $324 (including principal, interest, taxes and insurance). The high-ratio loan offered by pri vate mortgage insurers is increasingly Can you name any customer who is not worth the price o f a cup of coffee? How about a half-a-cup? That's a good way to evaluate the annual cost of our MoneyWise II program available on an exclu sive territory basis. Published four times a year, MoneyWise II is designed not only to generate goodwill but also to cross-sell various bank services. As one banker put it "our customers are becoming bank wise about money matters." Write for free samples that you can see for yourself that oneyWise II is attractive, well w rit ten, informative, and well worth the price of a half-a-cup of coffee. 1300 Hagan St., Champaign, IL 61820 Phone 217/356-1339 Let us make your new building a landmark in the community. Each phase of your project, from site selection through grand opening, is managed expertly by our specialists. IBBC 11054 SO. MICHIGAN AVE. CHICAGO, ILL. 60628 PHONE: 312/568-1030 8111 -B NO. UNIVERSITY PEORIA, ILL. 61614 PHONE: 309/692-2625 BG/22 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis necessary in order to accommodate the first-time home buyer who is being squeezed by higher shelter costs, high er interest costs, increased costs of util ities and maintenance, the trend toward higher cash down payments and sharp ly rising property taxes. A major effort needs to be made to modernize the mortgage instrument, bringing it in tune with the times and the needs of the current generation of home buyers and homeowners. The mortgage dates to the days of ancient Babylon. It is an evolving doc ument. Today’s real estate mortgage instrument, characterized by fixed-inter est rates, fixed-term (up to 30 years) and monthly amortization of principal and interest in leveled payments, was a creation of the 1930s. It is time to re visit that m ortgage instrument, w hich is a m onochrom e offering in a poly chrom e world. The major innovation in conventional lending since the ’30s has been the in troduction of the 5%- or 10%-down mort gage. In addition to a reverse-annuity mortgage, permitting well-established home buyers to liquidate on a systemat ic basis some of their built-up equity while still alive, there are a number of other techniques that deserve experi mentation: • Graduate payments with income. • Renegotiate rates and terms every five years. • Vary principal. • Vary interest rates. • Defer interest. • Permit skipped payments. • Offer line of credit. • Share equity increase with bor rower. • Have institution own property and lease to occupants. In an effort to educate the homeowner to the concept of mortgage in surance, MGIC has introduced a twopart sales kit for realtors entitled “The MAGIC Loan.” In it are two brochures. One is designed to help explain the pri vately insured loan to realtors and their sales people. The other offers the real tor assistance in explaining the MGICinsured loan to the home buyer. The brochures offer information on the mechanics of mortgage insurance, a comparison between the FHA-insured and MGIC-insured loan and the respec tive benefits of high-ratio privately in sured loans to both audience groups. The private mortgage insurance in dustry has always stressed speed of ser vice, reduced red tape and lower costs in urging lending institutions to use the conventional loan over the governmentinsured or guaranteed loan. In support of these features, MGIC has introduced many services through the years and taken steps to safeguard these advan tages. • • Is your insurance file like . . . . OPENING UP A PANDORAS BOX? https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Is your insurance file like opening up a PANDORA’S BOX? Has anyone really gone over your insurance file and given you a summary of what your insurance is all about? Do you know what the new pension reform act has to do with your operation? Do you know why you carry the insurance you now carry? Is your insurance current and complete? There is only one answer. . . from the firm that counsels over 300 financial institutions throughout the Midwest. Call or write . . . Robert A. Carney, President Insurance Programmers, Inc. 327 South LaSalle Street, Chicago, Illinois 60604— (312) 939-3366 BG/23 POSITIVE SIGNATURE VERIFICATION with LIGHT-WRYTER TRANSFER PAPER FOR BLACK LIGHT SIGNATURE VERIFICATION ■ Bright, Legible Signatures ■ Permanent—Guaranteed to last for Life of Passbook ■ Available with Your Custom Imprint Fo r co m p lete inform ation on Light-Wryter® T ra n sfe r Paper and B la c k Light S ig n a tu re V e rifi cation S y ste m s, co n ta ct U L T R A -V IO L E T n n P R O D U C T S , I N C . v 2£ P 5100 Walnut Grove Avenue San Gabriel, CA 91778 (213) 285-3123 ___________ r https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Graduated Mortgage Rates Offered by Seattle Mutual LEN D IN G program that gears payments on mortgages to a bor rower’s income by providing lower in terest rates at the beginning of the loan is being offered by Washington Mutual Savings Bank, Seattle. The plan is called “Step-Rate Resi dential Loan Program” and provides that the rate on a mortgage would be gin at 7.5% and increase every two years by 75 basis points until a 9.75% level is reached. The loan program is designed to reach home buyers who have been un able to afford conventional level-pay ment mortgages, according to C. W. Eldridge, president. Loans under the program are limited to homes with a value of $40,000 or less. More than 300 mortgages were ap proved under the program during its first two months, with the average size being $28,000. The Washington Mutual program has been termed a novel approach to home financing by observers of the mortgage lending area. However, some say the plan would narrow the spread between a lender’s cost of funds and return on investment to an unaccepta ble point. The new program comes at a time when increasing attention is being fo cused on alternate types of mortgage instruments. Legislation authorizing an equity-adjusted mortgage that would feature a graduated payment formula is currently being considered in Con gress. The legislation, called the Young Families Housing Act, might include a proposal to have the federal govern ment pay an indexed interest rate to lenders for home loans over a fixed rate granted to borrowers with the differ ence recaptured when the home is sold. Mr. Eldridge said that, under the step-loan program, the mutual is plac ing less emphasis on the location or age of a house and on the credit-worthiness of the borrower. He said he was not concerned that some borrowers might capitalize on the program by refinanc ing after the first six years, the period when payments are graduated upward. He said faster turnover in the mutual’s mortgage portfolio would be welcome. The savings bank also charges a 2% fee for making the loan. Also, the for mula used for computing payments al lows a slightly higher principal repay ment to the lender during the first few years of the loan. A On a 30-year mortgage, payments during the first two years would be computed on a 30-year term. After each succeeding increase in rate, pay ments would be calculated on a 28year term, 26-year term and then a 24year term for the remaining time of the loan. To illustrate the monthly payments, Mr. Eldridge cited an example of a 30year, $30,000 step-rate loan: “The monthly payments during the first two years would be $209.77. In years three and four, the payment would be $224.83; and in the next two years they would be $239.60. Pay ments would be $254.13 thereafter. If a home buyer arranged a typical 9.25% fixed-rate loan, the monthly pay ments over the life of the loan would be $246.81. The annual percentage rate would be 9.5%, the same as that on the step-rate loan.” • • CUSTOMER CONVENIENCE for your drive-in traffic TEL LITE High Visibility Signs •Color/Message coordinated to eliminate drive-in confusion. OPEN in Green, CLOSED in Red. •Solar screen face prevents sun glare. •Available in many configurations to complement your architectural style. •High intensity, long life lamps and stainless steel construction minimize costly maintenance. B U SIN ESS DATA SYSTEM S, INC. 578 Hillwood Dr., Milford, Mi. 48042 (313) 698-2300 We’re the money order company with balances in your favor. Express a preference for Travelers Express and you join the growing list of financial institutions who are turning money orders into one of their most profitable customer services. The reasons are many, but one of the more attractive is the extended reporting time built into the Travelers Express system. Larger balances result, which allow you to do what you do best: make money with money. You’ll also like the way Travelers Express smooths out the money order process. Our 35 years of specialization helps. We’ve got the people, the equipment and the expertise to improve on your—or any other—money order program. Give us a try. Call toll free: 800-328-4800* or write to us at 15 South Fifth Street Minneapolis, Minnesota 55402. *ln Minnesota call collect 612-332-7481. T r a v e le r s E x p r e s s https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1976, Travelers Express Company, Inc. FINANCIAL SERVICES. A Greyhound subsidiary. BG/25 'Why Didn’t I Think of That Then?’ How to Handle Customer Complaints With Tact NOW TH E feeling? Like the time you thought of that beautiful squelch—an hour after losing the argument to your broth er-in-law. The right answer—but the wrong time. It’s an experience shared by all. The bank officer, struck by the idea while shaving —that would have landed the cor porate account that got away yes terday. The savings and loan tel K ler who suddenly recalls, while freshening her make-up, how she could have soothed the irate cus tomer who closed his account an hour ago. And there are dozens of others, plagued by right an swers—too late. “Why didn’t I think of it then?” Fortunately, in many instances, the only damage is to our ego. (Remember, if you had thought of that brother-in-law put-down then, your wife probably wouldn’t be speaking to you now!) Other times, however—in a bank or savings and loan office— more than egos can be bruised. When a customer complains— and employees don’t have answers at the right time— damaged custom er relations, lost business and closed accounts can result. Here are three areas in which wrong dialogue with an unhappy customer can be dangerous: (a) When a customer seeks in formation about his account. (b) When he misunderstands some action concerning him. BG/26 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (c) When he has a specific complaint. As a customer, he is entitled to answers. You have to furnish those answers—hopefully, answers that do not jeopardize the cus tomer relationship. And you need those answers now. Not next week. Not tomorrow while shav ing or freshening make-up. That wouldn’t be difficult if on ly technically correct answers were required. Any employee is qualified to do that. But what is surprising is how few employees know—or remember—that how they answer questions is the key to soothing a dissatisfied custom er. Note this example of the dif ference it made in one instance when employees didn’t remember good customer relations prac tices. A senior officer, before he was known to tellers in the bank he had just joined, seemed just another customer— and received “just another customer” service when banking. It was technically competent but aloof, indifferent and with little personal interest. What a difference it made, how ever, when he became better known. Then, in addition to be ing efficient, the service he re ceived suddenly became warm, friendly and bubbling over with a desire to serve. Ominously, if this can happen in ordinary, day-to-day customer relations, think of the damage that results when a dissatisfied customer receives such treatment. Under no circumstance can “aloof, indifferent and impersonal” treat ment effectively smooth the ruffled feathers of an unhappy customer. Before you turn the page (be cause you know this couldn’t hap pen at your place!), check it. Phone in without giving your name and see how calls are handled. Walk through the lobby and listen to what tellers say— and don’t say—to customers. Check carbons of correspondence answering mail complaints. You may be in for a surprise. Prob ably even a shock—because fi nancial institutions, large and small, are guilty of careless cus tomer communications. Why do they turn off customers this way? Why don’t employees think—in time— of words that so lidify, not jeopardize, customer re lationships? Perhaps because so few understand— and live— a welltested business philosophy: T he custom er is always right. You don’t believe it works? Ask Nieman-Marcus. For them these five words—believed in and liter ally a way of life for everyone in their stores—made them one of America’s most fabulous retail op erations. Customers may be rude, inconsiderate or ask the impossi ble; if they are customers, Nie man-Marcus always makes them feel they are right. (One Christ mas Eve, for example, the store even chartered a plane to deliver (Continued on p ag e B G /2 8 ) Smile. Oían Mills is making your bank picture brighter. There’s som ething to smile about when people are flock ing to your bank in droves. And that’s exactly what happened in East Tennessee when 8 ,0 0 0 families discovered the Olan Mills Portrait Promotion at United American. But Olan Mills doesn’t feel like that’s enough. S o just recently they decided to give you som e thing to really smile about. Through it’s newly formed Bank Marketing Division, a brand new Bank Advertising Campaign is being produced. This campaign will be made https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis available to you at a very nom inal cost and will include a year-round program of news paper ads, radio sp o ts, billboard designs, statem ent stuffer designs plus a budget guide promotion. A special feature of the campaign is the free color portrait promotion for individuals and family groups— tried, tested and guaranteed to work. for design and production of all types of brochures— trust, IRA, DDA, Savings, etc. And we’ll even custom design your future value tables. For all your bank marketing needs, contact the Bank Mar keting Division at Olan Mills. If we don’t have it—we’ll find a way to get it. Keep on smiling and have a nice day. And if that’s not enough, you can look to Olan Mills’ Bank Marketing Division Bank Marketing Division 1101 Carter Street THE NATIONS STUDIO Chattanooga, Tennessee Telephone (615) 622-5141 Ext. 213 (ask for Jo e Trivett) m (M L 0 & Jf Why DidiTt I Think of That? (Continued from p ag e B G /2 6 ) FOR SALE OR LEASE Available for immediate delivery. Instant modular drive-in teller units. Ideal for ex pansion or to establish a remote drive-in. Prebuilt ready to install on your site— re quires only electrical hookup. Includes all equipment needed— electric heat and air conditioned, conduit for alarm and phone. Write for brochure of other sizes and models available, up to full branch build ings. FINANCIAL PRODUCTS, INC. P.O. Box 1035 Eau Claire, Wisconsin 54701 Phone: 715/835-8160 OVER 200 BANKS HAVE ASKED US TO HELP REDUCE THEIR OPERATING COSTS* WE DID IT. (and saved them 18% to 47% the first year) *Details on request. Call (214) 241'9444 Or write Howard J. Blender Company h jb H ow ard J. Blender Com pany 2695 Villa Creek Drive Suite 240 Dallas, Texas 75234 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis an outrageously late gift order—200 miles away—before Santa arrived!) No wonder thousands of Americans, coast to coast, are fanatically loyal to the store where they are always “right.” You say the money business is dif ferent? Of course it is. But customers anywhere are people, and people every where have the same likes and dislikes about the businesses that serve them. In banks and savings and loans, of course, a customer cannot always be technically right. But even when we know he’s wrong, remember that he thinks he is right. When a customer has a complaint and is wrong, we have two alternatives. We can argue with him and win—or by using the right words (at the right tim e), correct his problem without making him “lose face.” In the first case, we can easily win the argument but possibly lose an account; in the other alternative, everybody wins be cause you usually keep the account. Which alternative do your people use when a customer has a complaint? If you are interested in holding cus tomers, there are three ways to ensure proper customer communication. • One way is to set up a service in formation desk, staffed by specially trained employees. Customers with complaints or problems can be referred to them, and you know they will “think of the right things to say at the right time.” • If this approach isn’t suitable, a brief training program can be given all employees contacting customers. This isn’t easy but Nieman-Marcus and other retailers, large and small, prove it can be done. Hold small meetings and use employee bulletins to explain why “the customer is always right” and what that means to them. Teach them to see problems through customers’ eyes and to project a desire to be helpful. • Still a third road to good customer relations is to give guidance to specific employees in areas where problemcausing situations are likely to arise. Here are a few of the most common problems and several suggestions for meeting them: When customers say—“My account balance doesn’t agree w ith your state m ent.” Express concern and regret that the customer has been inconvenienced. Admit there is the possibility of a mis take. Check it immediately. If you are wrong, don’t blame the computer. If the customer has made the mistake, ex plain it tactfully; avoid blaming the customer or implying that he is care less or stupid. When settled satisfacto rily, thank the customer for coming in and allowing you to correct records. In vite the customer to phone or visit any time he has a question or problem. When customers say—“I didn’t re ceive the interest I ’m su pposed to.” In terest rates, of course, vary among fi nancial institutions. It’s easy to misun derstand how interest is calculated and paid. Explain how your interest is cal culated; check the customer’s records to make sure the correct amount has been paid. If applicable, show how fu ture interest earnings can be maximized by proper timing on deposits and with drawals. When customers say—“My social se curity ch eck is dep osited w ith you by the governm ent. H ow soon can I use this money?” A common question today. Handling procedures vary; be sure all employees know the answer for your institution. If you credit accounts im mediately (instead of waiting until checks actually are received), empha size this point; it is an important plus for you. When customers say—“My nam e on this ch eck is sp elled incorrectly. H ow shall I en dorse it?” This is an easy an swer for you but a confusing puzzle to many. Be sympathetic. Explain the “whys” of your answer. Joint-name ac counts also are frequently confused by endorsement problems—as are newly marrieds who face the single name/ married name dilemma. When customers say—“W hy aren’t you open evenings, Saturdays, etc?” A fairly common question from those with a particular individual need. Recognize the possible inconvenience your hours may cause some. Explain why the hours were so chosen (to serve the greatest number most efficiently). Suggest bank ing-by-mail wherever possible. This by no means exhausts the finan cial questions that may be asked you and your employees, and there is no way of predicting what customer com plaints may arise. Yet, if basic princi ples are kept in mind, virtually any question or complaint can be handled without jeopardizing account relation ships. Keep reminding those who meet cus tomers of the things that “buy” customer insurance— “the customer is always right.” See complaints and questions through customers’ eyes. Be courteous, sympathetic and show a desire to be helpful. And always remember, some times you may be wrong! This simple policy works for thou sands of businesses. You will be sur prised what it can do for you. Try it! (and save!) X. Why continue to buy preformed coin cartridges when you can make them yourself for half the price and trouble? The table top Manchester “4 4 ” will produce 2640 cylindrical coin cartridges per hour as you need them using convenient economical color coded rolls of paper for lc , 5c, 10c and 25c cartridges. JL B Corporation supplies the Manchester “4 4 ” and quired servicing w ithout charge. You pay only for the paper you use at as low as an amazing S 1.98 MamhtfsU'i 44 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis on usage. Stop worrying about expensive equipment, rising freight cost,, long ordertimes, and using up expensive storage space. Call or write today and start enjoying the use of a Manchester “4 4 ” coin cartridge making machine today! 193 ¿8212 313 593-4177 P O Bex Detroit. Michiqan Phone ( ) A BG/29 TMS Franchise Program Catches On With Banks, Thrifts Nationwide N JANUARY, 1974, First Federal S&L, Lincoln, Neb., the institution that conceived and executed the electronic-bank-in-a-supermarket program, caught the financial industry by surprise when it introduced TMS, or The Money Service, in two Hinky Dinky supermarkets. Since then, there have been many de velopments in electronic banking, but rarely is the subject discussed without the name “Hinky Dinky” entering the conversation. Today TM S is flourishing in Nebraska, and the TMS marketing program continues to gain momen tum on a national basis through a franchising pro gram. The Money Service is perceived in financial circles primarily as a debit card allowing customers to make deposits and withdrawals in supermarkets. However, the name and card also can represent a wide range of customer services. For example, The Money Service card is currently used to promote and identify statement savings in Washington, D. C., Maryland, New York and other areas. While in Pitts burgh, the card is associated with a pay-by-phone bill-paying service and will be used to access ATMs this fall. Has the TMS program lived up to the expecta tions of its designers? “Yes, definitely,” said John E. Lydick, director of marketing for First Federal Lincoln and president of TMS Corp. of the Americas, a wholly owned sub sidiary. “In 1972, First Federal began implementing a strategic marketing system that would satisfy three primary management objectives: attract deposits, lower the cost of money, lower transaction costs— all three are being achieved with TM S.” I The first step was to begin converting customers from the standard passbook to the magnetic stripe card and statement savings. To fully utilize the mag netic stripe card, an on-line system was installed using an inexpensive IBM audio response terminal at teller positions. The terminals use a magnetic stripe reader and keyboard for input, and the teller receives a verbal reply from the computer confirming the entry and authorizing the transaction. After nearly two million internal transactions with the system, terminals were installed in two Lincoln Hinky Dinky stores in January, 1974. Today, there are 66 merchant locations honoring the TM S card. These merchants include five super market chains, a clothing store and two mass merchandisers. Plans call for expanding the TMS merchant network to 92 locations in 33 cities by yearend, with four more merchants joining the system. Consumer response is snowballing and financial institutions continue to join the system, Mr. Lydick said. To date, nine thrift institutions in Nebraska are issuing The Money Service card. In June, TMS began servicing its first credit union, Offutt Federal Credit Union, Omaha. And Omaha National, the state’s largest commercial bank, shares terminals with TMS. “We have always been an advocate of terminal sharing, and two years of sharing experience have served to reinforce our beliefs,” said Mr. Lydick. “It has taken determination and cooperation to de sign cost-distribution formulas that are fair to all participating financial institutions. In addition to sharing operating costs, we coordinate considerable joint advertising and promotion of The Money Ser vice throughout the state. Formulas for sharing this THE MONEY SERVICE SYSTEM IN NEBRASKA SHARING INSTITUTIONS Illustration shows all of the TMS institutions and merchants currently honoring The Money Service program in Nebraska. In the Omaha area, terminals installed at three merchant locations are shared with the Omaha National Bank. The Omaha National program is called "Bank-in-aBillfold." BG/30 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M ERCHANT PARTICIPAN TS Christmas Comes But O nce a Year... , A Good Time to Court Customer Goodwill Enhance Your Bank's Image in the Community, and At The Same Time Put Sizeable Extra Business on Your Books. Fabcraffs Elegant Fine-Arts Tray/Plaques Have a Distinguished Record of Achievement With Banks Across the Country. The Results (As Reported to Us Via Letters): • FLORIDA — Very Successful, Very Popular. Total Order Completely Gone by Mid-December! • MAINE - Self-Liquidated at $1, Yet Increased Membership by 86.5%! • CO N N EC TIC U T -- 4th Straight Year, Each Year Better Than Last! • PENNSYLVANIA - Competitor Offered a Free Tray of Another Style, Yet We Sold 3,024 of Your Trays; Your Quality Responsible. • ILLINOIS -- Offered Choice: Your Currier & Ives Tray or Art Tile. Your Tray More Popular by 2 to 1. • M A SSA C H U SETTS — Substantial Increase in Clubs. Feel It's Due to Year-Round Appeal of Your Trays. • NEBRASKA -- Doubled Membership! Received Many Nice Compliments on Your Trays! • VIRGINIA — Tremendous Success. Sold Trays, Fully Self-Liquidated. People Loved Them. Re ordered Two Times— All Liquidated! https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BEAUTIFUL AND CERTAIN TO APPEAL TO YO U R CUSTOM ERS. O ur Exclusive, oval-shaped tray/ plaques are 111/2 X 141/2 inches, trimmed in white and gold, Our selection of original Currier & Ives prints depicts the four seasons — winter, spring, summer and fall. Reproduced in authentic colors, this selection has proved popular with customers throughout the United States. P R IZED . As d eco rative plaq ues, they will be displayed in prominent view in your customers' homes throughout the year (your name will be mentioned over and over). USEFUL. As a serving tray, this popular premium will be the topic of conversation when company visits (your bank will be thought well of, and spoken highly of). EASY TO ST O R E, EASY T O C A R R Y H O M E . These tray/ plaques take up little space (2,000 require less space than a normal-sized desk) for storage, and are easy to hand out and carry. They are lightweight, sleek, and unbreakable. EXCLUSIVE. Our oval shape is unique among manufacturers, and our product is not sold in retail stores (your bank will be your area's exclusive source of supply). FREE SAMPLE. A free sample tray/plaque and case history kit is available to bank officers. Please write on your bank's stationery and we will rush you a sample in time to take advantage of this year's Christmas Club season. FABCRAFT,INC.Frenchtown,N.J. 0 8 8 2 5 «(2 0 1 ) 9 9 6 - 2 M t^ c o u ld b e the most important thing your Bank w ill ever say! If you’re interested in retail market ing impact, meet THUM BODY. He tells people the one thing they really care about . . . that they are indi viduals. And that your bank treats them that way. TH U M BO D Y strikes firmly yet with charm at the very heart of consumer anxiety. Join the one hundred plus bankers who have profited from this phenomenal and flexible promotion. CALL COLLECT | (609) 9 2 4 -3 7 49 PRINCETON PA RTN ER S, INC 245 Nassau St., Princeton, NJ 08540 ©1976PRINCETON PARTNERS, INC. Think of the advantages of renting a new, completely furnished and fully equipped financial facility! • Start business immediately at your new location... • Establish traffic flow before your permanent struc ture is completed .. . • Rent a site and test your expansion plans! Financial Facilities portable modular units can even” be customized to match your main structure. Units include deluxe featu res: • • • • • Air Conditioning Electric Heat Kitchen Area Carpeting Desks, Chairs and Files • Drive-Up Window • Cash Safe • Hold-Up and Burglar Alarm Systems • Camera • Teller’s Counters and Check Desk • Teller’s Undercounters with Coin Chests • Night Depository (Optional on 600P) • One Hour Fire Rating • Site Planning • Insurance 'Rent fully equipped unit by the month for a nominal amount! Designed by Mayes, Williams & Partners, Architects A.I.A. Planners of over 300 Financial Institutions. BG/32 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis cost naturally are complex, as not all participants are represented statewide. “From the beginning, TM S Corp. has offered to share the TM S system with all insured financial institutions. Nevertheless, certain institutions want ing to offer the service have-been re luctant to join the TM S system. Al though logic dictates that terminal shar ing is economical and operationally ef ficient, emotion seems to win out in a few cases; however, in certain areas (Chicago, Cincinnati and Milwaukee), banks and thrifts have reconciled their emotional differences and are sharing terminal networks,” stated Mr. Lydick. To facilitate sharing between banks and thrifts, TMS Corp. recently an nounced Bank Money Service. In a given market area, banks will offer this service; thrifts will offer The Money Service, and the shared network will be identified as “Money Service” at mer chant locations. Nationally, TMS Corp. licenses The Money Service and Bank Money Ser vice to financial institutions through either exclusive or non-exclusive licen ses. “The most recent licensee is First Federal S&L, Rochester, N. Y., with assets over $1 billion (the largest S&L in the state).” According to George W. Peterson, TMS Corp.’s director of national mar keting, additional licensees include Broadview S&L and St. Clair S&L, both A variety of floor plans: [JFi— T □□□ ]!"=£ c -0 - telJH LOBBY Ct LOUN GE --ru n .... Model 1300P A Complete Analysis of Your Needs Without Obligation. CALL FINANCIAL FACILITIES at 312/858-1950 ■ 799 Roosevelt Road I Glen Ellyn, III. 60137 1 | Roll Your Own . . . and Save JLB Corp., Detroit, has announced a desk-top cartridge coin wrapper system, using the Man chester 44 producer. With the company's sys tem, the Manchester 44 is supplied free and the paper is purchased under a contractural arrangement. According to JLB, savings of 50% per thousand wrappers can be realized over current customer costs and service and parts for operation of the equipment are pro vided free for the length of the contract. Write: James Halpin, vice president, JLB Corp., P.O. Box 193, Detroit, Ml 48212. in Cleveland; American Federal S&L, Washington, D. C.; Baltimore Federal S&L; Dollar Savings Bank, Pittsburgh; Cheshire Savings Bank, Keene, N. H.; Standard Federal S&L, Chicago; Per petual S&L, Rapid City, S. D.; and First Federal S&L, Council Bluffs, la. “There are now over 30 licensees, and the list is growing,” Mr. Peterson said. “Our licensing package has been made modular to enable financial in stitutions to select the modules they want and need. We have seen time and time again that each financial institu tion has its own particular requirements and wants complete control over the customer services it offers. Our identi fication system, The Money Service or Bank Money Service, strongly supports the services a financial institution elects to offer. The Money Service program provides systems, operations and mar keting orientation and training, sales and promotional literature, extensive advertising materials, point-of-sale mar keting items, internal forms, customer new-account kits and a wide range of technical assistance, as requested by licensees. “When requested, we also assist in making merchant presentations and con sulting with licensees desiring to build a shared merchant terminal network. Exclusive use of the name and graphics may be granted for specific geographi cal areas,” added Mr. Peterson. * * Give America w hat it w ants for 76: made-in-America pewter.1 By international, by George! IN T E R N A T IO N A L S IL V E R C O M P A N Y The more you get into premiums the better we look. America’s Bicentennial celebration presents you with a once in a lifetime opportunity to offer your customers authentic replicas of early American craftsmanship—fine pewter holloware from International Silver. These premiums of lead-free pewter are made with all the qual ity you’d expect fromthe leading manufacturer of holloware. Plus the fact it’s one of the broadest lines of pewter products around, including a commemorative Bicentennial plate. See the specialists at International Silver for help. Our half century experience in the premium field can make your promo tion truly revolutionary. International Incentives A Division of International Silver Company Wallingford, Conn. 06492 Name. □ Call us as soon as possible. Address— □ Send catalog before we m eet City_____ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .Title. Company. .State. Mechanized Check Casher Reduces Transaction Time O LLEG E students demand fast, ac curate check-cashing service. Such demands sometimes cause customer dissatisfaction when a financial institu tion can’t provide fast service during peak periods of activity. However, a bank serving 40,000 stu dents on the University of Wisconsin campus in Madison believes it has solved the problem of handling the crush of students clamoring to cash checks received from home or else where. First Wisconsin National’s University Office has installed a Diebold Accel erated Cash Terminal, which has sub stantially reduced long lines of students building up at teller stations. The terminal has reduced check cashing time to 20 seconds, enabling three times as many check-cashing transactions to be handled as formerly with a manual system, said Thomas Ullsvik, bank assistant vice president. Here’s how the terminal works: The C Teller at First W isconsin N at'l, M adison, reaches for currency being dispensed by Diebold A c celerated C ash Term inal, w hich autom atically provides exact am ount of currency of check being cashed by customer. Coins a re handled se p arately. Use of term inal is said to cut tran s action time to 20 seconds per check. customer presents his check and the teller keys in the amount of the check on the terminal keyboard. The same amount appears on the terminal display panel and on the optional customer display panel. When the teller pushes a “dispense” button, a cash door opens and the amount of the check in curren cy is there for the teller to pick up and hand to the customer. A separate dis penser presents any coins involved di rectly to the customer. Reaction from students has been en thusiastic, Mr. Ullsvik said. They know which teller station is equipped with the terminal and make a bee-line for that station because they know service there will be faster. Tellers like the terminal, Mr. Ullsvik said, because they can balance out in five minutes instead of the usual 30 minutes at the end of the day. The registers provide a summary of the dif ferent bill denominations issued and of the coinage dispensed, plus a total number of transactions, making it sim ple for the teller to balance out by matching the amount of money issued with the number of checks and the cashed checks themselves. • • PICK A CARD... ANY CARD You can BANK on advertising playing cards For those banks who are serious about obtaining operational efficiency For complete facts, call or write: U.S. Microfilm Sales Corporation, 235 Montgomery Street, San Francisco, CA 94104. (415) 433-4864. Sustaining Member D ISTR IBU TED E X C LU S IV E LY BY: U.S. MICROFILM SALES CORP. BO STO N . BG/34 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ST . LO U IS • SAN F R A N C IS C O Long-lived, well received and always used. Paris Play ing Cards are a constant, si lent salesman for your BANK'S S E R V IC E S . And since cards offer such a multitude of uses for S H O W S , G IV E -A W A Y S , D IR E C T M A IL, P R O M O T IO N S , O P E N IN G S , OR A S G IF T S . ..you can always recom mend cards and K N O W T H E Y A R E RIG H T. Paris Cards are available in an infinite variety of styles, shapes, packages and prices. And anything from a simple initial, a colorful logo, or a spectacular 4-color photograph or design can be faithfully and beautifully reproduced. Write now for further information on PARISCO CA RD S, and how cards can implement your promotional plans. NO OBLIGATION. PARIS PLAYIN G C A R D C O . 8039 Paseo • Kansas City, M O . 64131 ■ ' . Order everything f 1 __ the one m ost-complete m anufacturing source! Electrostatic Copier Paper Perforated Tapes Teller and Bookkeeping Machine Rolls Automatic Coin Wrap H P * 1h i- ' •' Computer Print-Out Papers k Proof Fanfolded d Rolled Control Tapes v Carbon Polyethylene Ribbons Xerographic Copier Paper mÆWâww Double-Sided and Single-Sided Magnetic Cards and Other Word Processing Supplies ' Save on a complete line of Paper Products for Financial Institutions Benefit from the advantages of one-source buying! All our paper products are of guaranteed quality and are available for immediate delivery from stock. We offer you the best possible pricing, such as is possible only from a manufacturer. We give you additional price advantages for quantity buying. — SEND FOR COMPLETE CATALOG— of all paper products for financial institutions. It is free, of course. Institution Name ----- Title Address C ity/S tate /Z ip Phone. __________________________________/ 0 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis EB PAPER ROLL PRODUCTS CO. 20100 C ivic Center Drive, P.O. Box 405 I Manufacturers of Paper Rolls for All B usin ess M achines Southfield, Mich. 48037, Phone Co llect 1-800-521-2404 BG/35 'CUSTOM - DESIGNED 1 MOLDED MACHE BANKTO YS! ? m I L O W -C O S T HNFLÄTABLE KEY C H A IN S 25$ to $ 1 . 0 0 — M a d e to your s p e c ific a tio n s . ELI CHENG, INC. N. Broadway Billings, Mont 59101 Phone (406) 259-3157 Right on your watch crystal. Trans parent calendar sticker is easy to apply and easy to remove for monthend replacement. Will not harm watch crystal or interfere with telling time. Most convenient and practical calen dar available. Twelve stickers per set. Right on your watch crystal. With your ad on each monthly sticker your customer sees your name or message every time he looks at his watch. The perfect combination: appreciat ed goodwill plus year-long advertising exposure. Priced as low as 250- 100 per set in quantity with your imprint. Send $1.50 for each unimp rioted set for personal use; For free random imprinted samples and prices, write on letterhead today. Kevin Bruce, Marketing Manager CRYSTAL-DATE Watch Calendar Co. 690 W. Fremont, Box 2277* H Sunnyvale, CA 94087 (408)738-2200 or see your advertising specialty man. Patented. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank Spotlights Crepe Craze, Cooks Up Premium Promotion HAT DO French cooking and banking in Minneapolis have in common? New deposits! The people at Bank of Minneapolis, the downtown area’s smallest bank, de cided to do battle with the bank’s competitors last winter when practical ly every financial institution in town was offering incentives to customers. Since a restaurant featuri'hg crepes had just opened adjacent to the bank’s premises, and since a Minneapolisbased manufacturer of cookware had just added a crepette pan to its line, the bank decided to capitalize on the situation by offering a line of cook ware premiums, including the new crepette pan, as an incentive to gain new deposits. According to Dexter J. Sidney, as sistant vice president, residents were invited to select any one of six Nordic Wear cooking items at no charge when they deposited $300 in a new or exist ing savings or checking account. By adding $50 to an account, they could purchase any one of the items for $6.95. To add impetus to the promotion, the bank offered free certificates worth $2 each to the first 100 depositors se lecting the crepette pan premium. The certificates were redeemable at the nearby creperie restaurant, which was W N ew sp ap er ad for Bank of M inneapolis a n nouncing "Cooking Free for Saving Three" premium promotion featuring Nordic W are items. grateful for the extra business, since it had not yet had time to build a steady clientele. Another attraction during the promo tion was a “Cooking Free for Saving Three ($ 3 0 0 )” program that included Banks Post Cookware Successes Cookware is one of the more popular premiums at financial in stitutions this year. Two recent spectacular success stories of banks using Corning Ware premiums in volve Sun Banks of Florida and First National of Chicago. Sun Banks posted a 40% gain in new customers by offering 11 dif ferent pieces of cookware through the 39 banks making up the HC. Casserole dishes, sauce pans, coffee percolators or teapots could be ob tained free with a deposit of $250. “It was absolutely the most suc cessful premium program I’ve ever run,” said N. W. Pope, vice presi dent, marketing. First of Chicago chalked up 30,000 redemptions of cookware dur ing its recent promotion. “This pro motion was responsible for gener ating more deposits than any other we’ve ever done,” said John Tomick, director, product promotions. The bank sponsored a cookoff in conjunction with the promotion. The contest was built around prep aration of a meal for four people for less than $6 using a Corning Ware casserole. Winners received cash prizes. Nine different cookware pieces plus Corelle Livingware dinnerware were offered during the sev en-week promotion to people mak ing deposits of $250, $ 1,000 and $5,000. The size of the deposit determined which premium could be selected. The bank distributed 31,017 pieces, said to be an amount similar to what a major department store would move in a year’s time. E le g a n t e li r o u ie - f r a m e d a r t r e p r o d u c t io n s * ■ ■ ■ ■ ■ H I 24x30’ 16x20’ 24x36” S O d y n a m ic p r in t s in fo u r s iz e s t o h e lp y o u lu r e s a v e r s * Framed art reproductions never go out of date. They’re a safe, proven, dignified way to raise your cash reserves. And, this gallery is the most power fully appealing package we’ve ever offered. It was carefully selected by a professional art director ex clusively for the financial field. There are gorgeous serigraphs (a costly hand-screen ing process that produces rich, glowing colors). There are classic masterpieces. And you’ll find popular contemporary artists’ works as well. All faithfully reproduced down to the finest brushstrokes. The prints are grouped in four sizes, as shown above. Each group has a range of five different subjects (only one sample of each group is shown here). They’re all chrome framed, beautifully matted, covered with a clear sheet of virtually unbreakable styrene, and ready to hang. You can offer them at greatly reduced prices, or free. A complete promotional offer has been laid out for you, including a 1 7 x 2 2 ” four color printed piece that is ready for immediate mailing. Exclusive area rights and full return privileges are available. For the full facts on this dramatic pro motion write immediately, or call: -------------------------------------------------------------------------------- Ray Yodlowsky F -9 REDW OOD H O U SE 1 5 5 River Road, No. Arlington, N .J. 0 7 0 3 2 I 1 1 (2 0 1 ) 9 9 7 - 0 8 8 0 Please rush me a sample 1 7 x 2 2 ” m ailer and complete details on the Redwood House Gallery Promotion. | | | Name/Title------------------------------------------- —----------Financial Institution-----------------------------------------— REDWOOD BOOSE 1 5 5 River Road, No. Arlington, N .J. 0 7 0 3 2 Phone (2 0 1 ) 9 9 7 - 0 8 8 0 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Address-------------------------------------------------------------T own/State/Zip------------------------------------- -------------- I Phone Number__________________________ I _______________________I BG/37 C u t e . . . a n d a W in n e r ! a crepe cooking demonstration in the bank lobby with two local TV person alities taking part in a cooking contest. According to Mr. Sidney, results of the two-month promotion were satisfy ing. More than 1,200 new accounts were opened, bringing in more than $300,000 in new money. • • New Deposit System Cuts Costs for S&L OUR SUPER TIN LIZZIE gets instant attention. Perfect as a Christmas attraction. Ideal as a prize at opening of main office, drive-in, or branch. Used in parades instead of a float. A great car loan and sav ings incentive. Fine to give away in cooperation with local retail promo tions. Hundreds of different uses made by banks and thrift firms each year. Price, $670.00. P le a s e p la c e C h ristm a s o r d e r s right away, so as to a ssu re elivry d / S teel fram e a n d b o d y. L en g th 6 8 ”. W idth 3 4 ”. W gt. 2 0 0 p o u n d s. P n e u m atic tires. G aso lin e en g in e, 3 .2 H P . T o p sp e e d 1 7 M P H . P a rts alw ays available. S ta n d a rd c o lo r s c h e m e red , black, an d gold. BOB TU CK ER ASSOCIATES Box 1222 P ort Arthur, T x. 77640 “Since 1958” BG/38 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The use of wallet-style deposit-bymail system has enabled a Minnesota S&L to reduce costs by 25% and lessen the possibility of errors. The new system replaces one that used a double-coupon deposit envelope with a reuseable address card. The card addressed the envelope carrying the customer’s receipt and passbook through a window in the mailing en velope. The complicated deposit enve lope was expensive and the cards were often lost, according to Jim Holland at St. Louis County Federal Savings in Duluth. The new system has a reusable wal let with the depositor’s name and address printed on it. The wallet and a remittance-style envelope are de signed to fit in the association’s state ment envelope. Using the same enve lope for mailing both statements and deposit receipts reduces costs and simlifies inventory and re-orders. A de tachable coupon serves as a deposit slip and a withdrawal slip, to be mailed with the passbook in the pre-addressed envelope portion, said Mr. Holland. The new system is not only more convenient, it actually costs 25% less, according to Doug Marshall at Tension Envelope Corp., Kansas City, who worked with Mr. Holland in develop ing the system. The new deposit cou pon size permits verification of the transaction on mechanical equipment. The lost address card problem was eliminated by the reusable wallet. W allet-size deposit-by-m ail system en ab les St. Louis County Federal Savings, Duluth, Minn., to reduce costs and errors. i ;«»îiAi<w Wî3«? vyf «SÄ Cook up new deposits w ith Vernon's Be a C o o k-O u t flL H e r o ! “ Be a r Cook>Out Hero” Prom otion H ere’s th e p rom o tio n th a t’s th e h o ttest thing in banking. H ot enough to add $ 1 .3 million to th e vaults o f three S t. Jo sep h , Missouri banks. (S ee article in this m agazine.) Enough sizzle to bring in $ 3 4 0 ,0 0 0 fo r th e W ichita S tate Bank o f W ichita, Kansas in only tw o m onths. Why so successful? F irs t, th e universal appeal o f V ernon C hef Tongs. I t ’s a com b in ation fo rk , spatula, can opener, b o ttle opener and salad tossing tongs with 1 ,0 0 0 uses inside and outside. I t ’s a top quality item with a price low enough to perm it flexibility. S econd , V ernon provides a com p lete free prom otion al package cu sto m tail ored to th e needs o f y o u r bank. This includes Bar-B-Q ue grill, newspaper ads, direct mail literatu re, envelope stuffers, radio com m ercials, p rom otion al rem in ders and o th er m aterials. Everything yo u need to m ake it w ork, including a V ernon representative w ho will help yo u with all the details. G et th e full sto ry on Sales Promotion Dept. V e rn o n this proven p ro m o tio n . Mail th e co u p o n fo r a free “ Be a C ook-O ut H ero” in form ational company 604 West 4th St. North Newton, Iowa 50208 Or, if y o u ’re in a h u rry , call V ernon Please rush me a FREE Vernon Chef Tong and infor mation on your “Be a Cook-Out Hero” promotion. I understand that I’m under absolutely no obligation. Idea Man Don C ostanzo a t N a m e __________________ _____________ ______________ package 2880. and a V ernon C hef Tong. 5 1 5 -7 9 2 - H e’ll give yo u the full sto ry and Title ______________________________________ __________ show y o u h ow to get things co o k in ’ B a n k / S & L _____________________________________________________ a t y o u r bank. A d d ress ____________ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C i t y ________________ State vZip __ _____________ “ / BG/39 'Be a Cook-Out Hero’ Promos Help Banks Dispel Stuffiness T V 7H E N TH R EE BANKS controlled V t by First Midwest Bancorp., St. Joseph, Mo., held a cook-out, bad weather affected the turnout insignifi cantly. Cook-outs at First National, First Trust and First Stock Yards Bank were held indoors! Purpose of the cook-outs, which were held on five consecutive Fridays, was to assure area residents that banks aren’t stuffy places, as well as to bring in new deposits. Serving the hot dogs and fixins dur ing the 11 a.m. to 2 p.m. period were a group of local high-school girls, daughters of prominent St. Joseph fam ilies. They’re known by many who stopped in and a number of people visited the banks due to their acquaint ance with the girls and their families. “Be a Cook-Out Hero!” proclaimed newspaper ads run by the banks each Thursday before the Friday cook-outs. The large ads featured a group photo of the girls in front of a sign bearing that slogan, which was the promotion’s title. Teaser ads were spotted through out the newspaper to call attention to the free lunches, while radio spots helped spread the word. For the cook-outs, each bank in stalled an electric grill and tables that held all the necessary materials. Promi nently displayed was one utensil, the “10-in-l Bar-B-Que Chef Tong,” an implement that combined the utility of tongs, a spatula, a fork and a bottle and can opener. The tongs were offered free as a pre mium to customers depositing $150 or more in a new checking or savings ac count, an existing savings account or toward a CD. The implements are credited for the opening of 115 new savings accounts, 77 new checking ac counts and 29 new CDs, for about $300,000 in new money. About 600 customers added to existing accounts, bringing in another $600,000. During the four-week promotion, nearly $900,000 in new funds were accumulated. Fortifying the promotion was an em ployee-incentive contest. Any bank staff member could earn points by get ting new business for the bank and a point scale was created so non-contact personnel competed on equal grounds with contact personnel for new or re peat business. Staffers handed out referral cards to customers and possible customers throughout the St. Joseph area. When the cards were brought to the banks and accounts opened, staff members issuing the cards were credited with points. Because of the employee-incen tive promotion, an additional $420,000 came into the banks, nearly two-thirds of which was from new business. First-prize winners in each bank re ceived the electric grills, which were pedestal-mounted and included life time briquets. Second-place prizes were theater tickets or passes to a nearby amusement park and third-place win ners received free dinners and movie tickets or packages of hamburger and hot dogs, plus one of the tongs. After serving more than 3,200 hot dogs, the banks found that stuffiness had been banished from their premises and their vaults were $1.3 million richer. They also found the cook-outs had left a “good taste” in the mouths of a lot of people! • • Put your message in your customers’ homes! Porcelainized cast iron cookware with glass covers. Saucepans, skillets, casseroles available in single pieces or as boxed sets. Shown here: 8" skillet. With Attractive Porcelainized Premiums T h e se a ttra c tiv e an d p ra c tic a l p rem iu m s featu re a lon g lastin g p o rce la in en am el finish th a t’s virtu ally in d estru ctib le. A v ailab le w ith an y im p rin t, th ey p u t y o u r lo g o o r m essag e rig h t Wrought iron trivet with 4i/2" square porcelainized inset. Protective rubber tips on legs. in y o u r c u s to m e r’s h o m es. O r, o rd e r w ith p lain p o rcelain ized finish — E ith e r w ay , an e x ce lle n t p ro m o tio n a l item , m a d e in ~ A m e ric a by th e n a tio n ’s fo re m o st p o rcelain izer. P ric e d to c o n fo rm w ith F e d e ra l reg u latio n s. F o r fu rth e r d etails, c o n ta c t R o e s c h In c . Miniature 4" dia. porcelainized cast iron skillet. May be used as spoonholder or ashtray. BG/40 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Roesch, Inc. 100 N. 24th St. Belleville, III. 62222 618/233-2761 ______ Lawrence Systems Regional Headquarters Atlanta, Georgia 30329 52 Executive Park, South, N .E. (404)321-4007 Chicago, Illinois 60601 180 North LaSalle Street (312) 236-9333 Coral Gables, Florida 33134 P .O .B o x 341999 (305) 445-9601 Denver, Colorado 80211 Diamond Hill #130-D 2420 West 26th Avenue (303) 455-5100 Houston, Texas 77098 3801 Kirby Bldg. #456 (713)526-5154 Los Angeles, California 90017 700 South Flower St. #1222 (213)626-5431 New York, New York 10017 299 Park Avenue (212) 758-5800 Portland, Oregon 97205 720 S.W. Washington (503) 226-1585 San Francisco, California 94111 37 Drumm Street (415)981-5575 Corporate Offices: 37 Drumm Street San Francisco, CA 94111 (415)981-5575 Other offices throughout the U.S. and Canada; also Lawrence Collateral Services, Ltd., London, U.K. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis If you run a bank, and you’re not using Lawrence to secure your loans, you surely ought to use somebody. ■ P IBggy V jj| There is no reason in the world . for a bank to lose money on a secured com m ercial loan. So ( H I our message to bankers is plain. t If you don’t use Lawrence to ^ w r avoid these losses, you should use somebody. ^ At Law ren ce we security for secured loans. If it’s inventory, Lawrence con trols the inventory, guarantees d eliveries will be m ade in a c c o rd a n c e with the bank’s instructions, and stands ready to pay the bank if it suffers a loss because any deliveries are made in violation of the bank’s instructions. If it’s receivables, Lawrence guarantees the receivables are valid, guarantees there will be no diversion of funds, and stands ready to pay the bank if it suffers a loss because the receivables are invalid or if funds are diverted in violation of the bank’s instructions. The borrower benefits at the same time. Lawrence can improve a borrower’s capability in getting a loan, increasing a loan, extending a loan —on amounts anywhere from $ 50,000 into the millions. Lawrence has been helping banks and borrowers for 63 years. For every one of those years we have been the largest in our field. Call Lawrence. And if you don’t call Lawrence, call some body. You’ll find our number below. For somebody else, you’ll have to try the phone book. Lawrence: Systems of Collateral Control L a w r e n c e S y s te m s , 3 7 D r u m m , S a n F r a n c i s c o . A n I N A s u b s id ia ry . C a ll 4 1 5 - 9 8 1 - 5 5 7 5 o r a n y o f o u r o ff ic e s in th e U . S . & C a n a d a . BG/41 Popcorn: It Works for Financial Institutions EW THINGS attract attention more readily than a colorful, aromatic popcorn wagon. And when a gaily dec orated wagon is placed in a bank lobby, good things are liable to happen to both the customers and the bank. One of the first banks to learn that popcorn wagons yield salty profits is First National of Chicago. What’s one of the nation’s largest commercial banks, located in the midst of down town Chicago’s sober financial center, doing with a popcorn wagon? Making friends and profits! The bank paid $8,000 for a replica of a four-wheel ornate glass-and-wood wagon, the kind that whistled on the streets of yesteryear while a cascade of popped corn came from its steam-op erated griddle. The machine was placed on the side walk near the bank’s plaza area and was placed under the charge of three summer trainees. An average of 1,000 cartons of popcorn is sold daily during the warm months and sometimes long lines of customers wait patiently for service. Since one of the trainees is an ac counting student at the University of Illinois, he figured out that the gross profit margin on each carton of pop corn is 62%, making the popcorn opera tion the most profitable one in the bank! According to a bank executive, the prof it margin amounts to roughly 40 times the bank’s margin on nearly $12 billion in loans! Customers line up to pay for hot, buttered popcorn at First National Plaza, adjacent to First National of Chicago. Machine is profitable for bank and w as manufactured by Gold Metal Products Co., Cincinnati. Fourth National, Wichita, installed a colorful popcorn wagon in the glasswalled courtyard of its building when it opened the new quarters in 1974. The machine is operated a few hours each day and for two hours every Fri day afternoon sample bags of popcorn are dispensed free. The operation aver ages 350 servings per hour. Fourth National uses the wagon for special events, such as the opening of a large shopping center last year, where the bank promoted its BankAmericard service. In three days, 10,000 sample NAKEN FLA TW A R E CHESTS Naken flatw are ch e sts are sold in the fin e st d ep artm ent and jew elry sto res in the country. Now you can include them in your incentive program . All wood, fu rniture finished. Delivery n ever a problem . C all or w rite for details. Manufacturers of fine wood products since 1919 2950 West Chicago Ave. Chicago, Illinois 60622 Telephone (312) 489-4600 (Illinois, Call Collect) Call Toll-Free: (800) 621-0084 BG/42 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis bags of popcorn were distributed. The wagon has also been used at re mote radio broadcasts, customer busi ness openings, bank unit openings, com munity activities and fund-raising par ties. It also is used in other areas of the bank for receptions. But when it’s in the courtyard and not surrounded by a group of hungry customers, it’s considered to be one of the “art pieces” that decorate the prem ises. Not only large banks utilize popcorn machines. Bank of Kansas in South Hutchinson installed a two-wheel cart in its lobby last May when it opened its new building. Every weekend, free popcorn is dispensed to increase lobby traffic. According to bank President D. D. Hart, the unit is effective in drawing people into the bank. Customers have learned that, when the popcorn wagon’s red operating light is on, they can step up and receive a free bag of popcorn. The use of popcorn as an attraction at banks is not new, but it seems to be catching on at more banks. Brentwood Bank, located in a St. Louis suburb, has been borrowing a popcorn wagon from a local theater chain for years during the holiday season. It places the wagon in its lobby and dispenses free, hot popcorn to all comers. Other banks have used popcorn wag ons to call attention to premium of fers and solicit Christmas club accounts. One of the nation’s number-one snacks has been put to work to promote banking, and it’s doing a popping-good job of it! * * Building Better Customer Relations H ere a re 11 m o re 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Im proving T e lle r P ro fe s s io n a lis m Pro p er H andling of M oney R e d u cin g C h e c k -C a s h in g R is k s A c c e p tin g C h e c k in g D e p o sits S a v in g s A c c o u n t P ro c e d u re s Issu in g O th er N eg o tiab le In stru m e n ts H andling M is c e lla n e o u s T ra n s a c t io n s L e arn in g about D e b its and C re d its R e d u cin g B alan cin g -O u t E rro rs U n d erstan d in g O th er B a n k O p e ra tio n s S e c u rity and Fraud Do’s and Don’ts Modern Teller Training rapidly develops technical skills, self-confidence, and improved customer relations. Designed by a team of bankers, BAI staff professionals, and audiovisual training experts, the program is self-instructional and self-pacing. Over 500 illustrations in 12 workbooks coordinate with 7 hours of sound cassettes for the most comprehensive presentation ever developed to train tellers in your own bank. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis O R D E R T H IS PR O G R A M NOW: U S E D IN M O RE TH AN 4 0 0 B A N K S N ATIO N W ID E BAN K AD M IN ISTRATION IN STITU TE 303 S. N O RTH W EST HIGHWAY, PARK R ID G E, IL 60068 ADDITIONAL W ORKBOOK KITS B A SIC PROGRAM A tta c h e c a s e w ith 12 c a s s e tte s , T e lle r Kit w ith 12 w o rk b o o k s , A d m in is tra to r's G u id e , O n -th e -Jo b C h e c k lis t: $350 ($450 to n o n -m e m b e rs) N AM E O n e set n eed ed fo r e a ch stu d e n t: $27 e a c h ($35 to n o n -m e m b e rs) PANASONIC RQ309 P LA Y ER /R E C O R D E R $39.95 30-day preview check enclosed p lease bill us 10% d isc o u n t 10-24 20% d isc o u n t 25 + (ite m s ca n be m ixed ) TITLE _ □ BAI M EM B ER BANK A DDRESS □ □ □ C ITY/STA TE “ M ODERN T E L L E R T R A IN IN G ” from BAI Your Own In -B an k S c h o o l fo r T ellers ZIP ___ P re p a re N O W fo r A n n u a l M e e tin g s Booklets That Aid (!) Bank Management • How to Prepare for Kidnap/Extortion Threats. 4-page study, outlines security precautions to take at the bank and at home, sample “alert” system, action to take during and after threat. No. 114, 3 copies for $1. • So Your Husband Is a Bank Director. 2 pages. Outlines for tire bank director’s wife the “sensitive” nature of her hus band’s directorship. Stresses the confiden tial nature of the banking business; dis courages bridge-table gossip! No. 115, 3 copies for $1. • A Code of Ethics. 4 pages. Sample policy statements by two banks, covering personal conduct of officers, inside and outside the bank. Example: sets criteria for conflict of interest, political activity, outside interests, trading in bank stock, gifts and entertainment that can be ac cepted by officers. No. 116, 3 copies $1. • Capital Adequacy. 4 pages. When does a bank have enough capital? Should a bank resist supervisory pressure to increase capital? Should a committee of board mem bers keep abreast of capital requirements for their bank? These and other questions discussed. No. 117, 3 copies for $1. © Specialist Directors. This four-page study highlights the need for bank boards to consider adding “specialists” to the board. Example: CPA’s, educators, en vironmentalists, minority group representa tives, even labor leaders. What should your bank do about this? This study offers suggestions. No. 119, 3 copies for $1. • The Bankers’ Handbook. Considered the most complete and definitive reference source covering current practices. It places the money knowledge of 90 of the country’s (2) Bank Directors (3) Bank Stockholders • Bank Stock Prices. How the price range of a bank’s stock should be de termined is discussed in this four-page study. The pros and cons of high and low stock prices are examined so direc tors can determine where to set the price of their bank’s stock. No. 134, 3 copies for $1. leading bankers at the fingertips of the banker or businessman, in a concise, ana lytical style. In it are the answers to most of your questions about banking—easy to use. 11 major sections—in 87 chapters. 1230 pages. No. 120, $30.00. • Bank Audits and Examinations. This study, written in non-technical language, is designed to be helpful (1) to an inde pendent accountant engaged to conduct an opinion audit, (2) to an internal bank auditor who wishes to make his work more effective and (3 ) to a b a n k d ir e c t o r who wishes to compare procedures followed by his bank with the modern methods out lined. No. 121, $32. • Organizing Jobs in Banking. A practical manual designed for bank officers and de partment managers to use as a guide in defining the duties and responsibilities of every position in the bank. It establishes position qualifications and job specifications and contains suggestions for training new personnel and employees transferring from one position to another. No. 122, $28. • What Every Bank Director Should Know About Bank Counsel. A pithy dis cussion of the advantages and disadvan tages of a bank maintaining full-time coun sel, and whether that counsel should be an elected director. The counsel-director re lationship is also covered—a vital relation ship in these days of complicated legal maneuvering. No. 129, 3 copies for $1. • So Your Wife Is a Bank Director. With an increase in the number of women di rectors, there is a need for the husbands of these directors to “learn the ropes.” This study provides basic information for tire spouse that is designed to enable him to assist his wife in the complicated busi ness of running a bank. No. 130, 3 copies for $1. • Management Policies for Commercial Banks. 2nd edition by Howard D. Crosse and George H. Hempel. Substantially re vised edition dealing with major policies of liability and asset management in banks. Includes examples of major policies and the relationship of policy makers and the issuing of policy. Examines lending prac tices, personnel, marketing management and portfolio management and capital structure. No. 131, $15.95. • Management Succession. 8-page study. This has been termed the number one problem in banking. Directors have the legal duty to staff their banks and this publication provides invaluable aids to as sist directors in this area. Includes a com prehensive ch e c k lis t for management de velopment. No. 133, $1. © What Every Bank Director Should Know About Public Relations. A veteran journalist and PR man describes what PR is and how a message can be relayed to the public: how the good works of your bank can be publicized. Includes an ex ample of a deposit-building program that worked; also describes how the bank’s personnel were “sold” on the program, thus insuring its effectiveness. No. 135, 3 copies for $1. • What Every Director Should Know About Personnel Management. One im portant aspect: evaluation of employment policy . . . the director should understand this. Also, each bank should have a re cruitment policy and a general policy with respect to the role of fringe benefits. No. 139, 3 copies for $1. • Commercial Problem Loans. A study that makes a significant contribution to improving lending skills by filling a void in the loan department’s litera ture. The problem loan is identified in detail and a program of supervision is outlined. The volume includes a 41page chapter on collecting problem loans and a case study of a fraud that brings all the points discussed into full play. Also included are a complete sample credit file and a hypothetical credit policy statement. Published in 1974. No. 137, $18. Order by Number Using Coupon on the Opposite Page BG/44 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Be a Step Ahead of Bank Regulators! Examiners expect banks to have Written Loan Policies. Send TODAY for your copy of the revised and enlarged edition of The Bank Board and Loan Policy, a 40-page manual that discusses the reasons for a bank having a written loan policy. Included are current loan and credit policies of four well-managed banks that can aid your bank in establishing broad guidelines for its lending officers. A written loan policy can protect directors from lawsuits arising from failure to establish sound lending policies! C h eck B o x N o. 1 1 3 , $ 4 .2 5 p e r co p y OTHER MANAGEMENT-DIRECTOR MANUALS • Bank D irectors and Their Selection, Qualifications, Evaluation, Retirement. 24 pages. Answers key questions concerning director selection, retention and retire ment. Special section: the prospective di rector and h ow he should b e expected to contribute to the bank’s success. N o. 101, $2.85 per copy. • Bank Shareholders’ M eeting Manual. 60 pages, 8/2 x 11". D esigned to aid directors o f state-chartered banks, this b ook dis cusses conflict o f interest, m inority rights, fuller disclosure, voting o f trust-held se curities, preparation o f stock purchase and stock option plans, also capital notes and debentures. T h e manual also is helpful in updating annual shareholders’ meetings at a time w hen stockholders are b ecom in g m ore in sistent on receiving m eaningful inform ation at annual meetings and in annual reports. No. 102, $7.75 each. • A M od el Policy for the Bank’s Board o f Directors. 24-pages, reviews typical organizational chart, duties and responsi bilities o f m anaging officers and various standing com mittees, loan, investment and collection policies, and an outline o f a suggested investment policy. N o. 103, $2.85 per copy. board or m anagement? N o. 106, 3 copies for $1. • T he Board o f D irectors and Effective M anagement. H arold K oontz, 256 pages. Critical look at directors’ role: functions and responsibilities, decision areas, control, relationship o f success to m ore productive management. No. 107, $13.50 per copy. • D eferred Com pensation Plan for D irec tors. Explanation o f an important IRS Ruling that w ill allow your directors to collect directors fees after retirement, thus offering substantial tax savings. N o. 108, 3 copies for $1. • A Business D evelopm en t Policy. A plan for the small bank in setting up objectives and establishing responsibilities in the o f ficer staff for getting new business, holding present business. N o. 109, 3 copies for $1. • SALES: H o w Bank Directors Can H elp. D etailed outline o f a program that has developed m ore than $40 m illion in new business for a holdin g com pany chain in the Southeast. N o. 110, 3 copies for $1. • Planning The Board M eeting. This 28page booklet provides some workable agendas, suggestions for advance planning and also lists type of reports a board should receive monthly and periodically. It emphasizes the need for informing the board as q u ic k ly and co n c is e ly as possible. An excellent supplement to plans your bank already has. N o. I l l , $3.15 per copy. • Policy Statement for E qual E m ploy ment Opportunity. 4-page study, contains suggested Equal Opportunity Program aimed at preserving a bank’s eligibility to serve as federal depository. N o. 112, 3 copies for $1 . SEE OPPOSITE PAGE FOR OTHER TOPICS Please Send These Management Aids: • Annual R eview for Officer Promotions. 4-page study, contains 12 point-by-point appraisals o f officer perform ance and potentials. N o. 104, 3 copies for $1. • C heck List o f Audit Procedures for D irectors’ Examination. 23-part outline en compasses review o f m ajor audit cate gories. Special 4-page study. N o. 105, 3 copies for $ 1 . • Bank Board P olicy and the Preroga tives o f Operating M anagem ent. Special study focuses on utilization o f skills and know ledge o f “ outside” directors; should the board d o m ore than m erely set p olicy?; w h o should operate the bank— the https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 101 . . . . 102 . . . . copies copies $ .... 116 . . . . $ .... 117 . . . . copies $ Send Completed Coupon WITH C H EC K 119 . . . . $ to: Commerce Publishing Co., 408 Olive 103 . . . . copies $ .... 104 . . . . copies $ .... copies copies $ 120 . . . . copies $ 121 . . . . copies $ 105 . . . . copies $ .... 122 . . . . copies $ 106 . . . . copies $ .... 129 . . . . copies $ 107 . . . . copies $ .... 130 . . . . copies $ 131 . . . . copies $ 133 . . . . copies $ 108 . . . . copies $ .... 109 . . . . copies $ .... 134 . . . . copies $ 110 . . . . copies $ .... 135 . . . . copies $ .... copies $ .... 137 . . . . copies $ copies $ .... 139 . . . . copies $ Total $ Ill 112 . . . 113 . . . . copies $ .... (In Missouri add copies $ .... 4'/2% Tax) 114 . . . . St., St. Louis, Mo. 63102, publishers of The BANK BOARD Letter, Mid-Continent Banker and Mid-Western Banker. Enclose check payable to The BANK BOARD Letter Name .............................................................. Bank or Co m p an y......................................... Address............................................................ $ A re A TM s fo r Y ou r B an k ? These Two Independent Research Studies Can Provide Answers.... Save Your Bank TIME and MONEY Why re-invent the wheel? If you're considering the feasibility of ATMs for T E U J ® iHtOOU AM ffJJ| IX S T A I- A A T IO N .C B C T WjPOBT I f ' your bank, you'll save hundreds of man-hours on research by utilizing these studies created by the First Na tional Bank of Galesburg, III. And you may find that ATMs are not for you, thus saving your bank thousands of dollars of capital investment! The Galesburg bank, incidentally, has a successful track record with its ATM . It has, with its ATM , increased its market penetration of NEW A C CO U N TS from 37% to 56% in a fourbank community! And 16% of new checking accounts and 20% of new savings accounts came from competing banks. 00 $ 1 2 5 HERE’S WHAT IS PROVIDED IN THESE TWO MANUALS ELECTRONIC TELLER PROGRAM INSTALLATION MANUAL In 275 pages, this manual tracks the Galesburg bank's ATM operation through market analysis, cost justifica tion, installation procedures and results. One chapter shows actual samples of supplies used in the program, plastic cards, machine receipts. Another chapter discusses customer identification programs, with advertising used to announce ATM services. Manual recommends HOW to issue user cards. . . per sonnel and department to be assigned responsibility. . . also some do's and don'ts affecting any ATM program. Also: newspaper reports of C B C T regulatory rulings . . . a 35-page "interpretive ruling" by the Comptroller. All valuable information to help your bank reach a pro per decision on ATMs. M O N E Y B A C K G U A R A N T E E — I f n o t co m p letely satisfied, return w ithin 10 days fo r fu ll refund. M ID -CO N TIN EN T B A N K E R 408 Olive St., St. Louis, Mo.63102 I j Please se n d _______ copies of: Electronic Teller Program Installation Manual and C B C T Report to Management Check enclosed * $ ________________ N a m e _________________________________________T it le ________________ | CBCT REPORT TO MANAGEMENT This smaller report summarizes estimated vs. actual results of ATM operations. . . activity reports. . . income and expense items. . . also a seven-year projection of growth of checking and savings accounts originating from ATMs. BG/46 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank __________________________________________________________________ j S tree t___________________________________________________________________ | City, State, Z ip ________________________________________________________ j * C h e c k m u st a c c o m p a n y o rd e r. We p a y postage and h an d lin g . M isso uri b a n k s: in clu d e 434% sales ta x . N ew E d itio n o f th e D oor th a t L au n ch ed an E r a ... NEW FROM DIEBOLD At top, the Diebold Advanced-Basic II, our newest interpretation of the vault door that launched an era of new vault door design. Now a greater value than ever thanks to stainless steel finish throughout and many comparably significant features. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis At bottom, the Diebold Guardian Door — superlative in every category but price. Fashioned of jeweler’s quality stainless steel, the Guardian offers advantages you’d expect only in far more expensive vault doors. New ideas from where you’d except them — Diebold. I N C O R P O R A T E D BANK & BUSINESS S Y S TE M S C A N T O N , O H IO 44711 W e k n o w h o w t o h e lp you Announcing three great w ays to identify, inform and motivate. F E D 3000 Electronic Message Centers With the highly versatile EMC, your message can change or travel thousands of times each day developing the full potential of your location. Your newest promotion...special sale...public service message or featured attraction is in front of your customers’ eyes, within easy access of your business. One of the 30 Federal Sign EMC models can new customers, sell more to present customers and identify you as a contemporary business. FE D 2000 T & T PLU S Displays For high visual impact, consider Federal’s newest innovation. The T&T PLUS. Attract attention to your location and promote your business with up to eight pre-programmed messages or pictorials in addition to accurate time and temperature. Put the motivational power of an electronic display to work at your front door. Choose your T&T PLUS from the ten standard models available. FE D 1000 Time & Temperature Displays At today’s pace, pedestrians and motorists alike will quickly learn to rely on your business for this necessary information. A great way to register your image and location. Choose the T&T display that best suits your needs from 20 standard models. F E D —Federal Electronic Displays Federal has a full line of solid-state EMC’s and displays. Find out what they’ve done for other businesses—and what they can do for you. Federal Sign, Division of Federal Signal Corporation, Dept. FBG-96 140 E. Tower Drive, Burr Ridge, Illinois 60521 (312) 887-6800 □ Contact me im m ediately □ Se n d your free booklet on electron ic displays. ^ Visit Federal Sign’s Booths 302 & 303 _ e Title Com p any Phone A d d ress City BG/48 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis at the A B A Show state zip FEDERAL SION Division Federal Signal Corporation P U T T H IS CARD 'Letmetreatyou toaSundaeatEhrlsrs.’ IN T H IS S L O T AND G E T T H IS B U R G E R . :W m eNÍK»*»WSSV)»«X» «WW*» «5»«vrcxtgh «*«*•*•!«♦*»8««-*» Î?f«su*f :«****«*>**» *fceN»***; 1 >**«»»$ ttm fX text, ^ ( !«>S)tó,>Wu!ííi8Ete«'S 2. vtfsi&s*«» savfcsí» 3 g***»« «* *«»wx»?«*s «s*H» Y»>* **»«* « ***•> rtnUMtny« sGreat 1i>Know\fxiGo* b. Liberty National Bank LEFT: Corpus Christi (Tex.) N at'l publicized its ATM, called Dolphin 24, with this offer of free Burger Chef ham burger to each person w ho used m achine. Bank issued more than 10,000 ham burger coupons in fourw eek cam paign. Bank changed nam e from Corpus Christi State N at'l to present form after cam paign ended. CENTER: Free ice cream cones from Baskin Robbins w ere a v a ila b le to W orthen Bank of Little Rock customers w ho m ade cash w ith d ra w a ls from its ATMs. Bank also offered free Mc Donald's ham burgers to ATM users. RIGHT: ATM customers of Liberty Nat'l, Louisville, w ere treated to free ice cream sundaes at local d airy for using bank's ATM. Hamburgers and ice Cream Cones Promote Automated Tellers HAT DO hamburgers, ice cream cones, hot air balloons and robots have to do with banking? For one thing, they’re being used to publicize banks’ automated teller m a c h in e s (ATMs). The well-known McDonald’s ham burgers and Baskin-Robbins ice cream cones have been playing a big part in Worthen Bank of Little Rock’s ATM marketing program. The bank calls its ATM card “The 24-Hour Money Card.” To encourage greater use of its ATMs, the bank offered a certificate redeem able for a hamburger or cone each time a customer used one of the machines. The McDonald certificates, which were offered until August 31, were redeem able at all the firm’s locations in Little Rock, North Little Rock, Pine Bluff, Jacksonville and Conway, Ark. The Baskin-Robbins certificates, redeemable until September 6, were good for cones at that firm’s locations in Little Rock, North Little Rock, Jacksonville and Hot Springs, Ark. Of course, the news paper ads and TV commercials stressed that those who didn’t already have a Money Card could obtain one simply by going to any Worthen office and asking for it. Worthen’s TV commercials for this program featured an elderly woman, a W By RO SEM ARY M cKELVEY M an ag ing Editor young woman, a small boy and a con struction worker, all enjoying their free Big Macs or ice cream cones. Liberty National, Louisville, also ap pealed to the public’s sweet tooth by offering free ice cream sundaes to ATM customers. The bank’s ATMs issued a coupon good for the sundaes at eight local dairy stores with each cash with drawal made from checking, savings or Master Charge accounts. Choice of sundaes was a wise one for the bank. According to a Liberty National spokesman, on just one week end, about 2,000 of the coupons were redeemed. Banks that make up the St. Louisbased bank HC, First Union Group, are promoting their ATMs, called BANK24, with a hot air balloon. The 75-foot balloon with BANK24 banners encircling it was launched June 3 from Busch Stadium as part of “First Union Night” at a ball game between the St. Louis Cardinals and Philadelphia Phil lies. The balloon was used to dramatize the fact that BANK24 covers the St. Louis area with seven locations. Since its launching in June, the bal MID-CONTINENT BANKER for September, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis loon has appeared at a number of other events to focus attention on BANK24. It’s been used at “Fair St. Louis,” an annual arts and crafts show that at tracts thousands to the city’s Forest Park. The balloon has been used sev eral other times, including an appear ance at the Missouri State Fair in Sedalia. Seven St. Louis-area First Union banks coordinated the promotional ef fort that led up to “First Union Night” at Busch Stadium. The banks are First National, St. Louis; Chesterfield Bank; Florissant Bank; Crystal City State; Citizens Bank, Pacific; First National, St. Peters; and Vandalia State. Six weeks before the ball game, all seven banks began promoting it by offering free reserved seat tickets to customers opening new accounts for a minimum of $200. Thirty-five hundred tickets were given to new customers or sold at reduced prices to customers who added at least $25 to their accounts. First Union also used radio, TV, newspapers and direct mail to publicize the special night and to call attention to BANK24. As a result of all First Union franks in the St. Louis area flying colorful Cardinal pennants and having Cardinal baseball players on hand to meet the public and sign autographs, hundreds M3 This hot a ir baiioon is used by St. Louis-based bank HC, First Union Group, to spotlight member banks' ATMs. Balloon is pictured prior to being launched June 3 from St. Louis' Buschi Stadium a s part of "First Union N ight" at b aseb all gam e. Balloon is used at vario us events around M is souri, including State Fair at Sedaiia. of demonstrations of BANK24 were given. The banks also have been giving small banks in the shape of Cardinal baseball hats to persons who take part in BANK24 demonstrations. First Union banks also promote their BANK24 ATMs with a van that car ries one of the ATMs from one bank to another and also visits civic events across the state. For instance, during the giant July 4th riverfront festival in St. Louis, the van was parked on the levee and was used to demonstrate usage of the Docutel BANK24 to festi val visitors. First National in St. Louis last fall opened its remodeled Convenience Banking Center, which features four countertop computer-linked ATMs and is open to the public around the clock. A bank spokesman said that about 11,000 persons are using the center each month. Free refreshments will be served at the center this month dur ing a special Downtown St. Louis night, which First Union is helping to under write. The streets on which the center faces will be blocked off so that nearby restaurants can set tables and chairs outside and create sidewalk cafes. In addition, there will be a dance band. One of the First Union banks, Peo ples Bank of Branson, used the offer of free McDonald’s hamburgers with cash withdrawals at its BANK24 ATM as part of the grand-opening cere monies for its Peoples Banking Center in downtown Branson. Corpus Christi (Tex.) N a tio n a l sparked interest in its ATM program, called Super Dolphin 24, with a ham burger-premium promotion in 1975. For four weeks beginning in August, the bank dispensed a free Burger Chef Big Chef hamburger coupon in cash envelopes for withdrawals made through ! 14 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the ATMs. A customer could withdraw $100 a day (four envelopes) and obtain four coupons, each one good for a free hamburger. The campaign, says Brent Bike, mar keting officer, was designed to increase the ATMs’ transaction volume, acquire new accounts and draw attention to the bank. Results of the four-week pro gram surprised bank officers, accord ing to Mr. Bike, who added that trans action volume more than doubled, and the bank issued more than 10,000 ham burger coupons in the four weeks. The campaign was promoted pri marily through radio and newspaper media, as well as through point-of-pur chase displays, statement staffers and even a Labor Day airplane banner. To spotlight the automated feature of its ATM, Pan American Bank, Coral Gables, Fla., used an automated hu manoid robot called “Silver Bullet.” The Silver Bullet walks, talks and has op- Pan Am erican Bank, C oral G ables, F)a., dem onstrated how easy its ATM is to use by show ing that even robot can operate it. Robot, called Silver Bullet, is five feet, four inches tall, w eighs 240 pounds, has 480-word v o ca b ulary and can " s p e a k " seven lang uages. erable hands. For initiation of the bank’s ATM, called Panorama Pat (for per sonal automated teller), the robot had been programmed by Quasar Industries for opening-day ceremonies. Silver Bullet was chosen to be Pano rama Pat’s first customer, says A. David Russell III, vice president and man ager of the bank’s Red Road Office, as a way to dramatize the ATM’s operat ing simplicity. “As everyone on hand could see, the automatic banking system is so easy to operate that even a robot can use it,” Mr. Russell points out. Silver Bullet is a five-foot, four-inch robot, weighs 240 pounds, has a 480word vocabulary, can “speak” English, Spanish, German, Russian, Japanese, Chinese and French. The metallic ma chine with long spindly arms and a globular fiberglass head was created by Quasar Industries for various corpora tions’ advertising purposes. Panorama Pat, a Diebold TABS 550 —has two unusual features, according to Diebold, Inc., Canton, O. A special “no” button allows the user who has made a mistake in entering his or her personal identification number to begin again, without loss of card. Also, no cash is dispensed from the unit until the user card is removed, reducing the possibility of the customer’s forgetting the card. Another Diebold TABS unit—this one is a 550—has been spotlighted in a "Who Is Miss X?” campaign by Ex change Bancorp., Tampa, Fla. Tampa Bay residents were asked this question by billboards. In time, Miss X was identified as an attractive and appeal ing feminine clown and as “Miss X— the Sleepless Teller.” As Diebold puts it, “She became the warm and friendly symbol of Exchange Bancorp.’s new 24-hour automatic banking service.” Between the start of the billboard campaign in metropolitan Tampa and official introduction to the public, all demand-deposit customers of the bank were introduced to Miss X through a series of direct mailings. These ex plained that Miss X was the bank’s “sleepless teller” who soon would be available to serve customers at any hour of any day. One of the mailings included an application for a Miss X card with which ATMs can be acti vated. When the service was unveiled, Miss X was on hand, offering demonstrations of the new service at Exchange Ban corp. ’s two locations in greater Tampa. Since then, Exchange has found cus tomer acceptance of the Miss X symbol on a steadily rising curve. For example, last October, the Temple Terrace ATM installation recorded 7,700 transactions; by the end of the year, this number had risen to 10,500. The same installa tion recorded more than 14,000 in MID-CONTINENT BANKER for September. 1976 W e w ant the best for you. □ One way to make it happen is with our person-to-person correspondent banking service...administered by bankers who believe in practicing good service, as well as talking about it. We call that quick Louisville Trust Bank response. It’s also efficient, as rapid as possible, regardless of the current difficulties. □ At Louisville Trust Bank, our correspondent banking team is backed up by the cooperation of every other full service specialist in our bank. □ Yes, you can find everything you’re looking for in one convenient correspondent arrangement. Don’t worry about lost time when you work with our banking team, headed up by Frank Nichols and Jim Burkholder. □ To make your business grow, Louisville Trust Bank offers you the best of experience, sensitive service, and understanding.. .the type of service you need. □ If you’re too busy to call on us, give us a phone call and we’ll stop in to see you. We’d like to bring the best of Louisville Trust Bank to your bank. To start the ball rolling, call 502/589-5440 and ask for Frank or Jim in our Correspondent Banking Department. Lo u isville Tru st Bank O n e R iv e rfro n t P laza • L o u is v ille , K e n tu ck y 4 0 2 0 2 • 5 0 2 /5 8 9 -5 4 4 0 M e m b e r F e d e ra l R e s e rv e S ys te m . F e d era l D ep o s it In su ra n c e C orporation MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I 15 WRITTEN LOAN POLICY E very B a n k H ave S h o u ld O n e! LEFT: Curiosity gets the best of pedestrians in O klahom a City's Downtown Metro Concourse be low Liberty Nat'l a s they accept the invitation to "G u e ss W hat This Space Is for." It w as the future site of the ChecO K ard Money Center, the city's only on-line electronic banking facility, and guesses varied from those who thought it would be a closet, to one person who guessed it would be the d o o rw ay of a sm all restaurant for sm all people. RIGHT: Once com pleted, the banking center im m ediately sa w use by customers. C hecO K ard Banking Center Number One is on-line to Nat'l Sh ared ata Corp. computer facilities and w a s unveiled during the 1976 OBA convention. Liberty Nat'l dem onstrated the center by issuing C hecO K ards and $5 accounts to C EO s of its correspondent banks, and most "tried it and liked it." The Bank Board And Loan Policy Provides the Information May, 1976. As Diebold points out, what’s especially interesting is the fact that while the ratio of withdrawals to deposits has been 2/2-to-one, the ratio of deposits to withdrawals in terms of dollars has been three-to-one. Now Exchange is offering Miss X ’s services at four of its affiliated banks and finds the usage pattern, on a weighted population basis, comparable to that established at Temple Terrace. “On a long-term basis,” says A. Fred erick Pitzner, president, Exchange Op erating Service Corp., “we foresee ac celerating growth of E FT S, and build ing a broad plastic card usage base will be instrumental in expanding our E F T S involvement.” * * Needed to Formulate a Written Loan Policy or Update an Existing One! A must for banks, this 36-page m anual tells w hy all banks should h ave written loan policies and how they can form u late or update such policies to serve a s guides for lending officers and to help protect the bank from m aking costly commitments. The m anual presents the loan policies of four w ell-m anaged banks and con tains a rating form ula for secured and unsecured loans, conditional sale s con tracts, all m ortgages, governm ent and m unicipal bonds and governm ent agency securities. NOW Y O U MAY NEVER HAVE TO BUY T-BILLS AGAIN . . . TRUST FOR SHORT-TERM U.S. GOVERNMENT SECURITIES C o m p a n io n t o M o n e y M a r k e t M a n a g e m e n t , In c. * * Provides the yields of various government issues with different maturity dates. * No minimum holding period. Topics spotlighted include: • Conditional Sales Contracts • All Mortgages • * Stability of principal — constant net asset value $1. * Portfolio priced at amortized cost. Loans for Education Also included are sections on who should have lending authority, lending procedures, loan limits, credit depart ment responsibilities and loan examiner responsibilities. Can your bank afford to this manual? Invested exclusively in U.S. Government Securities maturing in one year or less. * Provides first day's interest: dividends 365 days a year. * Telephone transfer of monies. * No charges to buy. No charges to sell. M inim um investm ent: $100,000— 90 day accum ulation period. Current assets exceed $75,000,000. be without (M issouri banks add Price: $4.25 4'/2% tax) ORDER TO D A Y! (Sorry, no billed orders) For more complete information on TRU ST FOR SHORT-TERM U.S. GOVERNMENT S E C U R IT IE S management fees and expenses, call our Bank Service Desk. Ask for our literature and prospectus. Be sure to read before you invest. Call toll free: 800-245-2423. F E D E R A T E D S E C U R IT IE S C O R P . The BANK BOARD Letter 408 O live St., Suite 505 St. Louis, M O 63102 116 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Distributor Dept. ST-4 421 Seventh Avenue, Pittsburgh, PA 15219 J MID-CONTINENT BANKER for September, 1976 How our bank can help your bank grow with your farm ers and ranchers. The world’s appetite for food and fiber is getting bigger all the time. So today’s demands for agricultural financing may be more than you can handle with available funds. First National. Bank in St. Louis is ready to help you and your customers. With funds for operating and production loans, machinery and equipment loans. With leasing plans and exporting assistance. Even investment and estate planning to help them conserve their assets. You’ll find us easy to work with, and we’re staffed to respond quickly. Our Agricultural Department is headed by Neil Bergenthal, Vice-President, who has 20 years of farm credit experience in agribusiness and the U.S. Farm Credit Administration. Call Neil at (314) 342-6695. And send for our new brochure, “The Changed Nature of Agricultural Financing.” And grow with your farmers and ranchers. F i r s t N a t io n a l B a n k in S t . L o u i s W f c Member FDIC Hi I HI 510 Locust, St. Louis, Mo. 63101 MID-CONTINENT BANKER for September, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ! 17 firmly believe that Regulation Q must go—eventually. In this regard the only stipulation l would make is that S&Ls must be given the kinds of authorities that will allow them to become fully competitive but when that happens and S&Ls have had some time to implement their new authorities the differential should be eliminated , , , , S&Ls Are Not Banks Real Competition its fin an cia l Service and Consumer Finance Firm s As Well as Supermarkets and Department Stores T H ERE IS an emerging consensus in this country that we have too many regulations. We are beginning to realize that regulations— despite all the good intentions—have impeded prog ress, held back competition and pre vented our free markets from working. In banking, and in the S&L business, for example, there are innumerable reg ulations. Some regulations were well conceived and serve a useful purpose. Others, however, are meaningless and burdensome and force financial insti tutions to look for weaknesses and loop holes, which beget still more regula tions. In the area of bank holding com panies, for example, innovative and en terprising banks have been ingenious in finding ways of getting around the regulations, and if Congress and the regulatory authorities had taken the appropriate point of view in the first place, these things would not have hap pened. Accordingly, as a self-styled re former and free market economist, I believe we should make a concerted effort to de-regulate and redirect banks and S&Ls to get them back on the right track. In the area of financial reform, the impetus to make some crucial adjust ments to our financial system arose out of the first credit crunch in 1966. Think about that. It has been more than 10 years since the need for financial re form first became a matter of national ‘ urgency.” The Hunt Commission was formed in 1969, and since then we have had three more crunches—in 1969-70, 1973 and 1974. Each time we have a tight-money period and The speech on which this feature is based was given by Mr. Mann at the 1976 convention of the Association for Modern Banking in Illinois. 118 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By MAURICE MANN President Federal Home Loan Bank San Francisco soaring interest rates drive deposits out of banks and S&Ls (particularly the latter), the hue and cry for financial reform get louder. But then the situa tion eases, money and credit become plentiful again, and complacency and apathy set in. This has been the pat tern in the past, and it certainly char acterizes what has happened to finan cial reform efforts in the current en vironment. But the problems have not actually gone away; they merely ap pear to be gone because the symptoms have disappeared for awhile. Undoubt edly, however, the symptoms will rise again when another money crunch comes along. In short, because of a reluctance to change, massive lobbying efforts have been mounted. As a result, it appears unlikely that any significant financial reform measure will be passed by Con gress this year. There are two things wrong with this, one of which I have already mentioned— that it will take an other credit crunch to get financial re form moving again. An even more im portant danger, however, is that we will piecemeal our way into financial reform, with the result that basic in equities and unfair competitive ad vantages will be fostered, both institu tionally and geographically. For ex ample, New England states already have the right to issue NOW accounts, and Illinois also has been granted that authority. New York is fighting for NOW account privileges, and the Cali fornia legislature could at any time authorize such accounts. But federal law has not caught up, and so it’s likely that NOW account privileges will be granted on a piecemeal basis all over the country, with the individual states taking the leadership role. Another example is the variable-rate mortgage. In California, six major S&Ls are using the VRM, and using it successfully. Two of the larger banks also are experimenting with the VRM, and yet federal S&Ls in California—or anywhere else— are not permitted to make variable-rate loans. There is some thing incongruous and unfair about this situation, and I think it is about time we recognized it. How much better it would be if we could look at the whole package and rewrite the laws and regu lations and practices so that no institu tion or geographical area has an unfair competitive edge. What constantly amazes me, how ever, is how many things reasonable people in the financial community do agree about. For instance, nearly every one in the business agrees that it is foolish to make long-term, fixed-rate, fixed-term loans. Banks learned this some time ago, and they began tying business term loans to the prime rate. S&Ls also have discovered that they cannot compete when they are locked into 7%, 30-year mortgages while in terest rates rise to 8%, 9%, 10%, or even 11%. Almost everyone agrees also that vari ability is needed on both sides of the financial balance sheet. Banks have learned this; insurance companies have learned it, and S&Ls are beginning to understand it. Obviously, there is noth ing wrong with variability, because if you play the game of spread manage ment, this is how you stay in business. You pay up or pay dow n on the liability side, and you charge up or charge dow n on the asset side. This is exactly what a manufacturer of nuts and bolts does in MID-CONTINENT BANKER for September, 1976 All for one and one for all. All three of these men head the Correspondent Bank Depart ment for one bank, Memphis Bank & Trust. As a team, they’ve given us management depth and ability in correspondent banking that’s simply unbeatable. They’re a crack unit. Any one of the three can give you all the correspondent services you need, with better than 80 years of combined experience and a full staff behind them. To name a few: Transit Operations, Credit Assistance, Investments, Bond Portfolio Analysis, Safekeeping, Trust Services, Data Process ing, Business Referrals . . . in short, the whole ball of wax. They’ll even throw in some extras like expert insurance capability, guidance in the construc tion and design of bank facilities, furniture, decor . . . even supplies. Service fit for royalty. Lynn Hobson, Vice President Gus Morris, Vice President Jim Newman, Vice President Call toll-free and they’ll rush to your rescue. In Tennessee, 1-800-582-6277. In other states, 1-800-238-7477. TH ETH REE M B&T EER S Memphis Bank & Trust Correspondent Department MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I 19 his business; he goes up and down with the market. There is no reason why a well-managed financial in s t it u t io n — whether it is a bank, an S&L, an insur ance company or a credit union— should not operate the same way. Or stating it in a positive vein, there is every reason why financial institutions should play the spread management game—if they are able to play it well and fairly. The third area in which nearly every one is in agreement is with respect to the need for greater earnings and per manent capital by financial institutions, particularly deposit-type institutions. This need has become increasingly evi PROMPT, PERSONAL CORRESPONDENT BANKING SERVICES For knowledgeable, personal ized attention to correspondent banking problems . . . you o u g h t to k n o w a k DETROIT B A N K -e r D E T R O IT B A N K & TR U ST Member FDIC' d z l i II m J 7 [• j ( Credit Guarantee Insurance on all forms of lending. • MOBILE HOMES •BOATS • LAND CONTRACTS • MODULAR HOUSING «LEASES • VACATION HOMES For additional information, write or call: Payment Plans Diversified Credit Service Inc. 4524 Bailey Ave. • Buffalo, New York 14226 Telephone: 1 -7 1 6 -8 3 4 -7 6 0 0 120 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis dent in the past year or so as deposit institutions have overextended them selves, and the question of capital ade quacy—for both banks and S&Ls—is a matter of crucial importance to the fu ture health and viability of those insti tutions, particularly to the extent that financial institutions take on broad new powers and assume new risks. Almost everyone in the financial com munity believes there should be fair ness or equality in the tax laws. Frank ly, we have played games with the tax laws too long, what with bad-debt re serves, loan-loss reserves, investment tax credits, municipal securities, for eign tax credits, etc. We sh o u ld straighten out and simplify the tax laws, make tax benefits explicit and let everyone in the same type of business pay the same taxes. Bankers and their trade associations provide numbers in dicating that banks pay more taxes than S&Ls, and S&Ls produce equally con vincing numbers that show they pay more taxes than banks. Whatever the situation, and 1 am not going to argue who pays what, I think there ought to be equality, and I think we should stop kidding ourselves about it. Finally, I think there is agreement in the financial community— although to varying degrees—that it is inap propriate for any financial institution dealing in the same product in the same market at the same time to have an unfair competitive advantage. So it may come as a surprise to bankers to hear an S&L regulator say it, but I firmly believe that Regulation Q must go—eventually. In this regard, the only stipulation I would make is that S&Ls must be given the kinds of authorities that will allow them to become fully competitive, but when that happens, and S&Ls have had some time to im plement their new authorities, the dif ferential should be eliminated. As it is now, the differential provides a com petitive advantage for S&Ls, it is true. But it is reasonable so long as S&Ls do not have the same powers and com petitive abilities of the commercial banks. My reason for reciting these areas of agreement is to make the point that commercial banks and the thrift in dustry have a commonality of interest and purpose. If bankers consider the situation carefully, it becomes apparent that the natural division is not between thrift institutions and c o m m e rc ia l banks, but rather between deposit-type financial institutions and their non deposit competitors. Let me point out some characteristics of our mutual non deposit competitors to support my con tention that thrift institutions and com mercial banks should view themselves to a certain extent as allies. • Look at financial service compa nies. Such companies are in almost the MID-CONTINENT BANKER for September, 1 976 "your customers often appreciate our discipline as much as our money "Talcott can help you and your customers solve special financial problems ... with Talcott dis cipline. That's our specialty. That's why you can have confidence in us. Talcott can provide more money — with the right kind of consistent discipline — than you might care to provide for a customer's •/ specific constructive need'.' "Working with an old, trusted name like Talcott gives you the opportunity to maintain your relationship with your customers, letting Talcott handle the close loan administration required in secured financing. Talcott's experienced professionals handle the detail work for you. Because following up details is our business" "We can give your customer specialized help converting their accounts receivable and inventory into cash. We make your customer's assets work better for them. And your customer will receive Talcott s watchful and helpful discipline—perhaps the type of discipline you don't care to administer. Through our proven expertise, we know just what to do —at the right tim e—for the best results. "We call it Talcott discipline. It's a way of life with us’.' https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Russell Donahue President James Talcott Business Finance Call (312)654-3850 TALCOTT James Talcott, Inc. 1200 Harger Road Oak Brook, Illinois 60521 nnnrnnn î§) n FO R TH E R IG H T M AN r r o t z & r iff rvrr f .C '.O R TH E R IG H T )O B PP ( îf ...e x e c u tiv e personnel for banking, fin ance and related fields contact TO M C H EN O W ETH , | ! | | manager F f in a n c ia l ^ PLA C EM EN TS? ^912 Baltimore, Kansas City, Mo. phone 816 421-7941 122 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis same business as commercial banks. * Look at consumer finance com panies. T hey are in the same business. • Look at department stores and supermarkets. Like the others, they are doing the same things that banks and S&Ls are trying to do— they are com peting for the consumer’s dollar. Hypothesize for a moment about a well-known department store chain. Directly or indirectly, this firm is re lated to a bank in Chicago, and to a large S&L in California. What if this chain decides to put point-of-sale terminals or RSUs or some type of un manned tellers in all of its stores in California, or across the country, and then decides to pay interest on custom ers’ credit balances? It could be done, and if it were, would its customers really need a commercial bank or a savings and loan? I am not sure. Just think about it. I am exaggerating slightly to make a point, of course, but it is nonetheless true that supermarkets, department stores, consumer finance companies and financial service companies are all in the same contest that we are in—the contest to capture the consumer dollar in a reasonably well-defined arena. Al though these nondeposit competitors have a great deal in common with banks and S&Ls, they have one thing going for them the rest of us do not have: T hey are not regulated. But banks and S&Ls certainly are regulated. It is for just this reason that I do not understand why banks and S&Ls fail to look on each other as allies against a common competitor. At least we are competing on the same field and more or less under the same ground rules. Instead of banks complaining about S&Ls trying to get into the bankingbusiness (while, I might add, they are doing their best to get themselves into the investment business), they should recognize that they have more to gain by giving up fighting about being “king of the mountain” and work in conjunction with the thrift industry to improve the business we are in together —providing financial services for the consumer. There are signs of cooperation and progress among deposit-type institu tions, however, and perhaps the best example is in Illinois. Continental Illi nois National of Chicago is operating one of the most expansive and sophisti cated E FT S projects in the country, and it is doing so with the cooperation of other commercial banks, S&Ls, and the Federal Home Loan Bank of Chi cago. Continental offers a check-cash ing or authorization service through terminals located in about 200 grocery stores, not only for its own customers, but for customers of its correspondent banks and customers of the F H L B ’s on line member S&Ls as well. When the F HLB is linked to Continental’s switch system, Illinois savings and loan cus tomers will be able to make savings deposits and withdrawals, in addition to cashing checks, at Continental’s POS terminals. Such cooperation between banks and the thrift industry should re sult not only in improved consumer fi nancial services, but in increased busi ness for all participants. To return to my main point, S&Ls are not going to be viable, healthy and fully competitive institutions unless they are granted the additional lending and investment powers required to broaden their asset portfolios. They will not be healthy unless they are given authority to do consumer lending; they will not be viable and competitive unless they can participate in third-party payments systems and broaden their liability powers. In this regard, it may not be terribly important as to what kind of liability powers S&Ls get. Personally, I do not believe that S&Ls need checking accounts. From the consumer’s point of view, NOW accounts are a superior alternative to checking accounts anyway. If you look realistically at a savings passbook, you will recognize that it is just a NOW ac count, albeit not as conveniently ac cessible and not under the NOW ac count banner. And if you look realisti cally at the telephone transfers the banks want to do, you will recognize them as checking accounts with in terest. All one needs to do is to call a bank and request that funds be moved from a savings account to a checking account—interest-paying checking ac counts in disguise. What is an over draft account? The customer overdrafts his checking account, and the bank makes him a loan and charges interest on the overdraft. We persist in arguing about which institutions should be able to pay interest on checking accounts and which institutions should be able to issue NOW accounts. As I see it, almost everybody wants what the S&Ls are asking for— namely, MID-EONTINENT BANKER for September, 1976 Republie National Bank, fo r all your correspondent needs. Cal (214) 653-660Z Republic National Bank of Dallas A R epublic of Texas C om pany M ID -C O N T IN E N T B A N K E R f o r S ep tem b er, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 123 third-party payments, unsecured con sumer lending authority, liberalized in vestment authority and some alternative forms of the mortgage. As long as we generally are agreed on that, why can we not agree on the variable-rate mort gage or on the Canadian plan, which allows mortgages to be rewritten every five years? Why can we not go to de clining equity mortgages; when a per son gets to be 65 years old and has $40,000 or $100,000 equity in his house, why should he not be able to get an annuity from it? All kinds of in novations could be experimented with to build some flexibility, not only into mortgage instruments, but into other types of financial services as well. We refuse to use our imaginations with re gard to financial institutions, and we are making serious mistakes because of it. For one thing, we have managed to price new housing, in particular, far out of reach of the average American, and we have not adjusted fully on the other side to make it possible for most Americans to afford home ownership. To correct this and other serious problems in this country’s financial framework and for S&Ls to survive, the thrift industry must have the ability to compete for the entire consumer dol lar, just like everybody else. And like everybody else, S&Ls want the con sumer dollar both longitudinally (that is, from the cradle to the grave) and latitudinally (in terms of expansion on both sides of the balance sheet). If S&Ls are granted that capability, they will be in a position to benefit the consumer and to contribute more com petitively and with greater stability to the nation’s economic output. As a re sult, there would be a significantly greater efficiency in the financial sys tem, and we would be able to avoid the kinds of financial disruptions that we have had so frequently in the past 10 years. * # ABA Spokeswomen (Continued from p ag e 49) make about the project: Let our billion dollar organization help your bank profit. Call Allen (2 0 5 /3 2 8 -0 3 0 0 ), a member of our correspondent banking team. First Alabama Bancshares, Inc. Chuck Affiliate Banks First Alabama Bank of Montgomery, N.A. First Alabama Bank of Birmingham First Alabama Bank of Huntsville, N.A. First Alabama Bank of Tuscaloosa, N.A. First Alabama Bank of Dothan First Alabama Bank of Selma, N.A. First Alabama Bank of Gadsden, N.A. First Alabama Bank of Athens, N.A. First Alabama Bank of Baldwin County, N.A. First Alabama Bank of Guntersville First Alabama Bank of Hartselle First Alabama Bank of Phenix City, N.A. First Alabama Bank of Mobile County https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • While male bankers are just as capable of delivering the message, mar ket research shows that women have a far greater acceptability than men with the media outlets the association is try ing to penetrate. • Issue orientation as part of the training program is essential. The ABA consumer advisers were not ignorant of the issues, but weren’t familiar with re sponding to them in interviews. They also learned that answering “I don’t know” is not a mortal sin. • A continual flow of current infor mation from the ABA to the consumer advisers is necessary. This is accom plished by putting these women’s names on mailing lists for ABA news letters, press releases and daily news summaries. • Videotape recording and playback of mock interviews and news confer ences are extremely helpful because most of the consumer advisers haven’t had an opportunity to see themselves on TV. Tips on dressing and manner isms were included. * * R'stAlabama 124 • ABA sponsorship bestows credibil ity on these consumer advisers. ■ ST. JOSEPH BANK, South Bend, Ind., received the George Washington Honor Medal from the Freedoms Foun dation, Valley Forge, during South Bend’s bicentennial celebration. The award was made in recognition of the bank’s “Declaration of Independence” program, wherein citizens signed a copy of the document and received a minia ture copy of the declaration. ■ CHARLES J. KANE, president and chairman, Third National, Nashville, has been appointed to a fourth term as a member of the Banking, Monetary & Fiscal Affairs Committee of the Cham ber of Commerce of the U. S. MID-CONTINENT BANKER for September, 1976 A s a skipper, Ish Smith occasionally confuses "p ort" with "starboard" But as a Correspondent Banker, he's right on course. A l m o s t a n y n ic e w e e k e n d w ill fin d Ish S m i t h o n t h e b o u n d in g m a i n , is s u in g n a u t i c a l c o m m a n d s lik e “ T w o - b l o c k th e c a p s ta n ! A f t r u d d e r !” B ut. M o n d a y t h r o u g h F r i d a y h e ’s a p r o f e s s i o n a l c o r r e s p o n d e n t b a n k e r w ith b o t h f e e t f i r m ly o n t h e g r o u n d . Ish w o r k s w i th o u r c u s t o m e r s in t h e E a s t T e n n e s s e e a r e a , a n d u s e s h is 1 7 y e a r s o f c o r r e s p o n d e n t b a n k in g e x p e r i e n c e t o s e rv e t h e m w e ll. W h a te v e r y o u r c o r r e s p o n d e n t b a n k in g n e e d o r p r o b l e m , c a ll Is h S m it h o r a n o t h e r o f o u r c o r r e s p o n d e n t b a n k in g p ro fe ssio n a ls. O u r T e n n e sse e W A T S lin e is 1 - 8 0 0 - 3 4 2 - 8 3 6 0 . In n e ig h b o r in g s t a t e s , d ia l 1 - 8 0 0 - 2 5 1 - 8 5 1 6 . W e ’r e h e r e t o s e r v e y o u . TH IRD NATIONAL BANK IN NASHVILLE MID-CONTINENT BANKER for September, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M em ber F .D .I .C . 125 Discriminatory Standards Are Examined in Seminar On Consumer Legislation NASH\ IL L E — Lenders in attend ance at a consumer legislation seminar hosted by First American National’s correspondent and Guaranty Mortgage Co. divisions were urged to reeducate themselves and neutralize conscious or subconscious discriminatory standards they had been using, especially toward single or female credit applicants. A guest speaker, Ron Cline, director of sales and development, PMI Mort gage Insurance Corp. of San Francisco, Brokers in Financial Market Instruments NATIONAL MONEY MARKET IN Federal Funds Brokers Call Loans Eurocurrency Deposits Repurchase Agreements Term Federal Funds Bonds Borrowed and Loaned Domestic and Euro C D ’s George Palumbo & Company, Inc. Established 1963 GU UR 26 BROADWAY. NEW YORK, N. Y. J0004 Cable: PALUMAC Tel: 2I2 269 3456 told the group of 150 lenders from Ten nessee and Kentucky that severe com pensatory and punitive penalties may be the result of noncompliance with the Equal Credit Opportunity Act (ECOA). "ECOA has far-reaching effects on lenders, ’ Mr. Cline said. “This legis lation regulates all types of credit ex tensions and specifies the type of in formation lenders can require. Basically, the law prohibits lenders from discrim inating because of gender or marital status. “Implementation of ECOA began in October, 1975, and will be complete in March, 1977,” he continued. “Appli cants aren’t required to disclose receipt of alimony, child support or mainte nance payments and if a lender turns down a credit application, he must give written notice of the reason for the denial. For a secured loan request, the lender may inquire about marital status only—whether the applicant is married, unmarried or separated. “Use of titles in names is strictly vol untary with a loan applicant,” Mr. Cline said, “and by this November, re ports to credit reporting agencies on accounts held or used by both spouses must be made in the name of each in dividual. By February 1, 1977, creditors must notify holders of existing accounts of their rights to have credit histories reported individually.” Mr. Cline also said that many lend ers have been changing their credit ap plication forms to ensure that they ask for information that is legally accept able under ECOA. On hand to discuss RESPA— the Real Estate Settlement Procedures Act—was Percy Wilkins, a local real estate at torney. He explained what the lender must do for the applicant of a first mortgage residential loan: • Let the applicant know what costs to anticipate. • Explain what a mortgage loan is. • Give HUD’s booklet on RESPA to the applicant no later than three busi ness days following the application. Since the booklet contains general in formation, the lender must mail more detailed information, including costs Discussing consum er legislation during sem inar hosted by First Am erican N at'l, N ashville, are (from I.) Tommy Joe Fridy, Sebree (Ky.) De posit Bank; Carson Johnson, Law rence County Bank, Law renceburg, Tenn.; Ron Cline, dir. of sales and developm ent, PMI M ortgage Insur ance Corp., San Francisco; Evelyn W ilds, mgr., G u ara n ty M ortgage Co., Kingsport (Tenn.) O f fice, a bank sub sidiary; and Jim Reagle, v.p. of residential operations for G u ara n ty Mort gage, N ashville. incurred when the loan application is made, at a later date. • Allow the applicant to inspect business charges one business day be fore closing the loan. • When the loan is closed, it must be done on a standard form that dis closes all costs of the transaction. The form must be furnished to the buyer and seller. “In addition,” Mr. Wilkins said, “the law prohibits anyone involved with the loan from receiving compensation or anything of value in connection with the loan except for services performed.” Constitutional Convention Approved in Tennessee; Usury Law to Be Discussed NASHVILLE—Tennessee bankers’ efforts paid off last month, when the state’s voters approved a call for a limited state constitutional convention that will deal with Tennessee’s 10% usury law. Convention delegates will be selected November 2 from each of the state’s 99 districts in the House of Represent atives. The convention will begin hold ing meetings August 1, 1977, and must FARMERS GRAIN & LI HEDGING CORP. LOOKING FOR IM MEDIA TE ACCURA TE INFORMA TION TO DEAL WITH TODAY'S WILDLY FLUCTUATING GRAIN & LIVESTOCK MARKET ? OUR ONLY BUSINESS W R IT E O R C A L L IS ADVICE F G L * 120035th St. West Des M oines. Iowa 50265 515 223-2200 126 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CON TINENI BANKER for September, 1976 "Thanks to First Security, we got in the Bank Am ericard business without getting in the credit card business? A lp h a t i H u t c h i n s o n , President Citizens Bank of Morehead, Kentucky “Prior to 1969, there was no national charge card available through a Morehead bank. We had long considered introducing a card, but becoming a BankAmericard center required an investment in people and money we simply couldn’t justify. “First Security proposed an extremely attractive alternative. We would offer the First Security BankAmericard through our bank, but they would handle processing of applications, billing, delinquencies —all the headaches. “In August of 1969, we sent a few people to First Security for a day of training, began contacting local merchants about participating, and started promoting the card to our customers. The program was enormously successful. Today, between 30% and 40% of our customers have our BankAmericard. 1 he customers are happy. The merchants are happy. And we not only have another source of income, but we have a service that attracts new customers. “The BankAmericard program is typical of our correspondent relationship with First Security. We like doing business with them. They’re professional, they’re cooperative, they understand our business. And they’re accessible-they’re here regularly in person, and we use their toll-free number a good deal to get information or solve problems. “I’d have to say First Security has made a real contribution to the growth and success of Citizens Bank. I expect to be working with them for years to come.” To learn more about BankAmericard and other First Security services, call Sam Adams, Vice President, Correspondent Services, toll-free: Citizens is a thriving, $14 million bank in a highly competitive two-bank market. Mr. Hutchinson feels that the bank’s strong growth record may be attributed, in part, to its initiative in bringing new services to Morehead. Example: the First Security BankAmericard. (8 0 0 ) 4 3 2 -9 3 8 0 . First Security NATIONAL BANK & T R U ST COMPANY Member F.D.I.C, Lexington, Kentucky Big enough to bend a little MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 127 finish its work by the following July. Only the possible changes in the con stitution included in the call— the pos sibility of lifting the 10% interest-rate ceiling and a dozen other issues of less interest—may be considered at the con vention. All changes, including the usury law, will be voted on, item by item, and will have to be approved by a majority vote in the November, 1978, general election. Last month’s voter approval of the constitutional convention climaxed a three-month campaign by the state’s bankers to win this victory. Governor Ray Blanton, a Democrat, was against the convention proposal, saying the call was too narrow. He asked for a broader call next year, one that would include a discussion of a state income tax. The present state constitution forbids such a tax. Approval of the limited call de lays possible consideration of a state income tax until 1983. Illinois-M issouri BMA, Mo. BA To Hold Sem inar in St. Louis ST. LOUIS—The Illinois-Missouri Bank Marketing Association and the Missouri Bankers Association have an nounced joint sponsorship of a market ing seminar, to be held September 30 at the St. Louis Marriott Hotel. Highlights of the seminar are gen Exclusively Municipal Bonds Specializing in eral sessions on “Marketing Planning . . . That Gets Things Done,” “Radio Ad vertising . . . in the Age of Television” and the “Best of Bank Television Com mercials, 1975 (U. S. A.).” Workshops scheduled for the morn ing of the marketing seminar are “Trust Marketing,” “E F T S Update,” “Market ing Your Installment Loans,” “IRA and Keogh” and “Segmenting Your Market place.” Afternoon workshops will be “Direct Mail Marketing,” “Premiums 1976,” “Free Checking— What’s Happening,” “Market Research” and “NOW Ac counts and Other Dirty Words.” $1,000 Reward Is Given For Solution to Robbery KANSAS CITY—A reward of $1,000 has been given out through the Greater Kansas City Clearing House Associa tion’s Operation BREAKER for infor mation that led to the solution of the May 24 robbery of Central Bank. The reward was the first to be given since Operation BREAKER began in January, 1976. The information re ceived through the BREAKER phone from a citizen led to the arrest and in dictment of Donald Steven Scott. Scott reportedly was subsequently convicted of the crime. Operation BREAKER, an acronym for Bankers Reward to Expedite Action against Kidnapping, Extortion and Rob bery, was developed through the clear ing house with the cooperation of met ropolitan Kansas City banks. Telecom m unications W orkshop A LL G EN ER A L M ARKET BONDS Your "Correspondent” for Municipal Bonds Investment Bankers • Municipal Bonds ONE TWENTY SEVEN WEST TENTH KANSAS CITY, MISSOURI 64105 (816) 221-4311 128 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis WASHINGTON, D. C.— The ABA will sponsor banking’s first Tele communications Workshop February 13-16 at Atlanta’s Omni Hotel. In announcing the workshop, ABA Telecommunications Task Force chairman Charles W. Donaldson, vice president, Manufacturers Han over, New York City, cited these statistics from a recent survey: • Banking spends about $550 million annually on telecommunica tions. • Telephone and data communi cations cost banks 15% more in 1975 than in 1974. • Fifty-four percent of all banks are centrally planning for telecom munications needs, and more than 36% of all banks expressed a need for more industry-related informa tion. The workshop is a response to this last point. Mr. Donaldson has sent letters to telecommunications pro fessionals in banks asking them to supply the five most important topics each would like to have discussed at the workshop. A program will be developed from these replies. MID-CONTINENT BANKER for September, 1976 Murphy Brock (at left}, Vice President and Jim McKenzie (at right}, Asst. Cashier of Liberty Bank, correspond per sonally with Bobby M. Jenkins (center], Vice President and Cashier of the National Bank of Middlesboro, at the bank's main office. MiD-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis L ib e r ty N a tio n a l B a n k and Trust Company of Louisville 129 If Your Bank Is Still Getting Ripped O f f / Your Bank Is in Need of Better Security! By CARL L. CARTER Second Vice President N ational Bank of Detroit HP HE RE is enough evidence for anyJ- one to conclude that, while as an industry, banking may have done a great deal to upgrade its security, it has not done enough. The only thing that is growing faster than crime pre vention is crime. The F B I reported a 50% increase in the bank robbery rate last year and a substantial rise in other crimes against banks, including burglaries, bombing, extortion-kidnappings, etc. Those who don’t have a problem are lucky, if it’s just that they or their geographical area have not yet been targeted for an un relenting attack. If they have been subjected to such an attack and have turned things around, it’s more than luck. They have to be doing something right! On close examination, you would find, that they have an innovative se curity force which has management support, that they are utilizing modern and effective security procedures, methods and measures and that they have security equipment that meets their needs. It’s too bad that this is not generally the case! What we are currently doing at Na tional Bank of Detroit may or may not be what is called for in your own situa tion. Even what I see as being a good general approach may not be right for your bank. You must decide for your self what is the best approach for your situation. Further, one cursory look at your situation is not enough. I recommend that a risk analysis be made by a com petent security specialist. Because things change, you shouldn’t do this once and forget it. The security and crime prevention survey should be re peated on a scheduled basis. What is called for is the anticipation, recogni tion and appraisal of a crime risk (or opportunity) and the initiation of ac tion to remove or reduce it. This article is b ased on a talk by Mr. Carter at the 27th South ern Regional Convention o f BAI in O klahom a City recently. 130 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The place to start is outside the bank. Your building should look for midable and secure. You should exam ine all concept drawings, plans and specifications for new construction and/or alterations. Ask yourself: Will this become a target for robbers, burglars or thieves? Can unauthorized entry be adequately discouraged? Is this the place to build or stay when both market and security considera tions are carefully weighed? Recommend that the number of ex terior accessible openings in the build ing walls and roof through which an intruder might readily gain unautho rized entry be held to a minimum con sistent with safety and operational and esthetic requirements. Suggest that these be properly secured on at least all off hours. Doors and accessible win dows should be secured with tamperresistant locks. I favor one-inch-throw dead-bolt locks on exterior doors and key locks on windows that can be opened. Door hinge pins should be in side or they should be spot welded or secured with a hardened pin that can " B u lle t-re sista n t m a te ria ls a re isfy someone’s ego. One of the most crucial things you can do is maintain adequate records of where all locks are used and who has keys that will allow entry to the exterior or interior areas that have been secured. It’s easy to start with adequate ac cess controls and then let them fall into disrepair for lack of follow up and proper record-keeping. This is especial ly true with respect to lock-and-key as signments, and it can be true in other respects if alterations take place that you are not cognizant of or do not ex amine with a critical eye. Protective lighting is something that we frequently fail to concern ourselves with. Robbers, burglars and thieves prefer to work under cover of darkness. The Bank Protection Act states only that a cash vault or safe door should be bathed in light if it can be seen from outside the building. In my view, the nighttime level of light should be checked outside in alleys, near en trances, in parking lots and in the area of night depositories and cash dis pensers. Do employees and customers feel uneasy about going to their cars, espe cially at the time of year when it gets dark early? Are light sensors or timers utilized to make sure someone doesn’t forget to turn on needed lights? Are exterior lights mounted high on the building or on poles so that you get maximum efficiency and so that bulbs cannot be unscrewed? th e w ay telle r a n d / o r m a n a g e m e n t e n c lo su re s. T h e y to go w ith p ro v id e an respect to e x cellen t first lin e o f d e f e n s e a g a i n s t t h e b a n k r o b b e r , a r m e d o r u n a r m e d . " be removed only from the inside. Door panels and windows can be smashed easily if burglary resistant ma terials are not used. I recommend Vie" laminated burglary-resistant glass in all accessible exterior doors and windows. Attic ventilators, elevator houses and stairwells on the roof offer easy access into the building unless these, too, are properly secured. Side, rear and roof openings are highly subject to attack, because they are secluded from public view. Locks and other access-control de vices are intended to enable yon to de ter or at least delay and hopefully de tect unauthorized entry. On each build ing opening requiring a lock, you must have a locking device that cannot be compromised easily. Further, you must issue keys on a need basis only. It is easy to fall into the trap of passing out keys for convenience sake or to sat You should also study what is avail able at what price so you can recom mend the best possible lighting for your needs. Night lighting inside the building and out is helpful in silhouet ting the intruder. It is a powerful de terrent that must be used to be fully appreciated. Most of us are convinced that a pic ture is worth a thousand words when it comes to describing a holdup man to the authorities or to convincing a jury that the man on trial committed the crime he is charged with. I prefer hard film in surveillance cameras. There are many good argu ments for using closed-circuit TV, which still has only a limited useful ness because it does not offer sufficient line resolution or clarity of hard copy. It will someday be the answer, and for that reason, I keep looking at the latest offerings of various manufacturers. This is not to say that there is not MID-CONTINENT BANKER for September, 1976 THESE GUYS WON’T LEAVE WELL ENOUGH Joe Blank, Mike Miller and Ron Deal. It seems they have a couple of key phrases that work consistently well. For us, and our corre spondent banking friends. They go like this: What if? Why don’t we? Why not try this? (and) I wonder why nobody else thought of that? We didn’t get to be the largest bank in the state by offering you the same tired solutions over and over again. We keep it loose. Because every bank, and every banking problem, are MID-CONTINENT BANKER for September, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis unique. And we’re flexible enough to find the best solution for you. Because we’ve got people who won’t leave well enough alone. Call us toll free. In Tennessee, T 800-342-8240. In other states, 1-800-251-8514. First A m erica n First American Center, Nashville 37237 FirstAmtennBankgroup Member FDIC 131 a place for CCTV in a bank. W e use it on our computer floor, in our main cash vault, in the garage used by armored cars and in certain other areas. On the banking floor we use 16mm constant-surveillance cameras that speed up on demand. We use 16mm, not be cause it is superior to 35mm or 70mm, but because it is less expensive. It’s adequate, if the proper lens and set tings are used. To be sure of this, you have to test-develop film periodi cally and then you must make the ad justments that are called for as prompt ly as possible. We are firmly convinced that there are adequate reasons for constant sur veillance even though it is expensive. With it, you are more likely to get some shots of the holdup man, even if he is “Speedy Gonzales.” You will also get some value from the fact that con stant surveillance will sometimes get you pictures of the bad check passer or others who are causing you trouble. Physical-security barrier systems are nothing unique to the banking indus try. Barriers are normally used to dis courage entry. Somewhat recently we in banking have been making a great er use of burglary-resistant and bulletresistant glass, plexiglass and polycar bonates. Note these are two different things for two different purposes. One is burglary-resistant and one is bulletresistant. These materials are both ideal from the standpoint that they meet the re quirements of the marketing and se curity people. They do not obscure, but they effectively block entry. Burglary-resistant glass, or other ma terials that are so labeled by the Un derwriter’s Lab, will withstand a con siderable effort on the part of the would-be burglar to gain entry to your premises through window or door lights. 1 have seen bricks, “Molatov cocktails’ and full beer bottles thrown at such materials without causing holes. I have seen a fireman’s ax used to punch holes in ~fw," laminated burglaryresistant glass. The holes were about the size of the ax head, but the blade did not slice or shatter the glass suf ficiently to allow entry. The only big problem connected with the use of such materials is that the window mullions must be able to withstand the attack. Sometimes they will give way and sometimes, when a polycarbonate or plexiglass material is used, the material will give enough to pop out of the mullions. Bullet-resistant materials are the way to go with respect to teller and/or man agement enclosures. They provide an excellent first line of defense against the bank robber, armed or unarmed. 132 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A note bandit we observed some time ago liked to lean in the window and physically intimidate the teller. He also liked to be able to talk softly and menancingly to the teller. He cannot do this effectively if there is a barrier between him and the teller. He has to stand up, talk up and, ultimately, give up, when he encounters the bulletresistant barrier. The armed robber still has a consid erable advantage, but not as much as he had before. He can still threaten to shoot someone who is not behind a pro tective barrier, or he can start shooting anyway, and maybe, if he is using a heavy enough weapon, he can pene trate the barrier; but he is not apt to do either. He and the note bandits are effectively deterred by bullet-resistant barriers. Remember, the name of the game is “deterrence.” We had 58 holdups in 1974, when we had few branches protected by bullet-resistant barriers. We had only 12 robberies last year after we had in stalled such barriers in most of our high-holdup branches. W e have over 100 branches and, at present, approxi mately 90 of them are equipped with bullet-resistant barriers. Some of these enclose the management area as well as the teller stations, others do not, be cause the present situation does not seem to make this necessary. Last year we had two holdups where the robber clearly was not deterred by the barriers. One was successful, one was not. We also had a couple of rob beries where the barriers were in stalled, but by the nature of the at tempt (a bomb threat was used), the barrier was not effective. With a 79% reduction in holdups and an 85% reduction in dollar losses last year, we figure we at long last must be doing something right. Aside from installing bullet-resistant barriers, we are participating in a clearing house reward program that has been effective. While bank rob beries were climbing at a record rate, the Detroit Clearing House banks were reducing their holdups by 38% and they were reducing their losses by February. We will pay $1,000 for the arrest and indictment of anyone who robs a participating bank. The F B I and state and local law en forcement agencies are eager to help you fight crime. Their experience has proved that use of security procedures, methods and measures is both an effec tive deterrent to bank crime and an important aid to law enforcement in the apprehension of criminals. * * H istoric Theme: 'Best Dressed' Award Goes to Banker, Family The “Best Dressed Family” award in the bicentennial parade of Rens selaer, Ind., went to the clan of Don ald P. Steiner, vice president, State Bank. The Steiner family, clad in colonial garb, rode the bank’s float representing the state of Pennsylvania. Since that state’s motto is “Virtue, Liberty and Independence,” that was the float’s theme. Virtue was represented by Mrs. Steiner and her baby daughter, Eliza beth, who were seated in an antique rocker, and by four-year-old Sarah Steiner, who played at her mother’s side. Mr. Steiner, dressed as a minuteman, represented independence. His outfit was complete with antique musket and powder horn. State Bank’s /8-scale replica of the Liberty Bell symbolized the third part of Pennsylvania’s motto and the Stein ers’ sons James and Andrew were on hand, ringing it loudly. Motivation for the float was provided by an ancient Allis Chalmers “B” farm tractor driven and owned by Marvin E. Nesius, State Bank’s farm loan of ficer. 11%. The reward plan is not unlike the plans being used in other areas. The only real innovation is that we pay the reward of $1,000 for the arrest and indictment, not the arrest and convic tion, of the robber. This speeds things up and makes it more attractive to some would-be informers. Our expenses have been advertising costs, including quarter-page ads in three newspapers, and ad cards on city buses, as well as reward payments totaling approximately $24,000 since Donald P. Steiner, v.p., State Bank of Rens selaer, Ind., holds musket and w av e s from bank's float in tow n's bicentennial p arad e. Float represented state of P ennsylvania and had theme taken from state's motto, "V irtue, Liberty and Independence." Also seen on float a re mem bers of Steiner clan, w ho w on prize for "Best Dressed Fam ily," and driving tractor is M arvin E. Nesius, bank's farm In. off. MID-CONTINENT BANKER for September, 1976 WE'RE HELPING TO BUILD-UP THIS PART OF OUR GREAT LAND. WE'RE WITH YOU, EVERYWHERE! MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ABA Says Half of Surveyed Banks Active in Local Economic Development A SURVEY by the ABA Urban and Community Affairs Committee in dicates that more than half the re sponding institutions view their role in urban and community economic devel opment as “an active one in conjunc tion with local government.” Of 2,649 banks surveyed across the nation, 46% responded. Two-thirds of the respondents said they participate in organizations having the primary purpose of studying and making rec ommendations for selected community problems. The results of the ABA survey indi cate that: • Responding banks participate in 413 consortiums of financial institutions designed to assist local government in economic development, while another 80 are in the planning stage. • Of the responding banks, 272 have assisted in development of the two major equity financing organiza tions—Small Business Investment com panies (SBIC s) and Minority Enter prise Small Business Investment com panies (M E SB IC s). • Special programs for commercial development in declining neighbor hoods are being carried out by 280 of the respondents, while 255 have pro grams for inner-city industrial park development. Another 378 indicated having programs for local minority business lending and 128 have pro grams for local minority purchasing. • One out of seven participate in generating special tax legislation de signed to assist community develop ment areas. * Fifty percent have established personnel programs in cooperation with local governmental units and/or non profit organizations. These programs in clude the loan of bank executives, sem inar and training programs for financial officers and paid bank employee vol unteer work. • Programs to improve local public education are being used by about 60% of the responding banks—cash dona tions, bank-sponsored seminars, dona tions of books and supplies, scholar ships, etc.—and 33% participate in spe cial programs dealing with crime con trol and criminal justice: films and lectures, support of counseling and re habilitation centers and hiring of reha bilitated individuals. In addition, the survey shows that many banks support local symphonies, 134 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ballets, health service programs and that one-third of the respondents have formal programs on environmental pro tection and ecology. In the area of support for home improvement and purchase of homes in core-city areas, there were shown to be 135 programs for direct mortgage loans in high-risk neighborhoods, 61 for low-interest im provement loans to low-income families and 51 programs for low-interest mort gage loans to low- and moderateincome families. A booklet outlining the full results of the survey can be obtained from Katie O’Hara James at the ABA in Washington, D. C. # * UP on A m e ric a : the bank actually was discounting its old worn-out paper currency as part of the town’s “Sidewalk Days” event. The Palatine Downtown Merchants Association holds the sidewalk sale an nually and the bank takes part by set ting up a card table on its sidewalk and selling the old money. “It’s a sure way for shoppers to beat inflation,” a bank spokesman said, “and the sale gives local folks a chance at some real bargains. But there is a limit of two bills per person!” A ctio n C e n t e r': Customer Service Facility Opened by First, Chicago First National, Chicago, has opened its “Action Center,” a retail-customer service facility. The center functions as a one-stop consultation service. “Finding the right person in the right office to respond to a given pre dicament often can mean a disconcert ing and time-consuming series of re- Bank's Drive for Voters Enables Staff to Register Union Planters National, Memphis, is UP on America! How so? UP on America was the title of a voter registration program at the bank. What Union Planters has done, in essence, was to bring the vot ing commission to staff members. All employees received registration forms along with instructions on how to complete them. The bank’s political involvement committee and selected campaign workers provided assistance with registrations. The completed forms then were collected and mailed to the election commission in time for the new registrants to vote in the Au gust 5 primary. The only requirements for voter reg istration in Tennessee are that one be a U. S. citizen 18 years of age by the time of the primary and that the regis trant must have resided in the state 20 days prior to the date of registration. Mail-in, or “post card” registration is legal in Tennessee. Discounted Dollars: Bank Offers Old Money During 'Sidewalk' Sale Twenty-dollar bills on sale for only $19.50! Fifty-cent discounts on 10s and fives! Get your one-dollar bills here— only 90 cents each! That was the “spiel” shoppers in Pal atine, 111., heard one day as they passed Palatine National. No, it wasn’t a joke, Checking customer service inform ation at First Nat'l of Chicago's "A ction Center" are Dennis L. Schreiber, personal banking off., and Jacquelynn Epps, receptionist. Center w a s insti tuted by bank to help retail customers w ith exceptional problem s, com plem ents First's oth er service are a s. Mr. Schreiber is center's dir. ferrals,” a bank spokesman said. “The ‘Action Center’ combines a soothing environment, a gentle approach and re tail banking expertise to offer an ex pedient reaction to the retail customer having an exceptional problem.” Bank officials felt that the advent and expansion of electronic banking would place some stress on the custom er’s occasional need to converse with someone on the bank’s staff. The “Ac tion Center” is a consumer-oriented ac tivity designed to meet that need, of ficials of First National said. The center is located at the northeast corner of the bank’s plaza level floor and comments and suggestions about the service from customers are invited. MID-CONTINENT BANKER lor September, 1976 >- Count on the bank that counts w ith bankers. > > Witto) NATIONAL BANK OF NEW ORLEANS | Reliability in banking since 1883 Dependability and the will to serve are the prime ingredients of efficient correspondent banking. Since 1883, knowledgeable bankers have looked to the Whitney. More than 90 years of correpondent banking experience has earned for us a reputation for reliability and service. We’d like to join with your bank to work together. v MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 135 Current Financial Reporting Trends NABW Convention Sept. 2 6 -2 9 To Feature Departm ental, To Be Reviewed at R M A Conference ONCURRENT panel sessions, an address by Fed Vice Chairman Stephen S. Gardner and a critical re view of current financial reporting trends are on the agenda of the Robert Morris Associates’ 62nd annual fall conference October 17-20. The confer ence will be held at the Hyatt RegencyChicago. The conference will be opened with a talk on “What 1974-75 Taught Us” by Roger E. Anderson, chairman, Con tinental Illinois National, Chicago. Be sides Mr. Anderson and Mr. Gardner, other speakers will include Representa tive Henry S, Reuss (D .,W is.); Eliot Janeway, political economist, laneway Publishing & Researching Corp., New York City; and John F. McGillicudy, president, Manufacturers Hanover Trust, New York City. Concurrent Panel sessions are planned on "Structuring the Smaller Bank— Capitalization, Liquidity and Loan Prof itability, ’ “Financing Municipalities: Evaluating the Risks,” “Leasing: How to Deal Intelligently With the Pack C Panel Discussion and Talks ager,” “International Lending: A Con ceptual Framework of Country Risk Evaluation and the Development of Country Exposure Guidelines,” “Credit Information: Its Costs, Codes and Con cerns,” “Supervision of Loan Policy” and “Real Estate Lending: Where to From Here?” There also will be panels on the “Most Challenging Issues Facing Bank Lend ing” and “Sound and Profitable Loan Production in the Face of Conflicting Pressures.” In addition, the program will include a talk on “Recasting the Role of the Commercial Loan Officer” and a chief executive’s description of his expectations of his banks for the second half of the ’70s. The conference will open officially Sunday evening, October 17, with a cocktail reception, to be followed by en tertainment by Franz Benteler and his Continental Strings. The annual RMA president’s reception and banquet Oc tober 20 will feature entertainment by Danny Davis and the Nashville Brass. "What Can One Woman Do?” will be the theme of the 54th annual con vention of the National Association of Bank-Women September 26-29 at New York City’s Waldorf Astoria Hotel. NABW President Betty L. Steele will preside. She is vice president and sec retary, Brenton Banks, Inc., Des Moines, la. A “state of the industry” address will be given by the keynote speaker, William I. Spencer, president, Citibank, New York City. A panel, which will take a look at “The Shape of Things to Come,’ will include Representative STEELE RANDALL 4° rV ° eS . vNCV , W ^ * A C' r O ^ A s '0 o '6 0°S & ® %\oN° . o ' ? < 0 ^ °° o ^ ; o' CW fl\0 ' . a G6 G®-' \ w \|o' ..ftO AW Si I 36 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for September, 1976 BANKS COME IN ALL SIZES... ...a n d y o u 'll fiml d e ta iled inform ation ab o u t e v e r y sin gle one in th e A ortli A n ieriean and In tern a tio n a l Editions of P o lk 's W orld B a n k D ire cto ry R -L -P O L K & CO. p u b l i s h e r s P . O . B o x 1 3 4 0 , N a s h v ille , T e n n e s s e e 3 7 2 0 2 T e le p h o n e 6 1 5 / 8 8 9 - 3 3 5 0 C a b le A d d r e s s E N C Y C O B A N K MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 137 Som etim es enough N e w a rk 's enough. It really is The Big Apple. There really are a hundred places to find Szechwan oysters, kinesiology classes, maritime lawyers or a Spode gravy boat like the kids broke. But sometimes New York can get to be too much of a good thing. Unless you know somewhere to hide. Welcome to The Barclay. i!:„ 'i » . l ’* 'I, f * The Barclay is a small east side hotel. (The lobby is about fifty steps across. The Big Conference Room holds twenty people.) The Barclay is elegant without being stuffy, expensive without being ridiculous. Next time you need to get in out of New York, remember The Barclay. « iM N N i ^ m i i i ** it iSMÉ s#®! «** * Ü ijfijjptflfi ' ^ Ml* m m § Fernand St. Germain (D .,R .I.), chair man, House Subcommittee on Financial Institutions, Supervision, Regulations and Insurance of the Banking and Cur rency Committee. The panel chairman will be Kenneth A. Randall, who rerently became president and CEO, Conference Board, New York City. He formerly was chairman and CEO, United Virginia Bankshares, Richmond, and is still on the HC’s board. A MidContinent-area banker, Norman Ross, vice president, public affairs, First Na tional, Chicago, will speak during a communications departmental. He will discuss public and community affairs in the banking industry, drawing on his experience as a broadcaster and spokesman for First of Chicago. Other departmental are planned on lending, marketing and management. There also will be a panel on the ac quisition and use of power. i A Time Traveler: « Bank's Offer +o Citizens: 'You Can Make History' 7 Chicago City Bank has given the city’s citizenry the opportunity to “make history.’’ The bank will seal a time capsule in its vault next December 31 and has asked residents for ideas for items to be included in the capsule. The capsule will be opened in 2076 and Chicago citizens may obtain an entry form and suggest items they feel will best represent “what life was like in the ’70s” on both the national and local levels. Entries may include documents, photos, newspaper articles or personal items and entry forms have been made available at the bank, drive-up or by calling a special phone number. In the fall, a committee will review the entries and select winners for place ment in the capsule. Items included in the capsule will bear the donor’s name; donors will receive special “Time Cap sule” certificates. A Jam es H. Ja rre ll Dies When enough New York’s enough. 48th just off Park. (800) 221-2690. In New York State, call (800) 522-6449. In the city 755-5900. Call your corporate travel office or travel agent. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Jam es H. Jarrell, 73, founder, Am erican In dustrial Bankers A sso ciation (A IBA), died July 11. He also w as ch., Old Republic In ternet'! Corp., C h ica go, which controls Old Republic Insurance Co. and Old Republic Life Insurance Co. In 1928, Mr. Jarrell joined Bankers Credit Life In surance Co., w hich merged into Old Republic Life in 1930. Mr. Jarrell w a s nam ed its pres, in 1943 and pres., Old Republic Insurance, in 1955. He founded AIBA in 1934 and w a s an organizer of the Consum er Credit Insurance Association, of w hich he served as ch. in 1951 and 1952. v MUNICIPAL BONDS TAX EXEM PTION The major attraction of state and municipal bonds is their ex emption from the federal income tax. While income from cor porate and other securities is subject to federal income taxes ranging up to 70% , the interest on municipal bonds enjoys com plete exemption from these levies. This means that each dollar of income from municipal bonds is spendable— not just the re mainder after the tax collector takes his due. Speculators are not attracted to these securities because of this stable base. K. R. ADAM S, Chairman of Board JA C K L. PERRY, President NORM AN E. LEWIS, Vice-President, Secretary-Treasurer ROBERT P. MILLER, Vice-President G A R Y E. GREER, Vice-President J. M ICHAEL NAUM AN, Vice-President NELLIE M. SHIPMAN, Cashier K AR EN VAN VOORHEES, Asst. Cashier M ICHAEL G. McMAHON PERRY, ADAMS & LEWIS SECURITIES, INC. 1012 Baltimore Ave. / Kansas City, Missouri 64105 Investment Bankers P h o n e 8 1 6 /2 2 1 -4 0 9 0 MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 139 BAI Slates National Convention For Philadelphia O c t 17-20; All of Us Together Is Theme PHILADELPH IA— Bank Administra tion Institute has announced that its national convention will be held Octo ber 17-20, and the Philadelphia Civic Center will be headquarters. Theme of the convention, “All of Us Together,” is drawn from the hope that bankers will concentrate their efforts and work together toward improved banking procedures and practices. The BAI, which is headquartered in Park Bidge, Ilk, estimates that 3,000 persons will be in attendance. Serving as general chairman of the four-day convention will be John R. Bunting, chairman, First Pennsylvania Bank, Philadelphia. Vice general chair men will be Paul J. Laskoski, senior vice president, First Pennsylvania Corp., and G. William Metz, vice president, Federal Beserve Bank, both of Phila delphia. More than 50 bankers, consultants and economists will participate in the formal program, which will begin Mon day morning, October 18. Technical sessions will focus on the major areas of bank administration: the audit func tion, bank accounting, operations, per- sonnel administration, branch banking and security. Another feature of the program will be sessions on the future of bank HCs, the movement and control of securities and a “how-to” discussion, “Effectively Dealing With the Financial and Busi ness Press.” In addition to the formal program, an extensive social program has been planned, concluding with a banquet and entertainment Wednesday, Octo ber 20. One of a Kind: Gerry U. Stephens (I.), e.v.p., Am erican N at'l, Chattano oga, and Charles McRorie, history teacher at local high school, exam ine model of U. S. Capitol Building on disp lay in bank's lobby. Replica w a s constructed of plyw ood and lumber by Mr. McRorie and group of his stu dents a s bicentennial history project. Plywood Model of Capitol Is Popular Lobby Exhibit A popular and unique lobby exhibit, part of American National of Chat tanooga’s bicentennial program, was a one-of-a-kind replica of the U. S. Cap itol Building. Fashioned from plywood and lumber by a history class at an area high school, the model weighs 250 pounds and took more than one year to construct. Using only the simplest tools and following plans provided by Washington and with the aid of dozens of photos, the group of students, led by their teacher, were able to reproduce the structure’s smallest details. Some sections of the model required the cutting and gluing of more than 300 separate parts just to complete one wall, a bank spokesman said. The replica was shown in the bank’s Main Office lobby for one month before being returned to the school for per manent display. In vestm e n t B an kin g S in ce 1 8 9 0 UNDERWRITERS- DISTRIBUTORS- DEALERS S T IF E L , N IC O L A U S GENERAL MARKET MUNICIPAL BONDS LISTED and UNLISTED BONDS & STOCKS INSURANCE, DEFERRED ANNUITIES & OPTIONS MEMBERS NEW Y O RK STOCK EX C H A N G E, INC. A M ERICA N STO CK EX C H A N G E, IN C. MIDWEST STOCK EX C H A N G E, IN C. J Direct Wire to the Exchange Floors ST. LOUIS • ALTON * BLO O M IN G TO N • C H IC A G O * C H IC A G O HEIGHTS CLAYTO N • DENVER • IO W A CITY • KAN SA S CITY • LOUISVILLE • MEMPHIS • M ILW AUKEE M OLINE • O K LA H O M A CITY • TULSA ♦ W ICHITA 140 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for September, 1976 You save tim e and money and are assured of accurate transfer of loan information. You Save Time By sending us the loan information via your computer tape you save the time that would be required to complete the necessary forms. j~ I want to s a v e time and money. S e n d me more I information on your installment loan payment system. Nam e________________________________________________________________________ — ---- You Save Money Bank Name _______________________________________________ Because we save time in preparing the time payment books by using your computer tape, we are able to pass special savings on to you. Address____________________________________________________ C ity_________________________________________________ State Zip _____________________________ Phone _________________ You are Assured of Accurate Transfer of Information Because we take the information directly from your computer tape the possibility of human error in encoding and decoding the loan information is eliminated. Give us the opportunity to tell you more about our complete installment loan payment system. We’re second to none in qualily and price. MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis K ansas Bank Note Company FIFTH & JE F F E R S O N S T R E E T S • FREDO N IA, KAN SA S 66736 • 316-378-2146 For your total bank printing needs 141 1976 A BA M eeting Schedule Our correspondent men can approve a loan... alone. In addition to the ABA’s 1976 Con vention October 2-6 and Correspondent Banking Conference November 7-9, which are described elsewhere in this issue, the ABA will hold the following meetings in the next several months: Bank Card Convention, September 12-15, San Francisco, Hyatt Em barcadero Southern Regional Operations/ Au tomation Workshop, September 15-17, San Antonio, Tex., Hilton Palacio Del Rio National Personnel Conference, September 19-22, San Francisco, Fairmont Hotel Midwestern Regional Operations/ Automation Workshop, October 27-29, St. Louis, Chase-Park Plaza Hotel International Foreign Exchange Conference, November 3-5, New York City, Waldorf Astoria Hotel National Personnel School, No vember 7-12, Memphis, Hyatt Re gency Memphis National Commercial Lending School, November 7-19, Norman, Okla., University of Oklahoma Mid-Continent Trust Conference, November 10-12, Cincinnati, Stouffer’s Cincinnati Inn National Agricultural and Rural Affairs Conference, November 1417, New Orleans, New Orleans Marriott. Easy G ard en in g With Big Shovel F IR S T N A T IO N A L B A N K St. Joseph, Missouri • 816-279-2721 Call Benton O’Neal • Ed Boos • Dale Maudlin • Macon Dudley Affiliates of First Midwest Bancorp 142 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MEMBER F.D.I.C. Not every gardener is lucky enough to have as larg e a shovel a s that seen behind Betty W esseling, dir. of nursing. Good Sam aritan Hospital, and Kenneth C. McPherson, e.v.p. & cash., First Security Bank, both of Downers Grove, III. The duo took ad v an tag e of the oversized gardening tool to plant rose bushes on the grounds of the hospital, w hich is under construction. The bank donated the bushes, and are a residents w ere able to obtain the plants free by opening an account for $100 at First Security Bank. MID-CONTINENT BANKER for September, 1976 THINGS ARE HAPPENING AT s e c u v iY NATIONAL BANC OF KANSAS CITY . . . and things will be happening at the KBA Regionals when the Correspondent Specialists of Security National of Kansas City tell you of their new ideas and new services such as custom tailored trust seminars and SNB Systematics Data Processing. . . . and things will happen at your bank too, when you take on the personal service banking of these Correspondents and the Security National Bank full service team. THINGS ARE HAPPENING AT . Ill iil i i l i mam SEC U RITY NATIONAL BAMt OF KANSAS CITY 1 S e c u r ity P laza K a n s a s C ity, K a n s a s 66117 Member FDIC MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ial D ire c t — 9 1 3 - 2 8 1 - 3 1 6 5 143 How theFinancial Editor Looks at Commercial Banking D LIK E to take you back for a mo ment to a Sunday morning early last January. Tom Roche, who until his re tirement was the chief foreign ex change trader for the New York Fed, was on the telephone. Had I seen or heard of a Washington Post story on the New York City banks? “No,” I said, "but let me thumb through the Tim es.” When that proved fruitless, I said, “Let me check the Newark Star-Ledger. They use the Washington Post news service, I think.” There it was, finally, spread across the top of page 17: “Two N. Y. City Banks on Comptroller’s Problem List.” I quickly read the story to Tom, and we agreed there didn’t seem to be much in it that was not already known. But Tom decided that if it was not al ready aware of it, the New York Fed should be alerted to bring in foreign exchange traders at 5 a.m. Monday— when the markets opened in Europe— lest the effect of the story overseas cause a sudden run on the dollar. Alerted to the story, the Fed also could make emergency open market purchases of government securities if anything like a run on the banks should begin to develop. Well, nothing of the kind happened. If the intention of whoever leaked the information to the Washington Post was to drop a financial bombshell, the effort fizzled. The bomb proved a dud. Nevertheless, the lights burned brightly for much of that weekend not only at the New York Fed, but at the Treasury and the Comptroller’s office in Washington. The reporter who wrote the story and the editors who approved its publication may not have been aware of the fact, but they were, in ef fect, tossing lighted sticks of dynamite into public places. They were tempting fate to cause a run on the banks. A run today, of course, doesn’t mean long lines of small depositors lined up in front of tellers’ windows anxious to pull out their funds. Since the estab lishment of Federal Deposit insurance 40 years ago, this sort of thing doesn’t happen any more. What does happen is more sophisti- I T h e s p e e c h o n w h ic h this a rticle is b a s e d w as g iv e n b y M r. K rau s at t h e A s sociation fo r M o d e r n B a n k in g in Illinois’ 1 9 7 6 c o n v en tio n . 144 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By ALBERT L KRAUS Editor The M oney M an ag er N ew York City cated and complex. Corporate treasur ers, who move funds from place to place in quest of a fraction-of-a-point interest advantage, simply fail to re new their large, negotiable CDs when they mature. Since these large-denomination CDs mature over a period of time, it may be weeks before a bank knows whether it will be able to staunch the deposit outflow. In essence, this is what hap pened two years ago at Franklin Na tional. If the Fed hadn’t stepped in with emergency aid, it’s almost certain that some holders of CDs would not have been paid on maturity. One reason the Washington Post bomb proved a dud, undoubtedly, was the fact that depositors, overseas as well as here at home, recognized it for what it was: old news. The revelations in the story talked about problems dat ing back a year or more. " W h y is it . . . t h a t a s y n d i c a t e d n a tio n a l c o l u m n i s t w h o can w rite w ith sa g a c ity on th e c o m p le x issu es o f a r m s lim ita tio n c a n n o t s e e m to g r a s p th e s im p le s t in f o r m a t i o n in a n a n n u a l r e p o r t ? " But what if the same, or similar, in formation had been published a year earlier—after the Franklin National de bacle, when the worst of the R E IT losses were becoming known, and as the implications of the New York City crisis were just beginning to be bruited about. Could a run have been avoided? This raises the question of who dis closed the information— a criminal of fense— and why. Was it a disgruntled employee in the Comptroller’s office? Someone seeking to discredit the Administration? Someone from the se curities industry hopeful of dealing banks a blow in their efforts to obtain wider investment banking privileges? Someone short the bank stocks? Some one short the dollar? The list of pos sibilities is endless. Even more interesting was the re sponse of the other newspapers. Take the New York Times. Its first reaction was to pooh-pooh the Washington Post account. The Comptroller’s denial of serious trouble, those of the banks themselves, and those of bank stock analysts were given page-one play. This lasted a day or so. Then the Tim es shifted gears. If this was another Watergate, it wasn’t going to be caught flatfooted a second time. It set up a reportorial task force and, for several weeks, sought to outdo the Post in new sensations. Interestingly, however, both the Tim es and Post gave little attention, if any, to the only account purporting to describe current conditions, that of Frank Wille, then FD IC head. Of the nation’s 15,000 insured banks, Mr. Wille said, only 29 were regarded as problems serious enough to require possible payments to depositors by the FD IC . Another 92 were regarded as serious problems. The total, 121, repre sented less than 1% of all FDIC-insured banks in the country, and almost all were small. An even 100 had less than $50 million in deposits, and none had deposits of more than $1 billion. This raises another question: Why has the press seemed so ready to pil lory the American business community and banks in particular? Competition in sensation between the Post and the Times, generally regarded as the na tion’s two most influential journals, should not be minimized. Their ac counts are rewritten by the wire ser vices, by the newsweeklies and by the network television news shows. They are fed directly to hundreds of news papers across the country by way of the Post and Tim es news services. But that is only part of the story. More and more, businessmen are chal lenging not merely the way their story is reported in the media, but the back grounds and qualifications of those who present the information. Why is it, they ask, that a syndicated national columnist who can write with sagacity on the complex issues of arms limita tion cannot seem to grasp the simplest information in an annual report? Why are the media so seemingly illequipped to tell the story of the energy MID-CONTINENT BANKER for September, 1976 O n c e 13 stars a n d strip e s w a ved o ve r a c lu s te r o f se e d lin g states in a w ilde rne ss. In 1776, it w a s SPIRIT th a t fle w th e flag. W e u n ite d to fig h t fo r fre e d o m , an d w e w o n b e cau se w e had SPIRIT. W e jo in e d to g e th e r to strive fo r stre n g th , a n d w e w o n m a n y tim e s a g ain . . . b e cau se w e had SPIRIT. N o w , th e 50 states o f th e gre a te st n a tio n in th e w o rld sa lu te th e ir stars a n d stripes. A n d SPIRIT still flies th e flag. A t U n ite d A m e ric a n B a n k W e believe in un ity. W e believe in A m e rica . A n d w e believe in SPIRIT! Æ Ê k U N IT E D A M E R IC A N B A N K KN O X V IL LE , T E N N E S S E E M E M B E R FDIC the bank of tomorrow with the spirit of the past. MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 145 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Perseverance Perseverance. It took a lot of it to make Standard Life the leader in the credit life business. When we entered the field, it was a new concept in insurance and the risks were extraordinary. There were no pat solutions to problems. To overcome those problems, it took perseverance. And it took desire. We gave all we had of both. That’s how we made it to the top. But now that we’re where we are, we haven’t given up. You see, we know how we got here — and we know we’re going to have to keep doing the same thing to stay here. You can find out why we re the Standard in the business by simply picking up the phone and calling (601) 948-5300. Or call a friend of yours who’s a client. A /tandard life Insurance Company/ Jackson, Mississippi crisis? Or of the recession? Or inflation? Why is the role of money in keeping our complex society functioning so lit tle understood? There are a number of possible ex planations, but I’d like to venture a few. One is aptitudes. People skilled at using words often are dubs at using numbers. And vice versa. So the busi nessman, whose métier is income state ments and balance sheets, often has trouble explaining himself in English. And the journalist, whose forte is sen tences and paragraphs, even more of ten has nothing but contempt for peo ple who communicate in a language he cannot understand. Another reason for poor business and financial reporting is this country’s long muckraking tradition. Ever since the days of Lincoln Steffens, a current of belief—an erroneous one I should say —has grown that if you get to know too much about business, you won’t be able to criticize it. You will become too sympathetic. Still a third explanation is one offered by Jerry Goodman, who writes under the pen name Adam Smith. Young reporters, he says, acquire little but experience in their formative years. Since they have low salaries and noth ing to invest, they have little sympathy with business. As they gain experience and success, on the other hand, they tend to leave journalism for more lucra tive jobs outside. Thus, only the critics are left. Finally, there is the second-class citizenship to which most business and financial journalists are relegated. Al though the financial pages no longer are a dumping ground for drunks and other incompetents, it is rare that a financial reporter makes his way to the upper echelons of the editorial high command. This isn’t true in Britain, Canada, Australia and on the European conti nent. There, as part of their apprentice ship, all reporters are required to spend a year or so in the financial news de partment. Here, however, it’s a rare man who becomes a top political re porter, say, or a foreign correspondent after any service in the business and fi nancial corner. Even on the W all Street Journal, of all places, there is a bias against “mere” financial reporting. The sought-after jobs are political or investigative re porting or the fluffy front-page pieces run in columns one, four and six. And even today, when industry is spending hundreds of thousands of dol lars to underwrite university programs to improve such reporting, the empha sis is on economic writing rather than on the financial page as such. Let me speak for a moment about these academic efforts, for I have just spent a month or so as part of a team attempting to evaluate the first year of the Bagehot Fellowship program at Co lumbia where, quite a few years ago, I studied journalism in the graduate school. The program, incidentally, is named after Walter Bagehot, that delightful Englishman of a century ago who dis covered that unbeknown to themselves, directors of the Bank of England were practicing central banking. Rather like the young fellow who discovered that all these years he had been writing prose. The program, similar to others at Princeton and Missouri, brings working journalists in their early and middle 30s to the university. These are peo ple with five to 10 years’ experience. At Golpmbia, they put in a work week no less demanding than the jobs they have taken leave from—in the business school, the economics department, the law school and the like. The program is patterned very much on the more general Nieman Fellowship program, which has operated at Harvard for 35 years. I’d like to be able to say that the Bagehot program, and others like it, are the answer to the deficiencies in fi nancial and business news reporting. Certainly, the dozen or so young men and one woman who make up the first Bagehot group are an impressive lot, bright, hard working, dedicated. But the jury has to remain out, for a while longer at least, until these people re turn to their papers and discover how they are received. I recall how one Nieman fellow was greeted by his managing editor some years ago after putting in a year of effort at Harvard. “Well,” the managing editor said, “you have had a year’s vacation, now get back to work.” One disquieting fact about the Bage hot program and the others like it, as it has been since its beginning about the Nieman program, is that publishers are required to bear little, if any, of the cost. Some supplement the stipends re. ceived by their people attending the program. But the costs are borne chief ly by big industrial donors, people like RCA and AT&T. It’s an ancient and generally reliable maxim that people tend to value what they get by what they pay for it. Since editors and publishers pay little for such training, few recognize it for what it is— a substantial addition to their working capital, their human working capital. This is despite the fact that their people often study alongside students in middle-management and advancedmanagement programs on leave from MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis industrial and financial corporations where as much as $40,000 or $50,000 may be spent for comparable training. To say that publishers are chintzy while other heads of business are not would be to overstate the case. On their own business side, they have bright, able people. Some of these, in deed, have been sent to middle- and advance-management programs at the publishers’ expense. But somehow this recognition of the value of human capi tal doesn’t seem to carry over to the news side. It’s a puzzlement, one I can’t readily explain. For some years now, I have been active in the Society of American Business Writers. The SABW was set up to improve the standards of fi nancial and business news reporting, particularly by helping the financial editors of small and medium-sized papers lobby for more and bright er talent and a bigger news hole. The SABW has done many commendable things, among them establishment of the first code of ethics for the profes sion. But while it has been headed by such widely recognized people as TIobart Rowen of the Washington Post and Dick Griffin of the Chicago Daily News, I’d say it still has a considerable way to go to achieve first-class citizen ship for all of its members. * * Nature in M in iature: 'Interpretation of Bonsai' Is Lobby Display Theme The art of bonsai—the duplication in miniature of nature through the dwarfing of trees and shrubs—was the theme of a lobby display of Detroit Bank. Entitled “An American Interpreta tion of Bonsai” and presented by the Shibui Bonsai Society of Metropolitan Detroit, the showing included over 60 trees varying in age from five years to two centuries! Club members were on hand to discuss the art and answer questions for visitors. During two special periods, the art of bonsai was demonstrated: how to obtain the proper proportions among the trunks, branches, twigs, leaves, buds and roots of subject foliage so that, for example, a three-year-old juniper will have the same aged ap pearance—in miniature— as a tree 60 years old and 45 feet tall. The show, which included birches, pines, maples and fruit trees native to Michigan, was run for one week only. The reason? Although miniature, the trees retain all of their natural char acteristics and can’t tolerate being kept indoors for extended periods. 147 Value Programming, Handling Stress Are Topics O f Guest Speakers at KB A Regional Meetings G U EST SPEAKERS at the 1976 regional meetings of the Kansas Bankers Association will examine topics such as “value programming” and how to handle change and stress. Identical programs will be held at six locations, beginning September 21. The agricultural key banker lunch eons will be held at 11:45. Registration is set to open at 1:15 p.m. As usual, concurrent sessions will be held for CEOs and for other officers and personnel, each beginning at 2 p.m. Presiding over the CEO meetings will be the KBA regional vice presi dents. During the CEO meetings, a number of presentations are scheduled. First will be a report on the James T. LePage & Associates public attitude sur vey relating to statewide advertising and E F T , followed by a state legisla tive report by Harold Stones, KBA di rector of research. Next on hand will be a discussion of the banking struc ture of the KBA, including a full pre sentation on the facilities services ques tion in cities, the question of a con sumer-preference poll and the question of a banker-attitude survey. The program for other officers and personnel has been arranged by the Young Bank Officers of K an sas (YBO K ), and a representative of the YBOK will preside at each session. For the September meetings, Terry Heineman, public affairs administrator, Unit ed Bank, Denver, will present “What You Are Is Where You Were When,” a sweep through the “value program ming’ experience of different age groups. For the October meetings, Dr. Ron Barnes of Transitions, Inc., To- Regional Speakers HIELSCHER MURPHEY HEINEM AN BARNES Regional Meeting Dates Region 1—Oct. 14—Law rence Region 2 —Oct. 13—Chanute Region 3 —Sept. 2 1 —M anhattan Region 4—Oct. 12—W ichita Region 5—Sept. 2 2 —H ays Region 6 —Sept. 2 3 —Dodge City peka, will discuss “Handling Change and Stress.” A social hour is slated for 5:1 5 p.m., followed at 6:30 by a banquet. Afterdinner speaker for September meetings will be Newt Hielscher from Shreve port, La. Mr. Hielscher, known as “America’s Humorist With a Message,” will make “Four Deposits in the Hap piness Account.” On hand as the afterdinner speaker for the October meet ings will be Bob Murphey from Nacog doches, Tex., “America’s Happy At torney.” His topic will be “Laugh More and Live Longer.” Details of individual regional pro grams are as follows: Region One— October 14—Lawrence. Registration, Kansas Student Union Building, fifth level, Jayhawk Room lobby; key banker luncheon, English Room; CEO meeting, Jayhawk Room; other officers meeting, Big Eight Room; social hour, Eldridge House, Crystal Room; banquet, Student Union Ball room. Vice president of Region One is John J. Sullivan Jr., president, MidAmerican Bank, Shawnee Mission. He joined his bank in 1959 as executive vice presi dent and serves as president, MidAmerica Automated Clearing House Association. Mr. Sullivan is a past presi dent, Kansas Development Credit Corp. Region Two— October 13—Chanute. Registration, Neosho County Commu nity Junior College, Administration Building; key banker luncheon, Orchid Buffet; CEO meeting, Stolz Hall, Lec ture Hall; other officers meeting, Ad ministration Building, Auditorium; so cial hour, V FW Club; banquet, VFW Club, Banquet Room. Serving as Region Two vice presi- Regional Vice Presidents SULLIVAN 148 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SM ILEY STURDEVANT CARSON M O O RE MID-CONTINENT BANKER lor September, 1976 E x p erien ce Counts in C o rresp o n d en t B a n k in g a t F irst N atio n al Our bank was only twelve years old when this picture was taken at the northwest comer of Main and Douglas in Wichita, Kansas. While our name has changed, the location is the same, as 100 3rears ago. This year is our Centennial. Another thing has not changed, and that is our interest in Correspondent Banking. Today, Jim Stanley carries on this tradi tion. So when you need help on trust services, check clearing, overnight investments, or overline loans, call him. 316-263-5711. F.D.I.C. FIRST NATIONAL BANK IN W ICHITA Correspondent Banking Specialists Since 1876 MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 149 dent is James W. Sturdevant, president, First National, Girard. He entered banking in 1963 at First National, El Dorado, joining his present bank in 1966. Mr. Sturdevant advanced to pres ident of his bank one year later. He has served on the KRA governing coun cil. Region Three— September 21—Man hattan. Registration, KSU Student Union, Lobby Forum Hall; key banker luncheon, Ramada Inn, University Club; CEO meeting, KSU Student Union, Little Theater; other officers meeting, Student Union, Forum Hall; social hour, Ramada Inn, Party Room and pool area; banquet, KSU Student Un ion, Main and West Ranquet rooms. W. D. Moore, president, First Na tional, Alma, is vice president of Region Three. He entered banking in 1947 at his bank and advanced to president in 1956. Region Four—October 12—Wichita. Registration, Century II, lobby area; key banker luncheon, Regal Inn, Room 610; CEO meeting, Century II, M-201; other officers meeting, M -201; social hour, Century II, Convention Hall; banquet, Convention Hall. Vice president of Region Four is Frank L. Carson, president and chair man, Mulvane State. He entered bank ing as a youth by working part-time at First National, Wichita, and joined his present bank as cashier in 1949. Mr. Carson advanced to president and chairman seven years later and also is a director of First National, Wichita, and Severy State. He has served on the KRA governing council. Region F ive— September 22— Hays. Registration, Fort Hays Kansas State College, Memorial Union Ruilding, lob by area; key banker luncheon, Memo rial Union Ruilding, Trail’s Room; CEO meeting, Felten Star Theater; other officers meeting, Rlack & Gold Room; social hour, Smoky Hill Country Club; banquet, Memorial Union Ruild ing, Rallroom. W. A. Smiley is vice president of Region Five. He is chairman, First Na tional, Norton, where he entered bank ing in 1942 as a janitor. Mr. Smiley ad vanced through the ranks and was named chairman in 1974. He has at tended the Graduate School of Rank ing, Wisconsin University, Madison, and was vice chairman of the KRA reorganization task force. Mr. Smiley also has served on the ARA ad hoc committee on privacy and on the KRA federal affairs council. R egion Six— September 23—Dodge City. Registration, Dodge City Com munity Junior College; key banker luncheon, Student Union, Red Room; CEO meeting, Student U nion' Cafe teria; other officers meeting, Auditori ■ l « « If r1 um; social hour, V FW Club; banquet, Silver Spur Convention Center. Hal A. Hedlund, president, Monte zuma State, is Region Six vice presi dent. Pie entered banking in 1952 at his present bank and was elected presi dent in 1961. A past chairman, Kansas Committee for Independent Ranking, Mr. Hedlund has served on a number of KRA committees and is a past mem ber of the ARA Governing Council. IB COMM ERCIAL NATIONAL, Kan sas City, has promoted Marvin J. Schmidtberger from assistant vice presi dent to second vice president. He joined the bank in 1958 and is trust operations manager. ■ STEVEN CLAPHAM has advanced to vice president and Sandra Thorne has been named assistant vice presi dent at Kansas State, Wichita. Mr. Clapham joined the bank in 1975, while Miss Thome has been with Kan sas State since 1971. ffl DANIEL H. CORMAN has been appointed assistant cashier at Central Rank, Wichita. as JANE CLARK has been named as sistant vice president and manager of the drive-up facility of Southgate Rank, Prairie Village, while Rex N. Shewmake Jr. has joined the bank as trust officer. The Ultra Computer Ultra m odem . As the most sophisticated bonking com puter in our a re a , KSDGTs com puter w ill save your bonk tim e ond m oney. And customers. 1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis \ I ' |(| \ I 1 Ultra useful. For your business accounts: payroll services (12 different deductions), ta x reports, W-2 forms, and m ore. For your customers: com bined statem ent bonking, autom atic transfer, plus much m ore. Coll Ralph Hudson of 316-260-2211 for the com plete stoiy on the ultim ate in bonk computers. KANSAS STATEBANK AND TRUST COMPANY 129 N. MARKET W ICHITA, KANSAS 6 7 2 0 9 MEMBER FDIC MID-CONTINENT BANKER for September, 1976 BURY YOUR DELAYED GRAIN DRAFT COLLECTIONS Our unique collection system gives all banks immediate, one-day credit If you have a customer who ships grain through Hutchinson, we have a collection system that can save you time and money. With an account relationship at the First, you can eliminate float and stop losing the ability to invest funds. A draft mailed right to us will be paid the day oreceipt. You won’t have to wait three days, four days or a week. Your funds will be available to invest, usually the day after you’ve mailed your draft. Think, for a minute, how that will increase your bottom line at the end of a year! To discuss how your bank can benefit from this unique, one-day collection system, call Gary Karrer at our New Correspondent Center. (316) 663-1521 * First National Dank of Hutchinson Sherman and Main/Hutchinson, Kansas 67501 MID-CONTINENT BANKER for September, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 151 Regional Vice Presidents KRAMER HARRIS RESER SALLEE GREEN ECKELKAM P * CARR Holder-in-Due-Course Law, EFTS, ECOA To Be Examined During MBA Regionais P r i n c i p a l t o p i c s of discussion during the regional meetings of the Missouri Bankers Association will be the holder-in-duecourse law, E F T S and th e E q u a l Credit Opportunity Act (EC O A ). The m e e tin g s b e g in September 13 and conclude O c to b e r 21. E a c h m e e tin g will be called to order by the re gional vice president; minutes of the last meeting will be read and commit tee appointments will be announced. Scheduled to deliver remarks during each business session is Charles K. Richmond, MBA president and execu tive vice president, American National, St. Joseph. Following the president’s remarks will be current status reports on the PIolder-in-Due-Course law, the pros and eons of E F T S and on compliance with ECOA. Question-and-answer periods will be provided on those program pre sentations and the various committees RICHM OND 152 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Regional Meeting Dates Region Region Region Region Region Region Region Region 1—Sept. 13—M oberly 2 —Sept. 14—Trenton 3 —Sept. 15—St. Joseph 4 —Sept. 16—K an sas City 5—Oct. 18—W ashington 6 —Oct. 19—C ap e G ira rd ea u 7 —Oct. 2 0 —Springfield 8—Oct. 2 1 —Jefferson City will give their reports. Following the meetings will be social hours and banquets. After-dinner speak er will be J. N. “Chris” Christiansen, management consultant and humorist from Scottsdale, Ariz. Scheduled to address the business session of the Region Three meeting in St. Joseph are Truman E. Wilson, state senator from St. Joseph; Dale L. Henkel, vice president, First National, Omaha, who will discuss “Leasing Farm Equipment”; and Phillip R. Mil ler, vice president-agriculture, First Stock Yards Bank, St. Joseph, whose topic will be “Awarding of the Hat.” Following are the backgrounds on the regional vice presidents: Region One: George Harris joined Farmers & Merchants Bank, Huntsville, in 1968 as vice president, advancing to president in 1975. Prior to that, he served Bank of St. Louis and Bank of New Cambria. R egion Tw o: William E. Carr is pres ident, Farmers Bank of Green City. He entered banking in 1952 at American Trust, Hannibal, which he left in 1958 to become a state bank examiner. Mr. Carr advanced to supervising examiner in 1965 and joined his present bank in 1973. Region T hree: Frank N. Akers began his banking career in 1965, when he was elected a director of his bank, Gentry County Bank, Albany. He served in that post until 1970, when he was named the institution’s agricul tural loan representative. Mr. Akers advanced to assistant vice president in 1974. In addition, he is a past chair man, MBA agricultural rural affairs committee, and presently is chairman of the Basic Agricultural School of Banking, which is sponsored by the MBA on the campus of the University of Missouri— Columbia. R egion Four—Walter E. Kramer joined Alma Bank as assistant cashier in 1966 and successively held the posts MID-CONTINENT BANKER for September, 1976 ■A 4 <r Every 2.3 minutes an O zark nonstop takes off somewhere betw een N ew \i)rk and Denver: Check our schedules against yours, fj *Based on 459 weekday departures between 0545 and 2346. OZARK @ A IR LINES G et yourselfup! go O zark. MID-CONTINENT BANKER for September, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ¡53 LeG rand Leaving MBA Post JOHN W. RIDGEWAY AND ASSOCIATES Banking Consultants and Auditors Over 35 years experience in Banking, Examining, Supervision Contact us for Independent Audits Bank Appraisals Bank Sales Assistance Feasibility Surveys 909 M issouri Boulevard Jefferson City, Mo. 65101 314-635-6020 JEFFERSON CITY— Felix Le Grand has announced that he will retire as executive vice president of the Missouri Bankers Association December 31. He will become administrator of the MBA Voluntary Employee Bene ficiary Association, an insurance trust slated to begin operation Janu ary 1, 1977. The trust will adminis ter the MBA’s group insurance pro grams. Mr. LeGrand was named execu tive vice president of the MBA in 1964, succeeding the late Randall R. Kitt. of cashier and executive vice president. In 1972, Mr. Kramer was elected pres ident. He holds a certificate from the Kansas City A IB Chapter and is a grad uate of the School of Banking, Univer sity of Wisconsin, Madison. Region F iv e: Louis B. Eckelkamp entered banking in 1943, when he was elected a director of Bank of Washing ton. In 1951, he was named chairman, and 10 years later was elected to the additional office of president. Mr. Eckel kamp is a 1957 graduate of the School of Banking, University of Wisconsin, Madison. R egion Six: Robert E. Green is presi dent and CEO, New Era Bank, Fredericktown, which he joined in 1959. He was named to his present bank post in 1965. Region Seven: Bill J. Reser entered the field of finance in 1956 at a con sumer loan company, serving as a branch manager until 1968, when he became a banker. He joined the old Southern Missouri Trust (now Mercan tile Bank of Springfield) in 1971 as vice president of marketing-public re lations, his present position. R egion Eight: Frank Sallee Jr. is pres ident and CEO, Camden County Bank, Camdenton, where he entered banking in 1961. Mr. Sallee has served on the MBA bank management committee. • • Social Security Direct Deposits Go Checkless in KC-Fed A rea FIRST NATIONAL BANK & TRUST COM PANY OF JOPLIN Downtown/Southtown/Westown/Member FDIC Member, First Community Bancorporation 154 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis KANSAS CITY— More than 100,000 social security payments to recipients in Kansas and western Missouri now are being deposited electronically in area financial institutions, according to the Kansas City Fed. Previously, social security recipients in the area served by the bank had designated that their checks be sent di rectly to their financial institutions. But since July 1, the direct deposits The Patient W ill Recover . . . But W ill His Bank Loan? A serious accident to one of your installment loan borrowers often “in terrupts” loan payments . . . and even though the patient finally recovers, often his loan becomes delinquent and frequently charged off. You can avoid these problems with health and accident credit in surance issued A T THE T IM E THE LOAN IS MADE. This is the proper time to protect BOTH the borrower and YO UR BANK! And when you make a BIG LOAN or possibly a R ISK Y LOAN to the small businessman or the farmer, you’ll want to be doubly sure that he is properly insured. Rea son: when something happens to that type of borrower, the loan often be comes uncollectible. Our SIN G LE PREM IUM TERIVf IN SURANCE will solve your prob lem on those big loans. And, of course, we have a full range of credit life and other types of insurance that fit almost any lending situation. IF IT ’S A BANK INSURANCE PROBLEM , CALL IN SURANCE EN TER PR ISES. Serving Banks in Kansas-M issouri-l lli nois-Kentucky I nsurance E nterprises 581 I Hampton St., St. Louis, Mo. 63109 314/832-2717 General Agents for Security Benefit Life Insurance Co. MID-CONTINENT BANKER for September, 1976 Costum ed 'C haracters' Run Bank IT’S OUR th The staff of G a te w a y N at'l, St. Louis, must h ave surprised m any custom ers w ith these clothes, but it w a s all part of the bank's cos tume contest that w a s held in honor of the bicentennial. O v e rall w inners of the event line up for the cam era (from I.): Robert Fulton, Beverly C hand ler (first place), Brenda Ray, Beverly Brow n, C aro lyn Turner, Helen Sanders and Jacqu eline Carthen. have been sent electronically by means of computer tapes or other media by the Fed to the institutions. The Kansas City Fed area is the sec ond region in the U. S. to have the ser vice, the region served by the Atlanta Fed being the first. Covered by the Kansas City Fed program are direct de posits of recurring social security pay ments to recipients under retirement, supplemental income, disability insur ance and coal miner health benefits programs. According to a Kansas City Fed spokesman, 21% of social security re cipients in Kansas have opted for direct deposit, second in this country only to Florida’s 25%. In Missouri about 10% of recipients have opted for direct de posit and U. S. Treasury officials pro ject that about 40% of such payments will be deposited directly by 1980. i Anniversary We’re a community bank . . . and proud of the reliable service we’ve provided since 1926. When you’re in town, stop by to see us. Above: Our “new building” in 1929 cost $30,000 . . . was lauded as one o f the most beautiful in St. Louis County. Our current main bank building sits on the same foundation . . . still a hometown bank. ...bigger to serve you b etter B A N K & T R U S T C O. 8 9 2 4 St. Charles Road St. Johns, Mo. 63114 AIB-St. Louis Enrollm ent Night Local and nat'l officers gather for a photo during the fall enrollm ent and a w a rd s dinner of the St. Louis C hapter of the Am erican In stitute of Banking (from I.): Rosem arie Stall ings, a .v .p . & tr. op. off., Edgem ont (III.) Bank —chapter second v.p.; Albert A. M iller, v.p. & cash., Big Bend Bank, W ebster G ro ve s—chapter pres.; Jerry J. Jaso n , asst, personnel off., South East First Nat'l, M iami, Fla.—A IB nat'l v.p.; Joseph G. Steel, AIB-St. Louis exec, dir.; and M ichael P, Dolan, e.v.p., P la ia First N at'l of W est Port, St, Louis County—chapter first v.p. MID-CONTINENT BANKER for September, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Our new Mini-Bank opened in November 1974, providing drive-in and walk-up service at 9229 Natural Bridge. 155 NEWS F r o m the M id-C ontinent Area Alabama ■ KEN L. LO TT, president, Mer chants National, Mobile, has assumed additional responsibilities as CEO, fol lowing the September 1 retirement of Ernest F. Ladd Jr., the former chair man and CEO. Mr. Ladd, a past Ala.BA president and former member of the Comptroller of the Currency’s Na tional Advisory Committee, remains as chairman, president and CEO, South land Bancorp., the HC with which the bank is affiliated. Mr. Ladd also is a former director of the New Orleans Branch of the Atlanta Fed. Mr. Lott is a director of Merchants National and the HC. the department, handling requests from Arkansas bankers for loan participa tions, funds transfers and other ser vices. He joined the bank in 1972. M ORGAN ■ W ILLIAM E. E ST E S has joined Commercial National, Little Rock, as vice president and trust department manager, a newly created position. Prior to joining the bank, he was vice president and trust officer, Union Plant ers National, Memphis. SMITH the lobby area and safe deposit booths have been enlarged. The branch also has a meeting room with a capacity of 75 people. A major entrance has been added to the structure’s west side and the drive-up area has been modernized. The logo of the bank’s HC, First Bancgroup-Alabama, Inc., is on the exte rior’s south side. ■ SHELDON L. MORGAN, director of industrial development at Merchants National, Mobile, has been named senior vice president. Elected assistant cashiers were John “Jep” Hill, Benny K. Ingram, Jeannie M. Mount and Faye N. Nelson. LOTT LADD ■ F IR S T NATIONAL, Mobile, has announced the completion of extensive remodeling of the Springdale Plaza Branch. The building’s interior now is furnished in a contemporary style and Arkansas ■ RICHARD T. SMITH has advanced to assistant vice president of the cor respondent department of Worthen Bank, Little Rock. Mr. Smith serves as the Little Rock “anchor man” for This is no ordinary bank directory. $30 $40 standing order single issue ?Pl us sh ipp in g and hand lin g 156 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AMERICAN Bank Directory 6364 Warren Drive Norcross, Ga. 30071 (404) 448-1011 What’s so special about the American Bank Directory? it’s the only desk-top national bank directory, so compact you can hold it in one hand. ABD's convenient thumb-indexed, two-volume format makes it easy to locate complete, essential facts and figures on every bank and multi-bank holding company in the nation. But that's not all. The American Bank Directory is still America’s lowest-priced complete bank directory. That’s what’s so special. Call or write today to order The Extraordinary Bank Directory. ____ J ■ DENN7 SM ITH , formerly execu tive vice president and chief adminis trative officer, Northwest National, Fayetteville, has joined First National, Mountain Home, as executive vice president. In other news at First Na tional, Dwayne Hickman and Frances B. Lee have been elected vice presi dents, Danny Letter has been named cashier and Roger Lonon and Dessie Pitts have been elected assistant vice presidents. ■ SU Z A N N E B A R F I E L D M U R PH REE has been promoted from audi tor to cashier of First National, West Memphis. She has been there 13 years. ■ RONALD G. KUERNER, Arkansas operations manager, Bauxite Alcoa plant, has been elected a director of Union Bank of Benton. Illinois ■ JOHN A. SIVRIGHT, senior vice president, Harris Trust, Chicago, has been named group executive in charge of the Chicago banking group, succeed ing Car] S. Stanley, senior vice presi dent, who has resigned to become HARROW SMITH C O M P A N Y Union N ational Bank Bldg. 501/374-7555 Little Rock, A rk a n sa s J. E. W OM ELDORFF, Executive V ice President MID-CONTINENT BANKER for September, 1976 Letters take time to write, to travel and to get a response. And even phone calls can't always convey the full scope of a situation. So when these measures just won't go the distance for you, it's good to know we will. Whether it's meeting with you at your bank or setting up a conference at ours. Because at First National, being your correspondent banker means much more than handling problems by correspondence, it means being there w7hen you need us, with all the help you need. And you'll have plenty of assistance J L A to draw from. Our Correspondent Banking Jj% | f | | | | r H H l C J l l C l I j Division takes in some 16 separate areas of ___ gw 1 financial service. From data f 1W O processing and operations assis® lance to investment securities m and international banking. IRv M l U S I T N S C l I l S 1 1 I V l l S Among the hundreds of [people at work for you, you’ll find experts in such specialized areas' as geology, forestry and oil exploration. But to get the complete picture, call Jim Andress or Jack Andrade toll free. In Alabama dial (800) 672-6709 and in the Southeast call (800) 633-6710. And well send you a copy of our free correspondent brochure. Or chances are, well be in your area in the next week or two and can bring it by in person. than just writing letters © first National Bank of M obile A First Bancgroup—Alabama. Inc. Affiliate. Member FD1C. MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis STAN LEY SIVR IG H T DRiCK PALLUCK chairman and CEO, Wilmette Bank. Mr. Sivright formerly had been deputy group executive, Chicago group. In Harris Trust’s international banking group, the following executive changes have been announced: Donald S. Hunt, vice president, has been named over seas division administrator. Succeeding him as international division head for the U. S. and Canada is Albert F. Naveja, vice president, formerly gen eral manager of Harris Bank Interna tional Corp., New York City, a wholly owned bank subsidiary. W. Donald DeMoss, vice president, has been named as Mr. Naveja’s successor. He goes there from the bank’s London Branch, while Robert A. Sprowl, vice president, has transferred to the overseas divi sion’s Asia-Pacific section, where he will have responsibility for corporate and correspondent services and busi ness development. ■ CARL S. STANLEY, formerly sen ior vice president, Harris Trust, Chi cago, has been elected chairman and CEO, Wilmette Bank. He succeeds Fred L. Stone, who remains a director. At Wilmette Bank, Margaret Meder has been named senior vice president and comptroller. C olum bia N ational Opens COLUMBIA —Columbia National has opened with capital of $400,000, surplus of $400,000 and undivided profits of $200,000. The new bank’s officers are Louis H. Schlafly, president, and Gerald L. Giffhorn, cashier. Mr. Schlafly formerly was vice president, Union National, East St. Louis, where he remains a director. Mr. Giffhorn also had been with that bank as assistant cashier. Columbia National is located at Illinois Route 3 and Valmeyer Road and is in temporary quarters. A permanent building should be com pleted in eight months, according to a bank spokesman. The present facility has a driveup window, night depository and ex tended banking hours. 158 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis interest of Alton Banking & Trust by Melvin G. Hall, honoraiy chairman, Webster Groves (M o.) Trust, and his son, Robert Lynn Hall, president and manager, Branson (M o.) Inn. All di rectors of Alton Banking & Trust will continue in their positions and Law rence Keller Jr. has been named hon orary chairman and will serve as a bank consultant. Melvin G. Hall has been named chairman and CEO and Robert Lynn Hall will serve as bank vice president and director. Melvin Hall entered banking at Bank of Bentonville, Ark., 1947, serving as its chair man, 1948-1962. He was an organizer of State Bank of Noel, Mo., and has served as president, chairman and GEO, Webster Groves Trust. Robert Lynn Hall served Webster Groves Trust, 1967-1973, and Empire Bank, Springfield, Mo., as vice president. Pie left the latter bank in 1974 to head the Branson (M o.) Inn. ■ BANK OF B E L L E V IL L E has named Charles E. Lynch, installment loan department manager, and Terry W. Schaefer, operations, vice presi dents. Alice L. Gannon, who is respon sible for teller management, has been elected assistant vice president and cashier. KENSIL JO H N SO N B F IR S T NATIONAL, Chicago, has divided its corporate banking depart ment into two departments, the in dustrial and the commercial. Heading the industrial department is /Uvin C. Johnson, senior vice president, while Homer J. Livingston Jr., senior vice president, heads the commercial de partment. Robert D. Judson, senior vice president, has been named director of corporate marketing for both de partments and continues as a group head. The reorganization was made due to the impending retirement of John E. Driek, bank director and chair man, executive and credit policy com mittees. Succeeding him as credit policy committee chairman is Rudolph E. Palluck, executive vice president and former corporate department head. ■ DAVID R. KEN SIL has joined Millikin National, Decatur, as a farm manager. He formerly was associate manager, Federal Land Bank Associa tion, Charleston. Mr. Kensil holds a B. S. degree in agricultural science and is completing requirements for an M. S. degree in agricultural economics. ■ REGULATORY APPROVAL has been given for purchase of majority ■ JOHN V. EGAN JR., vice president, has been named to direct the newly formed corporate communications di vision of Continental Illinois National, Chicago. The new division is a com bination of the bank’s public affairs and advertising functions. Heading the di vision’s sections are John N. DeBoice, formerly public relations director, First National, Chicago, who directs Conti nental Bank’s creative services section and Eugene F. Grennan, public affairs officer, who will assist him in managing that section; William P. Schoentgen, second vice president, planning and policy issues manager; Stephen T. Ar nold, second vice president, advertising manager; Gerald E. Buldak, second vice president, press relations manager; Kermit L. Lee, vice president, urban affairs head; and Robert L. Fienberg; public affairs officer, corporate affairs head. Directing the division’s adminis tration section is David A. Woodworth, marketing officer, while Joseph W. LaBine, vice president, continues as con sultant to the division on special pub lic affairs projects. ■ J. JAY G ERBER, chairman. Bank of Naperville, has been elected chair man, First Ogden Corp., Naperville, while Donald H. Fischer has been named president and CEO. Appointed vice chairman was Kenneth Larrance, chairman, Illinois State, Chicago. These changes follow the resignation of Ver non S. “Tex” Hoesch as chairman and MID-CONTINENT BANKER for September, 1976 * ► > The Transit *■ H e found a w a y out o f the day-late, dollar-short di lem m a. > ► *■ > >- *■ ♦ 9-'V Dave has found a system that provides more cash on hand for his bank through: Our Accelerated Deposit Collection System —The Northern Trust’s own d irect send program accep ts D ave’s unsorted cash letters later than most deadlines in Chicago and provides imme diate availability for many financial https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis centers throughout the country. Our Automatic Funds Program—a unique reporting system th at gives him today’s information today on available deposits. Our Deposit Analysis Service —a periodic, computerized analysis th at provides complete, accurate informa tion on the composition of deposits. End result: Dave has more money available to invest for more profit. You could too. Our Trial Cash Letter will help. To set it up, contact your Calling Officer at: The Northern Trust Bank, 50 South LaSalle Street, Chicago 60690. Telephone (312) 630-6000. The Northern Trust Bank Bring your financial future to us. Packard 'Officiates' at Opening CEO. Joseph M. Quigley, formerly First Ogden vice chairman and finan cial vice president and secretary, NIGas Co., had served as temporary chairman, while Mr. Fischer formerly was president and chief operating of ficer. ■ JAM ES G. KENNEDY has been promoted to vice president-bank ser vices division, Heritage Bancorp., Inc., Evergreen Park. He has been with the HC since 1954. ■ CATHERINE A. W ILLIAM S has been promoted from assistant cashier to assistant vice president at National Boulevard Bank, Chicago, and James E. Berger, tax manager, has advanced to tax officer. Indiana a D E L B E R T C. STALEY, president, Indiana Bell Telephone Co., Inc., has been named a director of American Fletcher Corp. and its principal sub sidiary, American Fletcher National, both of Indianapolis. a W ELLIN G TO N D. JON ES III has been appointed vice president and data processing manager of First Bank, South Bend. Elevated to assistant vice presidents were Robert E. Love, sys tems/programming manager; Walter O. Gollnick Jr., marketing division; and Charles A. Talcott, mortgage banking department. Larry A. Gardner has been elected programmer-analyst; Larry J. Garnaat, operations manager; David L. Robertson, leasing officer; and Ronald H. Dvornik, trust accounting officer. Died: Oliver C. Carmichael Jr., 56, on August 3, after suffering a heart at tack. Mr. Carmichael was chairman, F B T Bancorp, Inc., and executive committee chairman of its principal subsidiary, First Bank, both of South Bend. He also was chairman, Marshall County Bank, Plymouth, and Bremen State. He entered banking in 1960 as chairman of First Bank, a post he held until 1975. "O fficiatin g" at the opening of the M ichigan Road Drive-Up of Am erican Fletcher Nat'l, In dian ap olis, is a 1930 Packard touring car ow ned by a local civic leader. Rather than having a traditional ribbon-cutting cerem ony, the opening of the facility w a s done by d riv ing the auto through a "grand opening" sign. The bank also had a tent set up in the p a rk ing lot, from w hich refreshm ents w ere served and d ra w in g s held for door prizes. National/West Facility at 75th and State. The building’s landscaping has been planned for customer conve nience. The city provided access roads to the facility, while the bank built a two-way public street connecting two streets at the property’s north bound ary. The facility has five drive-up lanes and parking space and the building is of light buff-colored concrete. It has 5,152 square feet of space. The interior is lit by sunlight from floor-to-ceiling windows and major walls are heavily textured and off-white in color. Bronze window frames set off the orange car peting and the lobby wall opposite the stainless-steel vault door features a large mural by Ernst Ulmer. Multi-colored, motor-driven draperies control the sun light entering the building’s east and west sides. ■ LAFA YETTE NATIONAL has pro moted the following to operations of ficers: Phyllis A. Tribby, Karen M. Waling and Betty L. Rohler. ■ DAVID MALAK has been named assistant manager, Burns Harbor Office, Northern Indiana Bank, which is head quartered in Valparaiso. Kansas a JUANITA TURN ER has advanced from cashier to vice president and cash ier of First National, Olathe, while Jim Derting has joined the bank as assistant vice president in the trust department. Landscaping of Security N at'l/W est Facility of Security Nat'l, K an sas City, w a s designed for utmost customer convenience. Exterior is of light buff-colored concrete, interior has 5,152 sq. ft. of space. ■ N. V. “NICK” HUDELSON JR. has joined Chandler National, Lyons, as president and CEO. He formerly was executive vice president, First Na tional of Shawnee Mission, Fairway. Mr. Hudelson has been in banking 14 years. B FO STER SM ITH has been named assistant cashier at First National, Wichita. He joined the bank in 1974 and will serve as credit analyst. B SECU RITY NATIONAL, Kansas City, has held an open house to cele brate the new building of the Security Close-up shot of Security N at'l/W est Facility of Security Nat'l, K an sas City, show s building's five drive-up lanes. Sunlight entering fulllength w ind ow s on either side of structure is controlled by multi-colored, motor-driven cur tains. C O M M E R C I A L N A T I O B A N N A L K 6th & M in n eso ta A ve . 913 3 7 1 -0 0 3 5 K a n s a s C ity, K a n s a s 66101 PROFESSIONAL CORRESPONDENT TRUST SERVICE 1 60 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for September, 1976 Correspondent Banking must also contain these same elements. A n d . . . you can look to our professional Correspondent Bank Team at Hutchinson National Bank and T ru st. . . for both vision and reality. 1« mm Dean Johnson Ed Splichal LuAlan Willems ¡lulchmsoiTNational ~~ bank and trust company One Polaris Plaza H utchinson, Kansas Member IF.D.I.C. MID-CONTINENT BANKER for September, 3 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ■ COM M ERCIAL NATIONAL, Kan sas City, has held an open house for its new administrative quarters on its fourth floor. On hand for the event were about 100 correspondent bankers, who were given a tour of the new offices by data division personnel. The quarters, in 3,600 square feet of space, house the bank’s administrative, marketing and systems and programming departments. On hand during open house for new adm inis trative quarters of Com m ercial N at'l, K an sas City, are (from I.) Bernard Ruysser, pres.; Don Barnes, data division s.v.p .; C. H. Pflumm Jr., pres., Shaw nee State; and Richard H. Muir, e.v.p., Lenexa State. and real estate lending officer; and Betty Williamson, cashier, has been ap pointed personnel officer. She continues as cashier and head of teller opera tions at the Main Office. Louisiana ■ GUARANTY BANK, Alexandria, has elected Walter W. Dupuy assistant vice president, while LaVerne Crump has been named assistant personal banking officer and Robert R. Kirby has been appointed commercial loan officer. ■ KEN NETH A. LANGGUTH has been named vice president, Bank of New Orleans. Also promoted at the bank were Gail E. Farrae, to assistant vice president, and John H. Blanke, F. Chris Dohmann and T h o ma s G. Jones, to assistant cashiers. The floor layout, designed by Robert C. Carlton, Commercial National purchas ing manager, and Bill Weeks of W. H. & R. Construction Co., accom modates 23 individual offices, a large conference room, a reception area and an executive office. Furnishings and de cor are contemporary in design. IN NEW ORLEANS The MONTELEONE is “a way of life" . . . the largest Hotel in the fabulous French Quarter, 600 luxur ious Rooms and Suites— a Roof top Swimming Pool— the French Cuisine of the Supper Club Restaurant— the revolving Carousel Bar and the sidewalk atmosphere of Le Cafe Restaurant. Located just one block from famous Bourbon Street— min utes from International Trade Mart and Rivergate Exposition Center. A WORLD OF SERVICE * 3 Cocktail Lounges— 2 superb res taurants * Radio-Color TV in every room * Garage in Hotel * Swimming and Wading Pools • Putting Practice Green • Variety and Gift Shops * Complete Valet * Barber Shop * Beauty Salon * Car Rentals * Sight-Seeing Tours MEETING FACILITIES The ultimate in Convention, Sales Meeting and Banquet facilities— to serve 15 to 1,380 people. Ideal for dinner-dances and exhibits alike. you KNOW YOU’RE IN NEW ORLEANS WHEN YOU’RE AT 214 RUE ROYALE NEW ORLEANS, LOUISIANA 70140 Phone: 504/523-3341 For further information and brochure Write Dept. RH Sales. 162 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Kentucky ■ BRUCE H. DAVIS has been named agricultural representative at First Na tional, Nicholasville. He will work as a liaison between the bank and its agri business accounts and will develop new business for the bank in that area. Mr. Davis holds two degrees from the Uni versity of Kentucky: a B. S. in agri culture and an M. S. in agriculture ed ucation. ■ DAVE J. BODI has been appointed assistant vice president and data op erations manager at First Guaranty Bank, Amite, while Mary Ann Colvin has been named customer service of ficer. Mississippi Celebrates 40th Year With Bank ■ E. G. ADAMS has returned to his home town of Hopkinsville to become president of Pennyville Citizens Bank. He had been president and CEO, Sedalia (M o.) Mercantile Bank. ■ LEONARD V. HARDIN has been elected executive vice president, First National, Louisville. He joined the bank in 1953 and continues as head of corporate-consumer lending. ■ F IR S T CITY BANK, Hopkinsville, has announced responsibility changes for the following: Don Atwood, vice president, has assumed duties as mar keting director; Daniel Mann, vice president, has been named branch co ordinator and continues as commercial J. H. Hines (c.)r ch. and C EO , Deposit G u ara n ty Nat'l, Jackson, is congratulated by Julian L. C la rk (r.), pres., and Russ M. Johnson, retired ch., for his 40th a n n iversary with the bank. Mr. Hines w a s honored with a testim onial dinner at the Country Club of Jackson; religious and business leaders and friends of Mr. Hines w ere on hand for the event. MID-CONTINENT BANKER for September, 1976 We made our mark in service Last year alone, the correspondent profes sionals of Citizens Fidelity Bank logged nearly 200,000 miles while making over 1,700 calls to bankers throughout the Southeast and Midwest. This commitment to personal serv ice is one reason Citizens Fidelity ranks in the top 25 of all correspondent banks in the na tion. Another reason is the development of an interdepartmental structure that extended to banks.over $80 million in credit and leases, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis held over $1 billion worth of securities in safekeeping, and handled over $500 billion worth of federal funds for our correspon dents. For information on Citizens Fidelity's experience in these and other correspondent areas including cash management, EDP, and credit card operations, call Bob Aldridge or any member of his staff. They'll help you make your mark, too. Come grow with us® . . . under the Sign of the Service Tree. C itizens! Fidelity Bank&Trust Company Citizens Plaza— Louisville, Kentucky 40202 (502) 581-3280 Kentucky WATS: 800-292-4593 ^Indiana. Tennessee WATS: 800-626-6505 You’ve tried the r e s t . . . Now stay at the BEST! * * RIVERFRONT * RESORT HENDRICKS HONTZAS lively, exciting entertainm ent center in DOWNTOWN ST. LOUIS Largest H oliday Inn com plex in the w orld . . . all you could want, rig h t under our roof. . . . IT’S THE ONLY WAY TO STAY IN ST. LOUIS 10 EXCITING RESTAURANTS, LOUNGES, from dazzling discotheque to candlelit glamour. Dancing, live entertainment nightly. FREE TO OUR GUESTS: Rooftop pool, year-round sauna, inn-house movies, secured indoor parking, promenade putting green, unlimited local phone calls, JUST STEPS FROM GATEWAY ARCH near Busch Stadium, only 5 blocks to new Convention Center. Superb meeting, banquet facilities. BEST LOCATION FOR BUSINESS OR PLEASURE! ■ SEVERAL PROMOTIONS ha ve been announced by Deposit Guaranty National, Jackson. C. B. Hendricks and Thomas M. Hontzas have been named senior vice presidents, Betty H. Nelson has been elected vice president and Willie Ray Ginn has advanced to assistant vice president. Mr. Hendricks serves as operations and personnel manager at Greenville Bank, branch of Deposit Guaranty National, and Mr. Hontzas is Deposit Guaranty’s corpo rate planning and research department manager. At Greenville Bank, Mrs. Nelson has responsibilities in the in vestment counseling, personnel and new accounts areas and Mr. Ginn is assigned to Deposit Guaranty’s install ment loan area. Missouri ☆ RESERVATIONS % CALL (314) 621-8200 or your nearest Holiday Inn or travel agent W OOD LUMPE ■ THOMAS J. WOOD III, formerly vice president, United Missouri Bank, Kansas City, has joined the affiliate bank, United Missouri of St. Louis, as president. He succeeds Wade R. Stin son, who has advanced to chairman. l \ RIVERFRONT» RESORT 4th & Pine. St. Louis, MO 63102 S a le s Dept. 29 Please send free brochures, rates: Business Trips □ Pleasure Trips □ Weekends □ Meetings □ Honeymoon □ NAME ADDRESS CITY STATE, ZIP ST. LOUIS, MISSOURI https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ■ LARRY E. LUM PE has resigned as senior vice president, Commerce Bank, Kansas City, to become president and CEO, Sedalia Mercantile Bank. Mr. Lumpe, who headed the Missouri Bank ers Association in 1972, was senior of ficer in charge of Missouri banks while with Commerce Bank. He also has been president of Commerce banks in Pop lar Bluff, St. Louis and University City. ■ LYNN H. M ILLER, executive vice president, has been elected a director of Mercantile Bank, St. Louis, while MID-CONTINENT BANKER for September, 1976 You’ll like Our New Correspondent O fficer because he knows the business outside in and inside out! [M eet John Jen n in g s, a n o th e r M a n c h e s te r P e rfo rm a n c e M an on th e m o ve fo r you. Someone who knows the business outside in, and out? IJhat’s right. It’s the perfect combination of qualities for a Manchester correspondent representative. Outside in . . . Jo h n ’s acclimated and trained for correspondent services Inside out . . . he came up through the cashier ranks [with day-to-day staff operational and problem-solving ¡experience. Couple all that with his computer data ¡processing expertise and we think you'll see why ¡•John Jennings should be your man. If you’d like to discuss any of your correspondent needs ‘with John, just give him a call collect at 314 • 652-1400. FULL SERVICE Manchester Bank BANK Vandeventer and Chouteau Avenues St. Louis, Missouri 63110 MANCHESTER FINANCIAL BANKS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ■ ' ■' ■ ¿8 m s i« ? ■• S : fS £ ■' ■ . • ■■ = ..€811 ,tla#lisr « ■ ’ M e m b e r FDIC Michael Brosnahan has joined the bank as vice president. Mr. Brosnahan for merly served Third National of Hamp den County, Springfield, Mass. ■ BOATM EN’S N A T I O N A L , St. Louis, has elected Reuben M. Morriss III and Russell W. Murphy senior vice presidents. Both are in the trust divi sion: Mr. Morriss is in charge of ad ministration and Mr. Murphy oversees investments. Boatmen’s National also has promoted the following: John F. Blum, Theresa J. Carnaghi, Sanford Miller and Michael W. Vasileff, to as sistant vice presidents; William Kling Jr., to assistant cashier; Joseph C. Bar bata, to operations officer; and W. John Gasawski, to data processing officer. M ORRISS MURPHY ■ JOSEPH G. L E W IS has been elected president and chairman of Com merce Bank, Excelsior Springs, going there from Commerce Bank, Bonne Terre, where he had held a similar po sition. ■ COM M ERCE BANK of Grandview hosted nearly 2,500 persons during its grand opening. Refreshments and bal loons were handed out and John May berry and A1 Fitzmorris of the Kansas City Royals were on hand. For custom ers opening checking or savings ac counts, Gott picnic equipment was of fered as premiums. The bank is in tem porary quarters located at 12829 South 71 Highway in Grandview. Completion of the permanent building is planned for fall, 1977. ■ W ALTER E. KNOW LES has been named senior vice president in charge of the bond department at Commerce Bank, Kansas City. The bank also has announced the following elections: Paul C. Clendening, to assistant vice presi dent, metropolitan division; Richard B. Holm, to trust investment officer; Anne M. Palans, to commercial bank ing officer; and W. Kay Voorhees, to trust officer. ■ LAUREL L E E GOFORTH has been appointed assistant vice president, L^nited Missouri Bank, Kansas City. She manages the credit analysis di vision. Nannetta Hughes, secretarytreasurer and manager, United Mis souri Bank Safe Deposit Co., has been named assistant cashier at the bank and Nancy E. Lewter and Melba L. Nicolaisen also have been elected as sistant cashiers. • PAUL M. STR IEK ER has been elected auditor of County National Bancorp, and its lead bank, St. Louis County National, both of Clayton. He joined the HC in 1975 and is a CPA. At the bank, Thomas C. James has been named commercial loan officer. He joined the bank in 1974. ■ PATSY R. AUSTIN has been named assistant cashier, First National, St. Louis, while John W. Fricke has been elected bond investment officer and Michael A. Alexander has advanced to commercial banking officer. ■ RUIDOSO STATE has received reg ulatory approval to open a facility in Carrizozo. It will be operated from temporary quarters until completion of a permanent building in spring, 1977. Mike Capps, vice president in charge of branch banking, will head the new facility. ■ CLAUDE F. COX has been elected president, Boatmen’s Bank of Troy. He joined the bank in 1956, advancing to his previous position, executive vice president and chief operating officer, in 1972. ■ W ILLIAM O. BRO W N LEE has been named president, First National, Richmond, succeeding Gordon O. Benitz, who resigned. Mr. Brownlee formerly was vice president, senior loan officer and a director of Miami County National, Paola, Kan. ■ JAM ES L. EATON JR. has ad vanced to president and chairman, Commerce Bank, Bonne Terre. He pre viously had been executive vice presi dent and secretary of the board. 166 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis New Mexico ■ JOHN B. ROBERTS, trust invest ment officer, First National, Albuquer que, has been promoted to assistant vice president and trust investment of ficer. ■ DAVID L. DOBBS, formerly of Citizens Bank, Farmington, has joined Security Trust, Albuquerque, as vice president and trust officer. ■ THOMAS C. HORN has joined Se curity National, Alamogordo, as vice chairman. He formerly was president, Security National Corp. and executive vice president, Security National, both of Sioux City, la., and has been in banking 30 years. Oklahoma ■ WOODY DAY, formerly assistant vice president, correspondent division, National Bank of Commerce, Memphis, has joined Exchange National, Ard more, as vice president and commercial loan officer. ■ GRADY YORK, vice president, has retired from Bank of Oklahoma, Tulsa, after 46 years. He joined the bank— which then was called Exchange Na tional— as a messenger in 1930 and for the past few years managed the bank’s agricultural department. At the bank’s parent HC, BaneOklahoma Corp., Tulsa, Charles A. McNamara has been named vice president, while Larry Heon and Sallie Hughes have advanced to assistant vice presidents. Mr. Mc Namara joined the bank in 1970; Mr. Heon, in 1971; and Miss Hughes, in July. YO RK HYDE ■ HAYDEN HYDE has been elected vice president and commercial loan of ficer, Fourth National, Tulsa. Susan Ratliff has been named auditor and David L. Lamb has been appointed assistant cashier. Mr. Hyde formerly was president, Bank of Commerce, Jenks; Miss Ratliff joined the bank in February; and Mr. Lamb is a credit review officer. ■ R O BERT L. BROOKSHIRE has joined American Bank, Edmond, as president and CEO. He goes there from First National, Ponca City, where he had been executive vice president. Mr. Brookshire had served his previous bank 22 years. ■ CHUCK MORTON has been elect ed senior vice president, Stock Yards Bank, Oklahoma City. He joined the bank in 1975 and is in charge of the personal banking center. Also named senior vice president was Ken McIlhaney. He joined Stock Yards Bank in 1973 and heads commercial loans. a F IR S T NATIONAL, Tulsa, has named Richard M. Lee and Jim D. Ross vice presidents. Both are account representatives, commercial lending area. MID-CONTINENT BANKER for September, 1976 Charles Rice, a banker's banker. C orrespondent Bankers C h a r le s R ic e hea d s our c o rresp o n d en t banking department. W T2 ' H e ’s o n e of five who can turn on the expertise, facilities and r e s o u r c e s of B a n k of O kla ho m a for you. Marvin Bray Lee Daniel Call him, and find out how your financial n e e d s fit into our capabilities — fast. (918) 5 8 4 -3 4 1 1 Charles McNam ara A Bill Hellen BANK OF OKLAHOMA P.O. Box 2300 / Tulsa, Oklahoma 74192 MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ■ F I R S T N A T I O N A L , Oklahoma City, has announced the following elec tions: Richard M. Bowen III, George N. Cook Jr., Larry M. Swanson and Tom J. Thompson, to vice presidents; Douglas W. Freebern and Richard Peetoom, to assistant vice presidents; E. Dean Chittenden, to investment of ficer; James B. Kite Jr., to banking of ficer; and Melvin E. Burch, to assistant cashier. ■ F IR ST AMERICAN NATIONAL, Nashville, has announced a number of promotions: William H. Coles Jr., Hills boro Office manager, and Kenneth W. Cox, branch administrator, to vice presi dents; and Charles M. Miller, corre spondent division, Joseph T. Carson, Woodbine Office manager, Jeffrey E. Lawrence, loan administration, James O. Williams, 100 Oaks Office manager, T. Charles Williams, data processing, James E. Windrow, loan analyst, and David E. Wolf, data processing, to as sistant vice presidents. ■ EDW ARD RAY PH ILLIPS has joined Ancorp Finance Co., Chatta nooga, as a financial counselor. Ancorp Finance Co. is a wholly owned sub sidiary of Ancorp Bancshares Inc., parent HC of American National, both of Chattanooga. ■ J. HANLEY SAYERS has advanced from assistant vice president to vice president at Third National, Nashville. Named assistant vice presidents were J. David Baird and Paul J. Brown, while Alice M. Balls and Elizabeth C. Thompson have been elected trust of ficers. 168 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Ringing in the Bicentennial Joining Robert Nodes (I.), mktg. and public a ffairs dept., Am erican N at'l, Chattano oga, a re Mr. and Mrs. Charles Almon of the C h a t tanooga Engineers Club. The quarter-size rep lica of the Liberty Bell w a s loaned to the club by the bank for the club's bicentennial lunch eon, for w hich mem bers dressed in Revolutionary-W ar-period garb. Each engineer rang the bell to help celebrate the nation's 200th ann ive rsa ry. ■ T. SCOTT FILLEBR O W N JR., president, First Amtenn Corp., Nash ville, has been reappointed the Tenn essee civilian aide to the Secretary of the Army. In that post, Mr. Fillebrown interprets and relates Army policies to the citizens of Tennessee and keeps Army Secretary Martin Hoffman in formed as to public opinion on matters of concern to the Army. ■ F IR ST NATIONAL, Fort Worth, has announced the following promo tions: to vice presidents and trust of ficers, John A. Bates, Rod Hailey, Tim W. McKinney, Robert E. Scott, Donald R. Smith, Bob Walsh and Jack West; to vice president and investment officer, J. R. Downing; to vice presidents, James Cullen, Mike Hyatt, Carl Mc Laughlin, Ronald J. Shettlesworth and Ken Pittman. In addition, John Brooks, Don Childers, Roger Lazier, Don Ozment, Thomas G. Pittman, Eddie L. Stamps, Tom Willis and Thomas Wheat have been elected assistant vice presi dents; and Ted W. Ingram has been named trust officer. ■ IRA H. GREEN has been promoted from senior vice president to executive vice president at First City National, Houston, and Gary E. Stamper has been named senior vice president. Elected vice presidents were Martin C. Bowen, Gerald A. Carwile III, L. Anderson Creel, Larry E. Hope, Dan R. Owen Jr. and Maurice J. Potts, while the following have been named assistant vice presidents: Jerrel D. Branson, Darby R. Byrd, Richard A. Durham, Ted R. Ellsworth, Thomas R. Fuller, Ralph P. Latimer, Henry Lowden, Douglas A. McKinnon, Lewis F. Parker and Margaret M. Patton. In ad dition, Nancy Jo Adams has been elect ed regional and correspondent banking officer. ■ V. DALE GOSNELL has been named senior vice president and senior trust officer, Texas Bank, Dallas. Lillian Edwards, Cece SmitJi and Robert Nich ols have been elected directors. Mr. Gosnell formerly was manager, national accounts and business development; Mrs. Edwards is staff vice president/ corporation counsel and secretary, Dres ser Industries, Inc.; Miss Smith is con troller, Steak & Ale Restaurants, Inc.; and Mr. Nichols is president, ConleyLott-Nichols Machinery Co. ■ JOHN T. CATER has been elected president and chief operating officer of Bank of the Southwest, Houston, suc ceeding Robert Stewart Jr., who has advanced to the new post of vice chair man. In the bank’s energy division, Ben E. Salisbury has been named vice president. GANTT CATER ■ BURT L. GANTT has joined Re public National, Dallas, as senior vice president, metropolitan department. He formerly was director of financial mar keting, System Development Corp. In his new post, he will oversee the bank’s E F T , marketing and public relations areas. In the correspondent department, Timothy James Maher and M. Rufus Vernon Jr. have been elected assistant vice presidents, while Richard Mac Holland and R. Dennis Kirkpatrick have been named banking officers. In other promotions, Richard E. Hobson, Jack D. Ashby, C. Douglas Smith, Jona than W. Wilson, Robert T. Shillinglaw and Jerry L. Turner have been elected vice presidents and trust officers and Caryl R. Madison and John C. Reap have advanced to assistant vice presi dents. Died: George C. Hopkins, 67, former vice president, Pittsburg National, at Pittsburg’s Medical Center Hospital July 7. He spent 44 years in banking, 15 of which were as a federal bank ex aminer. Mr. Hopkins had retired in 1975. MID-CONTINENT BANKER for September, 1976 Serving CorrespondentBankers inthe Great Southwest r~S¡Í^£¿nmittee Rex House 655-8004 if i2 1 4 ) 3 » (2 14 ) 655-80 09 m / « ïïfe n a S & S : '^S'4! > * r ^ c v > . From bonds to transit to trust. From Arkansas to the Texas Valley. These are the men you need to know. If you have a question, they'll have the answer. Texas Bank Professionals. Texas Bank and Trust Company of Dallas. One Main Place, Dallas, Texas 75250. Member FDIC. A First City B (incorporation M ember MID-CONTINENT BANKER for September, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 169 From 'Streets': Top Salesman of Year Is San Francisco 'Cop' Advertising Age, a national news paper for advertising executives, has initiated an annual “Oscar” award for a familiar face that brings a product to the public. And the first winner of the “Star Presenter of the Year” cita tion is a San Francisco “policeman.” Karl Malden, the screen and tele vision actor who for three years has es tablished himself as the American Ex press Travelers Cheques spokesman, was the first recipient of the honor. “He’s sometimes referred to as the division’s best salesman,” said an Amer ican Express official. “Sales for the last year have increased substantially, de spite recessionary pressures. “And Mr. Malden will continue as the spokesman for the division,” the official added. “His contract has been renewed for another three years and commercials are scheduled for Germany and Australia, as well as the U. S/’ Mr. Malden, who urges, “American Express Travelers Cheques: Don’t leave home without them,” has a personal TRY US FOR YOUR NEXT ENVELOPE REQUIREMENT* M ISSO U RI EN V ELO PE C O . 10655 GATEWAY BLVD. ST. LOUIS, MO. 63132 Phone 314/994-1300 *A$k for our new Plastic Sizer® Template — Tree with your first inquiry. Actor Karl M alden, spokesm an for Am erican Express Travelers Cheques, has won premier "Presenter of Y e a r" a w a rd from Advertising A g e for his success in bringing product to public. reason for giving such convincing per formances. While in London nine years ago, $2,000 in British pounds were stolen from a jacket he had left in his hotel room closet. The American Ex press Travelers Cheques in the same pocket weren’t touched by the robber. Index to Advertisers A m e r i c a n B a n k D i r e c t o r y .................................... 156 A m e r i c a n N a t ’ l. B a n k & Tr. Co., C hattanooga .............................................................. 133 A s s e m b l i e s f o r B a n k D i r e c t o r s ................... 1 1 -1 4 B a n k B o a r d L e t t e r .................................................... 116 B a n k o f O k l a h o m a .................................................... 167 6 B a n k o f t h e S o u t h w e s t ........................................... B a r c l a y , T h e ................................................................... 138 B o a t m e n ’ s N a t i o n a l B a n k .................................... 7 B r a n d t , I n c ......................................................................... 33 C e n t r a l N a t i o n a l B a n k , C h i c a g o ..................... 25 C i t i c o r p ............................................................................... 31 C i t i z e n s F i d e l i t y B a n k & Tr. Co., L o u i s v i l l e 163 42 C o m m e r c e B a n k , K a n s a s C i t y .......................... C o m m e r c i a l N a t ’ l B a n k , K a n s a s C it y, K a n . 160 C o m m e r c i a l N a t ’ l B a n k , Li t t le R o c k ............ 19 C o n t i n e n t a l B a n k ....................................................... 4 C r e a t i v e I m a g e ............................................................ 37 De L u x e C h e c k P r i n t e r s , I n c ............................... 17 D e t r o i t B a n k & T r u s t C o ......................................... 120 F a r m e r s G r a in & L i v e s t o c k H e d g i n g C o rp . 126 F e d e r a t e d S e c u r i t i e s C o r p ...................................... 11 6 F i n a n c i a l I n s u r a n c e S e r v i c e , I n c ...................... 35 F i n a n c i a l P l a c e m e n t s .............................................. 122 F ir s t A l a b a m a B a n c s h a r e s .......................... .. . 124 F ir s t A m e r i c a n N a t ’ l B a n k , N a s h v i l l e .......... 13 1 F ir s t C i t y N a t 'l B a n k , H o u s t o n ...................... 32 F ir s t N a t i o n a l B a n k , C h i c a g o .......................... 59 F ir s t N a t i o n a l B a n k , D a l l a s ............................... 53 F ir s t N a t i o n a l B a n k , H u t c h i n s o n , K a n . . . . 15 1 F ir s t N a t i o n a l B a n k , J a c k s o n , M i s s ................. 5 F ir s t N a t i o n a l B a n k , K a n s a s C i t y ................. 63 157 F ir s t N a t i o n a l B a n k , M o b i l e .......................... F ir s t N a t i o n a l B a n k , S t . J o s e p h , M o ..................142 F ir s t N a t i o n a l B a n k , S t . L o u i s . . . 27, 1 1 7 , 172 TEMPORARY BANKING FACILITIES MPA SYSTEMS 4120 RIO BRAVO EL PASO, TEXAS 79002 (915) 542-1345 170 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • F ir s t N a t i o n a l B a n k , W i c h i t a ............................... 149 F irst N a t 'l B a n k & Tr. Co ., J o p l i n ................. 154 F ir s t N a t ’ l B a n k o f C o m m e r c e , % 3 N e w O r l e a n s .............................................................. F ir s t S e c u r i t y N a t i o n a l B a n k .......................... 127 Fourth N ational Bank, Tulsa ........................ 51 H a r l a n d Co., J o h n H .................................................. 39 H a r r o w S m i t h C o ........................................................... 15 6 H i b b a r d , O ’C o n n o r & W e e k s , I n c ...................... 61 H o l i d a y Inn R i v e r f r o n t ............................................ 164 H u t c h i n s o n N a t ’ l B a n k & Tr. C o ...................... 161 I n s u r a n c e E n t e r p r i s e s , Inc. ............................. 15 4 K a n s a s B a n k N o t e ........................................ 141 K a n s a s S t a t e B a n k & Tr. Co., W i c h i t a 150 L i b e r t y N a t ’ l B a n k & Tr. Co ., L o u i s v i l l e . , 129 L i b e r t y N a t ’ l B a n k & Tr. Co., O k l a h o m a C i t y ......................................................... 2 L o u i s i a n a N a t i o n a l B a n k , B a t o n R o u g e 54-55 L o u i s v i l l e T r u s t B a n k ............................................. 1 1 5 M G I C - I n d e m n i t y C o r p .............................................. 40-41 M P A S y s t e m s ..................................................... 17 0 M a n c h e s t e r B a n k , S t . L o u i s .......................... 165 M e m p h i s B a n k & T r u s t C o ..................... 57, 1 1 9 9 M e r c a n t i l e B a n k , S t . L o u i s ................................. M e r c h a n t s N a t i o n a l B a n k , M o b i l e ................. 24 M i s s o u r i E n v e l o p e C o ........................... 17 0 M o n t e l e o n e , T h e ................................................ ' ' 152 N ational S t o c k Y a rd s N a t’l B a n k 171 N o r t h e r n T r u s t C o .......................... 159 O z a r k Air L i n e s , I n c ............................................. ' 1 5 3 P a l u m b o & Co ., In c., G e o r g e .............. 12 6 12 0 P a y m e n t P l a n s , I n c .................................................. P er ry , A d a m s & L e w i s S e c u r i t i e s , I n c ........... 139 P o l k & Co., R. L ............................ 137 13 6 R a n d M c N a l l y & C o ............................... R e e n t s , A p p r a i s e r , R a y E ........................................ 60 R e p u b l i c N a t ’ l B a n k , D a l l a s ............................. 12 3 R i d g e w a y & A s s o c i a t e s , J o h n W ............................. 1 5 4 Risk In su ra n ce M a n a g e m e n t G u id e . 114 S L T W a r e h o u s e Co. ................................................ 29 St. J o h n s (Mo.) B a n k .......................... 155 S c a r b o r o u g h & C o ............................. 21 S e c u r i t y N a t i o n a l B a n k , K a n s a s C ity , K a n . 143 S t a n d a r d L if e I n s u r a n c e Co., J a c k s o n , M i s s .............................................. 14(5 Stern Brothers ............ 52 S t i f e l , N i c o l a u s & Co., I n c ................ 14 0 T a l c o t t , Inc., J a m e s 121 T e x a s B a n k & T r u s t Co., D a l l a s ......... ' b ' . 169 Third N ational Bank, N a sh v ille 125 ............ 14 5 United A m e ric a n B a n k United Missouri Bank. K a n sa s C ity 23 V a n W a g e n e n Co ., G. D. 12 2 W h itn ey National B ank . 13 5 Z a h n e r & C o ............ 12 8 Index to Supplement (For Advertising Appearing Between Pages 64 and 113) A m e r i c a n P r e m i u m & S p e c i a l t y C o rp . . B G / 1 3 B a n k A d m i n i s t r a t i o n I n s t i t u t e ................. B G / 4 3 B ank C on su ltan ts of A m erica . BG/14 B a n k v e r t i s i n g C o ..................................................... B G / 2 2 B l e n d e r Co., H o w a r d J .................................. ’ B G /2 8 B u s i n e s s D a t a S y s t e m s , I n c .......................... B G / 2 4 C r u e - C u t M fg . & Dist. C o ............................... B G / 1 1 C r y s t a l - D a t e W a t c h C a l e n d a r Co. . . BG/36 D a k t r o n i c s , I n c .................... BG/18 D e p o s i t o r ’s P o r t r a i t S e r v i c e I n t e r n a t i o n a l .......................... B G / 2n D i e b o l d , I n c ....................... BG/47 b g /6 D o w n e y Co., C. L ................... D u p o n t C o .................................. BG/2 Eli C h e n g , I n c ..................................................... BG/36 Fabcraft, I n c ............................................................. B G / 3 1 F e d e r a l S i g n a l C o r p ............................................. B G /4 8 F i n a n c i a l F a c i l i t i e s ............................................. B G / 3 2 F i n a n c i a l I n s t i t u t i o n S e r v i c e s , I n c .............. B G / 1 5 F i n a n c i a l M a r k e t i n g G r o u p ................... BG/19 F i n a n c i a l P r o d u c t s , I n c ...................................... BG /2 8 F i n a n c i a l P r o m o t i o n S e r v i c e s ..................... B G /8 Flo -G o S i g n a l S y s t e m ...................................... B G / 1 8 G o l d M e d a l .............................................................. B G / 1 9 H el le r, W a l t e r E................................................ BG/7 Ill in o i s B a n k B u i l d i n g C o r p ........................ BG/22 I n s u r a n c e P r o g r a m m e r s , I n c ............... BG/23 I n t e r n a t i o n a l S i l v e r C o ............................. B G /33 J L B C o r p ...................................................................... BG 29 L a w r e n c e S y s t e m s ............................................. B G / 4 1 M a d i s o n A v e n u e A s s o c i a t e s , I n c ................ B G / 4 -5 M o n e y S e r v i c e , T h e .......................... BG/21 N a k e n Co., T h e .................................................... B G / 4 2 O la n M il ls ................................................................ BG '27 O ld R e p u b l i c L if e I n s u r a n c e C o ................. B G / 1 7 P a p e r Roll P r o d u c t s ........................................ B G / 3 5 P a r i s P l a y i n g C a r d C o ...................................... B G / 3 4 P a s s a n t e Co ., T h e ............................................. B G / 1 9 P r i n c e t o n P a r t n e r s , I n c .................................... B G / 3 2 R e d w o o d H o u s e .................................................... B G / 3 7 R o e s c h , I n c ................................................................. BG 40 S a l e m C h i n a C o ...................................................... B G /3 T e n s i o n E n v e l o p e C o r p ...................................... B G / 1 0 Travelers Express ............................................. B G / 2 5 T u c k e r A s s o c i a t e s , B o b ................................. B G /3 8 Ul tra V i o l e t P r o d u c t s C o r p ............................. B G /2 4 U. S. M i c r o f i l m S a l e s C o r p .......................... B G / 3 4 V e r n o n Co., T h e .................................................. BG 39 MID-CONTINENT BANKER for September, 1976 YOUR BAN KER'S B A N K ". . . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis J u s t a c r o s s the r iv e r fro m S t. L o u is THE NATIONAL STOCK YARDS NATIONAL BANK OF NATIONAL CITY NATIONAL STOCK YARDS. ILLINOIS 62071 RABBIT TRANSIT. An advanced check-clearing system that can dramatically improve your availability of funds. Reserve Headquarters and “Rabbit Transit.” It’s an improved system devised by First National Bank in St. Louis to expedite the clearing of cash letters. For you, it can mean two important things: better avail ability and bigger profits. Here’s how. We’re right in the heart of the nation. That’s more important than you might realize. Our location in the heart of Middle America permits ideal transportation into and out of St. Louis and pro vides a superior transportation network to all Federal Reserve cities. In addition, St. Louis is a Federal Reserve city which enjoys a proven advantage in mail times, and is less than one hour by air from Federal https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis With their up-to-the-minute knowledge, our specialized staff can also make a complete and objective analysis of your check Our computer is clearing system after an totally dedicated. appropriate test period. Then, It’s the latest Burroughs they’ll present a written recom computer system with IPS and mendation of how it can be MICR technology. handled with increased speed It’s used exclusively by our and efficiency. transit operation. And delays Phone (314) 342-6222 do not occur because of con for your own transit analysis. flicting priorities or competi tion for computer time. For a copy of our Avail Our Proof-of-Deposit ability Schedule, to arrange for system computes float on each an analysis of your check item processed by endpoint clearing system, or for more and time of day. information about “Rabbit Full-time specialized staff. Transit,” phone us now. Or contact your Correspondent This staff monitors out going transit and keeps current Banker at 510 Locust, St. Louis, with any changes in transporta Missouri 63101. tion scheduling. Volumes and endpoints are monitored con First National Bank tinually so cash letters clear in St.LouisP/^ efficiently. Member FDIC H B I ■ ■ International Airports in Chicago and Kansas City.
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